Cuba’s in the Air: The Legal Challenges to Loaning Art from Cuba due to Judgments under the State Sponsored Terrorism Exception

By Mandy Estinville*

Cuba and the United States are closer now than they have been for 50 years. In 2015, the United States officially removed Cuba from its list of State Sponsors of Terrorism. Moreover, the Obama Administration amended the Office of Foreign Assets Control (OFAC) regulations to allow for greater freedom in travel and remittances, and to permit U.S. telecommunications, media, construction, and agricultural companies to establish a physical presence in Cuba. Most recently, the United States loosened certain sanctions on Cuba, including lifting the $100 limit on bringing Cuban rum and cigars into the United States. Although future of the normalization process between the two countries is uncertain under the Trump administration, a continuation of diplomatic relations with Cuba will promote cultural exchanges, such as selling and loaning art to museums and galleries. In fact, The Art Newspaper reports that the “market for Cuban art is booming; 20th-century Modernists such as Wifredo Lam, Amelia Pelaez, and Rene Portocarrero are particularly popular.” 

Despite improved relations between the two countries, there remain many unresolved issues that may affect Cuba’s willingness to export art to the U.S. In particular, Cuba owes about $7 billion dollars in property claims to American citizens and corporations whose property in Cuba was seized by the Cuban government during the Fidel Castro administration. In addition to those claims, Cuba is responsible for default judgments totaling over $3 billion dollars for purported acts of terrorism against U.S. citizens. Until paid, judgment holders of terrorist-related claims may attempt to seize any Cuban governmental owned art that enters the U.S. for a museum exhibition.

The State Sponsor Terrorism Exception

The Foreign Sovereign Immunities Act (“FSIA”) provides that  foreign states are immune from the jurisdiction of state and federal courts. However, Congress has created certain terrorism-related exceptions to the general immunity that foreign sovereigns enjoy within the U.S. Namely, the State Sponsor Terrorism exception (“SST”) allows courts to exercise jurisdiction over claims against foreign state sponsors of terrorism that cause personal injury or death to the U.S. citizens.

Cuba was originally placed on the State Sponsors of Terrorism list in 1982 for reportedly sponsoring communist groups in other countries. After Congress enacted the State Sponsor Terrorism exception to the FSIA, many plaintiffs filed human rights lawsuits against Cuba. Consequently, in many cases, courts found Cuba liable for acts of terrorism against U.S. citizens. These cases were ex parte proceedings, which resulted in default judgments since Cuba failed to appear. In Alejandre v. Republic of Cuba, the Florida Southern District court found jurisdiction under the SST exception and held Cuba liable for the Cuban Air Force’s shoot-down of two U.S. registered civilian planes in 1996, killing four people, three of them U.S. citizens. Each plaintiff, in that case, was awarded between $16 and $17.5 million dollars in compensatory damages as well as $137.7 million dollars in punitive damages.  The Florida Circuit court  also found jurisdiction under SST exception in Hausler v. Republic of Cuba and held Cuba liable for the execution of Bobby Fuller in 1960. Mr. Fuller’s family was awarded $65 million dollars in economic losses, $35 million dollars for non-economic compensatory damages, and—notably—$300 million in punitive damages. Lastly, the court in Villoldo v. Ruz found jurisdiction under the SST exception and held Cuba liable for its role in the imprisonment and torture of Gustavo Villoldo following the Cuban Revolution. As a result, the court awarded the plaintiffs a $2.79 billion dollars judgment against the Republic of Cuba and other Cuban parties.

Enforcing Judgments Against Cuba

Although the plaintiffs in Villoldo, Hausler and other cases won sizable judgments against Cuba, the Cuban government failed to make any payments. Challenges to obtaining payment for these judgments remain since Cuba has no attachable property in the United States. Consequently, the plaintiff’s only current viable option is to go after the estimated $243.2 million dollars worth of assets previously blocked by the Kennedy administration following the Cuban Missile Crisis. These assets were originally blocked, or “frozen,” in order to prevent Cuba from using the United States banking system to transfer money to other Latin countries for use by local communist groups.

Some plaintiffs have been successful in attaching their judgment to Cuban blocked assets under section 201(A) of Terrorism Risk Insurance Act. This Act allows for the liquidation of blocked or frozen assets of a foreign state designated as a state sponsor of terrorism, or its agency or instrumentality, to satisfy a judgment against the foreign state for a claim based on SST. In fact, plaintiffs in Weininger v. Castro collected over $90 million dollars on their terrorist-related judgments against Cuba by liquidating frozen bank accounts owned by Cuban telecommunications companies. Because Cuban assets in the United States  are sparse, plaintiffs are forced to be creative in enforcing their judgments. For instance, a plaintiff unsuccessfully sought to have a $63.6 million judgment paid out of BNP’s forfeiture of funds for its criminal conduct of processing and transferring billions of U.S. dollars to and from entities in Sudan, Iran, and Cuba.

