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FM USMISSION USOSCE
TO RUEHC/SECSTATE WASHDC 5164
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UNCLAS SECTION 01 OF 02 USOSCE 000331 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR L/EUR AND EUR/RPM 
 
E.O. 12958: N/A 
TAGS: OSCE KTIA
SUBJECT: OSCE LEGAL PERSONALITY, ROUND 5 - MOVEMENT FORWARD AS 
RUSSIA PLAYS NICE (FOR NOW) 
 
REF: USOSCE 291 AND PREVIOUS 
 
¶1. (SBU) Summary: At the July 5-6 round of negotiations on a 
Convention on Legal Personality, Legal Capacity and Privileges and 
Immunities for the OSCE (CLPPI), the absence of key players limited 
the WG's ability to deal with unresolved issues.  There was extended 
discussion on a Belgian proposal that would exempt OSCE staff from 
paying national income tax provided an assessment was made that 
would go to the benefit of the organization itself despite concerns 
that such a decision would exceed the WG's mandate to deal with 
legal personality and privileges and immunities (P's and I's). 
Russia continued to insist that field operations are "temporary" and 
thus not fully part of the OSCE, but threw up fewer roadblocks to 
protecting field operations than in previous rounds.  Significant 
progress was eventually made on the question of treatment of field 
operations staff both in substance (Russia has accepted identical 
P's and I's for both "members of the OSCE Secretariat and 
Institutions" and "members of field operations," with a more limited 
geographical scope for the latter) and terminology (field operations 
staff will not be contrasted with "OSCE officials," a Russian 
proposal roundly rejected by the WG).  On entry into force (Article 
18), there was a general feeling that something less than unanimous 
ratification by all 56 States should be required for the convention 
to take effect.  The Russians appear to be taking a more 
conciliatory stance on convention negotiations with the goal of 
winning over more support for their charter draft.  The next round 
is scheduled to take place September 13-14.  End summary. 
 
--------------------------------------------- - 
Articles 14 bis -- Members of Field Operations 
--------------------------------------------- - 
 
¶2. (U) The fifth round of negotiations on the proposed CLPPI was 
again chaired by Dutch Ambassador Ida van Veldhuizen-Rothenbuecher, 
assisted by Austrian MFA Legal representative Helmut Tichy.  The 
absence of the Russian MFA legal adviser and OSCE Parliamentary (PA) 
representative Nothelle limited discussion of certain imporant 
outstanding issues. 
 
¶3.  (U) Discussion of which P's and I's should be afforded field 
operations staff and other OSCE personnel was unexpectedly 
harmonious.  The UK, backed by Canada, sought to eliminate one of 
the few remaining distinctions between the P's and I's to be given 
field operations staff and other OSCE personnel by proposing 
limiting P's and I's of all OSCE personnel (rather than only field 
operations staff) to the geographic areas where the officials are 
assigned.  Russia, supported by the United States, disagreed, noting 
that such a clause would unnecessarily limit the geographic scope of 
the P's and I's for Secretariat staff, whose responsibilities, 
unlike those of field staff, extend throughout the entire OSCE 
region  After considerable discussion, Russia accepted identical P's 
and I's for all personnel, with a more limited geographical scope 
for field operation staff to country of assignment and when on 
official travel, whereas staff of Secretariat and Institutions will 
have P's and I's throughout the OSCE region.  It also made a key 
concession on terminology, in that field operations staff will not 
be contrasted with "OSCE officials," a proposal roundly rejected by 
other States.  Instead, it has agreed to substitute a different 
term, such as "members of the OSCE Secretariat and Institutions," 
which does not imply that field operations staff are somehow not 
OSCE officials.  The Chair told us later that Russia has also agreed 
to drop its insistence on distinguishing between "OSCE" and "Field 
Operations" in Articles 5-10 covering premises, assets, etc. 
 
-- Sharp disagreement remains over whether to afford comprehensive 
immunity from personal arrest or detention to staff of the 
Secretariat and Institutions.  Opponents noted that no such right is 
 
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provided in the 1946 UN Convention, generally viewed as the model 
for P's and I's appropriate for IOs, while proponents argued that 
such immunity has been included in more recent conventions, such as 
those providing P's and I's for the ICC and ITLOS, and asserted that 
this more recent practice reflects the need to protect staff from 
political arrests. 
 
