Identifier
Created
Classification
Origin
06BUENOSAIRES1184
2006-05-24 19:00:00
CONFIDENTIAL
Embassy Buenos Aires
Cable title:  

EMBASSY SUCCESS ON BEHALF OF EXPRESS MAIL COMPANIES

Tags:  ECON ETRD AR 
pdf how-to read a cable
VZCZCXYZ0018
RR RUEHWEB

DE RUEHBU #1184/01 1441900
ZNY CCCCC ZZH
R 241900Z MAY 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4656
INFO RUEHAC/AMEMBASSY ASUNCION 5545
RUEHBR/AMEMBASSY BRASILIA 5351
RUEHLP/AMEMBASSY LA PAZ MAY MONTEVIDEO 5582
RUEHSG/AMEMBASSY SANTIAGO 5150
RUEHRI/AMCONSUL RIO DE JANEIRO 1994
RUEHSO/AMCONSUL SAO PAULO 2903
RUCPDOC/USDOC WASHDC
C O N F I D E N T I A L BUENOS AIRES 001184 

SIPDIS

SIPDIS

USDOC FOR 4322/ITA/MAC/OLAC/ANDERSEN/PEACHER

E.O. 12958: DECL: 05/21/2016
TAGS: ECON ETRD AR
SUBJECT: EMBASSY SUCCESS ON BEHALF OF EXPRESS MAIL COMPANIES

REF: (05) BUENOS AIRES 229

Classified By: Ambassador Lino Gutierrez for reasons 1.4 (b) and (d).

-------
Summary
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C O N F I D E N T I A L BUENOS AIRES 001184

SIPDIS

SIPDIS

USDOC FOR 4322/ITA/MAC/OLAC/ANDERSEN/PEACHER

E.O. 12958: DECL: 05/21/2016
TAGS: ECON ETRD AR
SUBJECT: EMBASSY SUCCESS ON BEHALF OF EXPRESS MAIL COMPANIES

REF: (05) BUENOS AIRES 229

Classified By: Ambassador Lino Gutierrez for reasons 1.4 (b) and (d).

--------------
Summary
--------------


1. (U) Argentina's Director General of Customs (DGC) has
suspended implementation of a resolution, Resolution 2021,
that would have amended the regulatory framework governing
international express mail deliveries. Post organized the
April 28 meeting between the DGC and representatives of
Argentina's Chamber of International Express Mail Service
Providers (CAPSIA) in which the DGC decided to suspend the
resolution. Resolution 2021 would have: required independent
customs brokers to process deliveries; reduced allowable
weight limits; imposed a 50-percent tax on "commercially
valuable" items; and established a new information technology
system to process deliveries. The DGC has agreed to work
with closely with CAPSIA on the development of controls
affecting the industry. End Summary.

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Couriers Face Stricter Rules
--------------


2. (U) Argentina's Federal Revenue Administration (AFIP)
published Resolution 2021 on March 31 in the Official Gazette
to amend regulations affecting express-mail service
companies. Resolution 2021 was scheduled to enter into force
on May 2 and would have increased controls to reduce the flow
of contraband as outlined in Resolution 1811 from January
2005 (see reftel). The proposed resolution required: senders
and receivers of express-mail deliveries to have an Argentine
tax or labor identification number; express-mail service
companies to use independent customs brokers for any package
destined for a given recipient that exceeds 50 kgs (110 lbs.)
and/or USD 1,000 in the course of a given month; and
recipients of express-mail deliveries to pay a duty equal to
50 percent of the declared value of any package deemed to
have commercial value. Federal Express and UPS expressed
their concerns to post that Resolution 2021 would create
bottlenecks that would adversely affect their business. The
firms doubted that Customs, which is overseen by AFIP, had
sufficient information technology resources and staff to

process the data which Resolution 2021 required express-mail
companies to provide.


3. (U) Companies forming Argentina's Chamber of
International Express-Mail Service Providers (CAPSIA)
increased their efforts to create allies within the small
business community and in the tourism sector to amend, if not
suspend implementation of, Resolution 2021. These efforts
began when Resolution 1811 went into effect (see reftel).
Representatives of CAPSIA companies published editorials
critical of Resolution 1811, emphasizing that Resolution 2021
would be more damaging to the industry. Another article
written by a private citizen, called "Barbie Imprisoned,"
criticized AFIP for allowing Customs to impede legitimate
transactions for no measurable benefit or security objective.
CAPSIA companies worked on an individual basis to meet with
the Director General of Customs as well as advisors to the
AFIP Administrator to discuss possible improvements to the
proposed Resolution 2021.

