The measure, against the Sherritt International Corporation, takes effect in 45 days. It follows the despatch this week of letters to "a handful" of senior executives and shareholders, informing them that they were "trafficking in confiscated US property in Cuba", in violation of the Helms-Burton or "Liberdad" bill signed by President Bill Clinton earlier this year.
The announcement marks the first sanctions against a foreign company for owning property taken from Americans after the 1959 Cuban revolution.
The announcement comes only six days before the 16 July deadline for Mr Clinton to decide whether to waive the most bitterly contested provision of the bill, the so-called Title III that allows American citizens or companies to sue foreigners using property taken from them by the Castro regime. The measure has been condemned by Canada and the European Union as illegal and blatant interference in the sovereignty of third countries. But its promoters are adamant.
To waive Title III, Jesse Helms, chairman of the Senate Foreign Relations Committee and one of the law's sponsors said, would be "appeasement at the worst possible time". He accused European critics of the measure of "painful hypocrisy"."After all, the United States has rescued every one of these countries from tyranny at one time or another," he said. "And this is the thanks we get."
Previously Mr Clinton has expressed deep unhappiness with Title III. But the key factor could be Florida's role as fourth richest source of electoral college votes for the presidency, and a place where the Cuban- American community, an impassioned supporter of Helms-Burton, is politically highly active. In the past the state has been solidly Republican. But recent Florida polls show Mr Clinton running neck-and-neck with, or even a fraction ahead of Bob Dole, his likely opponent in November.