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Cablegate: Nicaragua: Gon Racing Against the Clock to Resolve U.S.

VZCZCXYZ0000
RR RUEHWEB

DE RUEHMU #0830/01 1831824
ZNR UUUUU ZZH
R 011824Z JUL 08
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 2818
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS MANAGUA 000830

STATE FOR WHA/CEN, EB/IFD/OIA AND L/CID
STATE FOR WHA/EPSC
STATE PLEASE PASS TO USTR
TREASURY FOR INL AND OWH

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV ECON USTR KIDE NU
SUBJECT: NICARAGUA: GON RACING AGAINST THE CLOCK TO RESOLVE U.S.
CLAIMS

REF: A) MANAGUA 724, B) MANAGUA 633, C) MANAGUA 564, D) MANAGUA 424,
E) MANAGUA 287, F) MANAGUA 274, G) MANAGUA 106, H) MANAGUA 0002, I)
07 MANAGUA 2581, J) 02 MANAGUA 877

SUMMARY
-------

1. (SBU) During the June 26 monthly Working Group meeting on
property issues, Government of Nicaragua (GON) officials stated that
U.S. claimants finalized 18 out of the 42 "close to resolution"
claims with final settlements before the June 16 deadline. GON
officials agreed to improve cooperation and flexibility with
claimants to clarify their settlement offers and to find alternative
solutions to resolve additional cases. Econoff pressed the GON to
resolve claims under the control of government institutions and the
Army before the end of the Section 527 waiver year. The GON appears
eager to resolve more claims this year than last to improve its
prospects for a waiver.

18 CLAIMS FINALIZED; REMAINDER DEPOSITED IN ESCROW
--------------------------------------------- -----

2. (SBU) During the June 26 monthly Property Working Group meeting,
Econoff met with the head of the Office of Assessment and
Indemnification (OCI), the director of the National Confiscations
Review Commission (CNRC), and an official from the Office of the
Property Superintendent to discuss the final tally of 42 claims
that, in the GON's view, were ready for final settlement, pending
additional paperwork and claimant signatures by June 16 (Refs A-C).


3. (SBU) Ruth Zapata, head of OCI, reported that 18 out of the 42
U.S. citizen claimants had finalized their cases. She added that
the GON deposited indemnification bonds (BPIs) for the other 24
cases in escrow with the Finance Ministry for claimants to withdraw
later should they decide to settle on the government's terms at some
future date. She noted that these claimants could now no longer
pursue their claims via the administrative process and hence must
take their cases to court if they do not want to accept BPIs.
Econoff requested copies of the final settlement documents,
"finiquitos," for 11 of the settled claims. [Note: We have received
finiquitos for 7 out of the 18 U.S. citizen claimants who accepted
the GON's settlement offer. Including these 7 claims, the GON has
resolved 23 cases during this waiver year. End Note]

GON PROMISES BETTER COOPERATION WITH CLAIMANTS
--------------------------------------------- -

4. (SBU) Property Office staff and GON officials also reviewed 41
additional claims. Econoff pressed for better cooperation and
flexibility with claimants. Econoff explained that some claimants
had refused to finalize their cases simply because the GON has not
explained to them how it determined their final settlement offers.
He also noted that other claimants seek alternative solutions, such
as a land swap, instead of accepting BPIs. Econoff urged the GON to
do all it can to resolve as many claims as possible during the
balance of this waiver year. GON officials agreed to work with
claimants whose cases are close to final resolution.

NO CLAIMS RESOLVED UNDER GON CONTROL
------------------------------------

5. (SBU) Econoff pointed out that the Ortega government has not
resolved any claims for properties under its control during this
waiver year, and he pressed GON officials to do so. Zapata
responded that there are several claims close to resolution and she
and her colleagues are working with the Nicaraguan Army and
government ministries to wrap up pending legal and logistical
issues. Zapata highlighted that she met with Econoff and U.S.
claimant Juan Barreto, co-owner of the Las Serranias residential
complex (Ref J), on June 20 and she awaited his proposal as a
starting point for negotiations to resolve his claim for 29
properties under Nicaraguan Army control. Econoff noted that the
Ambassador received the proposal on June 26 and it would be sent
immediately to Attorney General Hernan Estrada.

COMMENT
-------

6. (SBU) The GON appears eager to resolve more claims this year than
last to improve its prospects for a waiver. GON working-level
officials are carefully tracking the number of claims that we
consider resolved cases. They believe that the Ortega government
would be in a good position to receive a waiver if the GON equals or
betters the number of claims it resolved last year (34).


TRIVELLI

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