Judgments against Cuba under the State Sponsored Terrorism Act may attach to Art loaned from Cuba

A potential unintended consequence of the normalization between Cuba and the U.S. is that it may provide plaintiffs with another viable option to collect on their judgments against Cuba. Section 1610 (a) of FSIA provides limited exceptions to immunity by allowing claimants to attach their judgments to foreign state’s property in the U.S. under certain circumstances.21 Under § 1610 (a) (7), claimants with judgments related to the State Sponsor Terrorism exception can attach that judgment to any Cuban governmental property. This attachment can occur regardless of whether the property is or was involved with the claim so long as the property is in the U.S. in connection to a commercial activity.

Typically, museums can apply to protect internationally loaned artworks from seizure under the Immunity from Seizure Act (“IFSA”). This protection is not automatic, once a museum submits its application to the State Department, the President or his designee must determine whether the object is of cultural significance and whether the temporary exhibition is in the national interest.  While IFSA may protect Cuban loaned art from attachment for judgments relating to SST claims, it is unclear if the State Department will grant this immunity for Cuban loaned art under the Trump administration since the future of the normalization process between the U.S. and Cuba is uncertain. Without an approved IFSA application, it is likely that the risk of possible attachment for judgments obtained against Cuba will curtail the chances of Cuba exporting its art to the U.S. for temporary exhibits. Relatedly, Cuba recently failed to loan art to the Bronx Museum for the “Wild Noise” exhibit despite a ruling from the Obama administration granting the pieces protection from seizure. Instead, the museum exhibited pieces from private collectors and galleries. Cuba’s reluctance to loan art to museums in the U.S. may be attributed to the diplomatic uncertainties under the Trump administration.

In December 2016, Congress enacted the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act ( the “Immunity Clarification Act””), which amended the Foreign Sovereign Immunity Act in response to the Malewicz v. City of Amsterdam finding that temporary art loans for exhibits are deemed a commercial activity. This new law clarifies that the act of exporting art that has been granted immunity from seizure under IFSA for a temporary exhibit in the U.S. is not considered a commercial activity and is, therefore, immune from U.S litigation. Despite the potential for this new amendment to increase international art exchanges, Cuba may still be vulnerable to expropriation claims if it exports art that was confiscated during Fidel Castro regime. One of the exceptions carved out in the Immunity Clarification Act disallows immunity for works “taken in connection with the acts of a foreign government as part of a systematic campaign of coercive confiscation or misappropriation of works from members of a targeted and vulnerable group.” Cuba may fall under that exception since it had systematically seized all Cuban property including property belonging to American individuals and corporations without compensation after the 1959 revolution led by Castro.

The ongoing disputes and outstanding claims and judgments between Cuba and the United States are not going to disappear. It has been reported that in addition to the  claims the U.S. has against Cuba, Cuba asserts that the United States also owes Cuba billions in reparations and for the economic damage caused by the embargo as well as damages resulting from events such as the Bay of Pigs invasion. Due to the precarious nature of Cuba’s relationship with the U.S, it is imperative that Cuba resolves its outstanding judgments in the U.S. before it risks loaning any of its art to a U.S museum.

From the Editors:

Cuba CollageOn March 22, 2017, Cardozo Law School’s Art Law Society and the Fashion, Arts, Media, and Entertainment Law Center (FAME) hosted a symposium, about Cuban art and the art market called “Not Their Art! Demystifying the Cuban Plunder and Nationalization of Art, Hoping for Restitution, and Predicting the Future of the Embargo and Its Sanctions.” Abigail McEwen, a specialist in Cuban and Porto Rican art of the twenty-century, moderated the event. There were three speakers at the event: Monica Dugot, the current International Director of Restitution at Christie’s, Carmen Melian, the former Director and Senior Specialist in Latin American Art at Sotheby’s New York for 15 years, and Carl Micarelli, a New York lawyer that advises clients on compliance with with regulations from the U.S. Department of Treasury’s Office of Foreign Assets Control.

Presentations at Cardozo centered around how artworks that were confiscated (or nationalized) by the Cuban government following the Cuban Revolution and the complicated relationship between Cuba and the United States have caused long-term problems still affecting the art market. For example, Dugot spoke about how Christie’s strives to make restitution of artwork for families that have had artwork confiscated an easy process for any valid claim that arises and is supported by sufficient documentation. Melian provided many examples of how artwork has come to market outside Cuba, including one involving a Cuban priest who sold artworks that were left with the church in an effort to provide funds for the parish, other examples centered around how many artist such as Wilfredo Lam who fled Cuba left many works behind, and how many forgeries permeate the art market as artworks are being copied from photographs with Cuban art in the background. Questions of authenticity and title have presented significant problems for provenance research and have complicated even the basic determination of whether artworks were privately or state-owned property. Micarelli informed the audience about the various U.S. laws and embargos  imposed vis-a-vis Cuba that affect the art market; he warned the audience about the uncertainty of U.S. policy in relation to Cuba.

