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### Viewing cable 07MANAGUA914, NICARAGUAN MEMORANDUM OF UNDERSTANDING WITH IRAN

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07MANAGUA914 | 2007-04-11 15:03 | 2011-04-25 19:07 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Managua

Appears in these articles:
http://www.nacion.com/2011-04-25/Mundo/NotaPrincipal/Mundo2743916.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2743919.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2743922.aspx
http://www.nacion.com/2011-04-25/Mundo/Relacionados/Mundo2752792.aspx

`

    VZCZCXYZ0000
    RR RUEHWEB

    DE RUEHMU #0914/01 1011516
    ZNR UUUUU ZZH
    R 111516Z APR 07
    FM AMEMBASSY MANAGUA
    TO RUEHC/SECSTATE WASHDC 9766
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
    RUEHCV/AMEMBASSY CARACAS 1055
    RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
    RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
    RHEBAAA/DEPT OF ENERGY WASHINGTON DC
    RUEATRS/DEPT OF TREASURY WASHINGTON DC

` `

    UNCLAS MANAGUA 000914

    SIPDIS

    SENSITIVE
    SIPDIS

    DEPT FOR WHA/CEN, WHA/EPSC, EB/ESC

    E.O. 12958: N/A
    TAGS: PREL PGOV PINR PTER EAID EFIN EINV ETRD EPET
    ENRG, EIND, VE, IR, NU
    SUBJECT: NICARAGUAN MEMORANDUM OF UNDERSTANDING WITH IRAN

    REF: A. MANAGUA 0725
         ¶B. MANAGUA 0639

    ¶1. (SBU) Summary.  Three days after signing a series of
    cooperation agreements with Venezuela, Nicaragua played host
    to Islamic Republic of Iran President Mahmoud Ahmadinejad on
    January 14.  In a southern barrio of Managua, Ortega
    informally presented Ahmadinejad to the public in a two-hour
    event broadcast live to the rest of the country.  Later at
    Olaf Palme Convention Center, Ahmadinejad and Ortega signed a
    Memorandum of Understanding, promising to reopen embassies in
    their respective capitals, offering mutual support in
    international fora, outlining potential areas for potential
    cooperation, and creating a Joint Commission to supervise
    bilateral cooperation.  While the visit appears to have been
    orchestrated to give Ahmadinejad greater international
    credibility and regional visibility, the ultimate result may
    have been simply to pull Nicaragua closer to Iran's low
    international standing.  End Summary.

    ¶2. (SBU) Three days after signing a series of Bolivarian
    Alternative agreements with Venezuela on January 11, 2007
    (Ref A), Nicaragua played host to Islamic Republic of Iran
    President Mahmoud Ahmadinejad.  A week before, the rumor
    circulated that Ahmadinejad would attend Daniel Ortega's
    January 10th presidential inauguration, but Ahmadinejad did
    not arrive until late in the evening of January 13.  On the
    morning of January 14, Ortega informally presented
    Ahmadinejad to the public in the "Barrio Cuba Libre," a
    Sandinista stronghold district in Managua, in a two-hour
    event broadcast live to the rest of the country.  In lengthy
    remarks, Ortega praised Ahmadinejad as a great revolutionary
    leader.  The fact that Nicaragua and Iran had initiated their
    revolutions in 1979, said Ortega, created some bond of
    kinship.  Ortega spent the rest of the time describing social
    and economic inequities facing Nicaragua, including poverty
    and hunger, and praising Venezuelan President Chavez for his
    support of Nicaragua and his vision.  Speaking to the public
    via consecutive translation, Ahmadinejad made a point of
    saying that both countries shared "common interests, common
    enemies, and common goals."

    ¶3. (SBU) Later at Olaf Palme Convention Center, Ahmadinejad
    and Ortega signed a Memorandum of Understanding (MOU).  The
    MOU states that the two countries will reopen embassies in
    their respective capitals, extend mutual support in
    international fora, explore areas for potential cooperation
    (See Paragraphs 8 and 12), and create a Joint Commission to
    supervise future bilateral cooperation.  Nicaragua also
    promised to introduce Iran, for possible participation, to
    projects financed by international institutions and bilateral
    sources.  Close to the bottom of the list is the possibility
    of entering into some sort of bilateral free trade or
    preferential tariff agreement.  While the press billed the
    visit as the moment when Iran would forgive its $152 million
    debt with Nicaragua, the MOU only states that Iran will study
    the possibility in the near term.

