Risking a new clash with Europe over Cuba, the Clinton administration has taken the first step to apply the Helms-Burton Act to a Spanish firm that runs 12 hotels in Cuba.

Officials of Grupo Sol Melia, which also runs the Melia Hotel in Miami, could be banned from visiting the United States if U.S. investigators confirm that one of its hotels in Cuba sits on land seized from U.S. citizens.

Such a sanction would almost certainly reignite a row with the European Union, which considers Helms-Burton illegal and has threatened to file a complaint before the World Trade Organization in Switzerland.

``The bar has been raised, and it's possible the Europeans will now respond more strongly against U.S. firms,'' said John Kavulick, head of the New York-based U.S.-Cuba Trade and Economic Council.

Clinton administration officials said Sol Melia was told Thursday that State Department investigators had concluded that there was reason to believe that one of its hotels in eastern Holguin province was built on land seized from U.S. citizens in 1961.

The officials declined to identify the hotel -- Sol Melia operates three resort hotels along Holguin beaches -- or the U.S. citizens affected, but said they were not Cuban Americans.

Sol Melia has management or equity interests in 12 Cuban hotels with 4,198 rooms that provide it with 11 percent of its worldwide income.

The firm must reply to the charge ``expeditiously,'' the officials said. If it doesn't, or if its reply is not convincing, U.S. investigators will send a formal letter giving it 45 days to reply. After that, the State Department can order that company officials, members of the board of directors and major stockholders be banned from U.S. territory.

Only three foreign companies have been sanctioned under the Title IV provisions of the Helms-Burton law: Canada's Sherritt International, the Mexico-based Grupo Domos and the Israeli-owned BM Group.

Grupo Domos, already embroiled in financial problems, opted to break off its joint venture with Cuba's telephone company after receiving its notice of possible Helms-Burton sanctions. Sherritt and BM continue operating in Cuba despite U.S. visa restrictions on their officers.

The 1996 Helms-Burton law, which seeks to punish foreign firms that ``traffic'' in properties seized by Cuba from U.S. citizens, has been denounced by the European Union as violating international trade agreements.

The EU filed a complaint with the World Trade Organization in 1996 but then put the case on hold while U.S. and European officials negotiated to avoid an all-out clash.