The market for Cuban artwork is said to be growing, but the sentiment of the panel was to be cautious when a buyer is going to purchase artwork that is from Cuba because of so much uncertainty surrounds ownership of the artwork that comes from Cuba.

Select Sources and Suggested Reading

  1. Julie Hirshchfield Davis, U.S. Removes Cuba From State-Sponsored Terrorism List, New York Times (May 29, 2015) https://www.nytimes.com/2015/05/30/us/us-removes-cuba-from-state-terrorism-list.html.
  2. Frequently Asked Questions Related to Cuba https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_faqs_ne.w.pdf
  3. Julie Hirshchfield Davis, Obama, Cementing New Ties With Cuba, Lifts Limits on Cigars and Rum, New York Times (October 14, 2016)  http://www.nytimes.com/2016/10/15/world/americas/obama-cuba-trade-embargo.html?_r=0.
  4. David D’Arcy, Cuba refuses to return seized art despite thaw in relations with US, The Art Newspaper (Feb. 23, 2015) http://old.theartnewspaper.com/articles/Cuba-refuses-to-return-seized-art-despite-thaw-in-relations-with-US/36940
  5. Mari-Claudia Jimenez, “RESTITUTING LOOTED CUBAN ART,” ASCA Cuba in Transition (2009), available at http://www.ascecuba.org/c/wp-content/uploads/2014/09/v19-jimenez.pdf
  6. 28 U.S.C. § 1605
  7. 28 U.S.C. § 1605A
  8. CRS Report for Congress: Cuba and the State Sponsors of Terrorism List https://www.fas.org/sgp/crs/row/RL32251.pdf
  9. 996 F. Supp. 1239 (S.D. Fla. 1997).
  10. Hausler v. Republic of Cuba, No. 02-12475, 2007 WL 6870681 (Fla. Cir. Ct.
    Jan. 19, 2007).
  11. Villoldo v. Ruz, No. 08-14505 CA-25, 2009 WL 1832603, at *2 (Fla. Cir. Ct. May
    29, 2009).
  12. Can Creditors enforce Terrorism Judgment against Cuba? https://www.fas.org/sgp/crs/terror/creditors.pdf
  13. Terrorist Assets Report for Calendar Year 2015 https://www.treasury.gov/resource-center/sanctions/Programs/Documents/tar2015.pdf
  14. Cuban Assets in U.S Frozen by Treasury, Chicago Tribune (July 9, 1963) http://archives.chicagotribune.com/1963/07/09/page/1/article/cuban-assets-in-u-s-frozen-by-treasury
  15. Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, § 201, 116 Stat. 2322.
  16. 462 F. Supp.2d 457, 98-503 (S.D.N.Y. 2006)
  17. United States v. BNP Paribas S.A., 14 Cr. 460 (LGS) (S.D.N.Y. Apr. 30, 2015)
  18. 28 U.S.C. § 1610(a)
  19. Immunity from Seizure Act: 22 U.S.C § 2459 https://www.gpo.gov/fdsys/pkg/USCODE-2011-title22/html/USCODE-2011-title22-chap33-sec2459.htm
  20. Randy Kennedy, Bronx Museum Won’t Get Loan of Art From Cuba, New York Times (Jan. 23, 2017) https://www.nytimes.com/2017/01/23/arts/design/bronx-museum-of-the-arts-cuba-declines-to-send-art.html
  21. Malewicz v. City of Amsterdam, 517 F. Supp. 2d 322; H.R. 6477
  22. Foreign Cultural Exchange Jurisdictional Immunity Clarification Act: H.R. 6477 https://www.congress.gov/bill/114th-congress/house-bill/6477
  23.  Frances Robles, Cuba Seizures Now Present Opportunities, New York Times (Dec. 21, 2014) https://www.nytimes.com/2014/12/22/world/cuba-seizures-now-present-opportunities.html.
  24. Senior State Department Official on Cuba Claims Discussions https://2009-2017.state.gov/r/pa/prs/ps/2016/07/260666.htm

About the Author: Mandy Estinville is an attorney based in New York, NY. She can be reached at mandyestinville@gmail.com.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Any views or opinions made in the linked article are the authors alone. Readers are not meant to act or rely on the information in this article without attorney consultation.

 

The International Criminal Court Takes on Attacks on Cultural Heritage, But is it Enough?

By Timur Tusiray*

Screen Shot 2015-10-13 at 11.39.07 AM

ICC Press Release, Sept. 30, 2015.

