VZCZCXYZ0002
RR RUEHWEB

DE RUEHSK #0662/01 2111350
ZNR UUUUU ZZH
R 301350Z JUL 07
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 6328
INFO RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS MINSK 000662 
 
SIPDIS 
 
FOR EB/IFD/OIA/HGOETHERT AND L/CID SAM MCDONALD 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: CASC EFIN EINV KIDE OPIC PGOV BO
SUBJECT: BELARUS: 2007 REPORT ON INVESTMENT DISPUTES AND 
EXPROPRIATION CLAIMS 
 
REF: STATE 55422 
 
Sensitive but Unclassified; Protect Accordingly 
 
¶1. (SBU) The United States Government is aware of seven (7) 
unresolved claims of United States persons that may be outstanding 
against the Government of Belarus (GOB).  Under the second heading 
are provided, as last year, six (6) other incidents in which 
property owned by the US Government was seized and expropriated. 
 
a.  Claimant A 
 
b. July 2005 
 
c. Claimant A is a US corporation which had a hydraulic pumping unit 
worth $23,552 seized by Belarusian Customs.  The claimant was 
shipping the unit from Poland to Russia.  Polish Customs had added 
the cost of transport to the unit's price on the shipping invoice, 
but provided a notarized statement to this effect.  Nonetheless, 
Belarusian Customs claimed this represented a discrepancy in the 
paperwork and referred the case to court for seizure by the 
Belarusian Government.  Knowing the Belarusian Government's daily 
practice of confiscating transiting goods and reselling them for 
profit, the US Embassy sent letters to and called the Ministry of 
Foreign Affairs, the Ministry of Justice, and Customs.  The US 
Embassy also arranged for additional supporting documents to be 
provided by the nearest Polish Consulate.  The hydraulic unit was 
released back to the American company in October.  The Belarusian 
Government did not provide compensation for legal costs or losses 
the American corporation incurred over this delay. 
 
a. Claimant B 
 
b. August 2005 
 
c. Claimant B is a US corporation which had $8,200 worth of 
sheetrock and other construction materials seized by Belarusian 
Customs.  Customs claimed the US corporation had gone out of 
business in 2001, and used this as legal grounds to formally 
confiscate this cargo.  The Belarusian Government did not provide 
compensation for this confiscation. 
 
a. Claimant C 
 
b. February 2005 
 
c. Claimant C is a US corporation which owns 9.35% of the Kommunarka 
candy company.  In 2000, the Belarusian Government used a Golden 
Share mechanism to take full control of Kommunarka for five years. 
The state used this control to grant itself majority ownership over 
the company.  In February 2005 the Belarusian State Food Industries 
Concern (Belgospischeprom) extended its Golden Share control over 
the company for another five years.  The Belarusian Government has 
not provided any compensation for this action. 
 
a. Claimant D 
 
b.  January 2004 
 
c.  Claimant D is a US corporation which had a shipment of 
second-hand clothing evaluated at $13,600 seized by Belarusian 
Customs.  The Claimant was shipping the clothes from the U.S. to 
Ukraine through Lithuania and Belarus.  The Belarusian government 
seized the shipment because it alleged the US corporation was not 
registered to do business at the time of the shipment, even though 
the US company provided information from the State of New York to 
prove they were registered.  The US Embassy provided the company 
with a letter of support and the US Ambassador raised this case, 
along with several others, in meetings with the Foreign Minister. 
The Belarusian government has not compensated the US corporation for 
the seizure. 
 
a. Claimant E 
 
b.  January 2004 
 
c.  Claimant E is a US corporation which had a shipment of 38 tons 
of frozen fish seized by Belarusian Customs.  The Claimant was 
shipping the fish from the U.S. to Ukraine and Moldova through 
Lithuania and Belarus.  The Belarusian government seized the 
shipment because it alleged the US corporation was not registered to 
do business at the time of the shipment, even though the US company 
provided apostillized information from the State of Oregon to prove 
they were registered.  The US Embassy provided the company with a 
letter of support and the US Ambassador raised this case, along with 
several others, in meetings with the Foreign Minister.  The 
Belarusian government has not compensated the US corporation for the 
seizure. 
 
a. Claimant F 
 
b. October 2006 
 
c. Claimant F is a US corporation that has six restaurant outlets in 
Belarus.  In 2002 Minsk City authorities physically blocked access 
to Claimant F's most popular branch, ostensibly as a safety 
precaution while the city performed construction work at a nearby 
building.  However, during the same time frame the Belarusian 
government made a number of public statements hostile towards 
Claimant F, including the Ministry of Health declaring Claimant F's 
food was dangerous to Belarusian citizens.  Claimant F's employees 
are allowed access to the closed outlet, but are not allowed to 
conduct business at the site.  The city has promised for the past 
several years to reopen the restaurant, but has taken no positive 
action.  Talks have been underway for compensation for several 
years, with no progress.  Claimant F has plans to expand in Belarus, 
but not until this outlet is returned to their control. 
 
a. Claimant G 
 
b.  1995 
 
c.  Claimant G is a US company that provided equipment and services 
to Belarus for a demilitarization project.  Claimant G alleges that 
Belarus effectively changed the agreed terms of the contract to 
exclude the company from ongoing participation without compensating 
the Claimant for the services and equipment it had provided.  After 
failure of direct negotiations with Belarus, Claimant G filed an 
expropriation claim with OPIC. 
 
