THE PRESENT STATUS QUO OF PROPERTY RIGHTS IN CUBA Juan C. Consuegra-Barquín The current Cuban situation shows just how difficult tion for property expropriated to non-Cubans, a it will be for a future democratic government to com- study of Cuban domestic law is presently the sole mit to property restitution. Official statistics in Cuba source available in order to understand the status of reflect a significant shortage of family housing, an in- property rights for Cuban nationals. creasingly unsafe and deteriorating housing infra- In addition, and after 36 years of government con- structure, and a high density of families living under trol, Fidel Castro undergoes an economic crisis the same roof. Furthermore, Cuban exiles (mostly caused by the disappearance of his communist allies. middle and upper class) were estimated to be over New types of economic reforms have been created to 10% of the total population by the end of 1961.1 save the Cuban economy. Basically, these reforms au- These, and other factors, have to be considered by thorize the creation of joint ventures between the any future democratic government aiming to estab- government and foreign entities. The Cuban joint lish an orderly public policy when considering resti- venture experiments guarantee that the foreigner will tution or compensation of property to former own- inject the hard currency needed to save the Cuban ers.2 economy and, thus, ensure the government’s surviv- al. The present status quo of property rights in Cuba is governed almost entirely by Cuban domestic Law. Currently, the Cuban government, pursuant article Whether Cuban nationals should be compensated 24 of the Constitution of 1976 (amended in 1992),4 for property expropriated by the Castro Regime, is has made public its interest in creating a new type of also an issue to be resolved pursuant to domestic property while selling it to foreigners.5 Accordingly, Law.3 Nevertheless, as opposed to international law, this type of government action rises a numerous of which may play a role with respect to the compensa- interesting questions regarding how the purchase of 1. Hemilce Esteve, El Exilio Cubano en Puerto Rico 13-14 (1984). 2. Juan C. Consuegra-Barquín, Cuba’s Residential Property Ownership Dilemma: A Human Rights Issue Under International Law 46.2 Rutgers Law Review 873, 875 (1994). 3. Id. at 887; Banco Nacional de Cuba v. Sabbatino, 307 F2d 845 (1962) at 861. 4. See, Consuegra-Barquín, supra note 2, at p.897. (note 105). “The collapse of communism in the Soviet Union and Eastern and Central Europe brought Cuba’s economy to bankruptcy. Seeking new forms of incentives to attract venture capital was one of the objectives of the 1992 amendments to the Socialist Constitution of 1976. New forms of property ownership were created as an incentive to attract joint ventures with foreign investors. “Those amendments authorized the transfer of property title only in those cases where the transfer benefitted the economic develop- ment of the Cuban economy; and when the social, economic and political principles of the socialist State were not affected. Further- more, a title transfers only with the approval of the Cuban Minister Council and Cuban Executive Committee.” Id. 5. See Ariel Remos, Institucionaliza Fidel Castro la Venta de Cuba, El Diario las Américas, enero 24, 1995 at 1. Cuba in Transition · ASCE 1995 private property by a foreign entity affects the rights question of whether the properties confiscated must of present and former owners. Perhaps, among them, be returned to their former owners. how does this action fit with the well recognized A considerable portion of this paper is a brief and an principle of international law which states that a suc- update of the law review article Cuba’s Residential cessor government is bound to recognize all obliga- Property Ownership Dilemma: A Human Right Issue tions incurred by the predecessor government?6 Under International Law, published at the Rutgers Today, it is still unclear whether a former owner Law Review and written by this author. Such article could claim his property back. Since the issue is not analyzes, inter alia, the current domestic law regard- solved, arguments to either position are well accept- ing property rights and the possible related contro- ed. Nevertheless, it is the duty of every responsible le- versies that will arise in the transitional process. gal scholar to avoid speculating on this issue, special- THE REVOLUTION AS A SOURCE OF LAW ly to guarantee and assure that properties confiscated OR “FUENTE DE DERECHO” will be returned or compensated. One thing is clear, When analyzing the current property rights in Cuba, however, the decision is a political question7 that the first question to answer is whether the triumph of might be left for the politicians to decide and not for the 1959 Revolution was powerful enough to over- the Courts. Thus, and until the time comes, we