On September 26, 2015 Nigerian authorities surrendered Ahmad Al Faqi Al Mahdi to the International Criminal Court (“ICC” or “the Court”) pursuant to an ICC arrest warrant issued September 15, 2015, charging him with war crimes in connection to the destruction of historic and religious monuments in Mali in 2012. This is the first major case brought by the Prosecutor of the ICC, Fatou Bensouda, since her appointment to this position in 2012, and the first case brought before the ICC to focus solely on the destruction of cultural heritage as a war crime. The warrant and subsequent arrest come as positive developments in the world of cultural heritage protections. However, this case is not likely to be the “gamechanger” some may expect it to be in the future prosecution of the world’s worst cultural property offenders.

Background

The warrant alleges that Al Faqi was a brigade commander in Ansar Dine, a fundamentalist Islamist militant group with ties to al-Qaeda. The warrant also alleges that over a 10-day period in 2012 Al Faqi committed the war crime of intentionally directing attacks against buildings dedicated to religious and historical monuments. Specifically, that he was involved in the destruction of the Sidi Yahia mosque and nine mausoleums in Timbuktu. This case is the first charge resulting from Bensouda’s three year investigation into the conflict in Mali, resulting from Mali’s self referral to the Court on July 13, 2012.

However, this is not the first prosecution of cultural destruction as an international crime. In most recent times, the International Criminal Tribunal of Yugoslavia (“ICTY”) has been one of the primary contemporary international courts to have addressed charges connected to the destruction of religious and historic structures. For example, the ICTY Tadiç case was the first that found the prohibition on attacking cultural property also applied to non-international armed conflicts, while cases like Kardić & Čerkez and Jokiç have further fleshed out individual liability for cultural and religious destruction.

Timing of the Arrest

There has already been criticism of Al Faqi’s arrest, claiming that it targets a mid-level perpetrator rather than the actual leaders of these different armed groups, and more specifically, that the arrest focuses on the crime of cultural heritage destruction over other more serious allegations of murder, torture, and rape occurring during the same period of time in Mali.

Harvard law professor Alex Whiting’s recent article on JustSecurity.org, makes a persuasive case as to the likely reasons for this specific arrest. First, the destruction of cultural heritage is not only a serious crime itself, but is oftentimes linked to some of the gravest crimes perpetrated during times of armed conflict. For example, as cited by Whiting, in the ICTY Krstić Case, the Trial Chamber discussed the connection between genocide and the destruction of culture stating, “The Trial Chamber however points out that where there is physical or biological destruction there are often simultaneous attacks on cultural and religious property and symbols of the targeted group as well, attacks which may legitimately be considered as evidence of an intent to physically destroy the group.” (Krstić, para. 580)

Second, this arrest may be indicative of the limitations inherent in the ICC. With the lack of funding to prosecute every alleged perpetrator, the Court must be strategic in its prosecutions. Furthermore, the jurisdictional limitations of the Court makes them reliant on the cooperation of other nations to deliver suspects for trial. In this case, after three years of investigations, this opportunity to prosecute Al Faqi may have been the best and strongest case presented to the ICC thus far, and one they could not justify refusing.

Finally, this arrest brings to the forefront of the public conscious the destruction of cultural and religious structures during armed conflict as an international crime. This is particularly relevant as the global community has become increasingly concerned and involved in preventing the loss of heritage over the past several decades. While this type of destruction is as old as humanity, over the past several years the call for action has reached a critical mass in lieu of the loss of heritage tied to the invasions of Afghanistan and Iraq, and with the current rise of ISIS and their highly publicized destruction of historic and religious sites and objects under their control.

Application to Contemporary Cultural Heritage Destruction

The case against Al Faqi likely is not the turning point against the contemporary loss of cultural heritage that some may expect it to be. The arrest warrant alleges only the war crime of attacks on cultural heritage, and does not touch upon certain crimes against humanity, such as persecution, which are oftentimes tied to heritage destruction. Furthermore, beyond the issue of the ICC’s limited funding and capacity to robustly prosecute the world’s international crimes, two immediate issues present themselves as roadblocks to the Court’s ability to tackle the loss of heritage as a war crime: (1) personal jurisdiction of the Court; and (2) the subject matter jurisdiction of the Court on war crimes, and its narrow definition of the crime of intentionally attacking protected structures (i.e. religious, historic, medical).

These difficulties can be better highlighted by using Syria as a case study. Over the last year alone ISIS has been on a relentless campaign to destroy historic and religious sites and artifacts across Syria and Iraq. In September of 2015 alone, they destroyed Roman temples in Palmyra, Syria, and they continue to be engaged in the highly industrial looting and international sale of artifacts connected to these sites. Furthermore, ISIS is not the only party active in this field, with Syrian government forces, other militia groups, as well as intervention by foreign militaries (Saudi Arabia, Turkey, the U.S. and Russia) adding to this destruction. Additionally, many of these actors in the Syrian conflict are not parties to the Rome Statute, and therefore are not subject to the jurisdiction of the Court. Among them include Syria, as well as Saudi Arabia, Turkey, the U.S. and Russia. The Rome Statute is the founding treaty of the ICC, which obligates States Parties’ to the treaty to cooperate with the Court’s activities. The ICC would, and indeed has had, significant issues with getting jurisdiction over perpetrators of international crimes in Syria. Even with personal jurisdiction, the Court may not be able to prosecute these perpetrators for war crimes based on the basic definitions of cultural crimes in the Court’s statute as discussed below.

