Identifier
Created
Classification
Origin
07TASHKENT2180
2007-12-27 13:46:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tashkent
Cable title:
AT LONG LAST, NGO FUNDS DISPUTE IS RESOLVED
how-toVZCZCXYZ0065 PP RUEHWEB DE RUEHNT #2180 3611346 ZNR UUUUU ZZH P 271346Z DEC 07 FM AMEMBASSY TASHKENT TO RUEHC/SECSTATE WASHDC PRIORITY 8974 INFO RUEHAH/AMEMBASSY ASHGABAT 3574 RUEHTA/AMEMBASSY ASTANA 9787 RUEHEK/AMEMBASSY BISHKEK 4190 RUEHLM/AMEMBASSY COLOMBO 0078 RUEHKA/AMEMBASSY DHAKA 0130 RUEHDBU/AMEMBASSY DUSHANBE 0066 RUEHIL/AMEMBASSY ISLAMABAD 3793 RUEHBUL/AMEMBASSY KABUL 2069 RUEHKT/AMEMBASSY KATHMANDU 0166 RUEHNE/AMEMBASSY NEW DELHI 0738 RUEHGV/USMISSION GENEVA 0917 RUEHVEN/USMISSION USOSCE 2216 RHEFDIA/DIA WASHDC RHEHNSC/NSC WASHINGTON DC RUEAIIA/CIA WASHDC
UNCLAS TASHKENT 002180
SIPDIS
SENSITIVE
SIPDIS
DEPARTMENT FOR SCA/CEN AND EUR/ACE
ASTANA FOR ALMATY/USAID
USAID/E&E/EA FOR BOB WALLIN
E.O. 12958: N/A
TAGS: PREL PGOV EAID UZ
SUBJECT: AT LONG LAST, NGO FUNDS DISPUTE IS RESOLVED
REF: A. TASHKENT 1070
B. TASHKENT 1151
UNCLAS TASHKENT 002180
SIPDIS
SENSITIVE
SIPDIS
DEPARTMENT FOR SCA/CEN AND EUR/ACE
ASTANA FOR ALMATY/USAID
USAID/E&E/EA FOR BOB WALLIN
E.O. 12958: N/A
TAGS: PREL PGOV EAID UZ
SUBJECT: AT LONG LAST, NGO FUNDS DISPUTE IS RESOLVED
REF: A. TASHKENT 1070
B. TASHKENT 1151
1. (SBU) Summary: On December 24 Post USAID Country Director
signed a Memorandum of Understanding with Deputy Minister of
Finance S. Bekenov establishing the legal framework for
reprogramming frozen funds from the Foundation for
International Community Assistance (FINCA) and the
Agricultural Cooperative Development International/Volunteers
in Overseas Assistance (ACDI/VOCA) for use in the health
sector. The agreement follows months of complex
negotiations. The GOU is expected to drop its legal cases
against both FINCA and ACDI/VOCA which have been pending in
the economic court. A joint liquidation committee will
satisfy outstanding liabilities, including some tax
obligations, although accruals of penalties and interest will
be forgiven. Remaining funds will be directed to development
projects in the health sector. USAID and the Ministry of
Health will collaborate to identify appropriate projects and
implementing partners, and the GOU expressed hope that this
memorandum will pave the way for expanded cooperation with
USAID. End summary.
2. (SBU) Per the GOU's request, USAID Country Director met
with Deputy Minister of Finance Bekenov on December 24 to
sign a memorandum of understanding which finally resolves the
FINCA and ACDI/VOCA cases. After the EUR/ACE Director's
visit to Tashkent to stress the seriousness of resolving
these seized funds cases with senior GOU officials, the GOU
agreed in principle in June 2007 to a solution in which
frozen funds would be reprogrammed to other health
development projects in Uzbekistan (reftels). However, the
final memorandum spelling out the process took several months
to negotiate. The GOU was eager to set up this signing
event, and the timing immediately after the Presidential
elections was coincidental.
