Cablegate: Head of Braziilan Tax Agency Proposes Negotiation

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BRASILIA 002653

SIPDIS

STATE PLEASE PASS TO IRS WASHDC
NSC FOR CRONIN
DEPT OF TREASURY FOR FPARODI, DGLASER, AND OFAC
BUENOS AIRES FOR BOGNANNO
BOGOTA FOR OLGA ACEVEDO

E.O. 12958: N/A
TAGS: EFIN ECON SNAR PGOV
SUBJECT: HEAD OF BRAZIILAN TAX AGENCY PROPOSES NEGOTIATION
OF A TIEA

1. (SBU) In a October 3 meeting with DCM, Jorge Rachid, head
of Brazil's Receita Federal, and his International Affairs
Advisor Zayda Manatta, proposed that Brazil and the USG
negotiate a Tax Information and Exchange Agreement (TIEA).
By facilitating the exchange of tax records and other data,
our interlocutors stated, conclusion of such an agreement
would benefit law enforcement investigators in both
countries. Rachid noted that while the GOB preferred
starting point for any negotiations was the Inter-American
Center of Tax Administration (CIAT) model text, Brazil was
also open to using any USG model TIEA as a base. Rachid
left behind a formal letter to the Ambassador (paragraph 4)
proposing the commencement of such talks. The mention in
that correspondence of an August 23 meeting with USG money
laundering authorities refers to the recent visit of Acting
Treasury A/S Danny Glaser.

2. (SBU) DCM noted that while, in principle, we looked
favorably upon such an initiative, we would need to consult
with the IRS and other USG authorities on this issue. He
pledged a speedy USG response to the Brazilian offer.

3. Action Request: For IRS WashDC and AmEmbassy Bogota (IRS
Attache). Please provide us with formal instructions
regarding how to respond to the GOB proposal.

4. Begin Text of Letter to Ambassador
(Separate originals in English and Portuguese)

To Your Excellency Brasilia 03 October 2005
Ambassador John Danilovich
United States Embassy in Brasilia

Dear Ambassador,

On occasion of the visit of the American delegation to the
Receita Federal of Brazil to discuss the issue of money
laundering on August 23, it became evident the importance of
cooperation among the competent authorities with the purpose
of fighting the various types of illicit activities, among
them corruption, terrorism, narco-trafficking, tax evasion,
and crimes related to money laundering.

We have been increasing our efforts to fight illegal
activities and constantly searching to improve our work
methods, with a view to the creation of a safe and favorable
environment for the practice of legal acts. Illicit
activities are a threat to societies and it is the main duty
of institutions like ours to combat them with efficacy.

We thank the collaboration we have been receiving from the
American government, which has importantly contributed to
the achievement of our institutional goals, and we reaffirm
our willingness to collaborate in projected aimed at the
fight against illicit activity related to money laundering.

International cooperation is fundamental to make the
acquisition of information more agile and, thus, enable a
more efficient and efficacious combat against criminal
activities that, in many occasions, have a strong
transnational component.

Conscious of the relevance of cooperation among countries,
it was emphasized, on the occasion of the aforesaid visit,
the importance of the exchange of fiscal information between
Brazil and the United States. In this manner, the
celebration of an agreement with such a purpose is
fundamental to the fulfillment of the above-mentioned goals.

We would like to propose, due to the discussions that took
place during the meeting of August 23, the negotiation of an
agreement for the exchange of information between our
countries and, for such purpose, the use of the model
developed within the scope of the Inter-American Center of
Tax Administration (CITA).

Consequently, I would like to suggest that our officials
meet in order to deepen discussions of this topic, and, in
this sense, I would designate, for the purpose of scheduling
a meeting and handling other related issues, Mrs. Zayda
Bastos Manatta, Head of International Affairs Tax
Coordination, who can be reached through telephone number 55
61 3412-2733, fax 55 61 3224-5501 or e-mail:
zayda.manatta@receita.fazenda.gov.br.

Finally, I reaffirm the importance we ascribe to relations
between our countries and the positive results we have
obtained through this partnership, which, I hope, can be
increased through the agreement we are proposing.

Yours faithfully,

Jorge Antonio Deher Rachid
Secretary-General of the Receita Federal of Brazil

SIPDIS

End Text
DANILOVICH

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