ICC Personal Jurisdiction

Personal jurisdiction is the power of the Court to try specific individuals. Under the ICC Statute, there are three methods in which the ICC has jurisdiction over nationals of non-parties to the ICC Statute.

  1. The ICC may prosecute non-party nationals when the situation is referred to them by the UN Security Council.
  2. Non-party nationals may be prosecuted when they have committed crimes on the territory of a State Party, or of a non-State Party who has accepted the jurisdiction of the Court.
  3. The non-State Party has explicitly consented to the jurisdiction of the Court.

Last year, the UN Security Council already tried to pass a resolution to refer Syria to the ICC, but was vetoed by both Russia and China. With Russia’s recent interventions in Syria and their UN Security Council veto power, UN referral seems less and less likely. Furthermore, the foreign countries most involved in the conflict are also not parties to the Rome Statute, and have not submitted to the jurisdiction of the Court. At this point in time, the ICC could presumably prosecute nationals of State Parties fighting for the various forces on the ground in Syria (e.g. French or British ISIS fighters), but this would likely not encompass the worst of the perpetrators of these alleged international crimes. Finally, the Assad regime will never explicitly consent to the personal jurisdiction of the Court, as it would expose the leaders in the regime to liability for their well-documented crimes committed during this conflict.

ICC Subject Matter Jurisdiction on Cultural Heritage War Crimes

Even with personal jurisdiction, the subject matter jurisdiction of the ICC on war crimes likely limits the Court’s ability to prosecute the equally serious looting of these sites. Subject matter jurisdiction limits the Court’s ability to hear cases to specific international crimes. Details on the specific crimes that the ICC has the power to hear and try can be found in the Rome Statute.

Al Faqi is only being charged for the war crime offence of attacking protected sites during armed conflict. The specific article detailing this offence incorporates very generic rules, the language of which reflects the Hague Regulations of 1907, which lists specific protected properties. The article reads as:

Intentionally directing attacks against buildings dedicated to religion, education, art, science or charitable purposes, historic monuments, hospitals and places where the sick and wounded are collected, provided they are not military objectives.

This crime would likely not apply to the widespread looting and sale of “moveable” artifacts, of which has been extremely well recorded as perpetrated by ISIS, Assad’s forces, and other rebel groups in Syria and elsewhere, because it only applies to “immovable” protected structures.

However, the Rome Statute’s war crimes section does allow for the crime of seizure or appropriation of property under Article 8(2)(a)(iv) and 8(2)(b)(xiii), as well as the offence of pillaging (Article 8(2)(b)(xvi) and 8(2)(e)(v)). That being said, only the crime of pillage could likely be used to charge acts against “moveable” property, because again the first two provisions on seizure are usually interpreted as referring to “immoveable” property.

Pillage is considered to have occurred when public or private property has been unlawfully stolen or acquired. In the context of ISIS and various rebel groups, this war crime would be the best approach to prosecute their looting and sale of objects. However, prosecuting equally as culpable members of Assad’s regime may prove more difficult, as prosecutors would have to prove that the regime unlawfully stole property owned by the regime itself. The complexities abound.

As a final note, this section only considers the complexities of charging war crimes against these alleged perpetrators. The ICC also has the option of trying the destruction and sale of cultural heritage as part of a crime against humanity, such as persecution, or even use it to prove the crime of genocide. Even so, the issues surrounding personal jurisdiction would still apply.

Conclusion

While the arrest and prosecution of Ahmad Al Faqi Al Mahdi is welcome news for those working to protect our global cultural heritage, the ICC is currently limited as a tool to prosecute some of the worst perpetrators of cultural heritage destruction in our world today. However, the Al Faqi case does allow the Court to interpret their jurisdictional mandates specifically on this topic, but only time will tell as to its true future impact.

Select Sources:

*About the Author: Timur Tusiray is a recent graduate of USC Gould School of Law, specializing in art and cultural heritage laws, human rights, and IP laws. He is currently an Orfalea-Brittingham Fellow at the Clinton Foundation. He may be reached at timurtusiray@gmail.com, or on twitter @TimurTusiray

Disclaimer: This article is being produced in the author’s individual capacity and does not reflect the views of his employer. This article is intended as general information, not legal advice, and is no substitute for seeking representation.

