OSCE LEGAL PERSONALITY, ROUND 5 - MOVEMENT FORWARD AS

UNCLAS SECTION 01 OF 02 USOSCE 000331

SIPDIS

SENSITIVE
SIPDIS

FOR L/EUR AND EUR/RPM

E.O. 12958: N/A
TAGS: OSCE KTIA
SUBJECT: OSCE LEGAL PERSONALITY, ROUND 5 - MOVEMENT FORWARD AS
RUSSIA PLAYS NICE (FOR NOW)

REF: USOSCE 291 AND PREVIOUS


1. (SBU) Summary: At the July 5-6 round of negotiations on a
Convention on Legal Personality, Legal Capacity and Privileges and
Immunities for the OSCE (CLPPI),the absence of key players limited
the WG's ability to deal with unresolved issues. There was extended
discussion on a Belgian proposal that would exempt OSCE staff from
paying national income tax provided an assessment was made that
would go to the benefit of the organization itself despite concerns
that such a decision would exceed the WG's mandate to deal with
legal personality and privileges and immunities (P's and I's).
Russia continued to insist that field operations are "temporary" and
thus not fully part of the OSCE, but threw up fewer roadblocks to
protecting field operations than in previous rounds. Significant
progress was eventually made on the question of treatment of field
operations staff both in substance (Russia has accepted identical
P's and I's for both "members of the OSCE Secretariat and
Institutions" and "members of field operations," with a more limited
geographical scope for the latter) and terminology (field operations
staff will not be contrasted with "OSCE officials," a Russian
proposal roundly rejected by the WG). On entry into force (Article
18),there was a general feeling that something less than unanimous
ratification by all 56 States should be required for the convention
to take effect. The Russians appear to be taking a more
conciliatory stance on convention negotiations with the goal of
winning over more support for their charter draft. The next round
is scheduled to take place September 13-14. End summary.

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Articles 14 bis -- Members of Field Operations
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2. (U) The fifth round of negotiations on the proposed CLPPI was
again chaired by Dutch Ambassador Ida van Veldhuizen-Rothenbuecher,
assisted by Austrian MFA Legal representative Helmut Tichy. The
absence of the Russian MFA legal adviser and OSCE Parliamentary (PA)
representative Nothelle limited discussion of certain imporant
outstanding issues.


3. (U) Discussion of which P's and I's should be afforded field
operations staff and other OSCE personnel was unexpectedly
harmonious. The UK, backed by Canada, sought to eliminate one of
the few remaining distinctions between the P's and I's to be given
field operations staff and other OSCE personnel by proposing
limiting P's and I's of all OSCE personnel (rather than only field
operations staff) to the geographic areas where the officials are
assigned. Russia, supported by the United States, disagreed, noting
that such a clause would unnecessarily limit the geographic scope of
the P's and I's for Secretariat staff, whose responsibilities,
unlike those of field staff, extend throughout the entire OSCE
region After considerable discussion, Russia accepted identical P's
and I's for all personnel, with a more limited geographical scope
for field operation staff to country of assignment and when on
official travel, whereas staff of Secretariat and Institutions will
have P's and I's throughout the OSCE region. It also made a key
concession on terminology, in that field operations staff will not
be contrasted with "OSCE officials," a proposal roundly rejected by
other States. Instead, it has agreed to substitute a different
term, such as "members of the OSCE Secretariat and Institutions,"
which does not imply that field operations staff are somehow not
OSCE officials. The Chair told us later that Russia has also agreed
to drop its insistence on distinguishing between "OSCE" and "Field
Operations" in Articles 5-10 covering premises, assets, etc.

-- Sharp disagreement remains over whether to afford comprehensive
immunity from personal arrest or detention to staff of the
Secretariat and Institutions. Opponents noted that no such right is

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provided in the 1946 UN Convention, generally viewed as the model
for P's and I's appropriate for IOs, while proponents argued that
such immunity has been included in more recent conventions, such as
those providing P's and I's for the ICC and ITLOS, and asserted that
this more recent practice reflects the need to protect staff from
political arrests.

