A change is government is like grist to a rumor mill and when it comes to the future of U.S.-Cuba policy, what a mash. I have had an noticeable uptick of individuals asking me about doing business in Cuba some day. Yet the most interesting calls have been from American citizens who have certified claims for property stolen by the Cuban regime. It seems as if some people want to buy these claims from Americans.
If some of these property claims stories are true, this mash is being used in wicked brew that will surely get someone in legal trouble in the not too distant future. And those individuals that are traveling the U.S. seeking to buy old claims, are walking a very fine line.
In fact, in July 2008, Adam Szubin, Director, Office of Foreign Assets Control, issue a notice on this very matter warning claim holders that OFAC authorization was needed before any such transaction could be deemed legal under the sanctions regulations.
The individuals that are traveling the U.S. seeking the claim holders tell them that it is best to sell now, that the properties will never be sold in a future Cuba, and that it is not worth a lot money.
By the way, the buyers apparently make a point of telling the potential sellers that they do not represent the Cuban Government (a wise move as it is illegal to act as a representative for the Cuban government in the U.S. without an OFAC license).
The bottomline is that if you are a holder of a certified claim, it generally makes no economic sense to sell that claim. Assuming you are one of the few lucky ones to hold a claim to Cuban real estate, how can the market really price it at its true value at this juncture? Currently, private property is illegal in Cuba and the Cuban regime has destroyed the island to the point that the true value of any property under a free market system is going to be worth much more.
Assume for a moment that the proposer of this scheme to buy your land are telling you the truth, that your claim is worth more today than it will be worth tomorrow. Then why do these people want your claim today? What are they proposing to do with it?
If that were true, then the only ultimate buyers one can reasonably deduce would want these old claims is the Cuban Communist Party. Why? To ensure that there are no “liens” on land that the Party seeks to sell to a foreign investor to develop a hotel, golf course, drill for oil, farm, or who knows what.
Another reason that claim holders need to pay close attention to these dubious offers is that it is generally illegal, unless authorized by OFAC, for any American to traffic in Cuba property. Unless authorized by the U.S. Government, you are exposing yourself to possible civil and criminal penalties if you sell your certified claim to these people.
Of all the issues on the table that need resolution between the U.S. and Cuba, this one is the political Pandora’s box that no politician or government official wants to talk about; however, the time is fast approaching for such a discussion. Because the matter has been ignored by the U.S. Government, hair-brained schemes such as the one described here are taking root.
If Cuba has been able to purchase more than $1 billion in food from U.S. businesses during the past few years, why has the U.S. not frozen some of those funds entering the U.S. and place them in trust for these claimants? Read more about this issue, here.