Carnival Corp. is the first U.S. company sued for using ‘stolen’ property in Cuba
Descendants of the owner of the second-largest Cuban-owned bank before 1959 are suing French bank Société Générale for $792 million for allegedly “trafficking” with their property, now part of the National Bank of Cuba.
The lawsuit was filed in federal court in Miami on Wednesday on behalf of the descendants of Carlos Núñez and Pura Galves, the owners of Banco Núñez. Some of the claimants currently live in Hialeah.
Banco Núñez had 22 branches and controlled $105 million in assets in 1958. Valued at about $8 million, it was confiscated in October 1960 by the Fidel Castro government and absorbed by the newly created National Bank of Cuba (BNC in Spanish).
The Cuban government did not offer compensation for the expropriation of the bank. But many decades after, in May of this year, President Donald Trump decided to enforce Title III of the Helms-Burton Act, a provision that allows seeking compensation in court for property that was confiscated by the Castro regime.
Since the law was signed in 1996, all presidents, from Bill Clinton to Barack Obama, suspended the right to sue to avoid conflicts with allied countries that have business ties with Cuba.
“This is the first lawsuit involving a financial institution that has been brought under the Helms-Burton Act,” said Javier Lopez, partner at Miami-based firm Kozyak, Tropin & Throckmorton.
Lopez and attorney Evan Stroman are representing 14 heirs of the Núñez family. “They were waiting for the day when a president would lift the pause button and allow them to get justice,” Lopez said.
The Núñez heirs claim they are entitled to 10.5 percent of the value of BNC and argue that Société Générale “trafficked” in their property by engaging in financial transactions with the BNC while earning more than a billion dollars in profits.
The Helms-Burton Act entitles claimants to sue for up to three times the original value of the property plus an annual interest rate of six percent, calculated from the time of expropriation.
In their favor, say the family’s lawyers, is the admission the French bank itself made that it had violated the U.S. embargo against Cuba, according to a deferred prosecution agreement with the Department of Justice for which the bank agreed to pay $1.4 billion in penalties and fines in November last year.
According to the court documents, Société Générale admitted to having concealed financial transactions related to Cuba, including credits and loans to the BNC, to evade U.S. sanctions. The French bank used a New York-based subsidiary and other U.S. financial institutions for these operations.
“They admitted to the behavior that accounts as ‘trafficking’ in the Helms-Burton Act in the criminal case, and we will use it against them in the civil lawsuit,” Lopez said. The Helms-Burton Acts states that any commercial or financial transaction involving confiscated property, with few exceptions, constitutes “trafficking.”
Société Générale did not immediately respond to a request for comment.
The lawsuit against the French bank follows another five already filed against the cruise company Carnival, several Cuban companies (CIMEX, Cuba Petróleo, Gaviota SA, Cubanacán and Grupo Hotelero Gran Caribe) and the Trivago travel website, an Expedia subsidiary.
John Kavulich, president of the U.S.-Cuba Trade and Economic Council, estimates that there are more than three dozen potential targets for these lawsuits, including U.S. airlines such as American and Delta.
The expert believes many of these cases are likely to end up with settlements, which would allow these companies to continue their business without fear of being sanctioned by the United States.
The agreements would also result in “an increase to the operational value of an asset located in Cuba,” said Kavulich, due to increased confidence of investors, partners, and suppliers in the long-term viability of the business.
Follow Nora Gámez Torres on Twitter: @ngameztorres