US embassy cable - 05BRASILIA2653

UNCLAS SECTION 01 OF 02 BRASILIA 002653 
 
SIPDIS 
 
STATE PLEASE PASS TO IRS WASHDC 
NSC FOR CRONIN 
DEPT OF TREASURY FOR FPARODI, DGLASER, AND OFAC 
BUENOS AIRES FOR BOGNANNO 
BOGOTA FOR OLGA ACEVEDO 
 
E.O. 12958: N/A 
TAGS: EFIN, ECON, SNAR, PGOV, Macroeconomics & Financial 
SUBJECT: HEAD OF BRAZIILAN TAX AGENCY PROPOSES NEGOTIATION 
OF A TIEA 
 
1. (SBU) In a October 3 meeting with DCM, Jorge Rachid, head 
of Brazil's Receita Federal, and his International Affairs 
Advisor Zayda Manatta, proposed that Brazil and the USG 
negotiate a Tax Information and Exchange Agreement (TIEA). 
By facilitating the exchange of tax records and other data, 
our interlocutors stated, conclusion of such an agreement 
would benefit law enforcement investigators in both 
countries.  Rachid noted that while the GOB preferred 
starting point for any negotiations was the Inter-American 
Center of Tax Administration (CIAT) model text, Brazil was 
also open to using any USG model TIEA as a base.  Rachid 
left behind a formal letter to the Ambassador (paragraph 4) 
proposing the commencement of such talks.  The mention in 
that correspondence of an August 23 meeting with USG money 
laundering authorities refers to the recent visit of Acting 
Treasury A/S Danny Glaser. 
 
2. (SBU) DCM noted that while, in principle, we looked 
favorably upon such an initiative, we would need to consult 
with the IRS and other USG authorities on this issue.  He 
pledged a speedy USG response to the Brazilian offer. 
 
3. Action Request: For IRS WashDC and AmEmbassy Bogota (IRS 
Attache).  Please provide us with formal instructions 
regarding how to respond to the GOB proposal. 
 
4. Begin Text of Letter to Ambassador 
(Separate originals in English and Portuguese) 
 
To Your Excellency                 Brasilia 03 October 2005 
Ambassador John Danilovich 
United States Embassy in Brasilia 
 
Dear Ambassador, 
 
On occasion of the visit of the American delegation to the 
Receita Federal of Brazil to discuss the issue of money 
laundering on August 23, it became evident the importance of 
cooperation among the competent authorities with the purpose 
of fighting the various types of illicit activities, among 
them corruption, terrorism, narco-trafficking, tax evasion, 
and crimes related to money laundering. 
 
We have been increasing our efforts to fight illegal 
activities and constantly searching to improve our work 
methods, with a view to the creation of a safe and favorable 
environment for the practice of legal acts.  Illicit 
activities are a threat to societies and it is the main duty 
of institutions like ours to combat them with efficacy. 
 
We thank the collaboration we have been receiving from the 
American government, which has importantly contributed to 
the achievement of our institutional goals, and we reaffirm 
our willingness to collaborate in projected aimed at the 
fight against illicit activity related to money laundering. 
 
International cooperation is fundamental to make the 
acquisition of information more agile and, thus, enable a 
more efficient and efficacious combat against criminal 
activities that, in many occasions, have a strong 
transnational component. 
 
Conscious of the relevance of cooperation among countries, 
it was emphasized, on the occasion of the aforesaid visit, 
the importance of the exchange of fiscal information between 
Brazil and the United States.  In this manner, the 
celebration of an agreement with such a purpose is 
fundamental to the fulfillment of the above-mentioned goals. 
 
We would like to propose, due to the discussions that took 
place during the meeting of August 23, the negotiation of an 
agreement for the exchange of information between our 
countries and, for such purpose, the use of the model 
developed within the scope of the Inter-American Center of 
Tax Administration (CITA). 
 
Consequently, I would like to suggest that our officials 
meet in order to deepen discussions of this topic, and, in 
this sense, I would designate, for the purpose of scheduling 
a meeting and handling other related issues, Mrs. Zayda 
Bastos Manatta, Head of International Affairs Tax 
Coordination, who can be reached through telephone number 55 
61 3412-2733, fax 55 61 3224-5501 or e-mail: 
zayda.manatta@receita.fazenda.gov.br. 
 
Finally, I reaffirm the importance we ascribe to relations 
between our countries and the positive results we have 
obtained through this partnership, which, I hope, can be 
increased through the agreement we are proposing. 
 
Yours faithfully, 
 
Jorge Antonio Deher Rachid 
Secretary-General of the Receita Federal of Brazil 
 
SIPDIS 
 
End Text 
DANILOVICH