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Cablegate: Eritrea: 2007 Report On Investment Disputes And

VZCZCXYZ0005
PP RUEHWEB

DE RUEHAE #0640/01 2131247
ZNR UUUUU ZZH
P 011247Z AUG 07
FM AMEMBASSY ASMARA
TO SECSTATE WASHDC PRIORITY 8979

UNCLAS ASMARA 000640

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ENIV CASC KIDE OPIC PGOV ER
SUBJECT: ERITREA: 2007 REPORT ON INVESTMENT DISPUTES AND
EXPROPRIATION CLAIMS (527)E

REF: STATE 55422

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). All, four of these
claims were reported in previous reports. Point of Contact
for U.S. Embassy, Asmara, Eritrea is: Holly Holzer, Political
and Economic Officer, Phone: 291-1-120-004, Email:
holzerhc@state.gov. Back up is Brian Shelbourn, Consular
Officer, Email: shelbournbl@state.gov.

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 officals,
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 with GSE
officials. There was contact between the two parties and an
attempt to resolve the case. Ssince 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 whould be addressed at &a later date.8 In 1993,
Claimant B reported that, after seeing a newspaper
announcement stating that properties would be returned, the
claimant 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, 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 has been taken by the claimant or the
representative on the claim at this time.

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 whould be addressed at &a later
date.8 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 had not been able to obtain a new certificate of
ownership from the GSE, although the 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 has been taken
since 2004.


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 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.
MCINTYRE

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