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Favorable decisions for Argentina in Germany and France
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June 26, 2009

The courts of those European countries revoked embargoes on funds that had been placed by bondholders that didn't accept the swap of 2005.

Court decisions in Germany and France revoked which had blocked Argentine state funds since March and April. According to a statement from the Solicitor of the Treasury, a judge the Hamburg Court annulled the judicial decision of March 25 which had ordered the embargo of money from multinational companies which have branches in Argentina, owed to Argentine tax authorities as taxes in the country.

The embargo, now no longer in effect, had been ordered as part of the lawsuits that holders of local public debt had initiated against Argentina soon after the default, and who didn't enter the swap of 2005. The judge concluded that the previous judge who ordered the embargo did not have international jurisdiction over the assets that were subject to the action the taxes which were not found in Germany.

As such, in general, the request of taxes by States can only be subject to proceedings of local execution in the sovereign territory of the State which requests them. In this specific case, considering that only within Argentine sovereign territory the country could demand tax payments by those subject to it, it is unfounded that there are assets under the jurisdiction of German courts, upon which embargoes can be ordered.

This way, the embargo over the amounts that multinational companies with branches in Argentina would have to pay, owe or will owe to Argentina as taxes, was no longer in effect. Also, a French court ordered the lifting of the embargo that since April 3rd had been placed on Argentina's accounts in France, whose use was for, among other things, the Argentine Embassy, the Argentine delegation to UNESCO, the Casa Argentina, the Defense Attache, and the Tourism Office. Those funds had been embargoed amidst lawsuits filed by the vulture fund NML against Argentina as a holder of local public debt.

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