3. (SBU) The delay in signing the agreement was largely due
to legal wrangling and discussions within the GOU, including
at the Cabinet of Ministers level. The MFA Legal Department
will now inform the Office of the State Prosecutor, which is
expected to formally drop its pending case against both FINCA
and ACDI/VOCA in the economic court. Following Uzbek law, a
joint liquidation committee will be formed, which will
identify legitimate creditors and pay outstanding
obligations, which include some taxes. However, the GOU has
agreed to waive contested accruals of penalties and interests
on outstanding taxes.
4. (SBU) Once the liquidation committee has completed its
task, USAID and the Ministry of Health will work together to
identify appropriate projects and implementing partners to
which remaining funds will be directed. The entire
legal-reprogramming process will take several months to
complete, but the stakeholders are satisfied that the issue
has finally been resolved.
5. (SBU) Comment: This is the first bilateral agreement in
the assistance sector signed with Uzbekistan in several
years. It is an important step towards normalizing the
bilateral relationship. The GOU recognized the seriousness
of negotiations on this issue and, now that an agreement has
been formally reached, it will be easier for the GOU to
expand cooperation with USAID in Uzbekistan.
NORLAND
SIPDIS
SENSITIVE
SIPDIS
DEPARTMENT FOR SCA/CEN AND EUR/ACE
ASTANA FOR ALMATY/USAID
USAID/E&E/EA FOR BOB WALLIN
E.O. 12958: N/A
TAGS: PREL PGOV EAID UZ
SUBJECT: AT LONG LAST, NGO FUNDS DISPUTE IS RESOLVED
REF: A. TASHKENT 1070
B. TASHKENT 1151
1. (SBU) Summary: On December 24 Post USAID Country Director
signed a Memorandum of Understanding with Deputy Minister of
Finance S. Bekenov establishing the legal framework for
reprogramming frozen funds from the Foundation for
International Community Assistance (FINCA) and the
Agricultural Cooperative Development International/Volunteers
in Overseas Assistance (ACDI/VOCA) for use in the health
sector. The agreement follows months of complex
negotiations. The GOU is expected to drop its legal cases
against both FINCA and ACDI/VOCA which have been pending in
the economic court. A joint liquidation committee will
satisfy outstanding liabilities, including some tax
obligations, although accruals of penalties and interest will
be forgiven. Remaining funds will be directed to development
projects in the health sector. USAID and the Ministry of
Health will collaborate to identify appropriate projects and
implementing partners, and the GOU expressed hope that this
memorandum will pave the way for expanded cooperation with
USAID. End summary.
2. (SBU) Per the GOU's request, USAID Country Director met
with Deputy Minister of Finance Bekenov on December 24 to
sign a memorandum of understanding which finally resolves the
FINCA and ACDI/VOCA cases. After the EUR/ACE Director's
visit to Tashkent to stress the seriousness of resolving
these seized funds cases with senior GOU officials, the GOU
agreed in principle in June 2007 to a solution in which
frozen funds would be reprogrammed to other health
development projects in Uzbekistan (reftels). However, the
final memorandum spelling out the process took several months
to negotiate. The GOU was eager to set up this signing
event, and the timing immediately after the Presidential
elections was coincidental.
3. (SBU) The delay in signing the agreement was largely due
to legal wrangling and discussions within the GOU, including
at the Cabinet of Ministers level. The MFA Legal Department
will now inform the Office of the State Prosecutor, which is
expected to formally drop its pending case against both FINCA
and ACDI/VOCA in the economic court. Following Uzbek law, a
joint liquidation committee will be formed, which will
identify legitimate creditors and pay outstanding
obligations, which include some taxes. However, the GOU has
agreed to waive contested accruals of penalties and interests
on outstanding taxes.
4. (SBU) Once the liquidation committee has completed its
task, USAID and the Ministry of Health will work together to
identify appropriate projects and implementing partners to
which remaining funds will be directed. The entire
legal-reprogramming process will take several months to
complete, but the stakeholders are satisfied that the issue
has finally been resolved.
5. (SBU) Comment: This is the first bilateral agreement in
the assistance sector signed with Uzbekistan in several
years. It is an important step towards normalizing the
bilateral relationship. The GOU recognized the seriousness
of negotiations on this issue and, now that an agreement has
been formally reached, it will be easier for the GOU to
expand cooperation with USAID in Uzbekistan.
NORLAND