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Viewing cable 08BRASILIA703, DEMARCHE DELIVERED: PARTICIPATION IN INT'L COMPACT WITH

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Reference ID Created Released Classification Origin
08BRASILIA703 2008-05-20 18:05 2011-07-11 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Brasilia 
VZCZCXRO8942
OO RUEHRG
DE RUEHBR #0703 1411805
ZNR UUUUU ZZH
O 201805Z MAY 08
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1737
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUEHRI/AMCONSUL RIO DE JANEIRO 6180
RUEHSO/AMCONSUL SAO PAULO 2113
RUEHRG/AMCONSUL RECIFE 8064
 
UNCLAS BRASILIA 000703 
 
STATE FOR NEA/I-KTAECKER 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGSS: EAID, ECON, EFIN, EINV, PGOV, PREL, BR, IZ 
SUBJECT:  DEMARCHE DELIVERED: PARTICIPATION IN INT'L COMPACT WITH 
IRAQ MINISTERIAL 
 
REFS: A. 08 STATE 43799 
       B. 08 Brasilia 36 
 
 
1. (U) Post delivered reftel points to the Brazilian Ministry of 
Foreign Affairs Office (MRE) on May 2 and to the Ministry of Finance 
on May 8. At MRE, Minister Luis Antonio Balduino Carneiro, 
Coordinator-General of the Finance Affairs Office, joined by 
representatives of the Middle East and United Nations offices, said 
they would consider the issue carefully, but expressed concerns 
about legal, bureaucratic, and political complications that would 
make a debt relief agreement difficult. 
 
2. (U) Ministry of Finance Deputy of Secretary for International 
Affairs Alvaro Vereda was receptive to Brazil attending the reftel 
conference, and confirmed Brazil's general commitment to Iraqi 
refugees, medical exchange programs and the host of other social 
programs outlined in reftel.  Conversely, when the discussion 
switched to debt relief, the reluctance to commit the GOB was again 
apparent (see ref B). 
 
3. (SBU) Vereda confirmed Brazil would like to participate in the 
conference, pending receipt of further logistical details.  However, 
he cautioned that there were still unresolved commercial issues 
between Iraq and Brazil that made Brazilian government and private 
sector reticent to pursue new commercial opportunities in Iraq. 
Prior to the 2004 invasion of Iraq, a Brazilian construction company 
led by "Mendes Jr." had acquired public funds from Banco do Brasil 
(BB), to facilitate engineering projects in Iraq.   Following the 
regime change in Iraq, Mendez's local Iraqi subcontractor company 
defaulted on payments to Mendez, which in turn defaulted on its BB 
loan.  This situation continues to be a legal issue for the GOB, as 
they seek to resolve the funds in default before exploring 
additional Iraqi development partnerships.  The Ministry of Finance 
has taken a proactive approach to rectify this financial impasse 
between the commercial sector and the GOB, with hopes of reaching a 
bilateral agreement before the end of 2008. 
 
4. (U) Vereda concluded that he and the GOB looks forward to 
receiving more details on the ICI, as they plan to be in attendance. 
 
 
      CHICOLA