Conflicting Economic Claims Between Cuba and the United States

An article by CNN published on June 4, 2026, recounts the story of the $9 billion in property claims of the Cuban-American diaspora as if it were the primary—perhaps the only—economic grievance structuring the relationship between the United States and Cuba.¹ Cuba’s $170 billion counter-claim is dismissed in a single sentence. This narrative asymmetry reflects a deeper asymmetry in the architecture of international law: the mechanisms through which wealthy States preserve the investment claims of their nationals are robust, institutionalized, and politically durable; the mechanisms through which poorer States might assert their own claims against the economic coercion of more powerful ones are morally significant but legally unenforceable. Naming both asymmetries is the starting point for any honest analysis.

My conclusion, set out from the beginning so that the reasoning can be judged against a known thesis: the United States possesses a legitimate, though methodologically inflated, claim for compensation arising from the 1959-1960 Cuban nationalizations. Cuba possesses a substantially larger, legally cognizable, and internationally admitted counter-claim arising from sixty-five years of comprehensive economic coercion that has caused cumulative damage an order of magnitude greater than that of the original expropriations. On a net basis, the equitable balance of the obligation tilts substantially in Cuba’s favor. The 2026 oil blockade constitutes a qualitative escalation that crosses the threshold of collective punishment under international human rights law and eliminates any remaining proportionality defense that the United States could invoke.

I. The Applicable Law: Two Frameworks in Tension

Any analysis of these claims must navigate a genuine tension within the corpus of international law. Two doctrinal frameworks, both with legitimate pedigree, point in opposite directions.

The first is the Hull formula, articulated by Secretary of State Cordell Hull in 1938 in response to Mexican oil nationalizations: the expropriation of foreign property is permissible under international law only if accompanied by compensation that is “prompt, adequate, and effective.”² This formula—enshrined in countless bilateral investment treaties and invoked in the arbitral jurisprudence of ICSID—provides the primary legal foundation for U.S. property claims. It represents the international law of capitalist States protecting outward investment flows.

The second is the Calvo doctrine, promoted throughout the 19th and 20th centuries by Latin American international jurists, which holds that foreign investors accept the jurisdiction and legal protections available to the nationals of the country and cannot invoke the diplomatic protection of their home States to demand preferential treatment.³ The Cuban nationalizations were carried out as a matter of sovereign economic policy, with the stated intention of redistributing land and productive assets from a concentrated—largely foreign—elite to the impoverished majority. UN General Assembly Resolution 1803 of 1962 on “Permanent Sovereignty over Natural Resources” partially codified this perspective, affirming a State’s right to nationalize foreign property subject to “appropriate”—not “adequate”—compensation in accordance with national law.⁴ The deliberate softening of the Hull formula’s language was itself a political verdict from the then-emerging post-colonial majority.

Neither framework holds exclusive sway. The Hull formula represents a genuine norm of customary international law regarding arbitrary expropriation without any compensation. Resolution 1803 represents an equally genuine norm protecting the sovereign right of developing States to restructure their economies, provided that such restructuring does not systematically deny foreign nationals access to any form of compensation. The Cuban nationalizations sit somewhere in this disputed middle ground, and this ambiguity affects the quantum of the U.S. claim. Crucially, neither framework grants any license to impose a comprehensive economic blockade of indefinite duration as a countermeasure. The law of countermeasures, as codified in the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (2001), requires countermeasures to be proportional to the wrongful act to which they respond, temporary in nature, and reversible.⁵ An embargo now entering its sixty-fifth year fails all three tests.

II. The United States Claims: Substance and Critique

The Certified Claims

The factual record of the Cuban nationalizations is not a matter of serious dispute. Following the consolidation of Fidel Castro’s power in 1959, the revolutionary government implemented a two-phase expropriation program. The first, an agrarian reform law in May 1959, nationalized large estates and banned foreign ownership of agricultural land—a policy consistent with land reform programs throughout the post-war developing world that, as Castro’s leading biographer Robert E. Quirk recognizes, enjoyed broad popular legitimacy.⁶ The second phase, from August to October 1960, was qualitatively different: a deliberate, politically motivated nationalization of U.S.-owned companies—oil refineries (Esso, Texaco, Shell), sugar mills, public utilities, and banks—executed in direct response to Washington’s threats to cut off oil supplies.⁷ Lillian Guerra of the University of Florida describes that Castro “deliberately provoked a confrontation with the U.S.” through these mass nationalizations, correctly capturing their dual character: economic policy and geopolitical provocation.⁸

