Identifier
Created
Classification
Origin
09TUNIS305
2009-05-19 15:51:00
CONFIDENTIAL
Embassy Tunis
Cable title:
AMBASSADOR DELIVERS SCHOOL NON-PAPER TO MINISTER
how-toVZCZCXRO8217 PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR RUEHTRO DE RUEHTU #0305/01 1391551 ZNY CCCCC ZZH P 191551Z MAY 09 FM AMEMBASSY TUNIS TO RUEHC/SECSTATE WASHDC PRIORITY 6303 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE RUCNMGH/MAGHREB COLLECTIVE RUEHOT/AMEMBASSY OTTAWA 0245
C O N F I D E N T I A L SECTION 01 OF 02 TUNIS 000305
SIPDIS
STATE FOR NEA/FO, NEA/MAG, NEA/SCA/EX;
STATE ALSO FOR A/OPR/OS, DS/OFM, L/DL
E.O. 12958: DECL: 05/18/2019
TAGS: ASCH OFDP PREL TS
SUBJECT: AMBASSADOR DELIVERS SCHOOL NON-PAPER TO MINISTER
OF FINANCE
REF: TUNIS 286 AND PREVIOUS
Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)
-------
SUMMARY
-------
C O N F I D E N T I A L SECTION 01 OF 02 TUNIS 000305
SIPDIS
STATE FOR NEA/FO, NEA/MAG, NEA/SCA/EX;
STATE ALSO FOR A/OPR/OS, DS/OFM, L/DL
E.O. 12958: DECL: 05/18/2019
TAGS: ASCH OFDP PREL TS
SUBJECT: AMBASSADOR DELIVERS SCHOOL NON-PAPER TO MINISTER
OF FINANCE
REF: TUNIS 286 AND PREVIOUS
Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)
--------------
SUMMARY
--------------
1. (C) The Ambassador delivered a non-paper to the Minister
of Finance conveying USG agreement in principle on the tax
aspects of a bilateral accord for the American Cooperative
School of Tunis (ACST). The GOT has yet to signal its
intentions on the question of the lease of the land occupied
by the school. The Minister stated that he could not speak
for other ministries while the Ambassador made clear that any
agreement must be comprenhensive. The Ambassador's request
for a meeting with the Minister of Public Lands is pending.
End summary.
--------------
READOUT
--------------
2. (C) On May 19, the Ambassador met with Minister of
Finance Mohamed Rachid Kechiche to convey the United States
position on the tax and status negotiations on behalf of
ACST. Accompanying the Ambassador were the DCM and IO (ACST
Board President).
3. (C) During the cordial meeting, the Ambassador delivered
a non-paper summarizing the United States position: in
short, acceptance in principle that ACST would pay 4.2
million Tunisian dinars over five years to settle all past
liabilities through June 30; a new fiscal status involving
significant taxation of salaries but substantial exoneration
for the school itself to take effect July 1. Both of these
are in the context of a comprehensive status agreement that
must include resolution of the lease called into question by
the GOT in March.
4. (C) Not unexpectedly, Minister Kechiche attempted to
deflect the land issue and any other non-tax questions as
outside his prerogative, insisting that he could not speak
for other ministries, nor could he agree to a fiscal
settlement contingent on actions by those other ministries.
Instead, the Minister emphasized the generosity of the
Tunisian offer on the fiscal questions. He even alluded to
the need to resolve fiscal issues as quickly as possible to
avoid ongoing complications for ACST,s overseas-hire staff
(for example, their current inablity to obtain road tax
stickers for their cars).
5. (C) In response, the Ambassador underlined that
substantial concessions been made by both sides. The United
States still does not accept the Tunisian position on the
past taxation, though we are willing to resolve the issue via
a settlement for the benefit of the school. He also reminded
the Minister that we are in government-to-government
negotiations, not discussions with just one ministry. Since
it was clear that Minister Kechiche would not, or could not,
address the land issue or other non-tax details of the
eventual accord, the Ambassador reiterated his appreciation
for the progress made in the negotiations and his confidence
that a comprehensive accord was within reach.
6. (C) The meeting closed with a suggestion by the Minister
that the terms agreed be reviewed and incorporated into a
"proces verbal" (settlement agreement) to resolve the tax
issues. The Ambassador acknowledged that possibility but
made no commitment. Later in the day, the Ambassador provide
the MFA Chief of Staff copies of the same non-paper on the
margins of another meeting.
--------------
COMMENT
--------------
7. (C) The Minister of Finance would prefer to close the
ACST tax case irrespective of any other issues, but we have
stressed from the beginning that the tax questions must be
addressed in the context of a comprehensive status agreement.
