Identifier
Created
Classification
Origin
09TUNIS217
2009-04-07 18:18:00
CONFIDENTIAL
Embassy Tunis
Cable title:  

THE GOT STICKS TO ITS STORY: THE AMERICAN

Tags:  ASCH OFDP PREL TS 
pdf how-to read a cable
VZCZCXYZ0015
PP RUEHWEB

DE RUEHTU #0217/01 0971818
ZNY CCCCC ZZH
P 071818Z APR 09
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 6173
INFO RUCNMGH/MAGHREB COLLECTIVE PRIORITY
C O N F I D E N T I A L TUNIS 000217 

SIPDIS

STATE FOR NEA/FO - HUDSON; NEA/MAG; NEA/SCA/EX;
STATE ALSO FOR A/OPR/OS - CAMERON

E.O. 12958: DECL: 04/07/2019
TAGS: ASCH OFDP PREL TS
SUBJECT: THE GOT STICKS TO ITS STORY: THE AMERICAN
SCHOOL'S TAX ISSUE IS TECHNICAL -- NOT POLITICAL

REF: A. TUNISIA NOTES FROM HAYES TO GODEC ET AL 4/6/2009

B. TUNIS 203

C. TUNIS 191

D. TUNIS 182

Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)

C O N F I D E N T I A L TUNIS 000217

SIPDIS

STATE FOR NEA/FO - HUDSON; NEA/MAG; NEA/SCA/EX;
STATE ALSO FOR A/OPR/OS - CAMERON

E.O. 12958: DECL: 04/07/2019
TAGS: ASCH OFDP PREL TS
SUBJECT: THE GOT STICKS TO ITS STORY: THE AMERICAN
SCHOOL'S TAX ISSUE IS TECHNICAL -- NOT POLITICAL

REF: A. TUNISIA NOTES FROM HAYES TO GODEC ET AL 4/6/2009

B. TUNIS 203

C. TUNIS 191

D. TUNIS 182

Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)


1. (C) Summary: Ministry of Foreign Affairs Chief of Staff
Khemiri provided the Ambassador today with a Ministry of
Finance Paper that attempts to justify its tax assessment on
the American Cooperative School of Tunis (ACST). Khemiri
repeated many of the points GOT officials have made in
previous meetings. He pleaded with the Ambassador to view
the issue as a purely technical, fiscal issue, and not to
view the tax assessment as politically motivated. The
Ambassador made clear that the forced closure of the school
would provoke a crisis that would have serious implications
for our bilateral relations. End Summary.


2. (C) The MOF Responds: Ministry of Foreign Affairs Chief
of Staff Mahmoud Khemiri summoned the Ambassador to a meeting
today at which he presented the English language version of a
Ministry of Finance (MOF) document that attempts to justify
the tax arrears imposed on ACST. (Note: Per Ref A, the
Tunisian Embassy in Washington provided the same document to
NEA/MAG on April 6.) The document catalogues the MOF's
claims of tax arrears amounting to 9.18 million Tunisian
Dinars, and seeks to refute "unsustainable" arguments put
forward by the ACST and the Embassy about the privileged
status the school has historically enjoyed.


3. (C) It's Very Fiscal: Khemiri was accompanied by the
Special Assistant to the Minister and Director General for
Europe Mohamed Lessir, as well as Elyes Kasri, Director
General for the Americas and Asia. The Chief of Staff
repeated many of the same points that he had made when the
Ambassador pressed the ACST issue during their March 26
meeting (Ref D). He reiterated that the MOF tax assessment
against ACST was a "technical, fiscal" matter and not at all
political, a point that Lessir echoed, saying in English,
"very fiscal." Khemiri seized on the fact that the ACST had
tried -- and failed -- to secure a loan to pay off the
arrears, asking out loud, "So that means there is a
disposition to pay?" The Ambassador pointed out that the
school had merely been conducting due diligence in exploring
options. He also noted that the school had conceded that it
did indeed owe approximately 1 million TD, due to accounting
irregularities, although it disputed the remaining
assessments.


4. (C) The Paper Trail: The Ambassador promised to read
carefully the MOF paper but stated clearly the US views the
GOT actions as political. He provided his interlocutors a
copy of the non-paper on the ACST (as cleared in the
Department and shared in final with NEA/MAG). He again
underscored the US position on the school, noting that it has
been the subject of many diplomatic exchanges between the GOT
and the USG, and that it has enjoyed special status. By way
of example, he pointed to a copy of a 1984 diplomatic note
from the MFA to the Embassy stating that teachers' salaries
are not subject to tax. The Ambassador emphasized that the
school's status should be the subject of bilateral
discussions, not unilateral action. He again asked for
bilateral negotiations on an agreement to cover the school.


5. (C) Grave Consequences of Closure: The Ambassador also
underscored that the school, which has been preparing to
celebrate its 50th anniversary this May, is a symbol of
US-Tunisian friendship. The consequences for the school's
bankruptcy and forced closure, he warned, would be very
grave. He explained that he would have to inform all of the
school's parents about the school's impending closure as
early as next week. The school's closure would carry
implications for the US Embassy, for other foreign missions,
and for the African Development Bank. Beyond that, he made
clear, the forced closure of the school would provoke a
policy review in Washington of our overall relations and our
bilateral assistance programs. Congress will have to be
briefed and may react, too. In addition, there is likely to
be negative international media coverage.


6. (C) Closure? Khemiri and Lessir were quick to protest:
"We shouldn't be talking about the school's closure. Nobody
wishes for its closure," a point to which the Ambassador
responded by pointing out that closure would be the
consequence if the 9.1 million dinar tax assessment is not
resolved. Both Khemiri and Lessir asked the Ambassador again
not to politicize this "purely technical" issue. Tunisia
wants to continue to enjoy good relations with the United

States, they said.

Please visit Embassy Tunis' Classified Website at:
http://www.state.sgov.gov/p/nea/tunis/index.c fm
Godec