will rule the Constitution of 1940. In other words, keep updating, studying, analyzing and comparing whether the Revolution was a legit Source of Law or different or newly emerged theories of law, in order “Fuente de Derecho.” This question has been hotly to help and assist the next transitional government debated by multiple law scholars in the exile.8 during its imminent transformation to a free market economy and to a democratic system of government. The general rule regarding revolutions is that a suc- Likewise, we also assist in answering the political cessful revolution has the power to annul the existing 6. The controversial Cuban Liberty Act, S. 381 H.R. 927, will not only have to deal with this principle, but will have to address the fol- lowing issues: whether the act of the state doctrine forbids a State to adjudicate the acts of another sovereign State performed within its territory; whether the United States has the authority to espouse the claims of United States citizens who were Cuban nationals at the time of the takings; whether the United States has territorial or personal jurisdiction to govern the transactions executed outside the United States between the sovereign government of Cuba and a private entity of another foreign State; whether the United States has the power under international law to adjudicate and enforce this Act; what alternatives the United States has in order to harmonize this Act with other bilateral or multilateral treatise as the North America Free trade Agreement (NAFTA) or the General Agreement of Tar- iffs and Trade (GATT); whether the method of compensation in the FCSC shall be similar to the traditional international standard of compensation, “prompt, adequate and effective”, or merely “appropriate” compensation, according to articles 24 of the 1940 Cuban Constitution and the Cuban Fundamental Law of 1959; whether this Act deteriorates the ability of the United States to espouse legiti- mate claims of persons who were United states citizens prior to the property takings; and others. 7. Emilio Cueto, one of the scholars who has study the issue thoroughly, has classified the property issue as a political question “with no real solution.” Emilio Cueto, Property Claims of Cuban Nationals, in Papers and Proceedings of the Cuban Transition Workshop, or- ganized by the Law Firm of Shaw, Pittman, Potts & Trowbridge, Washington DC, January 26, 1995 at 4. [hereinafter RESOLUTION OF PROPERTY CLAIM WORKSHOP]. “[t]he Cuban property claims will not, I believe, be fully resolved in a Court of Law which will carefully weigh the legal argu- ments on both sides of the issue. The problem is of such complexity that Law alone cannot be expected to solve it. Thus the ‘resolutions’ of these claims will be ‘political,’ in the broadest sense of the term, and will take place in a particular context which, I suspect, will emphasize National Reconciliation and Social Peace while recognizing existing reality, the scarcity of re- sources, and the search for viable, sustainable options.” Id. 8. See: Consuegra-Barquín, supra note 2; Matías Travieso, Some Legal and Practical Issues in the Resolution of Cuban Nationals Expropri- ation Claims Against Cuba, in Resolution of Property Claim Workshop, supra note 7; Cueto, supra note 7; Nicolás Gutiérrez, Jr., The De-Constitutionalization of Property Rights: Castro’s Systematic Assault on Private Ownership in Cuba, in Resolution of Property Claim Workshop, supra note 7; Nestor Cruz, Legal Issues Raised by the Transition: Cuba from Marxism to Democracy, 199_-200_?, in Cuba in Transition, Papers and Proceedings of the Association for the Studies of the Cuban Economy (ASCE) (1992)[hereinafter CUBA IN TRANSITION]; José D. Acosta, El Marco Juridico Institucional de un Gobierno Provisional de Unidad Nacional en Cuba, in Cuba in Transition, supra; and others. 196 The Present Status Quo of Property Rights in Cuba constitution with a new set of legal norms.9 Matías ed that the actual situation was not the one contemplated Travieso, citing a case from the High Court of the under the 1940 Constitution, being the revolutionary State of Lesotho, states the appropriate test to deter- movement the original cause of the Batista regime col- mine whether a revolutionary government is lawful.10 lapse, and therefore a legitimate Revolution. As a direct The test inquires, inter alia, if the government is result of this ruling, Manuel Urrutia Lleó, the Revo- firmly established, if the government administration lution’s candidate, was recognized as the legitimate is effective, and whether the majority of the people new president of Cuba.”15 behaves according to the new government.11 However, questions of recognition by other govern- Whether we like it or not, it seems that in 1959 the ments arise whenever a new government assumes Cuban Supreme Court did its own research and con- power through a revolution or a military coup d’etat.