WYWH: Review of “The New Cuba: What You Need to Know About the Cuban Art Market”

American and Cuban Presidents Obama and Castro shaking hands in Panama in early April 2015. (Source)

by Dennis C. Abrams

On the evening of April 12, less than a week after Presidents Barack Obama and Raúl Castro historically shook hands at the seventh Summit of the Americas, Herrick, Feinstein LLP and Akerman LLP co-sponsored a discussion entitled “The New Cuba: What You Need to Know About the Cuban Art Market” at Herrick’s offices in Midtown Manhattan. The seminar, featuring several distinguished speakers, explored the finer points and risks of buying, selling and collecting Cuban art in light of the President Obama’s recent decision to normalize diplomatic relations with Cuba.

The two panels explored the following discussion topics:

  • How recent U.S. regulatory changes will affect Americans’ ability to buy Cuban artwork;
  • Techniques for U.S. collectors to legally pay for new acquisitions and import their purchases into the United States;
  • The history of art nationalization in Cuba and how to avoid legal exposure by engaging in provenance- related due diligence.

Panel I

Introduced by Howard Spiegler, Partner at Herrick, the speakers on this first panel were Carlos Méndez-Peñate, a Partner and Co-Chair of the Latin America & the Caribbean Practice at Akerman LLP, Augusto E. Maxwell, a Partner and Chair of Akerman’s Cuba Practice and Alberto Magnan, the Cuban-born Gallery Principal at Magnan Metz Gallery.

Mr. Méndez-Peñate began by addressing the current state of the law regarding relations between the United States and Cuba, focusing on the Cuban Assets Control Regulations (CACR) which have been responsible for the American embargo on Cuba since being enacted by Congress in 1963. The CACR (which Lesley Sotolongo previously discussed for Center for Art Law) prohibit most forms of trade with Cuba but § 515.206(a) of the regulations explicitly exempts several different types of transactions from the ban including, most pertinently to this discussion, information and informational materials. The definition of “information and informational materials” specifically includes “artwork” and names several different types of media including films, posters and CD ROMs. However, as Méndez-Peñate pointed out, the item that is the subject of the transaction must be bought as is – meaning that, while Americans may buy completed artworks, they cannot commission a Cuban artist to create a new artwork nor hire a Cuban artist to alter or put the finishing touches on a preexisting project. Méndez-Peñate also mentioned that, because the embargo is embodied in statutory law, it will ultimately require an act of Congress to repeal and, until that time, any progress perceived to have been made by President Obama can easily be undone by the successive administration in 2017.

Mr. Maxwell then spoke about the specifics of traveling to and buying art in Cuba. He explained that the Office of Foreign Assets Control had recently relaxed its rules by issuing general licenses allowing travel to and transactions in Cuba for non-specific purposes and lifting the per diem limitation on expenses (which previously limited spending to $188 per day in Havana). Maxwell also discussed a roadblock for visitors to Cuba which may soon be resolved – because of Cuba’s status on the State Department’s list of State Sponsors of Terrorism, many banks refuse to do business in or with the island nation and, as a result, Americans’ credit and debit cards have long been nonoperational within its borders. Given President Obama’s recent endorsement of removing Cuba from that list, however, Americans may be able to buy art in Cuba using their credit cards before long. Finally, keeping in mind the sociopolitical sensitivity underscoring all interactions with Cuba, Maxwell outlined three things for buyers to beware of when shopping the Cuban art market: (1) artwork previously confiscated by the Cuban government, as rightful ownership and legal title may be subject to challenge, (2) purchasing works created by artists who have close ties to the Cuban government, as patronizing such artists may cause reputational damage to the buyer in anti-Castro circles, and (3) the danger of buying fakes in light of widespread forgeries in Cuba.

Lastly, Mr. Magnan discussed the history of art in Cuba since the 1980s and the current state of the nation’s art community. He lamented the fate of Cuba’s national art museum, the Museo Nacional de Bellas Artes de La Habana, which has suffered under the embargo as it would surely benefit from using American building materials for structural maintenance. At present, the museum relies largely on mid-20th century American air conditioners to control its climate and preserve its artworks. Magnan has contributed to the Cuban art community by exhibiting their work at his Manhattan gallery and curating shows in Cuba.

Shortly after the end of the Cuban Revolution, rebel Camilo Cienfuegos stands on a portrait of Marta Fernández de Batista which has been torn from its frame in the Presidential Palace. (Source)

Panel II          

The second panel addressed the subject of the nationalization of art by the Cuban government and the resulting legal risks in transacting in Cuban art. This discussion was covered by Mari-Claudi Jiménez, a partner in Herrick, Feinstein’s Art Law practice group, Monica Dugot, Senior Vice President and International Director of Restitution at Christie’s International and Lucian Simmons, a Senior Vice President at Sotheby’s New York and head of their Worldwide Restitution team.

