

Currently released so far... 6239 / 251,287
Articles
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Amsterdam
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lagos
Mission USNATO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Tijuana
USUN New York
USEU Brussels
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Browse by tag
ASEC
AU
AORC
AF
AM
AFIN
AEMR
AR
ASIG
AMGT
AG
APER
AL
ABLD
ASUP
AA
ASECKFRDCVISKIRFPHUMSMIGEG
AE
AMED
AS
AGMT
APECO
AO
AFFAIRS
AJ
ACOA
AX
AROC
ATFN
ASEAN
AFGHANISTAN
ADCO
AFU
AER
ALOW
AODE
ABUD
ATRN
AID
AC
AVERY
APCS
CASC
CJAN
CVIS
CS
COUNTER
CD
CU
CI
CO
CG
CE
CA
CMGT
CH
CWC
CBW
CKGR
CR
CN
CPAS
CONS
CDG
CLINTON
CT
CJUS
CY
CV
COUNTERTERRORISM
CIA
CACM
CDB
CAN
COE
CM
COUNTRY
CLEARANCE
CACS
CF
CONDOLEEZZA
CARSON
CL
CIS
CODEL
CTM
CB
COM
ECON
EFIN
ETRD
EAIR
EAID
ET
EFIS
ENRG
EPET
ETTC
ER
EG
EINV
EAGR
ELAB
EUN
EWWT
ENGR
EMIN
ECIN
ENIV
ES
EC
ECPS
EIND
EI
EU
ENVI
ETRDEINVECINPGOVCS
ELTN
EZ
EINT
ELN
EUR
EUNCH
EN
EINVECONSENVCSJA
ELECTIONS
EINVEFIN
ENNP
ECUN
EXTERNAL
EK
EFINECONCS
ECINECONCS
ECIP
EINDETRD
EUC
EREL
ENVR
ECA
ENERG
ENGY
ETRO
EFTA
ECONCS
ECONOMICS
ECONEFIN
EINVETC
EINN
ESA
ETC
ETRDEINVTINTCS
ESENV
ETRDECONWTOCS
IR
IZ
IWC
IC
ILC
IO
IAEA
IN
IS
IT
ICRC
INTELSAT
ILO
IBRD
IMF
ICAO
IMO
ITALY
ITALIAN
IRAQI
ITRA
ISRAELI
ICJ
IACI
INTERPOL
ID
IV
ICTY
IQ
IPR
INRB
ITPHUM
IIP
IL
IA
INR
ITPGOV
IZPREL
IRC
INRA
INRO
IRAJ
IEFIN
IF
KE
KCRM
KDRG
KIPR
KCOR
KSCA
KBIO
KDEM
KMCA
KMPI
KNNP
KJUS
KOMC
KGHG
KSUM
KSTC
KIRF
KTIP
KWMN
KZ
KG
KTFN
KHLS
KPAO
KFRD
KTIA
KOLY
KCFE
KISL
KFLU
KPKO
KWBG
KTBT
KTDB
KOCI
KUNR
KAWK
KICC
KPAL
KSTH
KN
KS
KGIC
KNPP
KWAC
KMDR
KAWC
KBCT
KIDE
KFLO
KWMNCS
KSEP
KU
KNEI
KVPR
KACT
KRAD
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KCIP
KSAF
KV
KSPR
KPRP
KFSC
KCRS
KR
KRFD
KX
KO
KPWR
KMIG
KSEC
KIFR
KDEMAF
KFIN
KGCC
KPIN
KHIV
KPLS
KIRC
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KGIT
KBTS
KPRV
KBTR
KERG
KWMM
KRVC
KNSD
KVIR
KNUP
KTER
KDDG
KHSA
KMRS
KHDP
KTLA
KPAK
KNAR
KREL
KPAI
KTEX
KCOM
KNNPMNUC
KPOA
KLIG
KHUM
KDEV
KNUC
KCFC
KREC
KOMS
KWWMN
MASS
MP
MARR
MOPS
MNUC
MX
MO
MCAP
MY
ML
MU
MIL
MC
MTRE
MA
MD
MTCRE
MEPI
MAR
MRCRE
MR
MV
MPOS
MZ
MEPP
MOPPS
MAPP
MASC
MT
MERCOSUR
MK
MDC
MI
MAPS
MCC
MASSMNUC
MQADHAFI
MUCN
MTCR
MG
OVIP
OREP
OTRA
OSCE
OECD
OIIP
OEXC
OPCW
OPIC
OPDC
OPRC
ODIP
OVP
OSCI
OAS
OFDP
OTR
OSAC
OIC
OFFICIALS
OIE
PREL
PGOV
PHUM
PTER
PE
PINR
PINS
PARMS
PARM
PHSA
PA
PK
PBTS
PO
PREF
POL
PLN
POLITICS
PROP
PL
PM
PAO
PSI
PG
PEPR
POV
PALESTINIAN
PINT
PSOE
PU
POLITICAL
PARTIES
PBIO
PECON
PAK
POGOV
PINL
PKFK
PMIL
PY
PFOR
PHALANAGE
PARTY
PRAM
PMAR
PGOVLO
PUNE
PORG
PHUMPREL
PF
POLINT
PHUS
PGOC
PNR
PGGV
PNAT
PGOVE
PRGOV
PRL
PROV
PTERE
PGOF
PHUMBA
PINF
PEL
SNAR
SO
SENV
SU
SCUL
SOCI
SP
SC
SA
SMIG
SAN
SZ
SW
SN
SY
SR
SL
SEVN
SF
SYR
SI
SG
STEINBERG
SIPRS
SH
SNARCS
SOFA
SANC
SHUM
SK
ST
TERRORISM
TRGY
TZ
TX
TBIO
TSPA
TS
TSPL
TW
TU
TD
TIP
TURKEY
TP
TI
TC
TPHY
TH
TO
TK
TNGD
TINT
TRSY
TR
TFIN
TT
UG
UK
UP
UNGA
UNHRC
UZ
UN
UNAUS
USTR
UNSC
US
UNEP
UY
UNESCO
USUN
UNHCR
UAE
UNMIK
USEU
UV
UNO
UNDP
UNCHS
UNVIE
UNCHC
UE
UNDESCO
USAID
UNDC
Browse by classification
Community resources
courage is contagious
Viewing cable 09REYKJAVIK202, GOVERNMENT RECONSIDERS AMOUNT OF TAX FOR ENERGY USE
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09REYKJAVIK202.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09REYKJAVIK202 | 2009-11-13 17:05 | 2011-01-13 05:05 | CONFIDENTIAL | Embassy Reykjavik |
VZCZCXYZ0000
PP RUEHWEB
DE RUEHRK #0202/01 3171721
ZNY CCCCC ZZH
P 131721Z NOV 09