The U.S. Foreign Claims Settlement Commission (FCSC) certified approximately 5,913 claims arising from these nationalizations, with an original assessed value of approximately $1.9 billion in 1960.⁹ Applying the 6% simple interest rate established by U.S. law, the State Department estimates the current value of these certified claims at just over $9 billion.

Why the $9 Billion Figure Is Inflated

That $9 billion figure would not survive scrutiny in a neutral arbitral forum.

The choice of 6% simple interest over sixty-five years is a political artifact, not a financial analysis. The resulting multiplier—approximately 4.9—does not derive from any actuarial analysis of what the claimants’ assets would have actually produced during the relevant period; it was administratively assigned by U.S. law in 1964 as a procedural convenience.¹⁰ An arbitral panel would apply the actual rate of return on comparable assets during the period, or the applicable commercial interest rate averaged over the relevant decades. Under either standard, the $9 billion figure is a ceiling, not a market valuation.

The underlying valuation of $1.9 billion was conducted under political conditions—during the Eisenhower administration, at the height of Cold War confrontation—that would costly produce neutral market valuations. Many of the certified claimants were companies whose Cuban operations were embedded in the pre-revolutionary economy of the Batista period, an era characterized by what historian Louis Pérez Jr. describes as a “profound structural dependency” in which U.S. corporate interests maintained preferential access to Cuban markets, resources, and political institutions.¹¹

A substantial portion of the certified claims, moreover, represents the interests of Cuban exiles who naturalized as U.S. citizens specifically to access the FCSC claims process, rather than U.S. nationals with prior arms-length commercial investments. This blurring of the line between the diplomatic protection of true foreign investors and the domestic politics of the Cuban-American community affects the legal character of the claims, though not necessarily their nominal validity.¹²

A figure in the range of $4 billion to $6 billion—reflecting reasonable market-rate returns on the original assets, net of the methodological inflations described—represents a more defensible estimate of the legitimate compensation owed by Cuba under international law. The $9 billion should be treated as an upper limit, not a starting point.

III. Cuba’s Counter-Claims: Substance and Assessment

The Architecture of the Embargo

The U.S. economic embargo against Cuba was not a proportionate diplomatic response to the nationalizations. It was a regime of comprehensive economic coercion whose stated objective was the overthrow of the Cuban government—a goal incompatible with the UN Charter’s prohibition on interference in the internal affairs of sovereign States.¹³

The construction of the embargo advanced in stages, each adding new dimensions of extraterritorial reach. President Eisenhower’s 1960 export ban was followed by the Kennedy administration’s formalization of a comprehensive trade embargo in 1962 (Proclamation 3447). The 1992 Cuban Democracy Act banned U.S. subsidiaries operating in third countries from trading with Cuba—an assertion of extraterritorial jurisdiction against which the European Union, Canada, and Mexico formally protested. The 1996 Helms-Burton Act went even further: Title III allowed U.S. nationals to sue foreign companies “trafficking” in property formerly owned by them in Cuba, effectively conscripting the judicial systems of third countries into the service of U.S. foreign policy.¹⁴ As Nigel White documents in the most systematic academic treatment of the embargo’s legality, The Cuban Embargo under International Law (Routledge, 2016), its extraterritorial dimensions constitute a violation of the customary international law prohibition on illicit economic coercion.¹⁵

The 2026 oil blockade represents a qualitative escalation beyond any element of the preceding six decades. The executive order of January 29, 2026, which labels Cuba “an unusual and extraordinary threat” and authorizes tariffs on any third country supplying oil to Cuba, effectively extended the jurisdiction of U.S. sanctions to the entire global oil market.¹⁶ The result was an effective cutoff of oil imports for an island nation of eleven million people whose electrical grid relies overwhelmingly on imported crude. March 2026 alone saw three nationwide grid collapses. By early May, eastern Cuba was cooking with firewood during blackouts lasting up to twenty-four hours, surgeries were postponed by the tens of thousands, and grid infrastructure was deteriorating faster than it could be repaired.¹⁷ The Office of the United Nations High Commissioner for Human Rights formally condemned the executive order as “a grave violation of international law” and raised the specter of collective punishment under international human rights law.¹⁸

