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The United States in July excused the Italian telecommunications company STET International from penalties under the Helms-Burton Law after it struck a deal with the ITT Corporation over telephone holdings in Cuba.
The U.S. State Department said STET paid ITT an undisclosed sum for a free hand in the Cuban telephone system, which ITT built and operated until it was nationalised by the Revolution
Department spokesman Nicholas Burns said the deal, valid for ten years, exonerated the Italian company from liability under Helms-Burton over its holding in Cuban telecommunications company ETECSA.
"The department has, therefore, terminated without adverse action the investigation which had been ongoing related to STET International's and its affiliates' use of ITT's confiscated property in Cuba," Burns said.
Burns said the settlement "sends a clear signal to foreign companies in Cuba using confiscated U.S. property that they will either have to reach agreement with U.S. national claimants ... or face visa denial/exclusion sanctions."
The agreement was welcomed by Republican Sen. Jesse Helms of North Carolina, chairman of the Senate Foreign Relations Committee and one of the sponsors of the law.
"This deal should serve as a warning to anyone considering investing in Cuba: the price of doing business in (Cuban President Fidel) Castro's tropical gulag has just gone up," he said in a statement.
The Cuban American National Foundation, an influential emigre group, called the deal a victory but said it still opposed STET's presence in Cuba "subsidizing tyranny and profiting from the misery of the Cuban people."
Ironically, the deal means that it is now possible for US companies to get around the US blockade if they were formerly owners of property in Cuba.
The United States so far has only sanctioned two foreign companies under the so-called Title Four of Helms-Burton, the Canadian mining group Sherritt International Corp and Mexican telecommunications firm Grupo Domos.
Grupo Domos invested along with STET in ETECSA, holding a larger share, but the Mexicans pulled out earlier this year, leading the Italian firm to raise its stake.