For 8 days, starting on January 23, 2023, a trial will be held in London where the Republic of Cuba and the Banco Nacional de Cuba will have to respond to a lawsuit for non-payment of a sovereign debt before the British High Court of Justice .
On February 28, 1983, Credit Lyonnais and L’Istituto Bancario Italiano signed a debt agreement with Banco Nacional de Cuba for the amount of 25,500,000 German Marks and 5,750,000 German Marks respectively. A guarantee was given by the Banco Nacional de Cuba as an institution with the capacity to assume and respect sovereign debts of the Cuban State at that time. In 1983 the Banco Nacional de Cuba (founded in 1948) fulfilled the functions of the Central Bank that later in 1997 would be granted to the Banco Central de Cuba. In Decree Law 84 of 1984 it was reiterated (or provided) “that the BNC was authorized to act on behalf of Cuba in relation to sovereign debt obligations”
In 2009 these debts were acquired in the secondary debt market by a British investment fund called CRF I (Cuba Recovery Fund I Limited) who are now suing Cuba for non-payment of a debt of 72 million euros. It must be borne in mind that in this trial the CRF I is only claiming a small part of the 1.5 billion that it possesses of the Cuban sovereign debt.
In the official newspaper of the Communist Party of Cuba they published on January 13, 2023, that “Cuba recognizes its debts and has always maintained the interest of negotiating with its legitimate creditors”, however in the same article the superintendent of the Central Bank of Cuba affirms that “CRF is not a creditor of Banco Nacional de Cuba or of Cuba and never has been.”
It turns out that Cuba only recognizes as creditors of the debt the institutions with which the debt was originally signed (Credit Lyonnais and IBI). The Cuban regime says that said debt could not be assigned without its consent. Cuban officials prepared and signed official documents giving consent to authorize the sale of the debt to CFR I. The Cuban regime accuses its own officials of acting out of ignorance or negligence.
The Cuban regime qualifies the CRF I investment fund as a “vulture fund” and specifies that it is registered as an offshore commercial entity in Grand Cayman. It is curious that the Cuban regime does not say anything about the hundreds of Cuban state companies that are also registered as offshore commercial entities in different tax havens.
In decree law 172 of 1997 that gives rise to the Central Bank of Cuba, it says “Article 1- An institution is created under the name of Banco Central de Cuba as the governing, regulatory and supervisory authority of financial institutions and representative offices that reside in the country, including the offshore banking center, free zones and industrial parks. It is the Central Bank of the State, it has organic autonomy, independent legal personality, its own assets and covers its expenses with its income, not responding to the obligations of the State, its agencies, bodies, companies and other economic entities, except in the case that the expressly assume. »
In other words, according to Decree Law 172 of 1997, the Central Bank of Cuba governs the Banco Nacional de Cuba, but is not responsible for the obligations of the Cuban State or its commercial banks (including the Banco Nacional de Cuba). So who is going to answer for the sovereign debt that the CRF I investment fund is claiming?
This is the question that all foreign multinationals that invest in or do business with the Cuban regime should be asking themselves. This is another example that in Cuba there are no guarantees for investors to do business. Notice how with the creation of a simple decree law, the island’s regime is capable of creating new institutions, changing names and functions of existing state institutions with the aim of ignoring the creditors of their debts.
This case creates the necessary conditions for the international community to decide to implement multilateral sanctions so that the Cuban regime understands what happens when its obligations are not breached. CRF I could seize the properties of the Cuban regime abroad, such as the Havana International Bank based in London.
Alexander Gonzalez Leon 
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