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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