Identifier
Created
Classification
Origin
05PRAGUE1608
2005-11-10 18:07:00
CONFIDENTIAL
Embassy Prague
Cable title:  

CZECH RESPONSES TO OECD SECGEN SELECTION, ACTION

Tags:  ECIN ECON EFIN EZ EINV 
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C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 001608 

SIPDIS

PARIS ALSO FOR USOECD
STATE FOR EB/IFD, L/EB, EUR/ERA, EUR/NCE
STATE PASS EX-IM FOR OGC/SONFIELD AND POLICY/FIRESTONE
TREASURY FOR TRADE FINANCE
COMMERCE FOR 6731 LENZ
JUSTICE FOR MENDELSOHN

E.O. 12958: DECL: 11/09/2015
TAGS: ECIN ECON EFIN EZ EINV
SUBJECT: CZECH RESPONSES TO OECD SECGEN SELECTION, ACTION
STATEMENT ON BRIBERY AND EXPORT CREDITS, AND CONVENTION ON
COMBATING BRIBERY

REF: A. STATE 204906

B. STATE 205372

C. BROWN-REIDER OCTOBER 28 E-MAIL

Classified By: ECON OFFICER KAREN REIDER FOR REASONS 1.4 (B) (D)

C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 001608

SIPDIS

PARIS ALSO FOR USOECD
STATE FOR EB/IFD, L/EB, EUR/ERA, EUR/NCE
STATE PASS EX-IM FOR OGC/SONFIELD AND POLICY/FIRESTONE
TREASURY FOR TRADE FINANCE
COMMERCE FOR 6731 LENZ
JUSTICE FOR MENDELSOHN

E.O. 12958: DECL: 11/09/2015
TAGS: ECIN ECON EFIN EZ EINV
SUBJECT: CZECH RESPONSES TO OECD SECGEN SELECTION, ACTION
STATEMENT ON BRIBERY AND EXPORT CREDITS, AND CONVENTION ON
COMBATING BRIBERY

REF: A. STATE 204906

B. STATE 205372

C. BROWN-REIDER OCTOBER 28 E-MAIL

Classified By: ECON OFFICER KAREN REIDER FOR REASONS 1.4 (B) (D)


1. (C) SUMMARY: Econoff met November 10 with Czech Ministry
of Foreign Affairs Department of Multilateral Economic
Relations Deputy Director Pavel Klima to deliver reftel A and
B demarches. Klima said that during the July 21 Polish state
visit, the Prime Minister signaled GOCR support former Polish
PM Belka as OECD Secretary General, against the MFA's advice
not to commit prematurely. Klima said the GOCR would support
the U.S. proposal to strengthen the existing Action Statement
on Bribery and Export Credits in the OECD's Working Party on
Export Credits and Credit Guarantees, although there may be
some suggested amendments, none of which should compromise
the strength of the Statement. On the recent postponement of
the peer-review visit by experts from the OECD Convention on
Combating Bribery, Klima said the embarrassing public fallout
from the cancellation would serve as a blessing in disguise
by elevating the issue to appropriate high levels and
providing needed pressure to pass necessary legislation to
comply with recommendations from a previous visit by the same
group as well as ensure a successful follow-on visit. END
SUMMARY.

--------------
OECD SECGEN SELECTION
--------------

2. (C) Klima (please protect) admitted the GOCR had already
boxed itself in a corner by signaling its support for the
former Polish PM Belka during the July 21, 2005 Polish state
visit. Despite the MFA's advice not/not to commit
prematurely to one candidate, Prime Minister Paroubek had
clearly indicated to his Polish counterpart that the GOCR
would support him for OECD Secretary General. Klima said the
Mexican Ambassador demarched the MFA Director General of

External Economic Relations Tomas Husak after the first round
of voting, and Jose Angel Gurria himself visited the Czech
Republic in early October to lobby for his candidacy. Mr.
Gurria had four meetings below the PM-level, including one
with Deputy Prime Minister for Economic Affairs Martin Jahn.
Klima said while the GOCR would be perfectly happy with
Gurria as the next OECD Secretary General, it would be
difficult for the GOCR to walk away at this point from its
commitment to the Polish candidate. He said the Poles were
counting on solidarity among the Visegrad-4 (Poland, Hungary,
Czech Republic and Slovakia) and if anyone backed out, it
would be too noticeable.

-------------- -------------- -------------- -------------- --------------
OECD ACTION STATEMENT ON BRIBERY AND EXPORT CREDITS
-------------- -------------- -------------- -------------- --------------

3. (C) Klima said the GOCR would support the U.S. proposal
to strengthen the existing Action Statement on Bribery and
Export Credits at the November 14 OECD Export Credit Group
(ECG) meeting. He added that the GOCR might suggest some
amendments, but they would not "undermine" the U.S. proposal.
Klima also noted that the GOCR was in the process of
reviewing the U.S. proposal to see if it contradicted
domestic Czech legislation in any way. In response to
econoff's inquired about how and which language might
contradict domestic legislation, Klima said while the GOCR
has no problem with language about applicants and exporters
declaring they will not and have not engaged in bribery, if
ECAs discovered derogatory information after credit has
already been extended, it could pose difficulties for the
GOCR. The GOCR has two Export Credit Agencies (ECAs) --
Export Guarantee and Insurance Corporation (EGAP) and the
Czech Export Bank (CEB). The GOCR is sending two
representatives from Prague to the Working Party meeting on
November 14 -- EGAP Managing Director Pavel Parizek and
Ministry of Finance Head of the Department of International
Organizations Zdenek Lukes.


-------------- -------------- -------------- --------------
OECD CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC
OFFICIALS
-------------- -------------- -------------- --------------


4. (C) Klima lamented the GOCR's decision to postpone the
scheduled visit by OECD experts to conduct a peer-review of
the GOCR's implementation of the Convention on Combating
Bribery -- just one day before the date of scheduled travel.
He stressed this was not/not the fault of Mr. Harbata, the
OECD's point of contact at the Ministry of Justice, and noted
Mr. Harbata did not have enough support from within the
Ministry. Klima said Mr. Harbata's only fault was not crying
out for help louder and earlier, when faced with the fact
that three positions directly above his chain of command were
vacant and he was faced with handling the visit all by
himself. Klima also said the GOCR was considering
compensating the OECD for costs incurred due to the last
minute cancellation of the visit.


5. (C) On a side note, Klima said he personally resented the
tone of the letter from Dr. Mark Pieth (reftel C),noting
that the GOCR had up to now had an excellent track record of
cooperation with the OECD. He noted this was the first
offense after years of untarnished cooperation, so the
self-righteous tone of the letter was over the top. At the
same time, Klima said the public embarrassment resulting from
the canceled visit would serve as a blessing in disguise --
not only to ensure a successful rescheduled visit, but also
in passing necessary legislation for the GOCR to adhere to
the one recommendation (on an otherwise positive review) by
an earlier OECD peer-review visit. This recommendation was
for the GOCR to amend the existing penal code so that
companies would be held responsible for bribery of public
officials, since the current version only holds individuals
accountable. Klima said that a two-year effort to amend the
penal code to adopt the OECD recommendation ended when
Parliament, at the last minute, decided such an amendment was
not/not necessary. However, Klima believed the OECD visit
cancellation fallout might be just what the GOCR needs to
push the amendment through Parliament.
CABANISS