Ever since the United States became an empire after the Spanish-American War in 1898, US companies and US citizens have been acquiring property and interests in foreign countries, particularly in Central and South America. Nationalist and socialist governments gradually took power in these countries. For ideological and economic reasons, these governments viewed the US ownership of property in their countries as counter to the national interest. They forcibly took possession of the property of US nationals without adequate compensation. In legal terms, these acts are referred to as expropriation.
The most significant expropriation for the US occurred in Cuba. Fidel Castro took power in Cuba in 1959. Relations between the two countries deteriorated. In 1961, Castro expropriated US-owned property in Cuba as well as property owned by Cubans. In response, the Eisenhower and Kennedy administrations imposed trade embargoes on Cuba, which remain in force today. In 1996, the US enacted the Helms-Burton law. This law enables US nationals whose property in Cuba was expropriated by the Cuban government to sue any person who uses or profits from the expropriated property in US federal courts. The law eliminates certain procedural hurdles to make it easier for the court to get to the merits of the case.
The president is empowered to suspend the Helms-Burton law if he or she believes that these lawsuits could adversely affect US national interests. Immediately after the law was enacted, President Bill Clinton suspended it. Each president after him has also suspended the law.
Consequently, no lawsuits have been filed since the law was enacted. On February 1, 2019, Donald Trump became the first president to lift the suspension. ExxonMobil is one of several claimants who have filed lawsuits which are now permitted under the Helms-Burton law. ExxonMobil is the successor owner of three oil refineries in Cuba. The Cuban government expropriated the refineries in 1961. ExxonMobil has sued two Cuban companies which have been using and profiting from the refineries.
The facts regarding the Cuban expropriations and the seizure of US-owned property in Cyprus after the Turkish invasion in 1974 differ in many ways. But these events raise the same fundamental legal question: What rights do US nationals have where they possess and hold title to property located in a foreign country under the laws of that foreign country and that property is seized? Part of the answer depends on the method by which the property is taken. In Cuba, the property was taken by expropriation. This means that the Cuban government took possession of the property and took title to the property. It took title under a new law enacted by the Castro regime which allegedly made it lawful for Cuba to take the titles to these properties.
Since 1974, when the Republic of Turkey invaded Cyprus, the Republic of Turkey has unlawfully occupied a portion of the territory of the Republic of Cyprus in which property owned by US citizens is located. The property was taken by trespass and the forced exclusion of the US nationals who hold title under the laws of the Republic of Cyprus. Although the Republic of Turkey forcibly took possession of the properties, it did not take the titles of the US nationals to their properties. Neither the Republic of Turkey nor its administrators in occupied Cyprus has ever alleged to have taken title to the properties. The European Court of Human Rights (ECHR) has confirmed that persons who held title to property located in occupied Cyprus under the laws of the Republic of Cyprus before the Turkish invasion in 1974 continue to hold absolute title to this day. The US nationals who own property in occupied Cyprus have a compelling case under the legal theory of the Helms-Burton law. These US nationals still have lawful title to their properties. They should only have to show that the trespass and exclusion by the Republic of Turkey was unlawful under the laws of the Republic of Cyprus.
In 2011, at the suggestion of the American Hellenic Institute (AHI), Congressman Frank Pallone (D-NJ) introduced legislation which was based on the Helms-Burton law. The legislation would have enabled US nationals who own property located in occupied Cyprus to sue private parties who use or profit from that in US federal court. The legislation was introduced in two subsequent Congressional sessions but it never progressed.
Given that the Helms-Burton law has been revived, it may be time to reconsider the Pallone legislation. If it were enacted, a US national could sue in US federal court any private party who uses or profits from the property of that US national which is located in occupied Cyprus. The law would also eliminate certain procedural hurdles so that the court could get to the merits of the case. For example, assume that an international hotel chain operates a hotel on the property of a US national in occupied Cyprus. If the hotel chain also operates hotels in the United States such that it is subject to the personal jurisdiction of US courts for wrongful acts committed outside of the US, the US national could sue the hotel chain in US federal court for unlawful possession and use of the property. The US court might not be able to restore the US national's possession of the property, but it could award back rent and damages for use of the property. Significantly, the US national would not in any way forfeit or lose title to the property.
Nicholas G. Karambelas is an attorney and a director on the board of directors of the American Hellenic Institute (AHI) in Washington, DC.