By CHRISTOPHER MARQUIS and JODI A. ENDA
Herald Staff Writers

GENEVA -- President Clinton and European leaders Monday struck a deal on investments in Cuba and other rogue states that left both sides claiming victory.

Announcing the pact in London, Clinton declared he had won concessions from Europe that would deter investment by its companies in properties illegally confiscated in Cuba and around the world.

``This understanding furthers the goals of protecting property rights in Cuba and worldwide, advances the interests of U.S. claimants and protects U.S. investors, and does so far more effectively than the United States could have done alone,'' Clinton said.

The European Union, in turn, asserted it won the President's assurances to defang a despised U.S. sanctions regime -- including the 1996 Helms-Burton Act. Europeans view such laws as an attempt by Congress to legislate beyond U.S. borders.

``The European Union has opposed the United States sanctions laws on investments in Iran, Libya and Cuba, not only because we believe they were illegal, but also because they were counterproductive,'' EU president Jacques Santer said.

Opinions were mixed as to whether Monday's deal would inhibit new investment in Cuba. But Iran emerged as a winner when France, Russia and Malaysia learned they could proceed with a $2 billion project to develop Iran's South Pars gas field without facing U.S. sanctions.

Yet, even as both sides praised the accord as an end to one of the most bitter disputes in trans-Atlantic trade relations, the deal was met with profound skepticism in Congress. Republican leaders, who have increasingly knit international sanctions into trade bills since Helms-Burton, complained that Clinton would sacrifice a potent U.S. weapon without guaranteeing that Europe would adhere to the new rules affecting confiscated property and terrorism.

``This is way too small a loaf,'' said Marc Thiessen, spokesman for the Senate Foreign Relations Committee, whose chairman is Sen. Jesse Helms, R-N.C. ``What the EU has basically offered us is a dilution of Helms-Burton in exchange for hot air.''

As it is, Congress must approve any changes to Helms-Burton, but in the case of the Iran-Libya Sanctions Act, the president has discretion over a series of actions.

Under the deal, Clinton agreed to ask Congress for the ability to waive Title IV of Helms-Burton, which requires the President to bar from the United States foreign executives -- as well as their spouses and minor children -- if they invest in properties in Cuba that are claimed by U.S. citizens. The sanction so far has been imposed only against executives from a Canadian and Mexican firm.

EU commitment

In addition, the EU agreed to help create an international registry that would give victims of illegal expropriations a tool to press their case in Europe and, potentially, around the world. Nations that recognize the registry would consult the list when considering investors' requests for government support or commercial assistance.

Stuart Eizenstat, the undersecretary of state for economic affairs who spent more than a year negotiating Monday's deal, called it ``the biggest blow ever struck for the protection of property rights of U.S. citizens and against the efforts of [Cuban President Fidel] Castro to expropriate property.''

Sen. Richard Lugar, a moderate Republican with long foreign-policy credentials, praised the accord as a ``significant breakthrough.''

Not convinced

But Cuban-American lawmakers, who support tough sanctions on foreign investors in Cuba, weren't convinced.

Rep. Lincoln Diaz-Balart, a Miami Republican, said he was not convinced that European investors in Cuba would be deterred by the absence of government help. ``Unless the administration can demonstrate to us that by prohibiting what they are prohibiting it will stop EU investments, it won't fly,'' Diaz-Balart said.

Rep. Ileana Ros-Lehtinen, another Miami Republican, predicted that the deal would chill future European investment in illegally confiscated property in Cuba but would do little to help Cuban Americans and others who have not been compensated for past expropriations. Clinton has repeatedly waived the Helms-Burton provision granting such people the right to file lawsuits against investors using confiscated property.

Clinton in Geneva

Hours after outlining the U.S.-EU accord, Clinton flew to Geneva to speak at the World Trade Organization, the newly established international arbiter of trade disputes, whose future was cast in doubt by the trans-Atlantic dispute over Helms-Burton and U.S. sanctions affecting business in Iran and Libya. The EU dropped its lawsuit over Helms-Burton as a deal became imminent.

As Clinton extolled the merits of free economies and unfettered trade Monday, Castro looked on from a front-row seat. Listening attentively to Clinton's speech with the help of an interpreter, the Cuban leader applauded politely as Clinton asserted that greater openness is the key to global prosperity.

Christopher Marquis reported from Washington. Jodi A. Enda reported from London and Geneva.