The Cuban Revolution was fought from 1953 to 1959 and resulted in the establishment of Fidel Castro’s communist government which remains in power today. After Castro assumed office, art was among the many valuable resources confiscated from private citizens and redistributed. Most of that immeasurable hoard of art wound up in museums, in the homes of government officials or sold abroad at auctions. However, while the identification and restitution of art confiscated under similar circumstances in other countries has long been a major cause for concern in the art market, the status of art looted during the Cuban Revolution has become a topic of interest only recently according to Ms. Jiménez, who recently spoke on this topic at the annual American Society of International Law Annual Meeting in Washington, D.C. According to her, part of the reason that awareness for this issue has lagged so far behind is due to the insular nature of the nation and that Cuban families often lack the resources to identify, locate and secure the return of their missing heirlooms. While it would be reasonable to assume that a framework for restitution could be instituted similar to the one which has facilitated the return of so many Nazi-looted artworks, there is an operative difference between the two regimes, which makes such a proposition inapposite. The key difference is that the United Nations’ London Declaration of 1943 invalidated all transfers of property made by the Nazi regime, thereby giving rightful title of any artwork taken by the Nazis to the owner from whom it was taken. Conversely, the nationalization of previously privately owned artwork by the Cuban government is given full legal effect, leaving original owners without any clear legal recourse. Therefore, for most Cuban victims of art confiscation, restitution is not so much a goal as it is a hope.

According to Ms. Dugot and Mr. Simmons, neither Christie’s nor Sotheby’s has yet had occasion to return much, if any, artwork looted or nationalized during or after the Cuban Revolution. However, both institutions do have agreements with specific families who had significant collections confiscated to be on the lookout for and notify them of any works that may have previously belonged to their families. Dugot also mentioned that, in addition to returning Nazi-looted artwork, Christie’s has been able to return pieces nationalized by the Soviet, Cambodian and Egyptian governments. Given that due diligence can often only be as thorough as the resources consulted, Dugot implored victims to register their missing art in stolen art databases whenever possible.

“The New Cuba” left attendees with mixed feelings as to the future of the Cuban art market. While America’s relaxation of its sanctions against Cuba seems likely to facilitate relatively free trade between Cuban artists and American buyers, there is no guarantee that the market will not be replete with artwork taken from their original owners by the Castro regime. Although Cuban nationalization of property is given legal effect in the U.S. and Cuba and the original owner of such a work therefore may not have superior title to the work, the stigma of forceful takings runs counter to the values and standards of the present day art community. This creates a moral dilemma for subsequent purchasers of the work. And, as Lucian Simmons said, good “moral title” is often just as important as valid legal title.

About the Author: Dennis C. Abrams, Legal Intern with Center for Art Law, is a 3rd year student at Benjamin N. Cardozo School of Law, with an interest in intellectual property, media, art, entertainment, and sports law. He can be reached by e-mail.

Russia is no Congo: Chabad Decisions and Moscow Convictions

Moscow Does not Believe in Tears, the movie, came out in 1980. According to Bulgakov, when Voland* visited Moscow in the 1930s, Moscow did not believe in God. Well, Moscow’s convictions regarding cultural artifacts are in the affirmative: when asked to return anything, it either ignores the request or gets even.

Following decades of efforts to recover books and manuscripts (the Collection) left in Europe before and after the Russian Revolution, in 2004, Chabad, a religious organization incorporated in New York as of 1940, brought legal action against the Russian Federation, the Russian Ministry of Culture and Mass Communication, the Russian State Library, and the Russian State Military Archive in U.S. Court. Initially Defendants in Agudas Chasidei Chabad of United States v. Russian Fed’n challenged jurisdictional grounds of the suit. However, in 2009, when the Court held that it had jurisdiction to review Chabad’s claim under one of the exceptions to the Foreign Sovereign Immunities Act, Defendants filed a Statement with Respect to Further Participation and informed the Court that they “decline[d] to participate further in this litigation” because they “believe[d] this Court has no authority to enter Orders with respect to the property owned by the Russian Federation and in its possession, and the Russian Federation will not consider any such Orders to be binding on it.” Opinions may vary on whether this decision was a dreadful mistake on the part of the Defendants’ counsel, Squire, Sanders & Dempsey, LLP (that incidentally filed a Motion to Withdraw Appearance as Counsel of Record) or whether it was proper as a cost cutting measure and a logical thing in light of the predictable outcome.

What followed left many incredulous…

First, in 2010, Chief United States District Judge Royce C. Lambeth entered a default judgement in favor of Chabad in Agudas Chasidei Chabad of United States v. Russian Fed’n, 729 F. Supp. 2d 141, 145 (D.D.C. 2010) ordering return of the Collection. The Court found that 1) Plaintiff sufficiently established its claim to the Library and Archive that “defendants unlawfully possess and refuse to relinquish;” 2) Defendants “expropriated both the Archive and Library from plaintiff in violation of international law;” 3) Plaintiff demonstrated that “the property at issue is owned or operated by agencies or instrumentalities of a foreign state, namely the Russian Federation;” and 4) Defendants were “engaged in a commercial activity in the United States.” The 2010 decision fell on deaf ears and not a single item from the Chabad Collection was sent from Moscow to New York.

