US embassy cable - 05PRAGUE1191

UNCLAS PRAGUE 001191 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
STATE FOR EUR/NCE, EB/IFD/OIA, L, WHA/CAN 
STATE PLEASE PASS USTR LISA ERRION 
COMMERCE FOR ITA/MAC/EUR MROGERS 
 
E.O. 12958: N/A 
TAGS: EINV, EZ, Economic Development 
SUBJECT: CZECH REPUBLIC:  BILATERAL INVESTMENT TREATY -- 
TIME TO ANSWER THE MAIL 
 
REF: PRAGUE 00827 
 
1.  (U)  This is an action request.  Please see para 5. 
 
2.  (U)  During an August 10 introductory call on Vaclav 
Rombald, Deputy Director General and Head of the Legal 
Section of the Ministry of Finance International Finance 
Department, econoff inquired about the timing and 
expectations for the report on the U.S.-Czech Bilateral 
Investment Treaty (BIT) due in cabinet this fall.  Econoff 
acknowledged that the Department had not yet responded to the 
March 4, 2005 diplomatic note from the Czech Embassy 
requesting USG reaction to a revised proposal for amending 
the BIT. 
 
3.   (U)  Rombald said that a progress report to the cabinet 
on GOCR efforts to renegotiate the U.S. BIT was due October 
(note: we understand the Czech Embassy has indicated a 
September time frame) and since the USG had not replied to 
the March dip note, it was difficult to say what they would 
report to cabinet.  He urged the USG to provide a reply so 
the GOCR can have something to go on. 
 
4.   (U)  Rombald emphasized that the goal of the GOCR was 
not/not to terminate the U.S. BIT, although it is "an 
ultimate possibility."  Rombald added that a delegation was 
traveling to Ottawa the following week for its final attempt 
to renegotiate the Canada BIT.  If the visit is not 
successful, Rombald said the GOCR would terminate the BIT 
with Canada. 
 
5.  (SBU)  COMMENT AND ACTION REQUEST:  Embassy feels 
strongly that the USG should answer the mail.  In our view, 
even an interim reply explaining what it would take to 
provide a reply would be better than a no reply at all.  U.S. 
companies, led by the American Chamber of Commerce in Prague, 
regard the BIT as an important element of the bilateral 
relationship.  The GOCR understands the USG seeks to keep the 
current BIT in place, and that any effort to amend it will 
take time.  Finance Minister Sobotka has told the Ambassador 
during previous meetings that he personally does not want to 
see the BIT terminated, but that he needs to demonstrate to 
the Cabinet continued progress on the negotiations.  A reply 
consistent with previous exchanges indicating that the USG 
believes the current version best preserves the interests of 
U.S investments in to the Czech Republic as well as Czech 
investments in the United States would be reasonable and 
appropriate.  Embassy requests that the Department initiate 
interagency consultations to address the March dip note and 
provide guidance on how to respond to the GOCR,s inquiry 
about the March dip note by September 15. 
MUNTER