property in socialist cuba, the first in a series

This article is the first in a series we will publish on property rights in Cuba, aimed at demystifying the legal processes surrounding ownership, expropriation, and confiscation.

Written by a Cuban lawyer publishing under a pseudonym for security reasons, this series seeks to provide a clear and accessible understanding of how property rights in Cuba differ significantly from those in the United States.  In Cuba, property rights are shaped by a unique legal framework, heavily influenced by its socialist structure and historical events, such as the sweeping nationalizations of the 1960s.

This first installment focuses on the distinctions between expropriation, which involves compensation for public utility or social interest, and confiscation, a penalty tied to criminal acts. By examining these processes, the article sets the stage for a deeper exploration of Cuban property law and its practical implications, offering readers valuable insights into a system that operates under fundamentally different principles from those in the U.S.

Expropriation vs. Confiscation

By Pedro Rodriguez

To address this topic, it is important to begin with definitions of key terms as found in dictionaries and encyclopedias. These terms reflect the legal principles and objectives pursued by lawmakers when drafting legislation.

Expropriation is broadly understood as a public phenomenon, constitutionally regulated and governed by specific laws. It pertains to administrative law and allows the State, under the framework of public administration, to take ownership of property from natural or legal persons. This process includes fair and proportional compensation for the property taken, and the property is then used either by the State or by a third party designated by the State.

Confiscation, on the other hand, arises from criminal proceedings. It involves the State, acting in its judicial capacity, taking property from individuals or entities as a penalty for criminal offenses. Confiscation serves as a primary sanction, while forfeiture or seizure acts as an accessory sanction, involving the goods used in committing the crime. These goods are confiscated to determine their subsequent disposition.

Comparative Analysis

In global legal systems, expropriation is addressed differently depending on the legal tradition. Under the Roman law tradition, expropriation is seen as a public right exercised in the interest of society.

The purpose is to meet a public need by occupying property, with fair compensation provided to the owner. A notable safeguard in this tradition is the possibility of reversion: if the declared public use is not achieved within a specified timeframe, the property must be returned to its original owner along with compensation.

In contrast, the common law tradition views expropriation as a dominant power exercised to acquire property for public purposes. This approach emphasizes negotiation, aiming for a "win-win" outcome that satisfies all parties involved, whether natural or legal persons.

Historical Context

In 1960, Cuba expropriated properties owned by U.S. citizens, an action that contributed to the breakdown of diplomatic relations between Cuba and the United States. At the time, Cuban authorities offered fair compensation to U.S. citizens whose private properties were nationalized in the public interest.

However, these offers were rejected under the assertion that the properties remained under U.S. ownership. Despite this, former property owners have continued to file claims in international courts, seeking compensation at current market values—often ten or more times higher than the values offered at the time of expropriation.

Administrative Expropriation

Forced expropriation in Cuba can follow one of three administrative procedures: urgent, ordinary, or joint assessment. These procedures share the goal of reaching mutual agreement on fair compensation between the parties involved.

The urgent administrative procedure is the most common. It requires the declaration of public utility or social interest for the project, public notification, identification of the properties affected, and strategic location analysis.

It also involves paying a prior deposit and compensation for damages, physically occupying the property, and paying the agreed-upon price. If agreement cannot be reached, administrative measures are used to resolve the matter.

The ordinary and joint assessment procedures differ in that property occupation occurs only after a ruling by the competent Administrative Tribunal. These procedures are less commonly used.

Expropriation for Public Utility or Social Interest in Cuba

Cuban law on expropriation dates back to the 1976 Constitution, which has been amended three times. The Constitution addressed expropriation in Article 25, requiring compensation for reasons of public utility or social interest, and confiscation in Article 60, as a penalty imposed by competent authorities.

The General Housing Law of 1998 complemented these principles, stating that properties in areas of high tourism significance could be assigned to the Ministry of Tourism, and the State could negotiate with property owners to purchase, relocate, or compensate them for properties to be used for tourism development.

The 2019 Constitution revisited these issues, reaffirming in Article 58 the possibility of expropriation for public utility or social interest with proper compensation and reiterating in Article 59 confiscation as a penalty imposed by authorities.

In 2022, Law 159 on Expropriation for Reasons of Public Utility or Social Interest was enacted to address gaps in prior legislation. This law ensures that expropriation is carried out according to legal standards and provides fair compensation. It allows for the reversion of expropriated property if the declared public utility or social interest is not fulfilled within three years.

Conclusion

Law 159 addresses previous regulatory gaps concerning expropriation in Cuba and balances individual rights with the State’s expropriatory powers. However, questions remain about the adequacy of compensation. The law mandates compensation based on appraised commercial value, determined by the Ministry of Finance and Prices. This value may not align with market realities, which depend on factors such as the property's location, technical condition, and size.

When expropriation serves tourism-related purposes, feasibility studies and technical assessments must be conducted to expedite the process and ensure completion within three years to avoid claims for reversion. Compensation must correspond to the property's technical state, area, and geographic location. The sentimental or historical value of the property to the owner, which cannot be quantified, remains a significant issue in compensation disputes.