Damage Estimates and Academic Corroboration

Cuba’s annual submissions to the UN regarding embargo losses have steadily risen: the 2021 estimate was approximately $144 billion; the 2025 estimate stands at approximately $170 billion.¹⁹ These figures encompass the direct costs of trade diversion, lost investment flows, elevated transaction costs imposed by over-compliance with OFAC regulations by financial institutions, and opportunity costs derived from the embargo’s effect on Cuba’s GDP growth trajectory.

The methodological legitimacy of these estimates is a matter of contention, and the dispute deserves to be taken seriously. The Cuban government has a structural incentive to attribute all of the island’s economic hardships to the embargo, when domestic policy failures—the inefficiencies of centralized planning, the displacement of private enterprise by the military conglomerate GAESA, restrictions on foreign direct investment, and distortions introduced by a dual-currency system—clearly bear independent causal responsibility.

The most rigorous attempt to isolate the causal effect of the embargo uses the synthetic control methodology. Bastos, González-Bockenbach, and co-authors constructed a statistical counterfactual Cuba and modeled what Cuba’s GDP per capita would have been in the absence of the revolution and the embargo. Their primary result—that the embargo explains “at most 8% of the gap between real and counterfactual GDP per capita”—has been sharply challenged in a 2026 critique published on arXiv, which argues that the methodology systematically understates the embargo’s effects by using input parameters that are, in the authors’ own words, “deliberately less realistic” and “generous to claims about embargo damages.”²⁰ This debate indicates that the 8% figure should be treated as a lower bound, not a firm estimate.

An econometric study published in the Journal of International Development in 2025 by Vidal offers more manageable evidence: analyzing Cuba’s total exports as a control variable across three decades of sanctions data, it demonstrates that sanctions “influence economic growth dynamics” to a statistically significant degree, while confirming that they are not the sole cause of Cuba’s economic difficulties.²¹ This is the most intellectually honest position available in the literature: the embargo causes substantial and measurable damage; however, it is not the unique cause of Cuba’s development failures.

Energy Infrastructure as a Concrete Measure

Abstract GDP comparisons are inherently open to question. The state of Cuba’s energy grid offers a more concrete and less politically manipulable measure of cumulative material damage.

Cuba’s electrical grid was built primarily with Soviet technology between the 1960s and 1980s. When Soviet subsidies collapsed after 1991, the Cuban government lacked the foreign exchange, access to international capital markets, and technology transfer agreements necessary to modernize the system. All three deficiencies are directly attributable, in significant measure, to the embargo: Cuba is excluded from the services of the World Bank, the Inter-American Development Bank, and the IMF; U.S. technology companies are barred from contracting with Cuba; and the threat of litigation under Title III of the Helms-Burton Act has deterred European and Canadian firms from investing in infrastructure.²² The March 2026 report by the Cuba Study Group, Without Power, There Is No Country, estimates the cost of grid modernization at $6.6 billion for generation alone, and between $8 billion and $10 billion if transmission and distribution infrastructure is included.²³ These are not speculative opportunity costs; they are engineering estimates of what it would cost to restore a grid that has been left to decay precisely because the embargo has denied Cuba the tools to maintain it.

IV. The Verdict of the International Community

There has never been a formal legal adjudication of Cuba’s claims regarding the embargo, because the United States has systematically refused to recognize the jurisdiction of any forum to conduct one. However, the political verdict of the international community has been rendered repeatedly, and its consistency justifies treating it as evidence of an emerging norm of customary international law.

The UN General Assembly has adopted resolutions calling for an end to the embargo for thirty-three consecutive years, most recently in Resolution 80/4 of 2025, passed by a vote of 165 to 7, with twelve abstentions.²⁴ The seven States voting alongside the United States represent an exceedingly narrow coalition. All major U.S. allies voted against the embargo. The European Union has maintained a formal diplomatic protest against the extraterritorial dimensions of the embargo since 1996.²⁵ Canada, Mexico, and virtually every government in Latin America have consistently voted against it.

