Identifier
Created
Classification
Origin
09STATE126229
2009-12-10 00:54:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Secretary of State
Cable title:  

DEMARCHE REQUEST: NYC TO IMPOSE TAX ON AU

Tags:  PREL AORC ODIP 
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VZCZCXYZ0002
OO RUEHWEB

DE RUEHC #6229 3440055
ZNR UUUUU ZZH
O 100054Z DEC 09
FM SECSTATE WASHDC
TO RUEHDS/USMISSION USAU ADDIS ABABA IMMEDIATE 0000
INFO RUEHDS/AMEMBASSY ADDIS ABABA IMMEDIATE 0000
RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 0000
RUEHBS/USEU BRUSSELS IMMEDIATE
UNCLAS STATE 126229 

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PREL AORC ODIP
SUBJECT: DEMARCHE REQUEST: NYC TO IMPOSE TAX ON AU
PROPERTIES

UNCLAS STATE 126229

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PREL AORC ODIP
SUBJECT: DEMARCHE REQUEST: NYC TO IMPOSE TAX ON AU
PROPERTIES


1. (U) This is an action request.


2. (SBU) Background. The City of New York notified the U.S.
Mission to the United Nations (USUN) on December 2 that both
the European Union (EU) and African Union (AU) Observer
Missions to the UN are obliged to pay municipal property tax.
After examining the City's claims, the Office of the Legal
Adviser agrees the two missions are not clearly entitled to a
tax exemption. The EU's situation can likely be remedied
with a new executive order. Since the AU's privileges and
immunities stem from different statutory authorization, the
Department may need to pursue a technical legislative fix in
addition to a new executive order. We believe Congress will
look favorably upon a technical fix of this nature, although
it will take some time to pass the new legislation. The City
plans to notify the EU and AU of their new tax liability
during the week of December 7.


3. (SBU) Using the points contained in para 4, AF PDAS
Donald Yamamoto will provide advance notice of the City's
intent to the AU Perm Rep in New York at 5:00 p.m. on
Wednesday, December 9. End Background.


4. (SBU) Action Request: Acting no earlier than PDAS
Yamamoto's delivery of notice to the AU Permanent
Representative, post is instructed to demarche the African
Union Commission at the highest appropriate level using the
points in para 5, and deliver the non-paper contained in para
6 which explains the legal circumstances of this situation.
Post should not provide a written copy of the points
contained in para 5. End Action Request.


5. (SBU) Talking points:

-- We understand the City of New York may soon notify your
Mission to the United Nations in New York that the AU Mission
to the UN is subject to municipal property taxation by the
City.

-- Our legal counsel advised us on Friday, December 4, that,
under existing legislation and the relevant executive order,
the AU Observer Mission to the UN is not entitled to claim a
tax exemption, therefore we are unable to contest the City's
determination.

-- The Department is researching options to restore the AU
Observer Mission's tax exempt status. The Bureau of African
Affairs intends to pursue the most expeditious remedy that
will resolve the situation.

-- I want to be clear that the present situation does not

affect the personal privileges and immunities enjoyed by the
AU Mission's staff, which will continue unchanged.

-- Please be assured that we are working to evaluate this
situation as quickly as possible. We will keep you updated
as the process proceeds.

-- In the meantime, if your Mission receives a notice or a
bill from the City of New York, we understand that you are
not required to make immediate payment as the City is seeking
tax payments only prospectively.

-- If Raised: The EU's Mission was formed at a much earlier
date, and its privileges and immunities are authorized by
different legal instruments. We are not certain how we will
address the EU's situation, which is different from that of
the African Union Mission.


5. (SBU) Non-paper:

Non-paper on the Privileges and Immunities of the UN Observer
Mission of the African Union Relevant to New York City
Property Tax

22 U.S.C. section 288f-2 provides, in pertinent part, as
follows:

Section 288f-2. Organization of African Unity; extension of
privileges, exemptions, and immunities

(a) The provisions of this subchapter may be extended to the
African Union . . . in the same manner, to the same extent,
and subject to the same conditions, as they may be extended
to a public international organization in which the United
States participates pursuant to any treaty or under the
authority of any Act of Congress authorizing such
participation or making an appropriation for such
participation.

(b) Under such terms and conditions as the President shall
determine, consistent with the purposes of this subchapter,
the President is authorized to extend, or enter into an
agreement to extend, to the African Union Mission to the
United States of America, and to its members, the privileges
and immunities enjoyed by diplomatic missions accredited to
the United States, and by members of such missions, subject
to corresponding conditions and obligations.

-- Subsection (a) thus authorized the President to extend to
the African Union (AU) the benefits of the International
Organizations Immunities Act (IOIA),which include immunity
from property tax only when such tax is imposed by the
federal government, not by a state. The President exercised
this authority when he issued Executive Order 13377 on April
13, 2005. In relevant part, this EO states: "The African
Union is hereby designated as a public international
organization entitled to enjoy the privileges, exemptions,
and immunities provided by the International Organizations
Immunities Act." As a result, the AU's Observer Mission to
the UN and its personnel enjoy all the privileges and
immunities of the IOIA. These benefits do not, however,
include an exemption from New York City property tax.

-- Subsection (b),which was added to the statute in 2007,
authorized the President to extend privileges and immunities
to the newly established bilateral mission of the AU to the
United States equivalent to those enjoyed by the bilateral
diplomatic missions of foreign States. This the President
did by Executive Order 13444, on September 12, 2007, which
provides in pertinent part: "By the authority vested in me as
President by the Constitution and the laws of the United
States of America, including section 7(a)(2) of the
Department of State Authorities Act of 2006 (Public Law
109-472),I hereby extend to the African Union Mission to the
United States of America, and to its members, the privileges
and immunities enjoyed by diplomatic missions accredited to
the United States, and by members of such missions, subject
to corresponding conditions and obligations." As a result of
this special legislation and order, the AU's bilateral
mission in Washington enjoys, inter alia, exemption from
virtually all forms of
real property tax, something its UN Observer Mission in New
York does not.

-- Because 22 U.S.C. section 288f-2 does not give the
President the authority to extend the same benefits to the AU
Observer Mission as are enjoyed by the AU bilateral mission,
the statute would have to be amended to achieve that end.
Once an amended statute gives the President additional
authority, he would be in a position to issue a new Executive
Order giving those privileges and immunities, including
exemption from property taxation, to the AU's Observer
Mission in New York.
CLINTON