The Trump administration is preparing to allow lawsuits in U.S. courts for the first time against some foreign companies doing business in Communist-ruled Cuba using properties confiscated from Cuban-Americans and other U.S. citizens, according to people familiar with the matter.
The move, which could be announced as early as Monday, could threaten Cuba's efforts to attract more foreign investment and is also aimed at punishing Havana over its support for Venezuela's socialist president, Nicolas Maduro, who is facing a political and economic crisis, the sources said.
President Donald Trump's administration is expected to act on a threat issued in January to allow a controversial law that has been suspended since its creation in 1996 to take effect later this month, permitting U.S. citizens to sue foreign companies over property seized in the 1960s by the Cuban government.
The State Department plans to allow Title III of the Helms-Burton Act to go into effect with a "partial waiver" to protect U.S. businesses and those of certain American allies, according to the sources, who were briefed on the matter. However, it could leave Russian and Chinese companies invested in Cuba at risk of U.S. litigation, they said.
The provision has been fully waived by every president over the past 23 years due to opposition from the international community and fears it could create chaos in the U.S. court system with a flood of lawsuits.
A complete lifting of the ban could let billions of dollars in legal claims move forward in U.S. courts and likely antagonize Canada and U.S. European partners, whose companies have significant business holdings in Cuba.
It could also affect some U.S. companies that have begun investing in the island since former President Barack Obama's opening to the old Cold War foe.
Allowing the provision to go into effect even on a limited basis could undermine efforts by Cuban President Miguel Diaz-Canel to foster foreign investment and promote tourism to bolster the Caribbean islands fragile economy.
Lawmakers were expected to be briefed on the plan later on Monday, a congressional source said.
The White House did not immediately respond to a request for comment.