ARGENTINA: DELIVERY OF ZIMBABWE DEMARCHE RE BANK

UNCLAS BUENOS AIRES 001373 SENSITIVE SIPDIS AF/S - BRIAN WALCH E.O. 12958: N/A TAGS: ASEC BEXP ECON EFIN AR ZI SUBJECT: ARGENTINA: DELIVERY OF ZIMBABWE DEMARCHE RE BANK NOTES REF: STATE 103129 ¶1. (SBU) EconOff delivered reftel demarche in separate meetings on October 1 to Marcelo Cesa, Argentine MFA desk officer for the U.S., Adrian Cosentino, new Finance Undersecretary at the Ministry of Economy, and also with Argentine Central Bank Managing Director and Chief Economist Hernan Lacunza and Lacunza's chief advisor, Guillermo Zuccolo. ¶2. (SBU) These GoA and Central Bank officials agreed to review the information provided on the situation in Zimbabwe and the possibility that the Government of Zimbabwe may be considering a supply contract with well-known Argentine supplier of bank note paper, Ciccone Calcografia. They each said they would have to discuss internally within their institutions whether the government and/or Central Bank would be willing to approach the printing company to discourage their participation in any contract with Zimbabwe. However, all emphasized that Argentina has no legal grounds for blocking such an arrangement. ¶3. (SBU) The MFA's Marcelo Cesa confirmed October 3 that he has passed the substance of the demarche up the chain of command in the MFA, but is so far unable to provide a general GoA position on Zimbabwe. However, Post notes that the MFA announced June 25 that it had suspended its plan to send Argentine election observers to Zimbabwe, following the UNSC's June 23 unanimous statement criticizing pre-election violence in Zimbabwe and raising concerns about the elections. The GoA press release calls for a negotiated solution to the situation in Zimbabwe. Post will highlight the statement in follow-up discussions with GoA and Central Bank officials on this topic. ¶4. (SBU) Post is conducting due diligence on Ciccone Calcografia before pursuing direct contact. Ciccone Calcografia is one of the largest Argentine suppliers of bank notes and has contracts with the Argentine Central Bank for printing bank notes and the Argentine Federal Police for printing passports. However, it has a troubled history (including allegations of corruption),may currently be experiencing financial difficulties, and has been the subject of several critical media exposes by local investigative journalists. One of these articles, in left-leaning daily "Pagina 12," criticized U.S. Embassy advocacy in 2005 on behalf of Californian firm Cogent Systems, which was bidding on computer security and digital fingerprint technology contracts in partnership with Ciccone Calcografia. Given the sensitivities involved, therefore, Post plans to move cautiously in approaching this company. WAYNE