Cablegate: Poland: Annual Investment Dispute Report

VZCZCXRO3173
RR RUEHKW
DE RUEHWR #1438 1731236
ZNR UUUUU ZZH
R 221236Z JUN 07
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC 4618
INFO RUEHKW/AMCONSUL KRAKOW 1750
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS WARSAW 001438

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/IFD/OIA HGOETHERT
STATE FOR L/CID SMCDONALD
STATE FOR EUR/NCE BPUTNEY
STATE PASS USTR
COMMERCE FOR 4232/ITA/MAC/EUR/OECA/MROGERS

E.O. 12958: N/A
TAGS: EINV CASC KIDE OPIC PGOV PL
SUBJECT: POLAND: ANNUAL INVESTMENT DISPUTE REPORT

REF: STATE

1. (SBU) Post is unaware of any ongoing expropriation
disputes involving Poland and U.S. companies or citizens.
However, on April 29, 2004, Cargill filed a request for
arbitration with the Polish Government relating to its
investment in an isoglucose plant in Wroclaw. In 1995,
Cargill invested $90 million to build an isoglucose sweetener
production facility, which opened in May 2001. The plant was
built with a capacity of 120,000 metric tons per year. As
part of Poland's EU accession negotiations, the EU imposed an
27,000 ton annual isoglucose quota on Poland, which limited
the ability of Cargill to utilize its investment. In
February, 2003 Cargill notified the Polish Government it
would seek international arbitration under Article 3 of the
UNCITRAL rules unless the two sides could reach an amicable
solution. A hearing on the case was held in May, 2006 and
the court is considering new documents provided by the GOP
after the original discovery deadline. The arbitration case
is still ongoing as of June, 2007. Company officials hope to
receive a final ruling in August or September, 2007. The
Polish government has not made an offer to settle the dispute.

2. (U) Poland
(U) The United States Government is aware of one claim of a
U.S. claimant that may be outstanding against the Government
of Poland.

1. a. Claimant A

b. 2003

c. In 1995, Claimant A, an American company, invested in a
sugar substitute production facility, which opened in May,
2001. In late 2001, the Polish Government implemented a
national production quota on sugar substitutes. Then in EU
accession discussions, the GOP agreed to an even lower quota
on sugar substitutes with the EU. These quotas limit the
ability of Claimant A to utilize its investment. In
February, 2003, Claimant A notified the Polish Government it
would seek international arbitration under Article 3 of the
UNCITRAL rules unless the two sides could reach an amicable
solution. A hearing was held in May, 2006. As of June 2007,
discussions between Claimant A and the Polish Government are
continuing.
ASHE

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