Customary international law crystallizes from the combination of state practice and opinio juris—the belief that the practice in question is legally obligatory. A resolution adopted by 165 votes to 7 for thirty-three consecutive years, by States explicitly invoking legal rather than merely political objections, constitutes as robust an evidentiary record of an emerging custom as can be found in modern international relations. Alfred-Maurice de Zayas, former UN Independent Expert on the promotion of a democratic and equitable international order, has argued that the embargo “certainly” violates international law and has framed the General Assembly’s consistent condemnation as the clearest available expression of the international community’s legal judgment.²⁶

The 2026 OHCHR condemnation goes further, raising the specific charge of collective punishment—a concept derived from international humanitarian law that is increasingly applied in human rights contexts to measures intentionally targeting civilian populations as a means to coerce a government.²⁷ When the United States imposes tariffs on any country supplying oil to Cuba, denying eleven million civilians access to the fuel necessary for electricity, water, sanitation, the refrigeration of medicines, and basic food production, the threshold for collective punishment is met—at a minimum, and arguably exceeded.

V. The Proportionality Calculus

The law of countermeasures, as codified in Articles 49 to 54 of the ILC Articles on State Responsibility, allows an injured State to take measures that would otherwise be internationally wrongful, for the purpose of inducing the responsible State to comply with its obligations, provided that such measures are proportionate to the injury suffered, temporary, and reversible once compliance is achieved.²⁸ The United States’ position—never formally articulated as such, but implicit in its legal defense of the embargo—is that the comprehensive trade embargo is a legitimate countermeasure to Cuba’s failure to compensate expropriated U.S. nationals.

This argument fails on all three criteria.

Proportionality. Even accepting the U.S. figure of $9 billion as legitimate, and even accepting the lowest available academic estimate of embargo costs—around $30 billion to $40 billion, applying the most conservative interpretation of the Bastos et al. methodology to a broader time horizon—the costs of the embargo exceed the original injury by a factor of at least three to four. Under the most defensible mid-range estimates—a total counterfactual cost of the embargo between $50 billion and $100 billion—the ratio is between six and eleven. A countermeasure that inflicts six to eleven times the damage of the original wrong is not proportional; it is punitive.²⁹

Temporality. Sixty-five years is not a temporary measure. The Helms-Burton Act’s explicit conditioning of the embargo’s removal on a transition to “representative democracy” transforms the countermeasure into a permanent condition precedent: an indefinite coercive campaign aimed at regime change rather than compensation. The ILC Commentary on Article 49 is explicit: countermeasures must be “directed against the State which has committed the internationally wrongful act, in order to induce it to comply with its obligations.”³⁰ An embargo whose legal conditions for termination include the political transformation of the target government’s character has crossed from a countermeasure into an unlawful intervention.

Reversibility. The 2026 oil blockade has damaged Cuba’s energy infrastructure, accelerated the emigration of skilled workers—over half a million Cubans emigrated in 2022-2023 alone, in what demographers call the most severe population hemorrhage in the island’s modern history—and produced humanitarian conditions that cannot be undone simply by lifting sanctions. The damage is no longer fully reversible.

VI. The Balance Sheet: Six Conclusions

First. Cuba’s 1959-1960 nationalizations violated the emerging norm of customary international law requiring, at a minimum, “appropriate” compensation for expropriated foreign assets. Cuba never provided any compensation to certified U.S. claimants. This constitutes a breach of an international obligation, and reparation is owed.

Second. The legitimate quantum of the U.S. claims sits in the range of $4 billion to $6 billion, reflecting reasonable returns on the original asset values net of the methodological inflations in the 6% simple interest rate, inflated pre-revolutionary valuations, and the complication introduced by the inclusion of Cuban-American claimants whose status as “foreign nationals” is legally disputed.

Third. The comprehensive United States trade embargo, as maintained from 1960 to the present, violates the international law of countermeasures on grounds of disproportionality, lack of temporality, and—in its extraterritorial Helms-Burton dimensions—illicit economic coercion of third States. The 33 consecutive UN General Assembly resolutions (165 to 7 in the most recent vote) constitute robust evidence of a customary international law norm against this form of unilateral economic coercion.