    ¶4. (SBU) We understand that the National Assembly will soon
    consider the MOU, but its approval is uncertain.  A number of
    National Assembly politicians representing the opposition
    Liberal Nicaraguan Alliance (ALN) party intend to vote
    against it.  They particularly object to Article 15, which
    states that the parties agree to consult regarding mutual
    support in international fora on principle topics relating to
    the global agenda, fearing that Nicaragua will side with Iran
    and alienate the United States.  Some Liberal Constitutional
    Party (PLC) lawmakers have told us they also oppose the
    agreement, but we suspect they can be pressured to vote for
    it if so ordered by PLC leader Arnoldo Aleman, whose
    political pact with and reliance on President Ortega for his
    medical parole/house arrest is likely to come into play.
    Possibly, the PLC and FSLN (Sandinistas) will skirt the issue
    by arguing that the agreement does not require a vote in the
    National Assembly because it is only a memorandum, not a
    treaty.

    Comment
    -------
    ¶5. (SBU) Ahmadinejad's visit appears to have been
    orchestrated to give Iran greater international credibility
    and regional visibility, but it may simply have pulled
    Nicaragua closer to Iran's low international standing.  Among
    major foreign investors, events surrounding the inauguration
    -) especially Ahmadinejad's visit -- clearly rubbed the
    wrong way.  One by one, CEOs filed into Nicaragua to reassess
    the political environment for their investments here, and one
    by one, the new government managed to assuage their fears.
    That said, with the great exception of increased interest
    from Venezuelan state-run enterprises, we have not seen much
    new foreign investment interest since the inaugural events
    with Presidents Hugo Chavez, Evo Morales (along with Cuban
    Vice President Jose Ramon Machado), and the subsequent visit
    by Mahmoud Ahmadinejad.  Quite the reverse, we have seen
    existing investors, both domestic and foreign, begin to
    examine ways to reduce their exposure to increasing
    Nicaraguan political risk.  End Comment.

    The MOU
    -------
    ¶6. (U) The remainder of this cable reports on the particulars
    of a signed copy of the MOU obtained by the Embassy.

    Preambular Language
    -------------------
    ¶7. (SBU) Preambular language states that the purpose of
    Ahmadinejad's visit was to congratulate Ortega on his
    democratic election.  In addition, the two countries declare
    their desire to strengthen traditional ties of friendship and
    recognize common interests, such as the need to coordinate
    forces to achieve common goals.  The two countries assert the
    importance of effective, reciprocal cooperation, based on
    solidarity and mutual respect.

    Articles 1-2: Friendship and Cooperation
    ----------------------------------------
    ¶8. (SBU) Nicaragua and Iran agree to "perfect" the mechanism
    for cooperation, exchange, and understanding on matters of
    common interest.  Parties pledge to develop, strengthen, and
    promote bilateral cooperation.  To strengthen ties of
    friendship, cooperation, and improve social well-being, Iran
    and Nicaragua promise to exchange experiences in the areas of
    economics, energy, trade, finance, infrastructure, and
    technical matters.

    Article 3: Complementing Agreements
    -----------------------------------
    ¶9. (SBU) If suitable, the areas of cooperation mentioned in
    this MOU shall be the subject of complementing agreements,
    which should specify objectives, timelines for execution, and
    feasibility studies by experts from both parties.

    Articles 4-5: New Projects and Facilitating Cooperation
    --------------------------------------------- ----------
    ¶10. (SBU) The execution of this MOU will be reviewed annually
    by the Presidents of a Joint Commission created for this
    purpose.  They should specify desired projects, their form of
    financing, their timeline for execution, and the obligations
    of each of the parties.  When state financing is employed,
    concessionary terms should apply in accord with the laws and
    obligations of both countries.  To facilitate cooperation,
    the parties shall grant privileges and necessary facilities
    in accord with internal legislation of each country.

    Article 6: Joint Commission
    ---------------------------
    ¶11. (SBU) The parties agree to establish a Joint Commission,
    headed by the ministers from each party, to follow up on this
    MOU and other points of common interest.  The Joint
    Commission will meet every year, alternatively in Iran and
    Nicaragua, or wherever the parties so agree.

    Article 7: Areas for Cooperation
    --------------------------------
    ¶12. (SBU) Iran expresses interest in supporting and assisting
    Nicaragua in the areas mentioned in Article 2, as well as
    expresses readiness to study and for its part execute all
    related projects that are economically justified, subject to
    agreement by the parties.  Common areas of cooperation
    include the following:

       a. Hydroelectric dams and irrigation systems;
       b. Study on port development on the part of Iran to
          the advantage of both parties;
       c. Cooperation in fishing through the supply of boats,
          technology, and industry;
       d. Development of the energy sector and energy
          production networks and overall generators of
          electricity and electrical centers;
       e. Housing construction, especially low income;
       f. Assembly and export of industrial and agricultural
          machinery, as well as buses, autos, motorcycles,
          bicycles, and all kinds of motors for irrigation
          and marine, with a view to reaching the regional
          market;
       g. Development of the cement sector through the
          construction of cement plants;
       h. Development and industrialization of agricultural
          production;
       i. Study of potable water systems and treatment of
          waste water for industrial use;
       j. Study of the application of energy needs, including
          petroleum and its derivatives, natural gas,
          electricity, etc.;
       k. Media for technical education;
       l. A free trade agreement and a preferential tariff
          agreement;
       m. Investment projects among private sectors of each
          state; and
       n. Information exchange between parties.