On March 31, 1997, OPIC compensated Claimant G in the amount of $5.9 
million for expropriation of its investment, a joint venture in 
Belarus, and the Claimant has assigned its claim against the GOB to 
OPIC.  Negotiations were suspended by OPIC when the MFA formally 
requested in March 1999 that OPIC cancel or withdraw its 
expropriation claim determination in favor of Claimant G.  OPIC has 
since informed Belarus that it is willing to resume negotiations, 
assuming some common ground can be found. 
 
US Government Property 
 
a.  Claimant H (US Government) 
 
b.  July 12, 2001 
 
c.  Claimant H provided US Government-owned computer and printing 
equipment to the Volny Gorod Newspaper in Krichev.  On July 12, 
2001, the Police confiscated the equipment, valued at $5,783.  US 
Embassy officials observed the court trial and State Department 
Spokesman Richard Boucher issued a statement concerning the case on 
August 3, 2001.  Post has reached no resolution with Belarus on this 
issue. 
 
a.  Claimant I (US Government) 
 
b.  August 2001 
 
c.  Claimant I provided US Government-owned computer and printing 
equipment to the Philon Kmita Regional Center for Support and 
Development of Democratic Changes in Orsha.  On August 14, 2001, the 
Police confiscated four computers from the center, citing a 
Presidential Decree as justification.  On August 17, 2001, the 
authorities returned and seized the center's risograph printing 
equipment.  The equipment was subsequently confiscated by court 
decision.  A still later court decision returned the risograph 
equipment, but the computers remain in Belarus' possession.  Post 
has not reached a resolution on this issue with Belarus. 
 
a.  Claimant J (US Government) 
 
b.  February 2003 
 
c.  Claimant J provided US Government-owned risograph printing 
equipment worth $6,735 to the Strike Committee of Outdoor Market 
Stall Operators.  The Police seized the equipment on February 15, 
2003, allegedly refusing to produce a warrant or give the Strike 
Committee a copy of the receipt confirming the seizure, as required 
under Belarusian law.  The equipment has not been returned, nor has 
Post been able to secure compensation for the seized risograph. 
 
a.  Claimant K (US Government) 
 
b.  October 2002 
 
c.  Claimant K is the US Government's Army and Air Force Exchange 
Service (AAFES).  Due to an administrative error, Customs 
documentation for an AAFES shipment bound for US troops in 
Afghanistan was incorrect.  At the Belarusian border Customs 
officials inspected the shipment and noted the discrepancy.  As a 
result, Belarusian Customs authorities seized government-owned cargo 
worth $16,240.  An October 29 court ruling formally expropriated the 
cargo. 
 
The US Embassy formally protested the action twice in writing and on 
numerous occasions verbally, offering assurances that the goods were 
not for use in Belarus and were not intended for commercial 
purposes.  AAFES has received no compensation for the confiscated 
property, nor has Belarus shown willingness to negotiate a 
resolution on the issue. 
 
a.  Claimant L (US Government) 
 
b.  March 2003 
 
c.  Claimant L loaned US Government-owned technical equipment to 
Belarusian television stations through an assistance program 
administered by the International Research and Exchanges Board 
(IREX).  In March 2003 an oblast court in Gomel ruled that seven 
pieces of US Government-owned equipment provided through the IREX 
program should be expropriated.  Although the US Government holds 
title to the equipment, Embassy officials were not allowed to 
participate in court proceedings. 
 
Following the seizure, the Embassy formally protested the court's 
ruling to the Ministry of Foreign Affairs (MFA), requesting that the 
equipment be returned to the US Government.  The issue was a subject 
of frequent interventions with the MFA, including with the Foreign 
Minister.  Belarus has shown no willingness to negotiate the return 
of the government-owned equipment. 
 
a. Claimant M (US Government) 
 
b. December 2004 
 
c. Claimant M provided US Government-owned computer equipment and 
cell phones worth approximately $10,000 to the NGO Business 
Initiative.  Police and the BKGB seized the equipment in April 2004 
when they arrested the head of the NGO.  On December 30, 2004 a 
Minsk District Court judge ruled the equipment should be returned to 
the Embassy.  No equipment has been returned; it remains in BKGB 
custody. 
 
Claimants 
--------- 
 
Claimant A is Emerson Process Management, a US company based in St. 
Louis, MO.  EPM has not signed a privacy waiver. 
 
Claimant B is Cartwright Trading Ltd.  Post does not know where 
Cartwright is registered, and Cartwright has not signed a privacy 
waiver. 
 
Claimant C is American MOL Corporation.  Post does not know where 
this company is registered, and American MOL has not signed a 
privacy waiver. 
 
Claimant D is P.I.N. Trade International, Inc., a U.S. corporation 
registered in Brooklyn, New York.  P.I.N. Trade International, Inc. 
has not signed a privacy waiver. 
 
Claimant E is Calls Capital, LLC, a U.S. corporation registered in 
Oregon.  Calls Capital, LLC has not signed a privacy waiver. 
 
Claimant F is McDonald's Corporation, headquartered in Chicago, IL. 
McDonald's has not signed a privacy waiver. 
 
Claimant G is Alliant Techsystems, a U.S. company headquartered in 
Edina, Minnesota.  Post has no information that Alliant Techsystems 
signed a privacy waiver. 
 
Claimants H, I, J, K, L and M are the U.S. Government. 
 
Stewart