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New lawsuit under Title III of Helms-Burton between sugar mills. Francisco Industries, Inc. v. ASR Group International, Inc.

| Publications | Cuban Desk

The lawsuit alleges that ASR has engaged in "trafficking" because it knowingly and intentionally profited from the assets once confiscated from the defendant through its business activity

On May 2nd, Francisco Industries, Inc. filed a lawsuit against ASR Group International, Inc. -both sugar companies- based on Title III of the Helms Burton Act (HBA), before the Southern District Court of Florida, Fort Pierce Division.

Recall that Title III of the HBA, activated in 2019 by the Donald Trump administration, allows US nationals to sue any person who knowingly and intentionally traffics in property that was confiscated by the Cuban government after Castro's revolution. The definition of "trafficking" includes the purchase, receipt, possession, control, management, use or holding of an interest in confiscated property without the owner's consent. It also includes engaging in commercial activities that use or benefit in any way from confiscated property without the owner's consent.

The plaintiff entity, formerly known as The Francisco Sugar Company, is an American company incorporated in the state of New Jersey. Prior to the Cuban Revolution, it was active in the international sugar trade, growing and processing sugar in south-eastern Camagüey, Cuba, and around the Port of Guayabal. Through its subsidiary, Compañía Marítima Guayabal, S.A., the claimant received the concession for the management and development of the Port of Guayabal for a term of 50 years, extendable until it had recovered its investment. Since the confiscation occurred only three years after it was granted and the investment had not yet been recovered, the claimant understands that the concession should still be in force today.

These assets were confiscated by the Cuban Government on 6th August 1960 by Resolution No. 1 of Cuban Law No. 851. Subsequently, following a claim filed by the Claimant, on 9th February 1971, the Foreign Claim Settlement Commission (FCSC) certified its claim, awarding it a value of 53,389,438.37 USD.

The defendant, ASR Group International, Inc. is a US company, incorporated in Delaware, with its headquarters and considerable business volume in Florida, and is one of the largest sugar refiners and traders in the world. It is currently run by the Fanjul brothers - Alfonso, José, Alexander and Andrés - who went into exile in Florida in 1960, as the defendant also had its assets confiscated by the Cuban government.

The plaintiff requests that the court enter judgment against ASR for damages, claiming the greater of the following amounts: (i) the amount indicated in the claim certified by the FCSC plus interest at 6% per annum from the date of confiscation; (ii) the current value of the property; or (iii) the market value of the assets at the time of confiscation plus interest. It also seeks treble damages, attorneys' fees and costs, in accordance with the provisions of Helms Burton.

Francisco Industries claims that the defendant purchased 11,000 tonnes of sugar in July 2016, which was shipped from the port of Guayabal to its wholly owned refinery in London, UK. Moreover, it alleges that the defendant used the company Corporación Azucarera del Perú, S.A. (Coazucar) as consignee and importer of record for this shipment, that is, as an intermediary in charge of taking possession of the cargo and transferring it from the seller to the final buyer.

The lawsuit alleges that ASR has engaged in "trafficking" because it knowingly and intentionally profited from the assets once confiscated from the defendant through its business activity. Proof of its knowledge and intent, it claims, is that the father of the executive José F. Fanjul, Jr. has owned 3,989 shares of Francisco Industries for many years. In addition, José F. Fanjul, Jr. worked for Francisco Industries prior to the seizure and was the legal representative of Compañía Marítima Guayabal, S.A. when it acquired the Guayabal Port concession in 1955.

Finally, although not included as parties to the lawsuit, allusion is made to the necessary participation of other actors such as the Cuban government; Azcuba, a 100% government-controlled company that owns and manages all sugar cultivation on the island; and Empresa Terminales Mambisas de la Habana, a company also 100% controlled by the Cuban government, which manages all the ports, including Guayabal.

Download the PDF file here.

For further information please contact:

Ignacio Aparicio | Partner Corporate / M&A and Director of the Cuban Desk

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