Reminder-
<
http://www.madote.com/2014/10/eritreas-response-to-2-tax-mining.html>
Eritrea's Response to 2% Tax, Mining Revenues and Illegal Arms Embargo
<
https://www.scribd.com/doc/243141200/Eritrea-s-Response-to-SEMG>
https://www.scribd.com/doc/243141200/Eritrea-s-Response-to-SEMG
Oct 18, 2014 | 11:50 AM
Permanent Mission of Eritrea to the United Nations
New York
Eritrea's Response to the Information Request Contained in the Letter
S/AC.29/2014/SEMG/C.14
14 July 2014
1. The Government of Eritrea (GOE) has been engaged with the Chair of the
Security Council Committee pursuant to resolutions 751 (1992) and 1907, H.E.
Ambassador Oh Joon, and has actively participated in good faith in the
meetings that took place in Paris and Cairo, which were facilitated by his
office.
2. It must also be underlined that the Government of Eritrea (GOE) on
several occasions and at different venues has communicated, in writing and
orally, its perspectives and explanations concerning the unjust and illegal
sanction resolutions as well as different allegations levelled against it.
However, in the spirit of cooperation and engagement, Eritrea sees the need
to once more spell out its views on the number of issues which have been
raised in the Paris and Cairo meetings in hopes of dispelling the
politically motivated lingering misperceptions and assumptions.
3. In these written responses and meetings, Eritrea has expressed its
concern regarding the manner in which SEMG has discharged its mandates.
Eritrea once again reiterates the need for Somalia Eritrea Monitoring Group
(SEMG) to respect the standards for investigation as stipulated in the
Report of Informal Working Group of the Security Council on the General
Issues of Sanctions (S/2006/997) which, inter alia, underscores the need for
expert panels to rely on verified information and documents, and ensure that
their "assertions are corroborated by solid information and that their
findings are substantiated by credible sources". It must also refrain from
dwelling into matters that do not fall within its mandate. The principle of
transparency, objectivity and impartiality must be respected.
I. The 2% Recovery and Rehabilitation Tax (RRT)
4. Eritrea wants to underline that the levying of various taxes is surely
the prerogative and sovereign right of any country and an exclusive matter
that concerns its citizens. Moreover, the UN Security Council Resolution
2-23 (2011) does not prevent Eritrea from collecting Recovery and
Rehabilitation Tax (RRT).
5. The RRT is part and parcel of Eritrea's taxation law and system. It has
its own evolution and history. Historically, Eritreans in all walks of life
voluntarily contributed to the national cause during the 30-year armed
struggle for independence and self-determination. This was at a time when
the international community had largely ignored the inalienable national
rights for self-determination and predicaments of the Eritrean people. In
those years, Eritreans abroad came together and formed civil society
associations and organized along professional, occupational and gender
dimensions to raise funds in support of relief and developmental work in the
liberated areas and to conduct public awareness campaigns. The magnitude of
their contributions varied from place to place and with time. Generally,
monthly contributions from members of the associations of Eritrean students
hovered around 10% while that of Eritrean women and workers reached 20% of
their gross income. This voluntary financial contribution was not only vital
in terms of mitigating the humanitarian consequences of the protracted war
for independence; but it was indispensable in reinforcing the bond between
the Diaspora and their compatriots at home.
6. After Eritrea's independence in 1991, the nascent government faced
enormous economic challenges and hurdles. In addition to the devastated
infrastructure and economy, the GOE had to address an onerous social burden
for the upkeep of the families of martyrs and disabled; over 60,000 martyrs
and over 10,000 war disabled. The GOE allocated a monthly payment of 500
Nakfa (birr at the time) for families of martyrs that is payable for a
lifetime to the parents while limited until the age of 18 years for minor
dependents and siblings of the martyrs. All war disabled fighters that could
not be fully rehabilitated with employable skills are also beneficiaries for
monthly payments. The demobilization programme was another major project
implemented in 1994 largely through government funds.
7. Under these circumstances, many citizens in the Diaspora launched
spontaneous and voluntary but fragmented initiatives, to raise funds for the
above mentioned noble and humanitarian causes, therefore, it became
essential and necessary to institutionalize those initiatives. Eritreans
residing abroad discussed the matter on the bases of their experience during
the 30-years struggle for independence. The overriding desire was to imbue
some structure and uniformity to what was effectively a burgeoning
spontaneous and voluntary grassroots movement. Subsequently with clear
objectives of funding the country's social and development programs, in
1994, the Eritrean National Assembly enacted the Rehabilitation and Recovery
Tax Proclamation (RRT). The RRT proclamation specifically targets only
citizens in Diaspora, not citizens of other countries of Eritrean decent.