Fourth. Cuba’s cognizable counter-claim under international law does not amount to the full $170 billion asserted in its annual UN submissions. However, based on the available econometric literature, the concrete engineering costs of embargo-induced infrastructure decay, the documented effects on trade diversion and exclusion from capital markets, and the partial corroboration provided by the UN’s own recognition of the figures, a conservative estimate of the internationally cognizable damage of the embargo—separating embargo effects from the effects of domestic economic mismanagement—sits in the range of $30 billion to $60 billion.

Fifth. The 2026 oil blockade constitutes a qualitative escalation beyond the preceding embargo regime. By extending the jurisdiction of U.S. sanctions to the global oil market and imposing tariffs on third countries supplying oil to Cuba, the January 29, 2026 executive order moves beyond the law of countermeasures into a realm more accurately characterized as collective economic warfare against a civilian population. The OHCHR’s characterization of the measure as a potential collective punishment is well-founded.

Sixth: The Net Equitable Balance. Setting the U.S. claim at $5 billion (the midpoint of the $4B-$6B range) and Cuba’s cognizable counter-claim at $45 billion (the midpoint of the $30B-$60B range), the net equitable obligation tilts in Cuba’s favor by approximately $40 billion, before any additional accounting for the irreversible humanitarian damages of the 2026 oil blockade.

VII. Reparation: Elements of a Settlement

A finding of net liability on the part of the United States does not automatically translate into a cash transfer. The structural reality of the U.S.-Cuba relationship—including Cuba’s own domestic economic dysfunctions, the distorting role of the military conglomerate GAESA in the Cuban economy, and the legitimate interests of U.S. claimants—demands a more nuanced framework for reparation.

Mutual Set-Off and Structured Settlement Fund. The U.S. nationalization claims and Cuba’s embargo counter-claims should be formally set off against each other, with the net balance owed to Cuba credited to a structured reconstruction fund administered by a neutral multilateral institution—the Inter-American Development Bank or a specially constituted trust. The fund would be earmarked for modernizing energy infrastructure, rebuilding the healthcare system, and supporting economic transition, serving not as a transfer to the Cuban State but as a targeted development mechanism.

Embargo Termination as Principal Reparation. Economist Ricardo Torres Pérez of American University, one of the most rigorous independent scholars of the Cuban economy, has argued that the value of lifting the embargo far exceeds any feasible cash settlement figure, because access to the U.S. market, capital, and technology would fundamentally restructure Cuba’s growth trajectory.³¹ The primary reparation is structural rather than monetary: the immediate and unconditional lifting of the comprehensive trade embargo, with the specific repeal of Title III of the Helms-Burton Act and the rescission of tariff threats against third countries.

The Vietnam Model, with Modifications. Torres has also pointed to the precedent of Vietnam: when normalization occurred between the U.S. and Vietnam in the 1990s, Vietnam quietly dropped its claims for war reparations in exchange for normalization, humanitarian aid, and economic integration. Cuba could reasonably be expected to follow a similar path, offering a negotiated settlement on nationalization claims—perhaps in the range of $2 billion to $3 billion, distributed over a decade—in exchange for full normalization.³² The critical modification is that no framework based on this model should condition normalization on a change in Cuba’s form of government, as currently required by the Helms-Burton Act. The right to compensation for expropriated assets is a matter of international economic law; democratic transition is a matter of political self-determination. Confounding the two transforms a legitimate legal claim into an instrument of regime change, which is precisely what Article 2(7) of the UN Charter prohibits.

The 2026 Oil Blockade: Immediate Reversal. The executive order of January 29, 2026, constitutes an ongoing internationally wrongful act that cannot be subsumed into a long-term settlement framework. It demands immediate cessation. The human costs currently being inflicted—postponed surgeries, destroyed food stocks, accelerated grid failure, mass emigration—are not recoverable through any future settlement. The proper reparation is cessation, not eventual compensation.

