Identifier
Created
Classification
Origin
07MINSK662
2007-07-30 13:50:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Minsk
Cable title:  

BELARUS: 2007 REPORT ON INVESTMENT DISPUTES AND

Tags:  CASC EFIN EINV KIDE OPIC PGOV BO 
pdf how-to read a cable
VZCZCXYZ0002
RR RUEHWEB

DE RUEHSK #0662/01 2111350
ZNR UUUUU ZZH
R 301350Z JUL 07
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 6328
INFO RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS MINSK 000662 

SIPDIS

FOR EB/IFD/OIA/HGOETHERT AND L/CID SAM MCDONALD

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: CASC EFIN EINV KIDE OPIC PGOV BO
SUBJECT: BELARUS: 2007 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS

REF: STATE 55422

Sensitive but Unclassified; Protect Accordingly

UNCLAS MINSK 000662

SIPDIS

FOR EB/IFD/OIA/HGOETHERT AND L/CID SAM MCDONALD

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: CASC EFIN EINV KIDE OPIC PGOV BO
SUBJECT: BELARUS: 2007 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS

REF: STATE 55422

Sensitive but Unclassified; Protect Accordingly


1. (SBU) The United States Government is aware of seven (7)
unresolved claims of United States persons that may be outstanding
against the Government of Belarus (GOB). Under the second heading
are provided, as last year, six (6) other incidents in which
property owned by the US Government was seized and expropriated.

a. Claimant A

b. July 2005

c. Claimant A is a US corporation which had a hydraulic pumping unit
worth $23,552 seized by Belarusian Customs. The claimant was
shipping the unit from Poland to Russia. Polish Customs had added
the cost of transport to the unit's price on the shipping invoice,
but provided a notarized statement to this effect. Nonetheless,
Belarusian Customs claimed this represented a discrepancy in the
paperwork and referred the case to court for seizure by the
Belarusian Government. Knowing the Belarusian Government's daily
practice of confiscating transiting goods and reselling them for
profit, the US Embassy sent letters to and called the Ministry of
Foreign Affairs, the Ministry of Justice, and Customs. The US
Embassy also arranged for additional supporting documents to be
provided by the nearest Polish Consulate. The hydraulic unit was
released back to the American company in October. The Belarusian
Government did not provide compensation for legal costs or losses
the American corporation incurred over this delay.

a. Claimant B

b. August 2005

c. Claimant B is a US corporation which had $8,200 worth of
sheetrock and other construction materials seized by Belarusian
Customs. Customs claimed the US corporation had gone out of
business in 2001, and used this as legal grounds to formally
confiscate this cargo. The Belarusian Government did not provide
compensation for this confiscation.

a. Claimant C

b. February 2005

c. Claimant C is a US corporation which owns 9.35% of the Kommunarka

candy company. In 2000, the Belarusian Government used a Golden
Share mechanism to take full control of Kommunarka for five years.
The state used this control to grant itself majority ownership over
the company. In February 2005 the Belarusian State Food Industries
Concern (Belgospischeprom) extended its Golden Share control over
the company for another five years. The Belarusian Government has
not provided any compensation for this action.

a. Claimant D

b. January 2004

c. Claimant D is a US corporation which had a shipment of
second-hand clothing evaluated at $13,600 seized by Belarusian
Customs. The Claimant was shipping the clothes from the U.S. to
Ukraine through Lithuania and Belarus. The Belarusian government
seized the shipment because it alleged the US corporation was not
registered to do business at the time of the shipment, even though
the US company provided information from the State of New York to
prove they were registered. The US Embassy provided the company
with a letter of support and the US Ambassador raised this case,
along with several others, in meetings with the Foreign Minister.
The Belarusian government has not compensated the US corporation for
the seizure.

a. Claimant E

b. January 2004

c. Claimant E is a US corporation which had a shipment of 38 tons
of frozen fish seized by Belarusian Customs. The Claimant was
shipping the fish from the U.S. to Ukraine and Moldova through
Lithuania and Belarus. The Belarusian government seized the
shipment because it alleged the US corporation was not registered to
do business at the time of the shipment, even though the US company
provided apostillized information from the State of Oregon to prove
they were registered. The US Embassy provided the company with a
letter of support and the US Ambassador raised this case, along with
several others, in meetings with the Foreign Minister. The
Belarusian government has not compensated the US corporation for the
seizure.

a. Claimant F

b. October 2006

c. Claimant F is a US corporation that has six restaurant outlets in
Belarus. In 2002 Minsk City authorities physically blocked access
to Claimant F's most popular branch, ostensibly as a safety
precaution while the city performed construction work at a nearby
building. However, during the same time frame the Belarusian
government made a number of public statements hostile towards
Claimant F, including the Ministry of Health declaring Claimant F's
food was dangerous to Belarusian citizens. Claimant F's employees
are allowed access to the closed outlet, but are not allowed to
conduct business at the site. The city has promised for the past
several years to reopen the restaurant, but has taken no positive
action. Talks have been underway for compensation for several
years, with no progress. Claimant F has plans to expand in Belarus,
but not until this outlet is returned to their control.

a. Claimant G

b. 1995

c. Claimant G is a US company that provided equipment and services
to Belarus for a demilitarization project. Claimant G alleges that
Belarus effectively changed the agreed terms of the contract to
exclude the company from ongoing participation without compensating
the Claimant for the services and equipment it had provided. After
failure of direct negotiations with Belarus, Claimant G filed an
expropriation claim with OPIC.