Then, on July 26, 2011, the Court granted Chabad’s motion seeking permission to pursue execution of the 2010 judgment. In relevant parts, the conclusion reads “The Court is sympathetic to plaintiff, aware of the long road it has traveled and all-too familiar with the difficult trail that lies ahead in attempting to enforce a FSIA judgment. … … that the ability to attach and execute property not otherwise subject to immunity under FSIA or any other federal statute may aid plaintiff in its pursuit of the return of the lost Library and Archive containing the cultural heritage and history of the Chasidim movement, and that the show cause order may prompt Russia to rethink its decision to retain items of immense historical and religious significance, seized during times of great crisis and in violation of international law, in warehouses rather than return them to their rightful owners.” Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 798 F. Supp. 2d 260, 274 (D.D.C. 2011). Again, Defendants ignored the holding and stopped loaning art works to the American cultural institutions.

Now, on January 16, 2013, Judge Lambeth imposed civil contempt sanctions against Defendants in the amount of $50,000/day until they comply with the 2010 and 2011 rulings and return the contested Collection to the Chabad corporation. The 2013 Lambeth decision finds that 1) The US Federal Court has authority to issue Sanctions against a foreign sovereign in the Foreign Sovereign Immunities Act (FSIA) context; 2) Sanctions are appropriate because Defendants have “steadily resisted all legal and diplomatic efforts to compel them to return the collection for at least two decades”; and 3) the size of the award is calibrated to “coerce compliance” and fitting Defendant’s size as one of the worlds’ largest economies.

It is worth noting that the United States government did submit a statement to the Court urging it “not to enter sanctions” (U.S. Statement, EDF no. 111) on legal and pragmatic grounds. After all, current United States -Russian relations are complicated enough (see Magnitsky Rule of Lawmoratorium on art loansObama/Putin relations; Registration of Foreign Agents in Russia; anti-Magnitsky Laws). Notwithstanding the United States government submission, the Court held that it may and ought to enter sanctions against this foreign government and its agencies. As precedent, the Court cited the 2011 decision in FG Hemisphere Associates, LLC v. Democratic Republic of Congo, 394 U.S. App. D.C. 439 (D.C. Cir. 2011aff’ing 637 F. 3d 373 (D.D.C. 2009), which affirmed lower court’s issuance of sanctions against a foreign state for refusing to comply with discovery orders. There the Court held that the FSIA “did not abrogate a court’s inherent power to impose contempt sanctions on a foreign sovereign.” It is unclear whether the Republic of Congo ever paid the amount assessed against it — $5,000 every week, doubling every four weeks until reaching a maximum of $80,000 per week.

What is crystal clear, even to the Court, is the difference between “entering” and “enforcing”sanctions. Enforcing of sanctions, monetary or otherwise is “carefully restricted by the FSIA.” Chabad, 2013 U.S. Dist. LEXIS 6244, 10. 

What’s next? At the time when the default judgment came down in 2010, Russia imposed a ban on art loans despite the fact that it had all assurances that its cultural treasures would be immune from attachment if on loan in the United States. “… with respect to any art or artifacts belonging to Russia and currently in the United States, the Court reaffirms what should have been obvious beforehand: absolutely nothing in today’s order has the effect of removing or altering any protection for cultural objects subject to immunity under 22 U.S.C. § 2459. The Court hopes that today’s opinion will help facilitate a return to business as usual in the sharing of artifacts and history between nations that is crucial to the promotion of cross-cultural understanding in a global world…” See Agudas Chasidei Chabad of U.S. v. Russian Fed’n, 798 F. Supp. 2d 260, 274 (D.D.C. 2011). One may wonder what constitutes “business as usual” with Russia. In any case, further enraged by the sanctions ordered, Moscow is threatening a lawsuit of its own, in a Moscow court, against none other than the United States Library of Congress for unreturned rare books loaned to the United States in 1994 from the Chabad Collection…

It has been reported that the Russian Foreign Ministry has “‘recommended’ that the Ministry for Culture and the Russian State Library prepare a counter suit against the US Library of Congress, which assisted Chabad-Lubavitch in appropriating some books from the Schneerson Library in 1990s. The Russian State Library’s actions are expected to be symmetrical to the actions of the American side….  If it finds the Library of Congress guilty of purloining the books and the financial claim is not settled, that will be a basis for Russia to demand the seizure of the non-immune American property abroad.” It appears that there were books given to the Library of Congress in 1994 and instead of returning the loan, the books were handed over to the Chabad community…

So what should we expect from Russia now? With Valentine’s day coming up? I don’t think its LOVE.

* Character in Master and Margaret, by Mikhail Bulgakov.

Sources: Case Law; RT.com; Newsru.com