The rate was fixed at a low 2% of net their income; in a country where
personal income tax is progressive and reaches 38%.
8. The Rehabilitation and Recovery Tax was envisaged as a time-bound
provision which would wind up at some time in the near future as the economy
of the new country grows and the social responsibility and burdens eases.
This was underlined during the discussions at the Eritrean National
Assembly, although it was not articulated in the forum of a definitive
sunset clause at the time of its proclamation. However, subsequent
developments, and notably the border war between Eritrea and Ethiopia
(1998-2000) cost the lives of 19,000 Eritreans and has created additional
martyrs families.
9. The legality of the RRT is unambiguous, and purposes laudable. It
represents a symbolic burden sharing by the Eritreans in the Diaspora with
the people inside the country. In this sense, its historical, moral,
humanitarian and patriotic contents and values are more significant and
profound than its material dividend. In fact, the funds collected annually
are modest that should not be overstated when compared with the government
budget and expenditure on basic social services. For the last four years,
for instance, the aggregate RRT collected annually vary from a total of 14.8
million dollars in 2010 to 24.7 million US dollars in 2013. In those four
years, the aggregate RRT collected did not exceed 73 Million US dollars,
while budgetary appropriation by the Government for the family of martyrs
and war disabled individuals for the same period hovers around 28 million US
dollars annually, which is almost 112 million dollars for the four year
period.
10. The distorted allegations that the GOE uses "extortion, threats of
violence, fraud and other illicit means" to collect RRT is utterly baseless.
It is a deliberate misinformation aimed at created misperception about the
active and voluntary participation of Eritreans in the Diaspora in the
affairs and development of their country. The GOE has neither the means nor
the desire to enforce the RRT proclamation through the extra-legal means. As
is the case in all countries, Eritrea has specific clauses on the rights and
obligations of its citizens concerning taxation. Regarding the RRT, there
are explicit enforcement measures implemented domestically such as "denial
of business licences and land entitlements to those who fail to meet their
fiscal obligation". These measures are not and cannot be implemented
extraterritoriality. They do not also curtail the natural right of Eritrean
citizens to visit their home country or relatives so long as they are
holders of Eritrean national identity card or passport. They don't need a
visa to enter Eritrea. Furthermore, as it is propagated in some quarters and
is frequent echoed in the reports of the SEMG, there is no "harassments
against their families living in the country".
11. Another misperception is the "UN Security Council Resolution 2023 (2011)
prevents Eritrea from collecting the RRT". No provision in the stated
resolutions prevents Eritrea from levying 2% tax from Eritreans residing
abroad. The measures imposed by some countries against the 2% Rehabilitation
and Recovery tax, under the pretext of implementing UN Security Council
Resolution are incorrect and constitute at best, a misinterpretation of the
Resolution. In fact, it is incumbent on the Security Council as well as the
SEMG to alert the member countries when their actions in implementing the
UNSC resolutions are not consistent with the previous of the resolution.
12. Given the fact that the African Diaspora is considered as the Sixth
Region of Africa by the Head of States of the African Union (AU) and the
establishment of African Remittance Insitute becoming a reality, Eritrea
which has effectively and productively involved and utilized its Diaspora
community in its 30-Year war for independence and 24-years national economic
development program must be commended and emulated, not punished and
obstructed.
II. Eritrea's Mining Revenues
13. Eritrea is endowed with mineral resources that are expected to make a
modest contribution to economic growth. At present, there are around 17
foreign companies that have been granted mineral exploration and development
licenses, but to date, only Bisha has been doing actual production.
14. The languages used in UNSC Resolution 2023 (2011) concerning the
Eritrean mining sector leaves much to be desired. There are two aspects of
the resolution that require emphasis. First, the recommended action is, once
again, anchored on hypothetical assumptions and potential use of revenue. In
the first place, the edifice from which purported measures ensure rests on
speculative and presumptive ground as it relates to a "potential" rather
than an "actual" act that has been established beyond any reasonable doubt.
It is not based on factual and solid evidences of Eritrea's misuse of
revenues from the mining sector for acts that breach international law. In
fact, the burden of proof is curiously transferred from the plaintiff to the
accused party. This is not in consonance with, but rather contrary to,
rudimentary legal and procedural principles. Second, the fact that these
guidelines were to be optional underscores, even if in an implicit manner,
that the sponsors of the resolution were comfortable with the rational and
logic of the case they wanted to make.
