DEMARCHE REQUEST: URGE GON TO RESOLVE PROPERTY

C O N F I D E N T I A L STATE 051201 SIPDIS E.O. 12958: DECL: 05/18/2019 TAGS: PGOV PREL ECON NU SUBJECT: DEMARCHE REQUEST: URGE GON TO RESOLVE PROPERTY CLAIMS Classified By: WHA A/S Thomas A. Shannon for reasons 1.4 (b,d) ¶1. (U) This is an action request. See para 5. ¶2. (C) The Department is concerned that despite recent GON efforts and initiatives to resolve U.S. citizen property claims, the number of cases resolved in the 2008-2009 waiver year could jeopardize our ability to grant Nicaragua a waiver under Section 527 of the Foreign Relations Authorizations Act of FY1994/1995. In granting a waiver to the GON in July 2008, the Secretary of State outlined three benchmarks by which to measure progress, including: (1) the GON's successful resolution of a substantial number of Embassy-registered claims; (2) the return of or compensation for properties held or controlled by the GON; and (3) the resolution of property claims controlled by the Nicaraguan Army. To date, progress on all three benchmarks has been very modest. ¶3. (C) Further complicating prospects for a waiver for Nicaragua are a significant number of dismissed American citizen property cases under Decrees 3 and 38, which allowed for the confiscation of properties belonging to the "allies" of former President Anastasio Somoza following the Sandinista revolution. U.S. concerns regarding such dismissals were raised during a December 2008 bilateral review of the GON's property claims resolution process and Attorney General Hernan Estrada undertook to review cases dismissed by the present administration. Similarly, recent nullifications of previously resolved claims are very troubling and could be particularly unfavorable to Nicaragua's chances for a waiver if allowed to stand. ¶4. (C) The current waiver year will expire on July 28, 2009, leaving less than three months for the GON to demonstrate significant progress on all three benchmarks. The Department requests that Post urge the GON, at the highest levels, to address our concerns and thereby increase the likelihood that a Section 527 waiver will be granted for Nicaragua. ¶5. (U) The Ambassador may draw on the following points to demarche Foreign Minister Samuel Santos and Attorney General Estrada regarding our concerns with U.S. citizen property claims in Nicaragua: Cooperation: We appreciate the establishment of the Attorney General's Liaison Office for U.S. Claims. The cooperation on casework has improved and the Liaison (Rebeca Zuniga) has done a good job of working with U.S. citizen claimants and the U.S. Embassy's Property Office to advance claims. Claims Under GON Control: We appreciate the progress the GON has made in resolving claims under the control of the Nicaraguan National Police (two claims) and the Nicaraguan Army (one claim) during this waiver year. We understand there has been progress on settling the 28 claims of U.S. citizen Juan Barreto, whose property is under the control of the Army. Resolving the Barreto case this waiver year would be looked on positively by the USG when it decides whether to grant a waiver to Nicaragua in July. Decree 3 and 38 dismissals: Decree 3 and 38 dismissals are a serious concern to the USG. We were pleased to hear that Attorney General Estrada promised in March to review 70 dismissed claims under Decrees 3 and 38, and that the GON has already resolved two claims favorably. We look forward to resolving the remaining 144 dismissals. Claims In Court: We remain concerned about the Attorney General's policy of withdrawing support from a U.S. citizen seeking the return of his/her property in court, and instead petitioning on behalf of the illegal occupant. So far we are aware of three claims in which the Attorney General has petitioned the court in favor of illegal occupants. These actions undermine the rule of law and discourage claimants from using the GON to advance claims in court. Resolution of Claims Through Official Publication: Section 527 of the Foreign Relations Authorization Act recognizes a claim as resolved when the claimant determines that he/she has received adequate compensation. The USG does not recognize claims as "resolved" that are published in the Official Gazette and the indemnification bonds are deposited in escrow. We urge the GON to work with claimants to resolve their claims. Nullification of Previously Resolved Claims: Reports of nullifications of previously resolved claims are very troubling. The National Confiscations Review Commission's reversal of its recent nullification notices to two U.S. citizens notifying them that their previously settled claims had been ruled null is a positive sign. We hope that other nullifications will be treated similarly. Confiscation of U.S. Citizen Property: We are concerned about reports that the GON recently confiscated the property of U.S. citizen Leonidas Guadamuz. We eagerly await Attorney General Estrada's explanation on the status of Mr. Guadamuz' property claim. It is our understanding that Mr. Guadamuz has stated repeatedly that he is willing to settle his claim through compensation. CLINTON