Tuesday, February 11, 2014
By Natan Levy
Argentina's state news agency Télam announced that the country intends to file a petition for a hearing (certiorari) to the US supreme court for a review of the August 23, 2013 ruling by the second circuit court of appeal, which set a ratable payment formula enjoining other market participants, including BNY Mellon.
The announcement also revealed that Argentina has secured the services of US lawyer Paul Clement, who will head the request for a rehearing. Clement, who was the former US solicitor general under the administration of George W. Bush, has also been talked of as a potential supreme court judge.
Ambito Financiero
Vultures: Argentina turns to the “Republican expert” to interest the Court
Monday will be the last opportunity the country will have for the U.S. court to accept the case
Wednesday, February 12, 2014
By Carlos Burgueño
The Argentine government will file on February 17 before the U.S. Supreme Court the appeal on the case it faces with the vulture funds, debuting a new legal weapon: the hiring of American attorney, of Republican origin, Paul Clement; allegedly an expert in litigating before the U.S. high court. So said the attorneys in the law firm of Cleary, Gottlieb Steen & Hamilton (CGSH) to the Argentine government, affirming that only with an expert linked to the Republicans could there be a chance that the Court would reconsider its current position an analyze the option of taking up the case against the vulture funds.
The appeal will be the last chance the country will have for the high court’s justices to take conscience of the importance of adding the case to the annual docket on what it must rule on an until now it was rejected by the Court. For this to interest one of its members, now at this last level, only with a personal request from a justice (or several) can a case enter into the select group of 80 cases that they will rule on between May 2014 and February 2015, the annual period of session of that Court.
According to the recommendation of Carmine Bocuzzi, one of the attorneys at CGSH that has carried forward Argentina’s filings until now, in the first and second instances in court (which the country lost in both rounds), Clement is the key man for the mission to interest one of the justices of the American Supreme Court.
On his CV, he counts 41 cases before the U.S. high court; 20 of which were filed in the last three judicial sessions. In 2005, he was nominated by former President George W. Bush as solicitor general, replacing Theodore Olson. He is a law professor at Georgetown University.
Clement’s task will be to seek, in record time, a parallel strategy to the very remote possibility that the government of Barack Obama will intervene before the court. Clement began to study the Argentine case on October 14 in New York, protesting against the lack of time for preparing something substantial. Even still, he is moderately optimistic for personal contacts. Clement was recommended to Bocuzzi by Bank of New York Mellon (BONY) after the negative ruling in the Court of Appeals, and only two months later, he was accepted by the Argentine government to be added to the Cleary firm. Clement’s strategy is to pressure the Republican justices John Roberts and Samuel Alito (whom he knows since his years of working in the Bush administration), to listen to the U.S. Solicitor General under Obama, Donald Verrilli, a Democrat, but with excellent dialogue with his predecessors.
Clement, last November, assured then-Economy minister Hernan Lorenzino that only with a direct intervention upon these justices would there be a chance for reconsidering the option of taking the Argentine case. If it does not, the ruling will stand from the appeals court of August 23 of last year, and the lawsuit would end firm against Argentina.
At that time, the country would be ordered to pay some US$1.33 billion in cash to the vulture funds, commanded by the Elliott fund of Paul Singer, a situation that would also provoke the other holders of Argentine debt still in default to also show up in the courtroom of Thomas Griesa to obtain an order of cash payment. Since the government of Cristina Kirchner will not comply with this mandate, the country would enter into a theoretical “contempt” according to U.S. law.
Clement’s strategy to interest the court will be to attempt to demonstrate the lack of equality that would exist in paying the holdouts and vulture funds (which make up 7% of what is left in default) with respect to the exchange bondholders. He will also mention the official decision of the Argentine government to reopen the debt swap for a third time, a law already approved by Congress and awaiting implementation by the Economy Ministry.
In parallel, and in absolute secret, Argentina is trying out an even more complicated and politically difficult idea. A parallel negotiation among private parties, to pay the litigant vulture funds indirectly with public money, but through third parties.
For now the idea was called “bizarre” by Singer, who is waiting to have a definitive ruling in his favor in the Court (starting with the rejection of the case) to then begin negotiations with Gramercy and Fintech.
El Cronista
For the government, there are still details left in getting off the gray list of the FAFT
Wednesday, February 12, 2014
By ESTEBAN RAFELE Buenos Aires
The government understands that there are only details left for exiting the intensive review program from the Financial Action Task Force (FATF), the entity that combats asset laundering and terrorism. The president of the Financial Information Unit (UIF), José Sbattella, traveled to Paris to defend, starting today, the country’s position in the plenary of the multilateral entity, which has Argentina on its list of cooperative countries with series deficiencies in control of laundering, or the “gray list”, since mid-2010.