15. It must be underlined that revenues from Eritrea's first mining plant
began to be materialize at more or less the same period as when Resolution
2023 (2011) was adopted. Although Nevsun the Canadian-based mining company,
started prospecting and exploration activities in Bisha in 2003, production
only began in 2010. Bearing in mind that the principal reason for why the
sanctions against Eritrea imposed in 2009 had to do with its purported
financing of Al-Shebaab well before the start of mining operations in Bisha,
the sudden switch to the "potential use of mining revenues for
destabilization" is very tenuous to say the least.
16. In the Bisha Mining operation, the Canadian company, Nevsun, holds
majority (60%) share, while the Eritrean National mining Company holds the
remaining 40%. Nevsun is publicly quoted company subject to Canadian
commercial laws and regulations. The financial proceedings of the Bisha
plant are consequently issued on a quarterly bases and available in the
public domain. These financial reports naturally include the proceedings
that accrue to Eritrea in the forum of corporate tax, royalties and dividens
for anyone to see and read.
17. As this public data corroborate, the aggregate GOE revenue from royalty,
taxes and dividends averages about 200 million US dollars annually for the
years 2011-2013. And this is prior to its debt servicing requirements for
loans incurred for purchase of 3-% equity from the company as well as
substantial pro rata payments for the initial capital expenditures for the
establishment of the plant prior to production. This income that Eritrea
gets from this single mining operation is smell in relation to its public
expenditures on education, health, food security and infrastructural
projects and programmes. It does not even cover the country's annual food
import bill.
18. In brief, the intrusive measures envisaged in Paragraphs 12, 13 and 14
of the Resolution that include "the issuance of due diligence guidelines"
seem to have been prompted by an unhealthy desire to harass Eritrea and
scare potential investors in the mining sector rather than a sincere concern
for the misuse of mining revenues, which the SEMG has so far failed to
prove.
III. Arms Embargo
19. Eritrea would like once again to express its indignation at this
misplaced depiction of Eritrea. Eritrea is not the perpetrator but rather
the victim of regional destabilization. The time has come to acknowledge and
applaud Eritrea's growing engagement and constructive role in the region.
Eritrea has indeed a laudable record of seeking peaceful/arbitral solutions
for good-faith border disputes when they arise and respecting the resulting
verdicts without equivocation. In addition, Eritrea's developmental and
national security interests are better served in an environment of regional
peace. Its pronounced foreign policy is in fact anchored on the enhancement
of a safe and cooperative neighbourhood.
20. Eritrea finds it difficult to understand the rationale of the arms
embargo imposed by the Security Council, while its land, including the town
of Badme, remains occupied by Ethiopia in breach of the UN Charter,
international law, the Algiers Peace Agreement, numerous Security Council
resolutions and the Final and Binding Eritrea Ethiopia Boundary Commission
(EEBC) 2002 Delimitation and 2007 Demarcation decisions. On the contrary,
Ethiopia has no restrictions on bolstering its defence forces and continues
to purchase arms without restrictions as its contracts worth 200 million
dollars for tanks from Ukraine this year alone attests.
21. While Eritrea is entitled to legitimate self-defence in accordance with
Article 51 of the UN Charter, the UNSC Resolutions to impose an unwarranted
and lop-sided arms embargo on Eritrea is an approach that lack balance,
fairness and legality. It goes against the letter spirit of the UN charter
and the requirements of peace and stability in the Horn of Africa region. It
rewards culprit while punished the victim. Therefore, the arms embargo
should have been imposed against Ethiopia, not Eritrea.
22. Despite repeated protestations and widely available information that the
Ethiopian government does not deny, but on the contrary openly boasts about,
the SEMG refused to proved context about Ethiopian blatant destabilization
actions against Eritrea and other countries in the region. Instead it has
chosen to focus on spurious allegations against Eritrea.
23. the Ethiopian Government pursues an open policy of "regime change" and
continues to harbour, finance and arm Eritrean subversive groups. A press
report issued this week talks about a meet that took place between Ethiopian
defence and intelligence service officials and leaders of Eritrean armed
groups to advance this aim. (See annex 1 and 2) Yet, Ethiopia is not brought
to account and no punitive measures are taken against it in spite of its
flagrant violations of international law. It must be recognized that these
anomalous realities are not only unfair but also carry the risk of
encouraging Ethiopia to indulge in more reckless and unlawful acts of
aggression against Eritrea.
24. It must be recalled that when UNSC Resolution 1907 (2009) was adopted,
the principal reason evoked to impose arms embargo was Eritrea's "military
support to Al-Shebaab in Somalia". Eritrea was wrongly accused of sending
2000 soldiers to Somalia. This false report was never acknowledged in
retrospect or formally retracted from the SEMG reports and records later
although the fallacy had become common knowledge. Another bogus accusation
was levelled against Eritrea in November 2011. Again, Eritrea was accused of
air-lifting weapons to Al-Shebaab through Baidoa. This false accusation was
timed to coincide with and influence the deliberations of the UNSC on
Resolution 2023.
