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knickt argy jetzt ein und zahlt urteile !?!? / The government tries to agree on payment of decisions in favor of U.S. firms

The government tries to agree on payment of decisions in favor of U.S. firms
Clarin
June 21, 2012
By Ana Baron

Azurix and Blueridge have sentences in their favor for US$400 million at ICSID

The government of Cristina Fern ndez Kirchner began talks with two U.S. companies, Azurix and Blueridge, to pay them on the rulings handed down in their favor at ICSID. The payment of those rulings would allow Argentina to again access the U.S. Generalized System of Preferences from which it was expelled over having that debt pending.

A source confirmed to Clarin that Economy Minister Hernan Lorenzino and representatives of the two companies are negotiating an accord over how to make the payment of the two rulings outside of the ICSID that would satisfy both parties.

From the beginning the government always said it wanted to pay the rulings. But the problem is that it insists that according to Article 54 of the ICSID charter, the two companies have to go through Argentine courts to be able to collect.

The companies turn to Article 54 to say that this is not necessary, that the rulings are to be automatically paid. The United States has taken their side.

What is in play is not a small amount of cash. It's an amount of around US$400 million. Whatever path is chosen to pay it will set a precedent. There is another company that obtained a ruling in its favor at ICSID Saur and according to reports, they are about to announce a ruling in favor of the French company, EDF.

A source that is following closely the discussions told Clarin that an agreement outside of ICSID is on the table. That is to say, in exchange for the companies renouncing the rulings, handed down in their favor, the government would pay the debt directly, with money or some other time of deal, but without them having to go before Argentine courts.

It appears that Cristina Kirchner, Legal and Technical Secretary Carlos Zannini and Economy Minister Hernan Lorenzino discussed various alternatives in New York. One of the sources consulted by Clarin said that Argentina wants to solve this problem because it's one of the issues that is most feeding anti-Argentine opinions that are being observed currently in Washington and at the global level.

It escapes no one in the U.S. capital that the Argentine embassy has launched a campaign to reverse the offensive set forth by the vulture funds against our country in the U.S. Congress and in the headquarters of the government of Barack Obama. To resolve the payment of the rulings to Azurix and Blueridge would favor the embassy's work and help improve Argentina's image in Washington.

It would also be very positive for the negotiations with the Paris Club and even Argentina's relations with the IMF where its board criticizes the fact that Argentina is not complying with the annual review of its accounts set forth in Article IV of the IMF charter, and the lack of progress on the normalization of the statistics at INDEC.

Secretary of State Hillary Clinton has already said that if Argentina doesn't show, by September, that it is working on creating a new national price index, there will be a motion of censure. That would be the first step in a long process that the IMF uses to expel a country for not providing reliable data.

Nobody expected a rapid conclusion of negotiations with Azurix and Blueridge. In fact these two companies want cash, but it will be difficult to determine the amount that they are willing to accept in exchange for renouncing the rulings.

The U.S. position in their favor gives the two companies some heft in the negotiations that they wouldn't have had any other way.

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