Identifier
Created
Classification
Origin
09PANAMA373
2009-05-07 23:23:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Panama
Cable title:  

MARTINELLI'S U.S. AMBASSADOR-DESIGNATE SUPPORTS

Tags:  ECON EFIN EFTA ETRD PGOV PM PREL SNAR 
pdf how-to read a cable
VZCZCXYZ0000
RR RUEHWEB

DE RUEHZP #0373/01 1272323
ZNR UUUUU ZZH
R 072323Z MAY 09
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 3365
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RHEHAAA/WHITE HOUSE WASHDC
UNCLAS PANAMA 000373 

SENSITIVE
SIPDIS

WHSC PLEASE PASS TO USTR AUSTR EISSENSTAT

E.O. 12958: N/A
TAGS: ECON EFIN EFTA ETRD PGOV PM PREL SNAR
SUBJECT: MARTINELLI'S U.S. AMBASSADOR-DESIGNATE SUPPORTS
TIEA COMMITMENT

REF: PANAMA 367

UNCLAS PANAMA 000373

SENSITIVE
SIPDIS

WHSC PLEASE PASS TO USTR AUSTR EISSENSTAT

E.O. 12958: N/A
TAGS: ECON EFIN EFTA ETRD PGOV PM PREL SNAR
SUBJECT: MARTINELLI'S U.S. AMBASSADOR-DESIGNATE SUPPORTS
TIEA COMMITMENT

REF: PANAMA 367


1. (SBU) Summary. Jaime Aleman, President-elect Martinelli's
Ambassador-designate to Washington, told Ambassador
Stephenson today (May 7) that Martinelli would support
initiation of Tax Information Exchange Agreement (TIEA)
negotiations with the United States soon as part of Panama's
2002 and 2009 OECD commitments, so long as it is not billed
as a quid pro quo for the U.S.-Panama Free Trade Agreement
(FTA) and contains restrictions such as exchange by request
only and a bar on triangulation of information. Aleman also
confirmed that Martinelli supports the Torrijos
Administration (reftel) carrying forth labor and bearer
shares legislation as part of the GOP's efforts to secure
passage of the FTA. Post believes, and Aleman appeared to
confirm, that the Torrijos government is in the best position
to deliver those reforms, especially changes to labor laws
and regulations. Ambassador Stephenson emphasized that time
is tight on achieving an FTA and suggested that the
Martinelli camp issue a clarifying press statement on its
willingness to consider a TIEA. "We have to do this (a
TIEA); it is in our interest," Aleman said, noting that at
this point he was still speaking personally. End summary.


2. (SBU) Ambassador Stephenson hosted a lunch at her
residence on May 7 for President Elect Martinelli's
Ambassador Designate to Washington, lawyer and power broker
Jaime Aleman, and Martinelli's campaign economic advisor and
prospective Vice Minister of Economy and Finance Frank De
Lima. DCM Gilmour and EconCouns also attended. Aleman's
younger brother, Jose Miguel Aleman, served as Foreign
Minister during the Moscoso Administration. Jaime Aleman, as
Minister of Government and Justice under President Delvalle
in 1988, signed the decree dismissing Manuel Noriega as Head
of the Armed Forces and was forced into exile in Miami. He
is a graduate of Georgetown Preparatory School, Notre Dame
(BA in Economics) and Duke (JD). Frank De Lima is a dual
U.S.-Panamanian citizen, a Boston University graduate, and

most recently held a management position in Martinelli's
supermarket firm and advisory position in his campaign.


3. (SBU) On the issue of a TIEA, Aleman said, "We have to do
this, it is part of our commitment." In addition, he noted
that holding out would be futile. Aleman also mentioned that
entering into TIEAs did not hinder other offshore banking
centers and was aware of the OECD's guideline for 12 TIEAs as
a basis for jurisdictions that had implemented the
internationally agreed tax standard. He ridiculed
application of Panama's retaliatory Ley de Retorcion as
"insane - if it is applied, down goes the Canal expansion
...," and called holdouts "dinosaurs." Aleman, however,
mentioned that publicizing a TIEA as a quid pro quo for the
Administration's FTA support was not acceptable and noted
that Panama would protect its interests by insisting on
exchange of information by request only (as opposed to an
automatic exchange) and a bar on the triangulation of
information (sharing with third parties). Aleman also
confirmed that Martinelli had accepted the Torrijos endgame
(reftel) and would not interfere with the current President's
efforts to pass labor reforms and bearer share regulation as
a precursor to passage of an FTA by the U.S. Congress. He
appeared very comfortable with the Torrijos government
carrying responsibility on these matters, especially changes
to Panama's labor laws and regulations.


4. (SBU) Ambassador Stephenson emphasized that timing is
tight on achieving an FTA and suggested that the Martinelli
camp issue a clarifying press statement soonest on its
willingness to consider a TIEA - apart from the FTA. She
noted that prior press statements by Martinelli and other
officials were causing confusion in Washington. Aleman
replied that passage of the FTA remained Martinelli's highest
priority and that he would convey this advice to the
President-elect. Significantly, Aleman revealed that he had
asked Yavel Francis, currently Panama's Ambassador to the
United Nations, to serve as his DCM. Francis was the
indispensable leader of the inaugural Pathways to Prosperity
Ministerial in Panama in December. She also had served as an
advisor on tax haven issues in the Foreign Ministry. Aleman
added that the Minister of Economy and Finance (and Frank De
Lima's boss) would be Alberto Vallarino, who shared an
interest in meeting OECD standards on transparency.


5. (SBU) Comment. The lunch was striking in that Aleman
needed no convincing on the necessity of committing to
negotiating a TIEA shortly. Almost as if he were reading our
talking points, he noted that a TIEA combined with bearer
shares regulation was essential to the continued growth of
Panama's emerging economy based on maintaining foreign
investment flows. Aleman's voice is powerful and
encouraging. Nonetheless, resistance to a TIEA will continue
in some quarters. Most importantly, reaching an FTA will
take close coordination with both the outgoing Torrijos and
incoming Martinelli administrations. Torrijos' center-left
PRD party is far and away in the better position to deliver
labor reforms and bearer share regulation. A TIEA - apart
from an FTA - must be sensitively negotiated with
President-elect Martinelli. End comment.
STEPHENSON