INDIA AGREES TO BILATERAL TALKS ON PROPERTY TAX

UNCLAS USUN NEW YORK 000240

SIPDIS

SIPDIS

DEPT FOR IO/UNP; L/DL, M

E.O. 12958: N/A
TAGS: OFDP PREL IN UN
SUBJECT: INDIA AGREES TO BILATERAL TALKS ON PROPERTY TAX

REF: STATE 26684


1. As instructed reftel, Ambassador Wolff met with Indian
DepPermRep Ajai Malhotra March 14 to deliver reftel talking
points and ask that the Indian Mission consider engaging in
bilateral talks on the issue of New York property tax rather
than bringing the issue before the UN Committee on Relations
with the Host Country or the ICJ. Malhotra responded that
the USG proposal was "eminently sensible", that India wanted
to resolve the issue in a friendly manner, and that India had
not mentioned possible referral of the issue to the ICJ in
its letter to the Committee Chair. (It turns out that the
ICJ reference originated with the Committee Chairman
Mavroyiannis himself, based on his conversations with other
interested delegations.) Malhotra mentioned that like India,
the Chinese Mission owned a mixed-use office/residence tower,
but did not pay taxes because the Consular Convention between
the US and China exempted the Chinese staff residences. He
implied that negotiation of a bilateral agreement to exempt
diplomatic and consular property from real estate taxes would
be of possible interest to India - noting that it would be
best if it could be made retroactive. He stressed that it is
in our joint interest to find a solution in order to avoid
reciprocal action which would be more costly to the U.S. than
to India given the extent of U.S. diplomatic and consular
properties there. Malhotra also confirmed that India would
appeal the District Court's February 2008 decision in favor
of New York City, and that the Indians would like to move
forward quickly on the bilateral track, preferably either in
New York or in New Delhi. Ambassador Wolff requested, and
Malhotra agreed to inform the Committee Chairman (subject to
almost certain approval from Delhi over the weekend of March
15-16) that India would pursue bilateral talks on the issue
and that an emergency meeting of the Committee need not take
place until further notice.


2. USUN Host Country and Legal MinCouns had met with
Chairman Mavroyiannis earlier on March 14 to inform him of
our upcoming approach to the Indians. Mavroyiannis agreed
not to announce a meeting of the Committee (in the unlikely
event it were to take place, the new date would be March 24
vice March 20) pending confirmation from the Indian Mission
that it did not see a need for an emergency meeting.
Following the meeting with Malhotra, Host Country MinCouns
told the Chair that the Indians had accepted the USG proposal
in principle and that it was very likely that India would
confirm that on Monday morning, March 17.


3. USUN plans to meet with the Mongolian PermRep as early as
Monday, March 17, but requests amended talking points for use
with that Mission.
KHALILZAD