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Bacardi challenges US government as battle for Havana Club escalates

Published:  16 February, 2016

Bacardi has demanded that the US government reverse its January 11 decision to grant the Havana Club trademark to Pernod Ricard.

Bacardi has written to the US Office of Foreign Assets Control (OFAC) detailing the history of the dispute and the OFAC's previous rulings in the matter, most recently in 2006, which recognised Bacardi's ownership of the mark.

Successive US administrations as well as a number of US courts have consistently sided with Bacardi in a dispute which stretches back to the Cuban revolution.

The present Cuban government confiscated and nationalised the Havana Club operation without compensation in 1960 after it seized power.

Havana Club was created by the Arechabala family at its Cardenas distillery in Cuba in 1934.

Pernod Ricard signed a joint venture with the Cuban government in 1993 to market the brand internationally, claiming that the Arechabala famlly let the trademark lapse in 1973.

However, Bacardi argues that it acquired both the rights to the brand and its recipe from the family, and has manufactured and distributed rum under the Havana Club trademark since 1994.

The case appeared settled in Bacardi's favour, but the prospect of the US embargo on trade with Cuba being further loosened or lifted entirely led Pernod Ricard to re-apply for a license this year.

Eduardo Sánchez, senior vice president and general counsel at Bacardi, said: "OFAC's decision to grant the license to the Cuban government reverses it prior decision in 2006 to deny that very same license and contradicts its own defense of that decision in various US courts.

"OFAC has acted in violation of well-settled US law and Congressional intent in a covert action that is unjustified in law. We request that OFAC revoke [the licence] retroactively to prevent Cuba - and its business partner Pernod Ricard - from their continued trafficking in illegally confiscated property.

"OFAC's decision to authorize Cuba's renewal of the stolen Havana Club mark encourages exactly the type of joint venture that Congress plainly intended to discourage and makes it easier for Cuba and its business partner to facilitate traffic in stolen property for prohibited purpose.

"OFAC should comply with the letter and spirit of U.S. law and revoke Cuba's license."

As part of its campaign against the US government's decision, Bacardi filed a Freedom of Information Act request with the US Department of Treasury earlier this month.

It has asked for all related documents and communications concerning the decision-making process from various branches of the US government, including the White House and the National Security Council.