UPDATE 2-U.S. allows lawsuits against Cuban entities but shields foreign firms for now

The Trump administration said on Monday it would allow lawsuits by U.S. citizens against dozens of Cuban companies and other entities on Washington's blacklist but will maintain, for now, a ban against suing foreign firms doing business on the communist-ruled island. The move marked an intensification of U.S. pressure on Cuba and also appeared aimed at punishing Havana over its support for Venezuela’s socialist president, Nicolas Maduro. But it stopped short of the more severe step of targeting foreign investments in Cuba - though it left the door open to doing so in the future.

Lawsuits in U.S. courts against potentially dozens of Cuban entities linked to military and intelligence services will be permitted beginning on March 19. But Washington will keep in place until at least April 17 a prohibition against legal action against foreign firms using property confiscated in the 1960s by the Cuban government, the State Department said. Every U.S. president has suspended on a rotating six-month basis a section of the 1996 Helms-Burton Act that would allow such lawsuits due to opposition from the international community and fears it could create chaos in the U.S. court system with a flood of lawsuits.

But President Donald Trump's administration first announced in January a 45-day review of the matter and has now added another 30 days for further study. A complete lifting of the ban could let billions of dollars in legal claims move forward in U.S. courts and likely antagonize Canada and U.S. European partners, whose companies have significant business holdings in Cuba.

It could also affect some U.S. companies that have begun investing in the island since former President Barack Obama's opening to the old Cold War foe. Allowing the provision to go into effect even on a limited basis could undermine efforts by Cuban President Miguel Diaz-Canel to foster foreign investment and promote tourism to bolster the Caribbean island’s fragile economy.

A senior State Department official said the Trump administration had consulted with Canada and European partners in deliberations on how to proceed. Under Monday's announcement, lawsuits will not be authorized against foreign partners in joint ventures with the Cuban government, the official told reporters. (Reporting By Matt Spetalnick, Patricia Zengerle and Lesley Wroughton; editing by Chizu Nomiyama, Jonathan Oatis and Susan Thomas)