NICARAGUA: 2007 EXPROPRIATION REPORT

UNCLAS MANAGUA 001528

SIPDIS

STATE FOR WHA/CEN, EB/IFD/OIA, WHA/EPSC L/LEI/EDAUGHTRY
TREASURY FOR INL/MDONOVAN, GCHRISTOPOLUS, OWH/ASHWARZMAN

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV ECON PGOV KIDE OPIC CASC NU
SUBJECT: NICARAGUA: 2007 EXPROPRIATION REPORT

REF: STATE 055422


1. (U) This cable provides proposed language for the Nicaragua
chapter of the 2007 Report on Investment Disputes and Expropriation
Claims. Embassy will e-mail comprehensive annex with details of
confiscated property claims by June 15 per reftel request.

Property Confiscation Claims
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2. (U) Property claim resolutions in Nicaragua continue to consume
the time and energy of former owners and government officials.
Since 1990, thousands of Nicaraguans and other nationals registered
more than 28,000 claims with the Nicaraguan government for homes,
farms, bank accounts, and other assets expropriated during the
1979-1990 Sandinista era. Although most were Nicaraguans at the
time of expropriation, many were or subsequently became U.S.
citizens.


3. (U) Between January 1995 and June 1, 2007, a total of 1,137 U.S.
citizens registered 3,193 property claims with the Embassy. Of
these, 2,509 claims have been resolved, primarily through
compensation in the form of long-term, low-interest,
government-issued bonds. The estimated face value of these bonds is
US$319,700,000. In isolated cases, claims have been resolved
through the return of property, cash compensation or, in one
instance, a landswap. Most claimants (i.e., 870 of the 1137) who
have registered their claims with the Embassy were not U.S. citizens
at the time of expropriation. Another 2020 U.S. citizen claims not
registered at Embassy/Managua have been resolved by government
authorities without Embassy assistance.


4. (U) As of June 1, 2007, 298 U.S. citizens await resolution of 684
Embassy-registered active claims. Sixty-four claimants, accounting
for 117 of these outstanding claims, were U.S. citizens at the time
of confiscation. Embassy/Managua employs an American officer and
two Nicaraguan attorneys to assist U.S. citizen claimants.


5. (SBU) Between August 1, 2006 and January 9, 2007, the government
resolved 29 U.S. citizen claims registered with the Embassy.
Between January 10, 2007 and June 1, 2007, the Sandinista
administration did not resolve any U.S. citizen claims registered
with the Embassy, a period of inactivity which is unprecedented. In
a series of approaches, post has insisted on the need for the
government to resume progress.


6. (SBU) On June 13, 2007, Nicaraguan Attorney General Hernan
Estrada convoked a meeting attended by Ambassador Trivelli, Embassy
property staff, and Nicaraguan property officials. Estrada stated
that the Sandinista government would demonstrate goodwill through
achieving prompt resolution of up to 56 additional U.S. citizen
claims. The Ambassador requested final proof of resolution because,
as of June 13, the Embassy had been made aware of only a handful of
settlements in progress. Comment: It seems as if the Sandinista
government is counting claims as having been settled once some
interagency agreement has been reached to make an offer. End
Comment. As the Ambassador exited, Estrada invited the media into
the room to expound on his efforts toward ending the longstanding
property conundrum with the United States.


7. (U) The Embassy will continue to press for swift and suitable
resolution of outstanding U.S. citizen property claims in accordance
with Section 584(c)(i) of H.R. 4818, the Consolidated Appropriations
Act, 2005. Section 584 specifically precludes adding claims
registered after August 1, 2005 for inclusion in waiver
determinations based on Section 527 of the Foreign Relations
Authorization Act of FY 1994/1995. The Embassy also assists U.S.
citizens seeking restitution for other claims.

TRIVELLI