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Cablegate: Eritrea: 2006 Report On Investment Disputes And

VZCZCXYZ0011
PP RUEHWEB

DE RUEHAE #0580/01 1880933
ZNR UUUUU ZZH
P 070933Z JUL 06
FM AMEMBASSY ASMARA
TO SECSTATE WASHDC PRIORITY 8278

UNCLAS ASMARA 000580

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ENIV CASC KIDE OPIC PGOV ER
SUBJECT: Eritrea: 2006 Report on Investment Disputes and
Expropriation Claims (527)

Ref: State 60294

1. The United States Government is aware of four claims by
American citizens that may be outstanding against the
Government of the State of Eritrea (GSE). Three of these
claims were reported in previous reports and there is one
new claim for 2006.

2. a) Claimant A

b) 1998

c) On July 20, 1998 Claimant A notified the Embassy that
eight machines and six lots of parts were stranded in the
port of Assab following the outbreak of hostilities between
Eritrea and Ethiopia. Following the Claimant's request for
assistance, the Embassy raised the issue with GSE
officials, however, the Embassy's intervention did not
succeed in securing the release of the equipment. Over a
period of several years the Embassy raised the issue
repeatedly with GSE officials. There has been contact
between the two parties in an attempt to resolve the case
yet since the submission of the 2003 report, the Embassy
has not been contacted by the claimant nor is the Embassy
aware of any recent activity on the case.

3. a) Claimant B

b) The two properties in question were nationalized in 1975
by the Derg government of Ethiopia. Eritrea was then a
province of Ethiopia.

c) The expropriated properties are commercial and located
at Martyrs' Avenue No. 273-281 and at Zibel Street No. 2-
10, both in Asmara. After Eritrea won its independence
from Ethiopia in 1991, it issued a decree dealing with
properties expropriated by the Derg government. Article 9
of this decree stated that the question of property
expropriated from foreigners would be addressed at "a later
date." In 1993, Claimant B reported that, after seeing a
newspaper announcement stating that properties would be
returned, it paid the GSE a rehabilitation tax for the
properties. Claimant B also continued to pay taxes on the
properties and reported that the GSE collected rents on the
properties.

In 2001, the Housing Commissioner of Eritrea told Claimant
B that the two properties would never be return nor would
compensation be paid. Later in 2001, the Housing
Commissioner reportedly told an Embassy officer the same
thing. An Embassy officer met with the GSE Minister of
Land twice on this issue and in June 2002 the Minister
denied the statement that the properties would not be
returned. He did add, however, that the GSE had not made
any decisions about expropriated properties and had no idea
when this would happen.

Claimant has not pursued legal action. Claimant estimated
total property value at 140,000 in 2004. There is a local
representative on the case and to the Embassy's knowledge
no further action on the claim.

4. a) Claimant C

b) The two properties in question were nationalized in 1975
by the Derg government of Ethiopia. Eritrea was then a
province of Ethiopia.

c) The expropriated properties are commercial and located
at Herent #212 and #214 in Asmara. After Eritrea won its
independence from Ethiopia in 1991, it issued a decree
dealing with properties expropriated by the Derg
government. Article 9 of this decree stated that the
question of property expropriated from foreigners would be
addressed at "a later date." In 1993, Claimant C reported
that all applications and documents needed for processing
the properties' return had been submitted. The GSE had
been collecting rent since 1991 and income taxes prior to
1973 (when the Derg seized power) had been paid. Land
taxes were paid.

Claimant C has not been able to obtain a new certificate of
ownership from the GSE, although claimant does have all
prior title documents. Claimant C has not pursued legal
action and estimated the total property value at $290,000
in 2004. There is a local representative on the claim
and to the Embassy's knowledge no further action taken.


5. a) Claimant D

b) 2006

c) In May 2006, Claimant D contacted Embassy to discuss the
expropriation of a private vehicle. Claimant D had
imported the vehicle in 1999 upon arrival in Eritrea to
work as a religious missionary and had paid all required
taxes and duties. In 2002, Claimant D was unexpectedly
asked to depart Eritrea and left care of the vehicle, with
a power of attorney, with an Eritrean national who is a
member of an unregistered religious institution. In June
2005 Claimant D returned to Eritrea for several months.
Again he departed and left the vehicle. Several months
later the GSE confiscated the vehicle allegedly for illegal
activity. Police have taken possession of the vehicle.
Claimant D did not place a value on the vehicle. Embassy
last had contact on June 8, 2006 with Claimant D.


6. Claimants:

Claimant A: Caterpillar Equipment. Status of Privacy Act
Waiver unknown.

Claimant B: Irene Shoa Kivitz, American Citizen, Privacy
Act Waiver not signed.

Claimant C: Susanne Shoa, American Citizen, Privacy Act
Waiver not signed.

Claimant D: D. Kevin Smith, American Citizen, Privacy Act
Waiver not signed.

DeLisi

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