Identifier
Created
Classification
Origin
09PANAMA481
2009-06-16 15:32:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Panama
Cable title:
PANAMA: 2009 REPORT ON INVESTMENT DISPUTES AND
how-toVZCZCXYZ0014 PP RUEHWEB DE RUEHZP #0481 1671532 ZNR UUUUU ZZH P 161532Z JUN 09 ZDK FM AMEMBASSY PANAMA TO RUEHC/SECSTATE WASHDC PRIORITY 3497 INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
UNCLAS PANAMA 000481
SIPDIS
SENSITIVE
FOR STATE WHA/CEN - SINGER
FOR STATE EB/IFD/OIA - GOETHERT AND BUTLER
FOR STATE L/CID - PEARSALL
E.O. 12958: N/A
TAGS: CASC ECON EFIN ENIV KIDE PGOV PM OPIC
SUBJECT: PANAMA: 2009 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS
This message is Sensitive But Unclassified. Please Handle
Accordingly.
UNCLAS PANAMA 000481
SIPDIS
SENSITIVE
FOR STATE WHA/CEN - SINGER
FOR STATE EB/IFD/OIA - GOETHERT AND BUTLER
FOR STATE L/CID - PEARSALL
E.O. 12958: N/A
TAGS: CASC ECON EFIN ENIV KIDE PGOV PM OPIC
SUBJECT: PANAMA: 2009 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS
This message is Sensitive But Unclassified. Please Handle
Accordingly.
1. (U) Below is Embassy Panama's input for the
congressionally mandated annual report on investment disputes
as contemplated in Section 527 of the FY 94-95 Foreign
Relations Authorizations Act.
The United States is aware of one case in which United States
citizens have an outstanding claim against the Government of
Panama. There are no new cases since Embassy Panama's filing
of the 2008 report.
2. (SBU) Last Update: 12 June 2009
a. Claimant A
b. 2005
c. In 1998, Claimant A invested $11 million for a Panamanian
energy company's equity and arranged for the company to
receive a $17 million bank bridge loan convertible into
bonds. Claimant A alleges that both the equity and debt
investments are subject to equal value tax credits under
Panamanian Law No. 28 of 1995. In March 2005, the
Vice-Minister of Finance notified Claimant A that the sale of
the original $11 million in stock was not subject to any tax
benefits. Claimant A has taken the matter to arbitration
under the U.S.-Panama Bilateral Investment Treaty.
POST ACTION: Previously, Post had urged the current GOP
government to resolve the tax credit dispute promptly and
fairly. The matter is in arbitration. Post will raise the
issue with appropriate members of the new GOP government
which takes office on July 1. Post remains in contact with
Claimant A and is monitoring the matter. On June 8, 2009,
Claimant A's lawyer stated the case is still in arbitration
and that there is no indication that the current government
will resolve the case. However, Claimant A's attorney states
that the in-coming government has indicated a willingness to
settle.
List of Claimants:
Claimant A: Corporacion Panamena de Energia S.A. (70%
interest held by U.S. controlled companies, Unisource Energy
Corporation and Electric Machinery Enterprises Inc.)
STEPHENSON
SIPDIS
SENSITIVE
FOR STATE WHA/CEN - SINGER
FOR STATE EB/IFD/OIA - GOETHERT AND BUTLER
FOR STATE L/CID - PEARSALL
E.O. 12958: N/A
TAGS: CASC ECON EFIN ENIV KIDE PGOV PM OPIC
SUBJECT: PANAMA: 2009 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS
This message is Sensitive But Unclassified. Please Handle
Accordingly.
1. (U) Below is Embassy Panama's input for the
congressionally mandated annual report on investment disputes
as contemplated in Section 527 of the FY 94-95 Foreign
Relations Authorizations Act.
The United States is aware of one case in which United States
citizens have an outstanding claim against the Government of
Panama. There are no new cases since Embassy Panama's filing
of the 2008 report.
2. (SBU) Last Update: 12 June 2009
a. Claimant A
b. 2005
c. In 1998, Claimant A invested $11 million for a Panamanian
energy company's equity and arranged for the company to
receive a $17 million bank bridge loan convertible into
bonds. Claimant A alleges that both the equity and debt
investments are subject to equal value tax credits under
Panamanian Law No. 28 of 1995. In March 2005, the
Vice-Minister of Finance notified Claimant A that the sale of
the original $11 million in stock was not subject to any tax
benefits. Claimant A has taken the matter to arbitration
under the U.S.-Panama Bilateral Investment Treaty.
POST ACTION: Previously, Post had urged the current GOP
government to resolve the tax credit dispute promptly and
fairly. The matter is in arbitration. Post will raise the
issue with appropriate members of the new GOP government
which takes office on July 1. Post remains in contact with
Claimant A and is monitoring the matter. On June 8, 2009,
Claimant A's lawyer stated the case is still in arbitration
and that there is no indication that the current government
will resolve the case. However, Claimant A's attorney states
that the in-coming government has indicated a willingness to
settle.
List of Claimants:
Claimant A: Corporacion Panamena de Energia S.A. (70%
interest held by U.S. controlled companies, Unisource Energy
Corporation and Electric Machinery Enterprises Inc.)
STEPHENSON