--------------
Post Builds on CSI Relationship
--------------


4. (U) Post responded to the U.S. companies' concerns by
raising the issue with interlocutors at various levels within
the Economy and Planning Ministries. Econoffs also met with
operations directors in Customs and AFIP for a "hands-on"
assessment of the effects of the implementation of Resolution
1811 to determine what changes would flow from the eventual
implementation of Resolution 2021. Econoff organized
meetings with the Deputy Director of Customs for Controls and
the U.S. companies in CAPSIA to monitor processing of
packages arriving at Buenos Aires Ezeiza International
Airport. Director General of Customs Ricardo Echegaray
contacted Econoff after these meetings had been and said that
"Customs has nothing to hide" regarding the express-mail
companies, and he would be "happy to answer any questions the
U.S. Embassy might have on the issue." Econoff suggested a
small meeting between representatives of CAPSIA companies and
the Director General, who accepted.


5. (U) Echegaray began the meeting thanking the Embassy for
its leadership in establishing the Container Security
Initiative and that he looked forward to enhancing bilateral
cooperation. He turned to the subject of the express-mail
companies and said that he was glad to have this opportunity
to address the companies at the same time, rather than having
to "hear from CAPSIA one day, respond to articles in the
newspaper the next, and respond to Secretary of Industry
Miguel Peirano the day after." (Note: The Commercial
Counselor and the Economic Counselor had called on Secretary
Peirano on July 27 and October 20, 2005, to express concerns
about Resolution 1811's impact on the small- and medium-sized
business community, which rely on express mail to receive
critical parts, deliver samples, and make Internet
deliveries. End Note.) Echegaray asked the company
representatives what their major concerns were regarding the
upcoming implementation of Resolution 2021. The companies
responded that the test runs they had conducted with customs
officers at Buenos Aires International Airport showed that
the number of officers and the information technology were
inadequate for processing packages in a timely manner.


6. (C) Echegaray responded critically to the existing
regulatory framework under Resolution 1811 and to the
proposed measures under Resolution 2021. He echoed comments
that his advisors had made in earlier meetings with Econoffs
that "Resolution 1811 does not work." He also said that
"there is a better way to regulate express-mail activity"
that will increase security without harming users. In a
surprisingly public censure, Echegaray lamented that AFIP was
"unfortunately plagued with mediocrity" and even "Customs
sometimes lacks vision when the issue is fulfilling the
policies of the State." He concluded by saying that he would
suspend implementation of Resolution 2021 until Customs had
had the opportunity to consult closely with CAPSIA members on
the development of an information technology system that is
able to process the information AFIP has required
express-mail companies to provide.

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Comment
--------------


7. (C) Customs Director Echegaray, who was appointed by
President Kirchner, and AFIP Administrator Abad, who was
appointed by former President Duhalde, have been struggling
for authority over customs issues since Echegaray's
appointment in May 2003. Echegaray has spent his entire
professional career working on customs issues, in an advisory
capacity for governments in Central America and in Patagonia
before working in the Kirchner administration. Consequently,
he views customs as both a revenue-collecting office and a
law enforcement agency. This may be the source of the
tension with AFIP Administrator Abad. Rumors about Abad's
departure have been in circulation since Echegaray's arrival,
but Abad remains in place, in part because of his success in
collecting record-level government revenues. The Embassy's
success in facilitating a suspension of Resolution 2021 is
partly related to Echegaray's willingness to challenge Abad's
effort to use the resolution to increase revenue collections
at the expense of the express-mail industry. This is not the
last word on the GOA's efforts to regulate the express-mail
industry, but the industry now appears to have a GOA official
who is willing to take its interests into consideration. End
Comment.


8. (U) To see more Buenos Aires reporting, visit our
classified website at:
http://www.state.sgov.gov/p/wha/buenosaires.< /a>
GUTIERREZ