VZCZCXRO8217
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR RUEHTRO
DE RUEHTU #0305/01 1391551
ZNY CCCCC ZZH
P 191551Z MAY 09
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 6303
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNMGH/MAGHREB COLLECTIVE
RUEHOT/AMEMBASSY OTTAWA 0245

C O N F I D E N T I A L SECTION 01 OF 02 TUNIS 000305 
 
SIPDIS 
 
STATE FOR NEA/FO, NEA/MAG, NEA/SCA/EX; 
STATE ALSO FOR A/OPR/OS, DS/OFM, L/DL 
 
E.O. 12958: DECL: 05/18/2019 
TAGS: ASCH OFDP PREL TS
SUBJECT: AMBASSADOR DELIVERS SCHOOL NON-PAPER TO MINISTER 
OF FINANCE 
 
REF: TUNIS 286 AND PREVIOUS 
 
Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d) 
 
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SUMMARY 
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¶1.  (C) The Ambassador delivered a non-paper to the Minister 
of Finance conveying USG agreement in principle on the tax 
aspects of a bilateral accord for the American Cooperative 
School of Tunis (ACST).  The GOT has yet to signal its 
intentions on the question of the lease of the land occupied 
by the school.  The Minister stated that he could not speak 
for other ministries while the Ambassador made clear that any 
agreement must be comprenhensive.  The Ambassador's request 
for a meeting with the Minister of Public Lands is pending. 
End summary. 
 
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READOUT 
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¶2.  (C) On May 19, the Ambassador met with Minister of 
Finance Mohamed Rachid Kechiche to convey the United States 
position on the tax and status negotiations on behalf of 
ACST.  Accompanying the Ambassador were the DCM and IO (ACST 
Board President). 
 
¶3.  (C) During the cordial meeting, the Ambassador delivered 
a non-paper summarizing the United States position:  in 
short, acceptance in principle that ACST would pay 4.2 
million Tunisian dinars over five years to settle all past 
liabilities through June 30; a new fiscal status involving 
significant taxation of salaries but substantial exoneration 
for the school itself to take effect July 1.  Both of these 
are in the context of a comprehensive status agreement that 
must include resolution of the lease called into question by 
the GOT in March. 
 
¶4.  (C) Not unexpectedly, Minister Kechiche attempted to 
deflect the land issue and any other non-tax questions as 
outside his prerogative, insisting that he could not speak 
for other ministries, nor could he agree to a fiscal 
settlement contingent on actions by those other ministries. 
Instead, the Minister emphasized the generosity of the 
Tunisian offer on the fiscal questions.  He even alluded to 
the need to resolve fiscal issues as quickly as possible to 
avoid ongoing complications for ACST,s overseas-hire staff 
(for example, their current inablity to obtain road tax 
stickers for their cars). 
 
¶5.  (C) In response, the Ambassador underlined that 
substantial concessions been made by both sides.  The United 
States still does not accept the Tunisian position on the 
past taxation, though we are willing to resolve the issue via 
a settlement for the benefit of the school.  He also reminded 
the Minister that we are in government-to-government 
negotiations, not discussions with just one ministry.  Since 
it was clear that Minister Kechiche would not, or could not, 
address the land issue or other non-tax details of the 
eventual accord, the Ambassador reiterated his appreciation 
for the progress made in the negotiations and his confidence 
that a comprehensive accord was within reach. 
 
¶6.  (C) The meeting closed with a suggestion by the Minister 
that the terms agreed be reviewed and incorporated into a 
"proces verbal" (settlement agreement) to resolve the tax 
issues.  The Ambassador acknowledged that possibility but 
made no commitment.  Later in the day, the Ambassador provide 
the MFA Chief of Staff copies of the same non-paper on the 
margins of another meeting. 
 
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COMMENT 
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¶7.  (C) The Minister of Finance would prefer to close the 
ACST tax case irrespective of any other issues, but we have 
stressed from the beginning that the tax questions must be 
addressed in the context of a comprehensive status agreement. 
 The Ambassador has already requested a meeting with the 
Minister of Public Lands and any accord will certainly be 
finalized through the Ministry of Foreign Affairs.  In the 
meantime, in consultation with relevant Department offices 
and ACST, post will start the process of formalizing the 
language on the tax issues but emphasize to the GOT that only 
 
TUNIS 00000305  002 OF 002 
 
 
a comprehensive agreement will be signed.  We will stand fast 
on the principle that "nothing is agreed until everything is 
agreed."  The next important step will be gauging the 
attitude of--and the instructions received by--the Minister 
of Public Lands.  End comment. 
Godec