25. Almost five years from the imposition of unfair sanctions against
Eritrea, it is now accepted that Eritrea is free from any military or
financial involvement with regards to Somalia.
26. However, some quarters who have a political agenda keep on moving the
goalpost by making other unfounded allegations which are irresponsibly
echoed by the SEMG until it harms Eritrea only to be dropped quietly later
without ascertaining its veracity and/or the sinister motivations of those
who fabricated it in the first place. These days new fabricated allegation
is paddled associating Eritrea with Riek Machar in the conflict in South
Sudan. Is it a case of déjà vu? This is another ridiculous allegation, which
was unsurprisingly made by Ethiopia. Eritrea has repeatedly made its
position on the tragic crisis in South Sudan very clear. Eritrea is
unequivocally opposed to a destructive armed rebellion against the
legitimately established government of South Sudan. Eritrea supports a
comprehensive ceasefire, containment of the situation and a peaceful
settlement of the underlying issues. And yet, the Ethiopia-inspired,
anti-Eritrean disinformation campaign and accusation has appeared in three
subsequent reports of the Monitoring Group, first in the February report as
"circumstantial" and then in the March and April reports with "credible"
qualifications and endorsements.
27. It must be underscored countries that have a hostile agenda against
Eritrea cannot be used as credible sources. Sadly these legitimate pleas
continue to be ignored as the following sentences from May 2014 SEMG Report
illustrates: "...On 12 and 13 May 2014, in Addis Abeba, the SEMG met with
Ethiopian Prime Minister, H.E. Hailemariam Desalegn, the Minster of Foreign
Affairs, H.E. Tedros Adhanom Ghebreyesus, the State Minister of the Ministry
of Foreign Affairs, H.E. Berhane Gebre-Christos, as well as a number of
other senior ambassadors and security officials to discuss areas of
cooperation and pending investigations of the SEMG". The SEMG's monthly
report continues to say that "In May 2014, the SEMG traveled to Djibouti to
meet with authorities as part of its investigations into allegations that
Erirea is providing material and logistical support to Riek Machar's forces
in South Sudan".
28. As Eritrea has pointed out in many of its previous communications, it is
incumbent for the SEMG to be objective, transparent, impartial and
non-political and conduct thorough validation process of the accusations
levelled against Eritrea. It is high time to stop wild and unfounded and
politically motivated accusations against Eritrea from the usual suspects
that are bent on using the SEMG for their own interests. Instead, those who
repeatedly make accusations that have been proven false in the past should
be accounted. In this context, it is important look at a leaked memo that
was sent to all diplomatic missions from the state minister Ambassador
Berhane Gebre-Christos on 20 Feburary 2014. It instructs Ethiopian
Diplomats, inter alia,: "to constantly provide information to the security
and intelligence agencies of the countries of the region so that they will
understand and explain Eritrea's destabilizing role in the region;....to
lobby member states of the UNSC to accept the reports of the SEMG as
credible; and, .....to develop close relations with the relevant departments
in the UN Secretariat in order to ensure that the reports are in line with
Ethiopia's position, or at least don't hurt Ethiopia's position." (see Annex
3)
IV. Conclusion
29. It is now five years since the unjust sanctions were imposed on Eritrea.
They have not contributed to regional peace and security in the Horn of
Africa. In fact, if they are not lifted they will bring perpetuate more
instability and conflict to the region. Indeed, they are harming the people
of Eritrea, hampering economic and social development. It is now clear that
there is no justification for the continuation of sanctions.
30. The initial and principal accusation concerning Eritrean support to
Al-Shabaab has long been proven to be non-existent. Moreover, Eritrea is
committed to teh Qatari mediation in relation to the Eritrea-Djibouti issue.
31. Therefore, it is now clear that there is no justification for their
continuation. Eritrea once again appeals to the United Nations Security
Council to urgently lift these unjust and counterproductive sanctions.
32. The event over the past 15-years and the facts on the ground clearly
show that it is Ethiopia, not Eritrea that is actively engaged in
destabilizing the region. Its continued occupation of sovereign Eritrean
territory, including the town of Badme, with impunity, in violation of the
United Nations Charter and its treaty obligation is the main cause of the
instability in the Horn of Africa. In the interest of peace and security in
the region and within the context of Resolutions 1907 (2009) and 2023
(2011), which reaffirms respect for the sovereignty and territorial
integrity of Eritrea, Ethiopia must be urged to immediately and without
precondition to withdraw from sovereign Eritrean territories, including the
town of Badme.
Received on Sat Oct 18 2014 - 06:27:08 EDT