BY NANCY SAN MARTIN

                      A guilty verdict by a Philadelphia jury against a Canadian businessman charged with violating the
                      Cuban trade embargo could lead to an international dispute between the United States and Canada
                      over trade relations with the communist-ruled nation, according to foreign trade experts.

                      The Canadian government has lodged protests with the State Department about the case, according to
                      Canadian press reports, and officials said Thursday they were carefully reviewing the conviction.

                      ''Exports from Canada to Cuba are permitted under Canadian law,'' said Rodney Moore, a spokesman
                      for the Canadian Embassy in Washington. ``We have a policy of engagement and Canada believes
                      that policy -- politically and economically -- has more potential to encourage greater respect for human
                      rights, democracy, development and economic reform in Cuba than a policy of isolation.''

                      James Sabzali, a 42-year-old Canadian citizen, was convicted Wednesday of violating the Trading with
                      the Enemy Act by selling water purification supplies to Cuba. Two American owners of the
                      Pennsylvania-based corporation he worked for also were found guilty.

                      But Sabzali is believed to be the first foreign national to be convicted in a U.S. court of trading with
                      Cuba, opening the door to international criticism for the prosecution of acts that are legal in Canada.

                      The case is regarded by some as a challenge to Canadian sovereignty, particularly because of a law
                      known as the Canadian Foreign Extraterritorial Measures Act, which prohibits Canadian business
                      people from complying with the U.S. trade ban. Several of the charges involve activities that occurred in
                      Canada.

                      ''The whole issue of this thing has to do with the extraterritoriality of this [U.S.] law,'' said Eduardo
                      Gamarra, a political science professor at Florida International University. ``The repercussions will be
                      interesting to see. It could become an international legal battle if Canada takes the case before the
                      World Trade Organization and files an accusation against the United States for being an obstacle to
                      free trade.''

                      Cuba is Canada's largest trading partner in the Caribbean, with imports and exports between both
                      countries estimated at more than $435 million a year.

                      Assistant U.S. Attorney Joseph Poluka said the ''document-intensive case'' involving some 25,000 pieces
                      of paperwork has nothing to do with Canada's commerce with Cuba.

                      ''There is no dispute that the man is a Canadian citizen,'' Poluka said. ``The indictment doesn't allege
                      that they did anything wrong by going to Cuba. The problem is they had to come here for the products.
                      This case is about commerce between the United States and Cuba. These men not only broke the law,
                      but they conspired to break it.''

                      The verdict comes as an increasing number of American corporations have been promoting sales to
                      Cuba, and lobbying efforts to lift the 42-year-old embargo have grown louder on Capitol Hill. Under U.S.
                      law, only the sale of food and medicine is allowed.

                      Sabzali, a salesman now living in suburban Philadelphia, was working for a Canadian subsidiary of
                      Bro-Tech Corp. when the transactions totaling $2.1 million began with Cuba. The product sold to Cuban
                      involves a chemical resin used to purify and soften water. The supplies made their way to Cuban
                      hospitals and factories from plants owned, directly or indirectly, by Bro-Tech, the indictment states.

                      Almost half of the charges in the case relate to activities conducted between 1992 and 1996 while
                      Sabzali was living in Ontario. He joined the company's Philadelphia-area headquarters in 1996,
                      according to the indictment.

                      Sabzali and business owner Donald Brodie, 54, of Bryn Mawr, Pa., were convicted on numerous counts
                      of illegal trade. Brodie's brother Stefan Brodie, 58, of Philadelphia, was convicted of conspiring to violate
                      the embargo.