-- On tax exemptions (14d),Belgium proposed conditioning tax
exemptions for OSCE personnel on the existence of a "staff
assessment" (in effect, an internal tax),citing the EU and the UN,
where the incomes of respective personnel are exempt from paying an
income tax but are instead subject to a staff assessment for the
benefit of those organizations. Belgium proposed language for a
similar system for the OSCE. The UK, Canada and Sweden supported
but the Netherlands noted that such a proposal may be more difficult
to sell in capitals. The Chair asked that this language be dropped;
Belgium said this was not justified as no States had objected and
only asked to consult with capitals. After considerable discussion,
the Chair again stressed that the matter at hand was a convention to
grant the OSCE legal personality; issues such as self-financing

USOSCE 00000331 002 OF 002


schemes for the organization could further complicate negotiations.
The United States noted that there was no precedent for an
international instrument's conditioning tax exemption on the
existence of a staff assessment; all such schemes had been adopted
internally, after and separately from establishment of the tax
exemption principle. Tichy agreed, suggesting that the WG could
consider such a proposal only if given a mandate following
discussion in the Permanent Council. He instead tabled language in
which individual parties could condition their grant of tax
exemption to the existence of such a staff assessment.

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Article 1 -- Definitions
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4. (U) The Chair tried to reach consensus on 1(a),which defines the
constituent elements of the OSCE (Russia since the beginning has
objected to including "field operations"). The Chair recommended
dropping "the Secretariat, Institutions [and Field Operations]" as
the first two were never again mentioned in the convention and the
last was dealt with separately in 14 bis. Supporting a Russian
proposal, she then advocated adding language taken from the Rules of
Procedure on executive structures. Russia again asserted that field
operations were only "temporary" in nature and for that reason, its
staff and P's and I's should be different from those of the
Secretariat. Tichy said the crux of the issue rested on whether

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there would be a 14 bis on field operations. Russia then said that
if there was agreement on the content and inclusion of 14 bis,
language on 1(i) bis (defining members of field operations) could be
kept. The provisionally agreed text follows standard practice by
defining the "OSCE" simply as "the Organization for Security and
Cooperation in Europe."

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Article 18 (Entry into Force)
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5. (U) There was considerable discussion over how many participating
States must ratify the convention before it entered into force. The
Chair noted that since the OSCE is a consensus-based organization,
it should theoretically be all 56 States, but that would be
difficult. Canada noted that if it were to be less than 56, there
would be two legal regimes in effect, i.e., with the convention and
without. However, since getting all 56 would take years, if it were
even possible, Ottawa was prepared to support a ratification by 50
percent plus one, that is, the convention would go into effect after
29 States ratify. The UK agreed that less than 56 would be
desirable and noted that those States that had not ratified could
still enter into a bilateral relationship with the OSCE. Russia
said it would prefer the "maximum" number, but could also compromise
on something less, perhaps two-thirds. It also suggested that the
ratifications of at least some, if not all, the 22 host countries
(i.e., Austria (Secretariat),Denmark (OSCE PA),Poland (ODIHR),
Czech Republic (Economic and Environmental Forum),as well as the 18
countries which currently host field operations) should be required
as they were the States in which the CLPPI would have greatest
impact. It noted that since only 34 participating States are not
host countries, a two-thirds rule (39 ratifications) would mean that
at least five host countries would be needed to ratify. The United
States reserved its position. Tichy noted that once the convention
enters into force, even if at a relatively low number, the OSCE's
international legal personality would be established, and that it
would be able to enter into contracts in those states which were
party to the convention. It was agreed to bracket the numbers 29
and 39 into the text.

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Comment
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6. (SBU) The Russians seem to be playing nice so far, foregoing many
(though not all) opportunities to poke sticks in the spokes and, in
fact, were affirmatively cooperative on the issue of Field
Operations. They may be seeking to cooperate on achieving an
acceptable text before Madrid, then urge EU Members and others to
pressure the United States to accept negotiations on a charter -
ratification of which they have made a condition of approving a
CLPPI. The Russian del again asserted to the U.S. representative on
the margins of the talks that under Russian law, a convention
granting legal personality and a legal instrument on structure
(i.e., a charter) are necessary to provide P's and I's. Some States
may find such an argument convincing. End comment.

LAEUCHLI