Gesamtzahl der Seitenaufrufe

Freitag, 14. März 2014

Clarin: “Vultures: Kerry did not rule out U.S. intervention in the case” El Cronista: “Kerry controversy: disagreements over its impact on the vulture fight” Telam: “The Department of State clarifies that the Solicitor General is the one that responds to the Supreme Court” Pagina/12: “The United States has not changed its position” El Cronista: “The American Task Force lashes out in the media” (ATFA Ad) BAE Negocios: “The Paris Club accepted the offer and in June the form of payment will be decided” Ambito Financiero: “IMF, concerned over the Argentina vs. vultures case”

Vultures: Kerry did not rule out U.S. intervention in the case
He clarified that it will not be voluntary.  But it will happen in case the Supreme Court asks for it.  

Friday, March 14, 2014

By Ana Baron

Washington. Correspondent - The State Department yesterday did not rule out that the United States will intervene in the case of the vulture funds. A spokesman for American diplomacy explained to Clarin that what Secretary of State John Kerry meant to say the day before in Congress was that the U.S. will not voluntarily present an opinion over whether the Supreme Court should or should not take the case. But that doesn't mean the U.S. will not intervene if the Supreme Court asks for its opinion.

Nor does it mean that it will not intervene later, if the case is accepted, when the underlying question is discussed. Otherwise, as Clarin has been stating all along, whenever the Supreme Court requests the opinion of the Executive Branch, it is the Solicitor General who gives it to them. "If it is not invited to do so, the U.S. will not file an amicus brief on whether the Supreme Court should reverse the ruling of the Court of Appeals on the pari passu case," a State Department official said to Clarin. The official explained, however, that "when the Supreme Court asks for our opinions, the uniform practice is for the Solicitor General to submit a response.”  The big question is the eventual response.

"For more details, I would say call the Department of Justice".

During the hearing in Congress two days ago, Kerry showed that from the political point of view the Department of State is as hardline as the lawmakers that defend the position of the vulture funds. Kerry said that Argentina must resolve the problem of public creditors and private creditors (i.e. the vulture funds). And he will continue to press for it to happen.  In any case, if the Court calls on Solicitor General Donald Verrilli, the legal position will prevail. On two occasions in which he supported the Argentine position before the Appeals court, the Solicitor explained clearly that he didn’t support the government of Cristina Kirchner nor its untidiness. In fact, the U.S. expressed the same concern on two previous occasions that was expressed yesterday by the International Monetary Fund, about the impact that the case can have on future debt restructurings.

El Cronista
Kerry controversy: disagreements over its impact on the vulture fight
At the time of interpreting the statements of the Secretary of State, who rejected the idea of supporting the Argentine position, the most optimistic postures suggest that the legal process will continue unchanged.  But another line of argument suggests that without the support of the U.S. government, Argentina will have less of a chance that the American Supreme Court will take the case or even call on the Solicitor General.  This last option is important, because it will allow for stretching out the procedural timing until next year.  

Friday, March 14, 2014

By Maria Elena Candia

The statements made by Secretary of State John Kerry, at a budget hearing in which he rejected the possibility of the State Department of that country will support the Argentine position in the case it maintains against the vulture funds before U.S. Supreme Court, generated different interpretations among experts that were consulted.

The more optimistic posture argues that Kerry’s comments would have no impact on the legal process that is now in the hands of the High Court, while another view focuses on the political importance of the message that the Secretary of State sent.

According to this line of analysis, Kerry was affirming that the United States government will not make a filing of an "amicus curiae" on behalf of the Argentine government next week. And that is very bad news for Argentina, because the absence of American support would increase the chances that the Supreme Court will not take the case.

“On the basis of press reports, my interpretation is that Kerry said that United States will not make an amicus curiae filing next week urging the Supreme Court to grant the request for a review of the case. That is very significant. This greatly increases the chances that the Supreme Court will refuse to grant Argentina’s appeal, which means that there won’t be any kind of hearing before the Court,” said Richard Samp, Chief Adviser of the Washington Legal Foundation, in an interview with El Cronista.

While Kerry said the State Department would not file a brief in favor of Argentina, the reality is that his agency does not have the authority to do so on its own. The United States has a single voice, that of the Solicitor General. This is why, according to Samp, Kerry said that no sector of the government of the United States will submit an amicus curiae in support of Argentina. This was one of the weapons that the government of Cristina Kirchner had hoped to count on when the justices of the Court decide the case.

