HONDURAS: DRAFT BILATERAL IMPLEMENTATION OF THE

UNCLAS TEGUCIGALPA 001727 SIPDIS STATE FOR WHA/CEN, WHA/EPSC STATE FOR EB/IFD/OMA (AWONG) STATE PASS AID FOR LAC/CAM TREASURY FOR DDOUGLASS GUATEMALA ALSO FOR COMATT:MLARSEN E.O. 12958: N/A TAGS: EFIN ECON KTIA HO SUBJECT: HONDURAS: DRAFT BILATERAL IMPLEMENTATION OF THE 2005 PARIS CLUB DEBT FORGIVENESS AGREEMENT DELIVERED REF: A. A) STATE 149880 ¶B. B) WONG/DUNN EMAIL OF 081505 ¶1. On August 16, EconChief met with Minister of Finance William Chong Wong and Director of Public Credit Orlando Garner to deliver the draft bilateral debt forgiveness agreement (ref B) based on the Agreed Minute on the Debt Reduction of the Republic of Honduras, signed on May 12, ¶2005. Copies in both English and Spanish were delivered and will be followed by electronic copies. Pursuant to instruction contained in ref A, EconChief explained that the documents can be signed only after the final language has been agreed and all necessary implementing actions have been taken by the GOH. ¶2. Chong replied that there are no implementing requirements save notifying Congress, since new legislation has granted him the right to negotiate and sign debt reduction agreements. Chong will provide a written certification to this effect prior to signing the document. ¶3. Concerning timing: Chong expects that it will take his Ministry and the Central Bank two to three weeks to review and approve the draft document. Garner, who glanced through the document during the meeting, said he thought there would likely be few or no changes, considering that the draft is based on the Paris Club Minute. (He half-jokingly offered to sign it on the spot.) Post will follow up with Garner and Chong and will pass any comments or questions about the draft agreement to the Department immediately. ¶4. Concerning venue: Chong would prefer to hold the signing ceremony here in Honduras, "since the last debt forgiveness agreement was signed in Washington." As an alternative, he would be willing to sign the document on the margins of the International Monetary Fund (IMF) meetings in Washington, where Honduran President Ricardo Maduro could also be a witness. ¶5. Comment: Post remains without an Ambassador pending the confirmation hearings for Ambassador-designate Charles Ford, hopefully in September. The two to three weeks the GOH have requested will delay signature of this agreement until early September at the earliest. Therefore, to best conform to GOH wishes for a signing ceremony in Honduras and to offer the new Ambassador a high-profile deliverable early in his tenure, Post recommends seeking to schedule a signing ceremony in late September. End Comment. Williard Williard