VIII. Conclusion

Cuba’s nationalizations were an internationally wrongful act. The United States’ response—a sixty-five-year comprehensive trade embargo that has caused damage vastly exceeding the original expropriations, extended by extraterritorial legislation against which other sovereign States have consistently protested, and now escalated to an oil blockade that UN human rights experts have characterized as collective punishment—is itself an internationally wrongful act of a considerably greater magnitude.

A just resolution would require the United States to recognize that international law’s constraint of proportionality applies to its own conduct as well as Cuba’s; that the certified claims of 5,913 U.S. nationals, however legitimate in principle, cannot serve as a blank check for six decades of economic warfare against eleven million people; and that the Helms-Burton Act’s conflation of property rights with regime change has done more to entrench the Cuban government’s political legitimacy at home—by providing it with a permanent external enemy—than to bring about the democratic transition it nominally pursues.

The primary reparation is not monetary. It is the one that, paradoxically, would most benefit both the Cuban people and the U.S. claimants themselves: lift the embargo, allow normalization, and let subsequent economic development create the conditions under which a negotiated settlement of property claims becomes politically and financially viable. No other path leads anywhere but deeper into the same sixty-five-year impasse.

Selected Bibliography

Primary Sources and Official Documents

• Executive Order 14,XXX, “Addressing Threats to the United States by the Government of Cuba,” January 29, 2026.
• Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (Helms-Burton Act), Pub. L. No. 104-114.
• International Law Commission, Articles on Responsibility of States for Internationally Wrongful Acts (2001).
• UN General Assembly Resolution 1803 (XVII), “Permanent Sovereignty over Natural Resources” (1962).
• UN General Assembly Resolution 80/4, “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba” (2025).
• Office of the United Nations High Commissioner for Human Rights, “UN Experts Condemn US Executive Order Imposing Fuel Blockade on Cuba,” press release, February 2026.
• U.S. Foreign Claims Settlement Commission, Cuban Claims Program (Title V, International Claims Settlement Act of 1949, as amended).

Books

• Crawford, James. The International Law Commission’s Articles on State Responsibility. Cambridge: Cambridge University Press, 2002.
• Pérez Jr., Louis A. Cuba and the United States: Ties of Singular Intimacy. 3rd ed. Athens: University of Georgia Press, 2003.
• Pérez-Stable, Marifeli. The Cuban Revolution: Origins, Course, and Legacy. 3rd ed. Oxford: Oxford University Press, 2012.
• Quirk, Robert E. Fidel Castro. New York: Norton, 1993.
• Roy, Joaquín. Cuba, the United States, and the Helms-Burton Doctrine: International Reactions. Gainesville: University Press of Florida, 2000.
• Schoultz, Lars. That Infernal Little Cuban Republic: The United States and the Cuban Revolution. Chapel Hill: University of North Carolina Press, 2009.
• White, Nigel D. The Cuban Embargo under International Law: El Bloqueo. London: Routledge, 2016.

Journal Articles and Working Papers

• “Identifying the Effect of the US Embargo on the Cuban Economy: A Comment on Bastos et al.” arXiv:2604.19627, April 21, 2026.
• Vidal, Pavel. “Impact of Sanctions Policy Shifts: A Case Study of the United States and Cuba, 1994–2020.” Journal of International Development 37 (2025): 540–553.

Reports and Policy Analyses

• Columbia Law School Center for Cuba Capacity Building Project (Cuban Horizon). “What Effects Do US Sanctions Have on the Cuban Economy?” 2024.
• Council on Foreign Relations. “Trump’s Maximum Pressure Campaign on Cuba, Explained.” March 31, 2026.
• Cuba Study Group. Without Power, There Is No Country. March 2026.
• “The United States-Cuba Oil Embargo and International Law.” Just Security, April 29, 2026.
• “Weaponizing Necessity: Fuel Blockade and the US Economic Warfare Against Cuba.” Verfassungsblog, April 7, 2026.
• Washington Office on Latin America (WOLA). “Understanding the Failure of the US Embargo on Cuba.” January 2025.

Journalism

• Rodriguez, Andrea, and Associated Press. “Cuba Begins to Restore Power After Third Nationwide Collapse.” Fortune, March 22, 2026.
• Saltman, Max, and Gonzalo Zegarra. “The $9 Billion Issue at the Heart of US-Cuba Tensions.” CNN, June 4, 2026.

Notes