EU calls on its firms to defy US sanctions

Date: 01/08/1996

By Elizabeth Wise

EUROPEAN retaliation for US sanctions on foreigners dealing with Cuba is now moving from the theoretical to the practical as proposed counter-sanctions go to EU governments for approval.

With measures approved this week by the European Commission, the Union also formally moves into stand-off mode against Washington as it instructs European companies to ignore the US Helms-Burton legislation which threatens their businesses in Cuba.

Under Helms-Burton, which comes into force today (1 August), Americans can sue EU firms for using property in Cuba 'stolen' from them when Castro nationalised property in 1959.

The Commission proposal, which is expected to be approved by Union foreign ministers in September, tells European businessmen not to cooperate if suits are brought against them in US courts.

“The anti-boycott regulation would be fully binding on all EU member states,” said Trade Commissioner Sir Leon Brittan, adding that court judgements made outside the EU would not be recognised in the Union.

Calling on EU firms to inform its officials if Americans or US companies file lawsuits against them, the Commission also said it was working on creating a legal statute which would enable Europeans to counter-sue in courts in Europe to recover damages.

Assuming the proposals win the unanimous approval of member states, they could be applied not only in the Cuba case but also to sanctions which could hit companies investing in Iran and Libya's oil sectors if the US bill becomes law.

American law says Europeans dealing with Cuba cannot be sued before 1 November, 90 days after Helms-Burton comes into force. US President Bill Clinton's decision to delay any suits for six months means EU firms should be safe until 1 February, but Clinton may change his mind and revoke the waiver.

In the meantime, Europeans can be stopped at US borders at any time.

But so far, no European firms have received a letter from the State Department informing its executives that they have 45 days to cease activities in Cuba or be barred from entry to the US.

Possible recipients of such letters include Italian telecoms company Stet, the Mallorca-based Sol Melia hotel chain and French distillers Pernod-Ricard. Dutch Bank ING has pulled out of Cuba in face of the threat.

US diplomats are playing down the possible effects of American sanctions, hinting that by February, with the US electoral season over, “things could change a great deal”.

Clinton will soon name a special envoy to discuss Helms-Burton with European officials and other “friends and allies” adversely affected by the law.