However, sources from the U.S. embassy assured that there was no change in the position of the United States on the debt issue.  The United States will not file an amicus curiae that is not solicited by the Supreme Court. In general, if the Court requests it, the Solicitor General presents his opinion.

In the near term, on March 24, other amicus curiae briefs will be filed in favor of Argentina and then the "vulture funds" will have 30 days to respond. From there, the Court will take its time to communicate if it will either take the case, reject it or ask the Solicitor General for his opinion. This option would significantly extend the final resolution of the case, which could take place in 2015.

"Political statements do not have a direct impact on the legal system if they are not filed,” said Marco Schnabl, a lawyer for Skadden. In fact, Schnabl finds it to be positive that the Court has accepted the Discovery case, to analyze the limits of the use of American law, which has a point of contact with the current pari passu case, although it is put forth in a different context.

The Department of State clarifies that the Solicitor General is the one that responds to the Supreme Court

Friday, March 14, 2014

The State Department said that if the Supreme Court asks for the position of the U.S. Government in the case in which Argentina is facing off against the vulture funds, "it is the practice" that the Solicitor General is the one who lays out the government’s position on the subject.

"We cannot speculate on hypotheticals, but when the Supreme Court invites us to give our views, it is the practice of the Solicitor General (of the state) to file a brief in response," explained a State Department source to Telam, thus denying rumors that circulated in various media that the United States will not support Argentina in its fight with the vulture funds.

The American foreign ministry held that what was said by the Secretary of State, John Kerry, in a presentation to the Congress during the day before, was that his country will not file an 'amicus brief' (friend of the Court) that is not requested, in the case of the pari passu clause, which is currently in the petition stage.

"The United States is not filing an unsolicited amicus" regarding whether the Supreme Court should or should not reverse "the decision of the Second Circuit on the obligations of Argentina to make payments to its bondholders in the so-called pari passu case," said the diplomatic source.

Kerry’s statements in the Capitol responded, therefore, to what is established by the Department of Justice, which states that "although the (U.S.) government may file an amicus suggesting that the Court grant or reject a review in a case, the Solicitor General does not usually file an amicus brief in the petition stage unless it is invited to do so by the Supreme Court,” according to the website of the American agency regarding the options which could come with different scenarios.

It is different when the case in question is at the written merits stage and the government can present an "amicus curiae" by its own decision, just as it did days ago in support of Argentina in the case known as "World Discovery."

The administration of Barack Obama, through Solicitor General Donald Varrilli, filed an amicus curiae brief in which he claimed to have "an interest in the correct interpretation and application of the U.S. law on sovereign immunity and the treatment of foreign States" in American courts.

The United States has not changed its position
The American Secretary of State said that he will not file a brief before the Supreme Court in support of Argentina.  The Argentine government clarified that it never thought of the possibility of such a brief, nor did the statement change the known position of the Obama government.  

Friday, March 14, 2014

By Tomás Lukin

U.S. Secretary of State John Kerry said on Wednesday that the American government will not file a brief before the Supreme Court of that country, backing the Argentine position in the dispute with the vulture funds. The chances that the highest U.S. Court will accept review of the case and to rule on behalf of the Argentina are slim. From the economic team, they acknowledge that the filing of a brief from the Obama administration in line with the official position is a relevant element for reaching that goal. As has already happened in previous instances, "it's practically impossible", they say at the Palacio de Hacienda, that the U.S. will spontaneously file an amicus curiae brief in favor of the country.  For that, beyond the taxing and surprising statements by the diplomat, made during the defense of his department’s budget for 2015, those in the government are not ruling out that the Supreme Court will as the U.S. authorities for their opinion. If that happens, the Department of Justice - not Kerry’s department - is the one in charge of responding through Solicitor General Donald Verrilli. In fact, it happened last week in the satellite case where the vultures are seeking information attach Argentine assets abroad.

Today is the deadline for those wishing to submit an amicus curiae spontaneously before the Supreme Court, although the information will only be made available next week. As it occurred before the Appeals court, it is expected that France will endorse the Argentine position and it cannot be ruled out that other countries will file their own. One of the possible supportive briefs could come from the Government of Mexico. The existence weighty filings increases the chances that the Supreme Court will request the opinion of the United States. But not only are countries presenting amicus curiae briefs. Another possible backing could come from  the IMF, which had already made public its intention to back up Argentina’s position at the appellate stage, although it did not end up filing one. "The Fund is seriously concerned by the widespread systemic implications that could come from a decision by the Court on debt restructuring processes in general," Gerry Rice, the IMF spokesman, responded when asked about Kerry’s statements, although he avoided speaking about a possible amicus curiae from the Fund.

The statements by the U.S. Secretary of State were binding; but diplomatic sources consulted by Pagina/12 said that, for the moment, they did not reveal a change of view by the Obama administration, which already filed two amicus curiae briefs at the request of the Court in the past three months. An important element that was set aside by the statements of the American Secretary of State is the context in which they were made. The official ruled out that his department will support the Argentine position during a hearing of the House Appropriations Committee.

During that meeting with House members, Kerry had to defend his department’s 2015 budget before a Subcommittee where the Republicans are the majority. With Ukraine as a central theme (in its geopolitical dispute with Russia, the Obama administration aims to provide that country with $ 1 billion in credits) the official answered legislators’ questions for two hours. "I want to bring the discussion a little closer to our continent," said Mario Diaz-Balart, asking Kerry about what the Florida congressman considered to be human rights violations in Cuba and Venezuela, as well as the dispute between Argentina and the vulture funds. Before asking about the position of the State Department in the case, the anti-Castro and anti-Chávez Diaz-Balart accused the government of working with "Iran to erase its responsibility in the attack" on the AMIA. "If requested by the courts, will the Department of State again present an amicus curiae, supporting the Argentine position?", asked the Republican legislator. "I can answer that very fast: it will not do so. That is clear," Kerry retorted. In addition, the official emphasized the "pressure" from their country for "Argentina to pay its debt with private creditors and the government of the United States.” In that regard, he recalled the payment agreement through bonds that put an end to ICSID cases with American companies and pondered the "new price index to deal with deficiencies and requirements from the IMF.”

El Cronista
The American Task Force lashes out in the media

Friday, March 14, 2014

In recent days, American Task Force Argentina (ATFA), one of the main political pressure groups of holdouts, resumed its ad campaigns in major American media, like the Wall Street Journal and the Washington Post, that sent blunt messages to politicians in Washington D.C., about their position on Argentina in the U.S. courts.

The ad points out that Argentina's lawyer, Jonathan Blackman, said to a U.S. judge that the country will not obey the American judiciary should it rule that the country must pay its creditors. The ads appear both in print and online, with a link that shows how Blackman told the judge of the Court of Appeals that he will not voluntarily obey a court order.

According to a press release ATFA issued this week, eight US lawmakers wrote a letter requesting that the United States government urge Argentina to honor judicial decisions and their financial obligations with U.S. creditors.

"The Congressmen urged the Treasury Department to prioritize the issue of Argentina’s mistreatment of U.S. investors and the judicial process in the American courts," the organization’s press release said.

BAE Negocios
The Paris Club accepted the offer and in June the form of payment will be decided

Friday, March 14, 2014

by Alejandro Bercovich

And the day has finally come. On Tuesday morning, in a private meeting without publicly announcing its decision, the Secretariat of the Paris Club formally approved the beginning of negotiations with Argentina over the debt in default since 2001. According to what BAE Negocios confirmed through foreign diplomatic sources and local officials, the rich creditor countries have set May 26 as the date to begin to define the terms of payment of more than US$ 9 billion owed to them, including principal and late interest. In principle, they agreed that the payment be made in installments and conditioning that the agreement bring fresh dollars in to the Central Bank reserves. The news came hours before President Cristina Kirchner travels to the French capital, invited by her counterpart Françoise Hollande, but the topic is not part of her official agenda.

The information has circulated since Tuesday with absolute secrecy on the economic team and with a handful of embassies from the major creditor countries, where they are closely following the final stretch of negotiations, as subsidized banks and development agencies appropriations are awaiting to be unblocked so that the multinationals headquartered in those countries will invest in Argentina. For the government, the goal is to comply with the specifications which were set by the major Wall Street banks to resume issuing debt at rates that are reasonable for the Argentine government, which included cleaning up the INDEC, the payment of judgments to companies in ICSID, and compensation to Repsol for the expropriation of YPF.  What is left is resumption of negotiations with the vulture funds who rejected the 2005 and 2010 debt swaps.

As reported by this newspaper in late December, Secretariat of the Club changed its intransigent position to a more conciliatory one during that month. It was because the newly promoted Kicillof removed the previous condition that export credit agencies (ECAs) commit to proportional inflows of direct investment to the debt that must be paid to each creditor country. In other words, the offer reformulated by the government no longer required that each nation ensure the inflow of dollars to Argentina of dollars while demanding the payment of late debt at the same time.  According to sources, the payments will continue to be limited to the flows of funds that will enter in the future, but without individualizing them by creditor.

The negotiations are being conducted by Finance Secretary Pablo López, who minimized the role of the former Minister and Ambassador to the European Union, Hernán Lorenzino, in the discussions due to Kicillof’s distrust of him. Officials who were consulted explained that the Economy Ministry approached the Club with several proposals to avoid having the agreement tap the reserves of the Central Bank with a cash payment, as the creditors were initially seeing.   They had all been rejected until December, when the positions got closer together with the first draft that the new Economy Minister sent.

The latest Argentine offer, which the Club discussed in January and that this newspaper published on  February 5th, included:

-Recognizing the total debt without a haircut on the present value, beyond the debate on the amount actually owed in principal and interest.

-Paying everything within a maximum period of 5 years from the signing of the agreement, or in less time when firms based in the creditor countries bring dollars into the country.

-Make a down payment of US$2 billion in the year after the signing of the agreement. It would be the only installment that Cristina Kirchner will have to cover, conditioned to credits in dollars that allow for no impact on the reserves.

-Pay off the remaining amount in annual installments, the first of which should be made within a year after the first payment.

Countries in favor and opposed

On January 20, Economy Minister Axel Kicillof traveled to the French capital and said that his meeting with the representatives of the creditors had been "very positive". But Club spokeswoman, Clotilde L'Angevin, clarified that the negotiations "have not formally begun" and that it was "too early" to respond to Argentina’s proposal.

Following Kicillof’s visit, the creditors met in private and both sides maintained total secrecy before the press. But at that meeting, according to diplomatic sources that were consulted, envoys from a group of countries found that the proposal was acceptable. These were envoys from Germany, Italy, France, the United Kingdom and the United States.

Other creditor governments, like Japan’s, were indifferent. The Netherlands and Spain were more hardline, which are among the biggest creditors. The debt with the Paris Club has origins mostly in loans requested by the last dictatorship from European companies for arms purchases (which in some cases didn’t even arrive) and infrastructure (which, like a massive gas pipeline, were also not carried out), but also includes credits that Madrid extended during the convertibility crisis.


President Cristina Fernández will travel on Wednesday of next week to Paris, responding to an invitation from the French head of state, François Hollande. The President will inaugurate the Paris book fair and will participate in an official lunch at the Elysee Palace. The heads of state will hold a bilateral meeting with a heavy agenda on relations between Argentina and France, as well as the most important issues in the international arena, but without touching on the Paris Club.

Ambito Financiero
IMF, concerned over the Argentina vs. vultures case

Friday, March 14, 2014

Washington - The International Monetary Fund reiterated its "deep concern" about the "systemic implications" on debt restructuring processes that may come from the judicial dispute being carried out by Argentina and the vulture funds in the U.S. courts.

"The Fund continues to be deeply concerned about the broad systemic implications that the decision of the lower court (in New York) may have for debt restructuring processes in general," said Gerry Rice, spokesman for the Fund, during his weekly press conference held each Thursday.

The IMF, which is closely following the legal dispute between Argentina and bondholders who are still in a default situation, has been warning for some time about the consequences upon the international financial system that could come from the U.S. Supreme Court upholding decisions made by lower courts in Manhattan.

In a May 2013 document, the IMF had already stated that upholding New York court rulings "could probably give greater advantage" to bondholders who did not enter the 2005 and 2010 debt swaps. It also indicated that, given that scenario, "could make the process of restructuring more complicated."


The 'concern' now raised by the IMF spokesman regarding the case between Argentina and the vulture funds coincides with one of the arguments from lawyers representing the country in the appeal before the Supreme Court on February 18. In it, the Argentine government asked that decisions made by lower courts of New York be reviewed, describing them as "erroneous" since they would prevent the country from making "debt obligation payments, which are being paid on time and in accordance with its terms.”  The decisions challenged by Argentina were issued first by New York Judge Thomas Griesa, and then by the Court of Appeals of the Second Circuit of New York, which established a method of payment to bondholders who did not enter debt swaps, for an approximate amount of US$1.33 billion dollars as compensation for 100% of the bonds in default.

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