Sbattella traveled to Paris at the start of this week, and since Monday has participated in the technical meetings in which cases are taken up of countries under intensive review by the FATF. Today and tomorrow, he will participate in the plenary and will return on Friday for the public hearing in which the government will defend his reappointment to the UIF, something the opposition is resisting.
According to official sources, the government believes that it is complying with 80% of the action plan agreed to with the FATF three and a half years ago. Since then, the country has passed anti-laundering and anti-terrorism laws, the UIF has issued dozens of resolutions ordering different subjects to report suspicious operations and, recently, the entity that Sbattella presides over pushed different judicial cases to show the applicability of the rules.
What is left for the country to get off the gray list? According to official sources, the FATF lists two failures from the current anti-laundering rules. On the one hand, it states that different organizations involved in the control of anti-laundering do not have oversight authority, like the AFIP, the Insurance authority and the Central Bank. The government response, in this case, is that those organizations respond to the UIF, which has in its structure a Department of Oversight.
Another point that the FATF is discussing is the power to sanction the Insurance authority and the Central Bank. “They say to us that they don’t have a range of sanctions that is sufficiently broad,” said a sources who knows the discussions. Here, the response is the same as in the previous critique: it’s the UIF that has the capacity to sanction and that receives reports from other public dependencies. “Argentina says that it is already in force and FATF responds that it’s not written,” they interpret in the government, which does not rule out making those additions to the rulemaking.
A third complaint from FATF is mutual legal assistance, or the response that the country gives to petitions for help from other countries. In that case, Argentina says it has the norm, but the FATF demands it demonstrate its functioning in practice. “The problem is that we don’t have practical cases. We never had requests,” said a source close to the negotiations.
To leave the “gray list”, Argentina must ask for a high level visit for the president of FATF, Russian Vladimir Nechaev, to come to the country. On Friday, the FATF will have its usual communication on the progress of the countries under supervision. In the government they are awaiting good news, but they say it’s premature to define if the process to leave intensive review will start.
Ambito Financiero
Classic: Scioli in New York with launch music
He will show a presidential profile in a 48 hour round with dozens of investors and businessmen
Tuesday, February 11, 2014
by: Rubén Rabanal
New York – The Big Apple will give a key boost today to Daniel Scioli in his presidential run. The governor will land today to give a presentation before the Council of the Americas this afternoon, which is, in reality, only the formal reason for a much broader agenda that includes meetings with businessmen and local media.
The governor’s trip to the city goes beyond the official announcement to transmit confidence and predictability to businessmen (a one-on-one round with a dozen companies and banks has been organized) and the hundred who bought tickets to listen to Scioli at the Council.
The governor will, also, have to submit to a press conference, an chapter almost impossible to avoid in the United States. There will be two full days in the trip with immersion in showing himself in New York, as all Argentine presidential candidates have done at the start of their campaigns.
In the case of Cristina de Kirchner, it was a political “walkabout” with an exam before directors of investment funds, banks and all the companies that are members of the club in the Council of the Americas.
Scioli today will be the only speaker in the session that the Council will begin at 6:30pm, Buenos Aires time. For the occasion, the Americas Society, of Susan Segal, will have him at the well-known headquarters on Park Avenue. At that building, Argentines are well-known. Segal was announced on her visits to Buenos Aires, where a satellite session of the Council is held each year, as a personal friend of Cristina de Kirchner. She has already said the same about Scioli, an advance look at the strategy that the entity always follows to raise the curiosity of the New York financial establishment for presidential candidates (with a chance) in Latin America.
In that building, Cristina de Kirchner also took some substantially recorded steps in this city. Three years ago, for example, she announced there that a group of investors has asked Argentina to analyze the possibility of placing debt again. The rate offered at that time was 8% annual. Amado Boudou, then Economy minister, announced that the government preferred waiting for a better offer.
This time New York is not as curious as it was with the Kirchners, for whom they even organized presentations in Columbia and New York universities. The interest passes now for knowing who is taking the reins inside Peronism and under what conditions. And while Scioli will speak today about promotions of investments, administrative reforms in the province of Buenos Aires and how the eternal Buenos Aires deficit has been modifying, the room full of investors that look with fear upon the possibility that the devaluation, the loss of reserves and the uncontrollable deficit will end up generating a contagion in emerging countries, will listen to him more as a candidate. They will ask him, therefore, for more details about the future than the list of past successes.
The displacement of Scioli in New York is a mise en scène for the candidate. Yesterday an advance team arrived from his administration, which organized the final points of his trip to the city. They are made up of the provincial Economy Minister Silvina Batakis –the one responsible for the program of meetings with groups of investors that will occupy the government for most of today and tomorrow – and the head of Banco Provincia and Scioli’s political adviser, Gustavo Marangoni.
All in line with protocol that the presidential aspirants normally follow
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