Identifier
Created
Classification
Origin
09MANAGUA902
2009-09-11 16:57:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Managua
Cable title:  

NICARAGUAN GOVERNMENT SEEKS USE OF U.S. LAW TO AVOID

Tags:  EINV ECON USTR KIDE NU 
pdf how-to read a cable
VZCZCXYZ0000
RR RUEHWEB

DE RUEHMU #0902/01 2541657
ZNR UUUUU ZZH
R 111657Z SEP 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 4554
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
UNCLAS MANAGUA 000902 

STATE FOR WHA/CEN, EB/IFD/OIA, AND L/CID
STATE ALSO FOR WHA/EPSC
STATE PASS TO USTR
TREASURY FOR INL AND OWH

SENSITIVE

SIPDIS


E.O. 12958: N/A
TAGS: EINV ECON USTR KIDE NU
SUBJECT: NICARAGUAN GOVERNMENT SEEKS USE OF U.S. LAW TO AVOID
COMPENSATING U.S. CITIZEN CLAIMANTS

REFS: A) MANAGUA 537, B) MANAGUA 002, C) MANAGUA 542, D) 02 MANAGUA
877

SUMMARY
-------

UNCLAS MANAGUA 000902

STATE FOR WHA/CEN, EB/IFD/OIA, AND L/CID
STATE ALSO FOR WHA/EPSC
STATE PASS TO USTR
TREASURY FOR INL AND OWH

SENSITIVE

SIPDIS


E.O. 12958: N/A
TAGS: EINV ECON USTR KIDE NU
SUBJECT: NICARAGUAN GOVERNMENT SEEKS USE OF U.S. LAW TO AVOID
COMPENSATING U.S. CITIZEN CLAIMANTS

REFS: A) MANAGUA 537, B) MANAGUA 002, C) MANAGUA 542, D) 02 MANAGUA
877

SUMMARY
--------------


1. (SBU) During the August 27 Property Working Group
meeting, Government of Nicaragua (GON)officials told us they were
reviewing 26 U.S. citizen claims to determine whether they met the
criteria established in Section 527 of the Foreign Relations
Authorization Act of Fiscal Years 1994 and 1995. They informed us
that 19 U.S. claimants could no longer pursue their claims through
the administrative process and could either accept the government's
settlement offer or seek resolution in court. Officials asked us to
contact 24 claimants whose claims were dismissed for administrative
reasons and ask them to submit documents to advance their cases.
They assured us that the government would resolve the 28 claims of
U.S. citizen Juan Barreto, whose property is under the control of
the Nicaraguan Army. During the first working group meeting of the
2009-2010 waiver year, the GON made it clear that their strategy is
to compel U.S. claimants to accept whatever compensation the
government offers without negotiation and use any mechanism at its
disposal to dismiss claims or pay inadequate compensation.

MISINTERPRETATION OF SECTION 527
--------------


2. (U) On August 27, Econoff held the monthly Property Working Group
meeting with Ruth Zapata, Head of the Office of Assessment and
Quantification (OCI); Jeanette Garcia, President of the National
Confiscations Review Commission (CNRC); Magally Bravo, the Attorney
General4s Executive Coordinator for Property Issues; Alfonso
Solorzano, CNRC member; and Rebeca Zuniga, Coordinator of the Office
of U.S. Citizen Claims. Zapata and Bravo told us that the GON was
reviewing 26 U.S. citizen claims to determine whether they complied
with paragraph (h) of Section 527 of the Foreign Relations
Authorization Act of Fiscal Years 1994 and 1995. Paragraph (h)
defines a United States person as a U.S. citizen, corporation,
partnership, or association at least 50 percent beneficially owned
by United States citizens.


3. (SBU) Econoff explained that at this time, the only
operable paragraph of Section 527 is (g),which authorizes the U.S.
Government to grant a waiver to Nicaragua based on U.S. national
interests. He explained that the criteria applicable in evaluating
Nicaragua's progress in resolving U.S. citizen claims during this
waiver year are the benchmarks laid out in the Secretary's 2009-2010
Section 527 waiver notification letter to Foreign Minister Samuel
Santos. Econoff emphasized that the USG only considers a property
claim resolved when a U.S. citizen has determined that he/she has
received adequate and effective compensation.

GON SETTLEMENT OFFERS: TAKE IT OR LEAVE IT
--------------


4. (SBU) Zapata provided Econoff a list of 19 U.S. claimants
who could no longer pursue their claims through the administrative
process. She added that they could either accept the government's
settlement offer or seek resolution in court. Econoff said the
Property Office would contact claimants but he asked for additional
information about the status of these claims. He urged GON
officials to work with claimants to resolve outstanding claims,
underscoring that the USG does not consider a claim resolved when
the GON publishes case resolutions in the Official Gazette and
deposits compensation in an escrow account (Ref A).

GON REDUCES ADMINISTRATIVE DISMISSALS
--------------


5. (SBU) Bravo provided Econoff a revised list of 24 U.S. claimants
whose claims the GON dismissed for administrative reasons; some lack
of proof of ownership and/or confiscation of the property in
question, and other claims were never filed with the CNRC. Econoff
responded that the Property Office would follow up with these
claimants, but he also asked GON officials to exercise patience and
flexibility. He noted that some claimants were physically forced
from their property without possessions, while others lost documents
located at regional cadastral registry offices that had been
destroyed by fire, as was the case in Matagalpa, or during the civil
war, as occurred in Chinandega and Masaya (Ref B). [Note: On May
22, Attorney General Hernan Estrada sent the Ambassador a list of 52
U.S. claimants whose claims the GON had dismissed for administrative
reasons. The Property Office contacted the majority of these
claimants, and they provided the necessary paperwork to the CNRC.
The GON subsequently reduced the number of administrative dismissals
from 52 to 24 (Ref C). End Note.]

STATUS OF THE BARRETO CASE
--------------


6. (SBU) Econoff raised the case of U.S. citizen Juan Barreto, whose
28 properties are under control of the Nicaraguan Army (Ref D).
Zuniga said she awaited additional paperwork from the Barreto family
to finalize the case. Zapata assured Econoff that the GON would
settle the case as soon as possible.

COMMENT
--------------


7. (SBU) During the first working group meeting of the 2009-2010
waiver year, GON officials made it clear that their strategy is to
compel U.S. claimants to accept whatever compensation the government
offers without negotiation. The government will also use any
mechanism at its disposal, including misinterpretation of U.S. law,
to dismiss claims or pay inadequate compensation. This approach
complicates our efforts to cooperate with the GON and U.S. claimants
to advance case resolution during this waiver year. We will
encourage the GON to work with us and U.S. claimants to find
reasonable solutions to advance claims. We will emphasiQ to the
GON that we are also interested in reducing the number of
outstanding claims, as long as cases are addressed in a fair and
transparent manner. End Comment.

CALLAHAN