United States: The Next Wave Of US Extraterritorial Sanctions Regarding Cuba – Potential Impacts For Canadian Companies

On May 2, 2019, after 22 years of semi-annual deferrals by multiple presidents, the United States brought Title III of its Helms-Burton Act into force.1 The Helms-Burton Act significantly broadened US economic sanctions against Cuba. The activation of the controversial Title III now allows certain US nationals to bring suits in US Federal Court against foreign companies who “traffic” (i.e. derive an economic benefit) from property expropriated by the Cuban Government after the Cuban revolution.

Such proceedings are available for both “certified claims” (i.e. claims of US persons or companies who were already US citizens at the time of confiscation, and who applied at the relevant time for their claims to be properly “certified” by the relevant US authorities) as well as claims known as “Cuban American claims” (i.e. claims by persons who were not US citizens at the time of confiscation, but who later became naturalized Americans).

Having regard to the very high degree of media attention that these provisions attracted, it can be expected that many claimants who may benefit from Title III could initiate proceedings quickly.

International opposition to the Helms-Burton Act

Canadian Foreign Affairs Minister Chrystia Freeland and the European Union Commissioner for Trade Cecilia Malmström issued a joint statement on April 17, 2019 expressing concern about the US Government’s decision to activate Title III. Both highlighted the existence of so-called “blocking statutes” that provide some degree of protection to domestic companies by blocking the enforcement or recognition of Title III judgments in Canada and in the EU, in addition to other aspects of the Helms-Burton Act.2

The Canadian blocking regime is established under the Foreign Extraterritorial Measures Act (“FEMA”).3 In Canada, FEMA historically has been used primarily to block attempts by US authorities to enforce sanctions restricting trade with Cuba against foreign affiliates and contract counterparties of US companies.4  A cabinet order issued under FEMA5 requires Canadian companies and their officers and directors to notify the Attorney General of Canada (“AG”) in certain circumstances when they receive communications related to trade or commerce between Canada and Cuba. Such Canadian companies are also prohibited from complying with these directives (and/or directly complying with the US sanctions).

Multinational companies face serious challenges in seeking to comply with both the US trade sanctions regarding Cuba and with the Canadian FEMA regime, since the regimes contain potentially conflicting criminal offences which can give rise to “double jeopardy” situations.  Legal counsel in both jurisdictions should be consulted before communications are made or contracts are signed in such situations.

FEMA’s blocking mechanisms in relation to Title III

FEMA’s Title III blocking mechanisms are somewhat more targeted than the general FEMA notification requirements and prohibitions. The basic principle adopted by Canada is to prevent or offset the legal exposure of Canadians to the Title III regime where American claimants seek the assistance of Canadian courts to obtain evidence for use in their claims or to enforce any judgments issued by US courts.

Evidence gathering

FEMA permits the Government of Canada to prohibit or restrict a Canadian citizen or resident from producing records under his/her control and giving evidence to a foreign court in respect of Helms-Burton litigation. The AG may issue an order in this regard where disclosure would adversely affect Canadian business interests related to international trade or commerce carried on, in whole or in part, in Canada.6  Thus, Canadian businesses who are targets of Title III proceedings in the US may want to seek the assistance of the AG to block production of evidence located in Canada in response to discovery procedures in US legal proceedings.

Further, Canadian courts may issue warrants authorizing the seizure of records located in Canada to prevent their use in foreign proceedings. The AG must convince the Canadian court that an order made relating to the production of records or giving of information likely will not be complied with, putting Canadian business interests at risk. Records seized pursuant to such a warrant must be delivered to the court or a designated person for safe-keeping.

Enforcement of foreign judgments and recovery of damages

Under FEMA, Canadian courts are also prohibited from recognizing or enforcing any judgment issued by US courts under the Helms-Burton Act. 7

These Canada-centered protective measures will be considerably less effective if the Canadian company also does business in, or owns assets located in the US.  In such cases, it will be important to consider possible limitations under domestic US law itself.  For instance, there may be cases where the US Federal Court may not have the required jurisdiction over the defendant.  Also, some limited statutory exceptions to Title III exist in industries such as travel and telecommunications.

FEMA also contemplates that Canadians who are targeted by Title III litigation may use Canadian courts to recover damages that they have been ordered to pay in the US. A Canadian citizen or resident, or a Canadian company or person carrying on business in Canada, can apply to the AG for an order related to an issued or potential US Title III judgment. A Canadian defendant in the US proceedings may thereby become a claimant in the Canadian courts and “claw-back” damages under the US-issued judgment obtained against the defendant or, where a final judgment has not yet been issued, recover the cost of defending the US proceedings.

A Canadian court awarding these claw-back damages to a Canadian defendant can order the seizure and sale of property in which the US plaintiff has a direct or indirect beneficial interest. Such seizures may include shares of any Canadian company in which the US plaintiff has a beneficial interest regardless of whether the share certificates are located in or outside Canada.

In light of the activation of Title III, Canadian businesses doing business in Cuba would be well advised to obtain an updated assessment on any potential exposure to US trade sanctions and the protective mechanisms that may be available to them.

by Neil Campbell, Éric Vallières and Lisa Page, Articling Student


1 The Helms-Burton Act is also known as the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, USC title 22 §§ 6021-6091.

2 The EU blocking regime is contained in Council Regulation (No 2271/96).  Blocking mechanisms were also introduced in response to the Helms-Burton Act in 1996 by the United Kingdom under the Protection of Trading Interests Act, 1980 and by Mexico under the Law of Protection of Commerce and Investments from Foreign Policies that Contravene International Law.

3 RSC 1985, c F-29.

4 In 2015, FEMA was also used to block an extraterritorial attempt by the Government of Alaska to force an American firm that had a contract to redevelop the ferry terminal facility in Prince Rupert, British Columbia, to purchase iron and steel materials only from US suppliers.

5 Foreign Extraterritorial Measures (United States) Order, 1992, amendment, SOR/96-84.

6 The AG may also issue a blocking order where the enforcement of a foreign trade law is believed to infringe Canadian sovereignty, jurisdiction or powers.

7 The AG can also declare a foreign court’s antitrust judgment as unrecognizable and unenforceable in Canada, or can reduce such a judgment to an amount specified in an order (for instance, by negating the trebling of damage awards that is contemplated under US antitrust laws).

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2019

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions