INDIA AND MONGOLIA WANT NY PROPERTY TAX ISSUE

C O N F I D E N T I A L USUN NEW YORK 000207

SIPDIS

SIPDIS

DEPT FOR M, IO/UNP, L/DL

E.O. 12958: DECL: 03/05/2013
TAGS: OFDP UN
SUBJECT: INDIA AND MONGOLIA WANT NY PROPERTY TAX ISSUE
REFERRED TO THE INTERNATIONAL COURT OF JUSTICE

Classified By: Ambassador Alejandro D. Wolff for reasons 1.4(b and d).


1. Cypriot Ambassador Mavroyiannis, Chairman of the UN
Committee on Relations with the Host Country, has informed
USUN that the Indian and Mongolian Ambassadors have asked him
to convene an emergency meeting of the Committee with a view
toward a General Assembly request to the International Court
of Justice (ICJ) for an advisory opinion that New York's
attempt to tax diplomatic staff residences and other foreign
government owned property is a violation of diplomatic
immunity. It is expected that India and Mongolia will take
the position that a tax lien on such property makes it
impossible to sell and thus de facto violates a country's
immunity from execution of the lien. The 19-member committee
cannot refer an issue directly to the ICJ, but it will almost
certainly approve a recommendation to the UN General Assembly
that it consider a UNGA resolution requesting the ICJ to
provide an opinion on this issue. It is the Chairman's
intention to convene the meeting during the week of March 17.
USUN understands that the Department has not yet developed a
position as to whether the current New York Real Property Tax
Law is consistent with international practice or USG
diplomatic interests in property overseas and may not be able
to do so before March 17. If we are not able to articulate a
clear host country position on the issue, our ability to
influence the parties will remain minimal. (And if our
position is to support the City's interpretation of the tax
law, it would likely lead to an ICJ referral anyway.)


2. USUN understands that some Department offices would
prefer that a Host Country Committee meeting not take place
and India's and Mongolia's concerns not be referred to the
ICJ. It is possible that the committee's Chairman would be
willing to defer a meeting, but highly unlikely that he would
agree to do so without the concurrence of the Indians and
Mongolians. In order to get that concurrence, either he or
USUN would have to signal to India and Mongolia that the host
country is sympathetic to their views and is formulating a
strategy to deal with the issue. However, even if a meeting
of the Committee were postponed, that would not prevent
states from bringing the matter directly before the General
Assembly Plenary.


KHALILZAD