CL Colgate Palmolive Co

By Felicia Schwartz 

U.S. and Cuban officials meet Tuesday in Havana for their first round of talks on billions of dollars in competing financial claims, one of the most contentious challenges in the process of normalizing relations.

The negotiations are part of a broader agenda of discussions aimed at normalizing relations between the two countries after 50 years of enmity, but claims talks are considered to be among the most complicated.

There are 5,913 U.S. individuals and companies with claims that have been certified by U.S. officials against the Cuban government for property confiscated after the 1959 revolution. The claims, originally valued at $1.9 billion, now are estimated to be worth $7 to $8 billion, with interest.

Corporate claims make up most of that money and include several Fortune 500 companies, including Coca-Cola Co., Exxon Mobil Corp., Starwood Hotels & Resorts Worldwide Inc. and Colgate-Palmolive Co.

Office Depot Inc. currently holds the largest claim, which is now valued at over $1 billion. That claim, originally made by Cuban Electric Co., has changed hands several times over the years through mergers and acquisitions. Many of the companies nationalized by the Castro regime no longer exist and claims have been passed down. Individuals also have pressed claims.

Cuba says it has about $121 billion in counterclaims for damages stemming from the U.S. economic embargo.

The U.S. delegation to the talks is being led by the State Department's acting legal adviser, Mary McLeod. The two sides will discuss "a wide variety of claims," including those certified by the U.S. Foreign Claims Settlement Commission, government claims and claims related to unsatisfied U.S. court judgments against Cuba, the State Department said.

"The meeting is the first step in what we expect to be a long and complex process, but the United States views the resolution of outstanding claims as a top priority for normalization," State Department spokesman John Kirby said.

The talks are likely last beyond President Barack Obama's presidency, but U.S. officials and independent experts consider that start of negotiations to be a significant step.

The U.S. and Cuba also have begun talks this year on a number of other issues, including civil aviation, direct mail servic

e, counternarcotics efforts, environmental cooperation, law enforcement and telecommunications. The two sides also have continued pre-existing talks that have been under way on migration issues.

The U.S. and Cuba signed an agreement last month to cooperate on environmental issues. The pact covers coastal and marine protection, climate change, disaster risk reduction and marine pollution.

U.S. and Cuban negotiators are close to reaching agreements on civil aviation and direct mail service, with both agreements expected to come late this year or early next year, Cuban and U.S. officials said. Negotiators are expected to meet next week for a final round of talks on civil aviation, with a goal of announcing an agreement to resume direct commercial flights between the U.S. and Cuba early next year.

Mr. Obama and Cuban President Raúl Castro announced last December that the U.S. and Cuba would begin to normalize relations after decades of frozen ties.

Only Congress can fully lift the trade and travel embargoes, but Mr. Obama took several steps on his own to loosen regulations. The U.S. removed Cuba from its state sponsor of terrorism list earlier this year and Washington and Havana restored diplomatic relations and reopened embassies in both capitals this summer.

Write to Felicia Schwartz at Felicia.Schwartz@wsj.com

(END) Dow Jones Newswires

December 08, 2015 12:58 ET (17:58 GMT)

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