The Ambassador has already requested a meeting with the
Minister of Public Lands and any accord will certainly be
finalized through the Ministry of Foreign Affairs. In the
meantime, in consultation with relevant Department offices
and ACST, post will start the process of formalizing the
language on the tax issues but emphasize to the GOT that only
TUNIS 00000305 002 OF 002
a comprehensive agreement will be signed. We will stand fast
on the principle that "nothing is agreed until everything is
agreed." The next important step will be gauging the
attitude of--and the instructions received by--the Minister
of Public Lands. End comment.
Godec
SIPDIS
STATE FOR NEA/FO, NEA/MAG, NEA/SCA/EX;
STATE ALSO FOR A/OPR/OS, DS/OFM, L/DL
E.O. 12958: DECL: 05/18/2019
TAGS: ASCH OFDP PREL TS
SUBJECT: AMBASSADOR DELIVERS SCHOOL NON-PAPER TO MINISTER
OF FINANCE
REF: TUNIS 286 AND PREVIOUS
Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)
--------------
SUMMARY
--------------
1. (C) The Ambassador delivered a non-paper to the Minister
of Finance conveying USG agreement in principle on the tax
aspects of a bilateral accord for the American Cooperative
School of Tunis (ACST). The GOT has yet to signal its
intentions on the question of the lease of the land occupied
by the school. The Minister stated that he could not speak
for other ministries while the Ambassador made clear that any
agreement must be comprenhensive. The Ambassador's request
for a meeting with the Minister of Public Lands is pending.
End summary.
--------------
READOUT
--------------
2. (C) On May 19, the Ambassador met with Minister of
Finance Mohamed Rachid Kechiche to convey the United States
position on the tax and status negotiations on behalf of
ACST. Accompanying the Ambassador were the DCM and IO (ACST
Board President).
3. (C) During the cordial meeting, the Ambassador delivered
a non-paper summarizing the United States position: in
short, acceptance in principle that ACST would pay 4.2
million Tunisian dinars over five years to settle all past
liabilities through June 30; a new fiscal status involving
significant taxation of salaries but substantial exoneration
for the school itself to take effect July 1. Both of these
are in the context of a comprehensive status agreement that
must include resolution of the lease called into question by
the GOT in March.
4. (C) Not unexpectedly, Minister Kechiche attempted to
deflect the land issue and any other non-tax questions as
outside his prerogative, insisting that he could not speak
for other ministries, nor could he agree to a fiscal
settlement contingent on actions by those other ministries.
Instead, the Minister emphasized the generosity of the
Tunisian offer on the fiscal questions. He even alluded to
the need to resolve fiscal issues as quickly as possible to
avoid ongoing complications for ACST,s overseas-hire staff
(for example, their current inablity to obtain road tax
stickers for their cars).
5. (C) In response, the Ambassador underlined that
substantial concessions been made by both sides. The United
States still does not accept the Tunisian position on the
past taxation, though we are willing to resolve the issue via
a settlement for the benefit of the school. He also reminded
the Minister that we are in government-to-government
negotiations, not discussions with just one ministry. Since
it was clear that Minister Kechiche would not, or could not,
address the land issue or other non-tax details of the
eventual accord, the Ambassador reiterated his appreciation
for the progress made in the negotiations and his confidence
that a comprehensive accord was within reach.
6. (C) The meeting closed with a suggestion by the Minister
that the terms agreed be reviewed and incorporated into a
"proces verbal" (settlement agreement) to resolve the tax
issues. The Ambassador acknowledged that possibility but
made no commitment. Later in the day, the Ambassador provide
the MFA Chief of Staff copies of the same non-paper on the
margins of another meeting.
--------------
COMMENT
--------------
7. (C) The Minister of Finance would prefer to close the
ACST tax case irrespective of any other issues, but we have
stressed from the beginning that the tax questions must be
addressed in the context of a comprehensive status agreement.
The Ambassador has already requested a meeting with the
Minister of Public Lands and any accord will certainly be
finalized through the Ministry of Foreign Affairs. In the
meantime, in consultation with relevant Department offices
and ACST, post will start the process of formalizing the
language on the tax issues but emphasize to the GOT that only
TUNIS 00000305 002 OF 002
a comprehensive agreement will be signed. We will stand fast
on the principle that "nothing is agreed until everything is
agreed." The next important step will be gauging the
attitude of--and the instructions received by--the Minister
of Public Lands. End comment.
Godec