    Articles 9-10: Feasibility Studies
    ----------------------------------
    ¶13. (SBU) To facilitate cooperation with Iran, Nicaragua
    promises to submit for consideration and study information
    necessary to justify various projects with respect to
    feasibility studies in areas so mentioned, so that possible
    execution may be based upon international norms.  For its
    part, Iran agrees to consider and study presented projects,
    with priority, and to assist Nicaragua with experts, whom may
    be sourced from the private sector.

    Article 11: Trilateral Cooperation with Venezuela
    --------------------------------------------- ----
    ¶14. (SBU) The parties agree to create and define the form,
    with the cooperation of the friendly, fraternal government of
    the Bolivarian Republic of Venezuela, of a joint fund that
    will contribute to the execution of projects of interest to
    the three parties, through a trilateral consortium to
    facilitate the execution of projects.  In addition, Nicaragua
    shall request access to the joint fund created by the
    President of the Islamic Republic of Iran Mahmoud Ahmadinejad
    and President Hugo Chavez of the Bolivarian Republic of
    Venezuela to support Latin America and Africa, once that fund
    has been ratified and confirmed.

    Article 12: Debt Forgiveness
    ----------------------------
    ¶15. (SBU) Considering its critical economic situation and
    existing crisis, the Nicaragua has requested that Iran
    forgive bilateral debt totaling $152 million dollars.  Taking
    into account the various interests of state in this matter,
    such as Parliament, Iran has expressed its willingness to
    study this request in shortest timeframe possible.

    Article 13: Incorporating Iran in Existing Projects
    --------------------------------------------- ------
    ¶16. (SBU) Nicaragua agrees to introduce Iran, for its
    consideration and possible participation, to projects whose
    financing has been provided by international organizations
    and other countries.

    Article 14: Project Development
    -------------------------------
    ¶17. (SBU) Upon prior consultation, Iran will send to
    Nicaragua an expert technical delegation to study ways -- be
    they public, private, or mixed ownership -- to execute
    various projects of common interest, especially those
    concerning technical, engineering, and financial services.
    The creation of this delegation and the date of this trip
    will be defined beforehand through agreement by the parties.

    Article 15: Mutual Support in International Fora
    --------------------------------------------- ---
    ¶18. (SBU) The parties agree to consult regarding mutual
    support in international fora on principle topics relating to
    the global agenda.

    Article 16: Reopening Embassies
    -------------------------------
    ¶19. (SBU) The parties agree to reopen their embassies in
    their respective capitals.

    Articles 17-19: Education and Training
    -------------------------------------
    ¶20. (SBU) Iran agrees to facilitate the installation of
    technical and professional education centers in Nicaragua to
    improve opportunities for work in Nicaragua.  Iran agrees to
    host ten young diplomats from Nicaragua, without charge, to
    contribute to their training.  Iran expresses its interest in
    cooperating with Nicaragua on improving its system of middle
    and higher education.

    Article 20: Trade
    -----------------
    ¶21. (SBU) The parties promise to exchange information lists
    of traded products so that they may take maximum advantage of
    their capacity for bilateral trade, with the view of also
    reaching potential regional markets.  (Also see Paragraph 12,
    Item L.)

    Article 21: Construction of a Refinery with Venezuela
    --------------------------------------------- --------
    ¶22. (SBU) With prior consultation with the fraternal
    Government of the Bolivarian Republic of Venezuela, the
    parties agreed to Iranian cooperation in the construction of
    a refinery in Nicaragua, as recently agreed upon by Nicaragua
    and Venezuela (Ref B).

    Article 22: Dispute Settlement
    ------------------------------
    ¶23. (SBU) Doubts that may arise concerning the interpretation
    and execution of this agreement shall be resolved through
    diplomatic means.

    Articles 23-25: Entry into Force, Renewal,
                    and Termination
    ------------------------------------------
    ¶24. (SBU) This MOU will enter into force upon signature.
    Either party may withdraw from this MOU after providing
    six-months' prior notification.  Withdrawal shall not affect
    the development of programs and projects that may be in
    execution on the date of withdrawal.  This MOU will be in
    effect for two years and automatically renewed for equal
    periods, unless one of the parties provides prior
    notification in writing of its intention not to renew three
    months before the agreement lapses.

    Signatures
    ----------
    ¶25. (SBU) Signed in Managua, Nicaragua on the 14th day of
    January in 2007, the 24th of the month Dey of the year 1385
    (Hegira Solar), in two copies, one in Spanish and the other
    in Persian, each equally authentic.
    TRIVELLI

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