-- On tax exemptions (14d), Belgium proposed conditioning tax 
exemptions for OSCE personnel on the existence of a "staff 
assessment" (in effect, an internal tax), citing the EU and the UN, 
where the incomes of respective personnel are exempt from paying an 
income tax but are instead subject to a staff assessment for the 
benefit of those organizations.  Belgium proposed language for a 
similar system for the OSCE.  The UK, Canada and Sweden supported 
but the Netherlands noted that such a proposal may be more difficult 
to sell in capitals.  The Chair asked that this language be dropped; 
Belgium said this was not justified as no States had objected and 
only asked to consult with capitals.  After considerable discussion, 
the Chair again stressed that the matter at hand was a convention to 
grant the OSCE legal personality; issues such as self-financing 
 
USOSCE 00000331  002 OF 002 
 
 
schemes for the organization could further complicate negotiations. 
The United States noted that there was no precedent for an 
international instrument's conditioning tax exemption on the 
existence of a staff assessment; all such schemes had been adopted 
internally, after and separately from establishment of the tax 
exemption principle.  Tichy agreed, suggesting that the WG could 
consider such a proposal only if given a mandate following 
discussion in the Permanent Council.  He instead tabled language in 
which individual parties could condition their grant of tax 
exemption to the existence of such a staff assessment. 
 
------------------------ 
Article 1 -- Definitions 
------------------------ 
 
¶4. (U) The Chair tried to reach consensus on 1(a), which defines the 
constituent elements of the OSCE (Russia since the beginning has 
objected to including "field operations").  The Chair recommended 
dropping "the Secretariat, Institutions [and Field Operations]" as 
the first two were never again mentioned in the convention and the 
last was dealt with separately in 14 bis.  Supporting a Russian 
proposal, she then advocated adding language taken from the Rules of 
Procedure on executive structures.  Russia again asserted that field 
operations were only "temporary" in nature and for that reason, its 
staff and P's and I's should be different from those of the 
Secretariat.  Tichy said the crux of the issue rested on whether 
 
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there would be a 14 bis on field operations.  Russia then said that 
if there was agreement on the content and inclusion of 14 bis, 
language on 1(i) bis (defining members of field operations) could be 
kept.  The provisionally agreed text follows standard practice by 
defining the "OSCE" simply as "the Organization for Security and 
Cooperation in Europe." 
 
----------------------------- 
Article 18 (Entry into Force) 
----------------------------- 
 
¶5. (U) There was considerable discussion over how many participating 
States must ratify the convention before it entered into force.  The 
Chair noted that since the OSCE is a consensus-based organization, 
it should theoretically be all 56 States, but that would be 
difficult.  Canada noted that if it were to be less than 56, there 
would be two legal regimes in effect, i.e., with the convention and 
without.  However, since getting all 56 would take years, if it were 
even possible, Ottawa was prepared to support a ratification by 50 
percent plus one, that is, the convention would go into effect after 
29 States ratify.  The UK agreed that less than 56 would be 
desirable and noted that those States that had not ratified could 
still enter into a bilateral relationship with the OSCE.  Russia 
said it would prefer the "maximum" number, but could also compromise 
on something less, perhaps two-thirds.  It also suggested that the 
ratifications of at least some, if not all, the 22 host countries 
(i.e., Austria (Secretariat), Denmark (OSCE PA), Poland (ODIHR), 
Czech Republic (Economic and Environmental Forum), as well as the 18 
countries which currently host field operations) should be required 
as they were the States in which the CLPPI would have greatest 
impact.  It noted that since only 34 participating States are not 
host countries, a two-thirds rule (39 ratifications) would mean that 
at least five host countries would be needed to ratify.  The United 
States reserved its position.  Tichy noted that once the convention 
enters into force, even if at a relatively low number, the OSCE's 
international legal personality would be established, and that it 
would be able to enter into contracts in those states which were 
party to the convention.  It was agreed to bracket the numbers 29 
and 39 into the text. 
 
------- 
Comment 
------- 
 
¶6. (SBU) The Russians seem to be playing nice so far, foregoing many 
(though not all) opportunities to poke sticks in the spokes and, in 
fact, were affirmatively cooperative on the issue of Field 
Operations.  They may be seeking to cooperate on achieving an 
acceptable text before Madrid, then urge EU Members and others to 
pressure the United States to accept negotiations on a charter - 
ratification of which they have made a condition of approving a 
CLPPI.  The Russian del again asserted to the U.S. representative on 
the margins of the talks that under Russian law, a convention 
granting legal personality and a legal instrument on structure 
(i.e., a charter) are necessary to provide P's and I's.  Some States 
may find such an argument convincing.  End comment. 
 
LAEUCHLI