Cuban pull-out increases pressure on UK bosses

The prospect of leading British businessmen being barred from entering the US grew yesterday as the first big company began pulling out of Cuba in response to a controversial new Washington law against investment in the communist-led Caribbean island.

Under the so-called Helms-Burton law, companies doing business in Cuba, including British firms such as tobacco giant BAT and sugar trader ED and F Man, could later be ordered to give up their holdings in Cuba or face charges in the US. Company directors could also be refused US visas, even for holidays.

US and Mexican officials said Cemex, one of the world's largest cement producers, had terminated a contract under which it managed a plant with the Cuban authorities in the town of Mariel. The company had begun pulling its staff out of Cuba, the officials said.

Cemex's billionaire chief executive Lorenzo Zambrano was reported last week to be on a US "black list" of those perceived as the biggest violators of the new legislation.

US officials said Mr Zambrano was likely to be among those receiving a warning letter from the US State Department, saying he might be barred from the US for "trafficking" with Cuba.

By "trafficking," the law means engaging in joint ventures with Fidel Castro's communist regime on property confiscated by the Cuban president after his 1959 revolution. The Mariel plant managed by Cemex, for example, is claimed by an American firm, Lone Star Industries.

The law, signed by President Bill Clinton in February after Cuba shot down two American civilian light aircraft in the Florida Straits, has opened a Pandora's Box of possible future litigation in the US over who owns what in Cuba.

Foreign firms operating in Cuba can be sued in the US for using property confiscated by Mr Castro's regime - which includes virtually every farm and factory.

The governments of the countries with most investments on the island - mainly Mexico, Canada and the European Union - have strongly protested against the law as contrary to free trade agreements.

US officials said the first warning letters to the "worst violators" were being sent out yesterday to three large investors - Mexican telephone company Grupo Domos, Canadian mining company Sherritt International Corporation and Italian phone company Stet.

The officials said Stet's investment involved "trafficking" in property owned before the revolution by US electronics conglomerate ITT.