On March 31, 1997, OPIC compensated Claimant G in the amount of $5.9
million for expropriation of its investment, a joint venture in
Belarus, and the Claimant has assigned its claim against the GOB to
OPIC. Negotiations were suspended by OPIC when the MFA formally
requested in March 1999 that OPIC cancel or withdraw its
expropriation claim determination in favor of Claimant G. OPIC has
since informed Belarus that it is willing to resume negotiations,
assuming some common ground can be found.

US Government Property

a. Claimant H (US Government)

b. July 12, 2001

c. Claimant H provided US Government-owned computer and printing
equipment to the Volny Gorod Newspaper in Krichev. On July 12,
2001, the Police confiscated the equipment, valued at $5,783. US
Embassy officials observed the court trial and State Department
Spokesman Richard Boucher issued a statement concerning the case on
August 3, 2001. Post has reached no resolution with Belarus on this
issue.

a. Claimant I (US Government)

b. August 2001

c. Claimant I provided US Government-owned computer and printing
equipment to the Philon Kmita Regional Center for Support and
Development of Democratic Changes in Orsha. On August 14, 2001, the
Police confiscated four computers from the center, citing a
Presidential Decree as justification. On August 17, 2001, the
authorities returned and seized the center's risograph printing
equipment. The equipment was subsequently confiscated by court
decision. A still later court decision returned the risograph
equipment, but the computers remain in Belarus' possession. Post
has not reached a resolution on this issue with Belarus.

a. Claimant J (US Government)

b. February 2003

c. Claimant J provided US Government-owned risograph printing
equipment worth $6,735 to the Strike Committee of Outdoor Market
Stall Operators. The Police seized the equipment on February 15,
2003, allegedly refusing to produce a warrant or give the Strike
Committee a copy of the receipt confirming the seizure, as required
under Belarusian law. The equipment has not been returned, nor has
Post been able to secure compensation for the seized risograph.

a. Claimant K (US Government)

b. October 2002

c. Claimant K is the US Government's Army and Air Force Exchange
Service (AAFES). Due to an administrative error, Customs
documentation for an AAFES shipment bound for US troops in
Afghanistan was incorrect. At the Belarusian border Customs
officials inspected the shipment and noted the discrepancy. As a
result, Belarusian Customs authorities seized government-owned cargo
worth $16,240. An October 29 court ruling formally expropriated the
cargo.

The US Embassy formally protested the action twice in writing and on
numerous occasions verbally, offering assurances that the goods were
not for use in Belarus and were not intended for commercial
purposes. AAFES has received no compensation for the confiscated
property, nor has Belarus shown willingness to negotiate a
resolution on the issue.

a. Claimant L (US Government)

b. March 2003

c. Claimant L loaned US Government-owned technical equipment to
Belarusian television stations through an assistance program
administered by the International Research and Exchanges Board
(IREX). In March 2003 an oblast court in Gomel ruled that seven
pieces of US Government-owned equipment provided through the IREX
program should be expropriated. Although the US Government holds
title to the equipment, Embassy officials were not allowed to
participate in court proceedings.

Following the seizure, the Embassy formally protested the court's
ruling to the Ministry of Foreign Affairs (MFA),requesting that the
equipment be returned to the US Government. The issue was a subject
of frequent interventions with the MFA, including with the Foreign
Minister. Belarus has shown no willingness to negotiate the return
of the government-owned equipment.

a. Claimant M (US Government)

b. December 2004

c. Claimant M provided US Government-owned computer equipment and
cell phones worth approximately $10,000 to the NGO Business
Initiative. Police and the BKGB seized the equipment in April 2004
when they arrested the head of the NGO. On December 30, 2004 a
Minsk District Court judge ruled the equipment should be returned to
the Embassy. No equipment has been returned; it remains in BKGB
custody.

Claimants
--------------

Claimant A is Emerson Process Management, a US company based in St.
Louis, MO. EPM has not signed a privacy waiver.

Claimant B is Cartwright Trading Ltd. Post does not know where
Cartwright is registered, and Cartwright has not signed a privacy
waiver.

Claimant C is American MOL Corporation. Post does not know where
this company is registered, and American MOL has not signed a
privacy waiver.

Claimant D is P.I.N. Trade International, Inc., a U.S. corporation
registered in Brooklyn, New York. P.I.N. Trade International, Inc.
has not signed a privacy waiver.

Claimant E is Calls Capital, LLC, a U.S. corporation registered in
Oregon. Calls Capital, LLC has not signed a privacy waiver.

Claimant F is McDonald's Corporation, headquartered in Chicago, IL.
McDonald's has not signed a privacy waiver.

Claimant G is Alliant Techsystems, a U.S. company headquartered in
Edina, Minnesota. Post has no information that Alliant Techsystems
signed a privacy waiver.

Claimants H, I, J, K, L and M are the U.S. Government.

Stewart