NICARAGUA - VENEZUELA LETTER OF INTENT ON THE

UNCLAS MANAGUA 000638

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/CEN, WHA/EPSC

E.O. 12958: N/A
TAGS: EIND ENRG EAID NU VE
SUBJECT: NICARAGUA - VENEZUELA LETTER OF INTENT ON THE
ESTABLISHMENT OF ALUMINUM PRODUCTS FACTORIES IN NICARAGUA


1. (SBU) Summary. As part of a series of Bolivarian
Alternative agreements signed on January 11, 2007, the
Nicaraguan Minister of Foreign Relations Samuel Santos and
Venezuelan Minister of Foreign Relations Nicolas Maduro Moros
signed a Letter of Intent to commission a feasibility study
on placing two aluminum transformation factories in
Nicaragua. One factory would manufacture semi-rigid
containers and trays and the other would manufacture kitchen
utensils and kettles. End Summary.


2. (SBU) This Letter of Intent between the Government of
Nicaragua and the Government of Venezuela was one of a series
of thirteen commitments with Venezuela negotiated by the
Ortega government before it came to power on January 10,

2007. The Nicaraguan Minister of Foreign Relations Samuel
Santos and Venezuelan Minister of Foreign Relations Nicolas
Maduro Moros signed the letter on January 11, 2007. The
substance of this letter along with the other commitments was
kept from the public for weeks, although the Embassy managed
to obtain an unsigned copy. This cable reports on the
substance of this particular Letter of Intent.

Preambular Language
--------------

3. (SBU) Preambular language takes into account the
friendship and understanding between the two governments, and
the promises and challenges in strengthening social and
economic integration. Also mentioned is the desire of both
governments to promote and provide stimulus for public and
private foreign investment, with the object of forming
strategic alliances or associations on projects of common
interest -- as long as technology transfer, education of
personnel, technical assistance, and maximum domestic content
is guaranteed.


4. (SBU) The letter also recognizes and defines a number of
principles that guide the two governments, including:

-- solidarity, understood as commitment to mutually support
and unite forces to achieve sustainable development and
attend to emerging needs, possibilities, and agreed shared
responsibilities;

-- cooperation, seen as the will of the parties to advance
relations within the development of joint projects and
strategic alliances of mutual benefit;

-- complementarity, understood as the promise to identify and
develop common projects that allow for integration and/or
synergies according to the abilities and interests of the
parties;

-- reciprocity, viewed as the obligation to establish
relations based on fair exchange and sharing, taking into
account differences between parties and principles of equity
and good faith.

-- sustainability, understood as the promise to identify and
develop projects and programs of cooperation, oriented toward
achieving sustainable development, from the economic, social,
and environmental points view.

Objective
--------------

5. (SBU) The objective of this Letter of Intent is the
realization of a technical, economic, and financial study to
determine the feasibility of installing two aluminum
transformation factories in Nicaragua. One factory would
manufacture semi-rigid containers and trays and the other
would manufacture kitchen utensils and kettles.

Implementation
--------------

6. (SBU) The Governments of Nicaragua and Venezuela will
jointly form a Technical Commission within 30 days of the
signing of this Letter of Intent. The Commission will begin
work immediately on an action plan by first creating a work
plan. The parties agree that all costs generated by the
execution of this Letter of Intent will be assumed by
Government of Venezuela. This letter does not obligate the
parties to any more than what is strictly stated. That is,
the Letter of Intent does not generate preferential rights,
exclusive or excluding, nor does it promise the execution of
joint projects, nor the constitution of alliances with other
countries or enterprises. As a consequence, the Letter of
Intent will not affect prior commitments by the parties, in
agreements with third parties.

Responsible Authorities
--------------

7. (SBU) The Government Nicaragua designates the National
Corporation for the Public Sector (CORNAP) and the Government
of Venezuela designates the Ministry of Basic Industry and
Mines and its associated enterprise, CVG ALUNASA, located in
Costa Rica, as the executing authorities for this Letter of
Intent.

Duration, Disputes, Modifications
--------------

8. (SBU) This Letter of Intent will be in effect for 90 days
from the date of signature, and may be extended by mutual
agreement. Either party may terminate this letter by written
diplomatic note thirty days before the expiry of the letter.
Disputes about the interpretation or implementation of this
letter will be resolved through the amicable and direct
consultations between the parties. This letter may be
modified through common agreement by the parties.
TRIVELLI