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC PRIORITY 4215
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
C O N F I D E N T I A L REYKJAVIK 000202
SIPDIS
TREASURY FOR MYERS AND NORTON
NSC FOR HOVENIER
COMMERCE FOR DERSTINE
E.O. 12958: DECL: 11/10/2019
TAGS: ECON EFIN IC PGOV PREL
SUBJECT: GOVERNMENT RECONSIDERS AMOUNT OF TAX FOR ENERGY USE
REF: A. REYKJAVIK 191
¶B. REYKJAVIK 176
Classified By: CDA SAM WATSON FOR REASONS 1.4 (B) AND (D)
¶1. (C) SUMMARY: Recent actions by the government of Iceland
(GOI), including a proposal to introduce a significant energy
tax in the 2010 budget bill (reftel B), have raised concerns
about the current environment for foreign investors.
Implementing significant tax increases ex-post-facto, for
example, could disadvantage American companies currently
operating in Iceland and significantly hinder Iceland's
ability to attract needed foreign direct investment (FDI).
Over the past few weeks, the Charge d'Affaires (CDA) has
conveyed such concerns to various high-ranking members of the
GOI including: representatives in the offices of the Prime
Minister and President as well as the Ministers of Economic
Affairs, Environment, Finance, Foreign Affairs and External
Trade, and Industry. GOI officials appear to understand the
message and assured CDA that Iceland wants to take steps
necessary to attract FDI while also taking into consideration
the nation's fiscal challenges. Now the GOI has, in fact,
walked back the proposed energy tax and is engaging industry
leaders in the process. END SUMMARY.
The Aluminum Industry
---------------------
¶2. (C) The aluminum industry has been one of the more vocal
opponents of several recent GOI actions and expressed concern
that the GOI wants to kick it out of the country. In recent
months, government decisions have resulted in the cessation
of plans to build a smelter in Bakki and a delay in
construction of a new smelter in Helguvik. Plans to expand a
third smelter in Straumsvik are also being called into
question. In addition, the first draft of the 2010 budget
bill proposed implementing an energy tax of one ISK per kWh
(0.8 cents) for electricity usage. This proposed tax has
generated anger among many businesses, but particularly the
aluminum industry because it chose to locate in Iceland for
the low power costs and it accounts for about 80% of the
country's electricity consumption. Executives from the two
American-owned aluminum smelters, Alcoa and Century Aluminum,
expressed concern to CDA that such action could violate their
existing investment agreements and significantly reduce the
companies' profitability. They estimate the tax at one ISK
per kWh would create an additional expense of 13.2 billion
ISK ($106 million) per year. Equally troubling, said
aluminum representatives, is that they first learned about
the proposed tax in the newspaper. Communication with the
government, they complained, has been virtually non-existent
since the new government (with the pro-environment
anti-aluminum Left Greens as a partner) took control earlier
this year.
¶3. (C) GOI officials across the board, including the Minister
of Environment Svandis Svavarsdottir, have told CDA that they
do not want the aluminum companies to leave Iceland. All
recognize the importance of this sector as one of the
country's largest employers and largest export industries.
(Note: the aluminum industry accounts for almost 42 percent
of exported goods and 29 percent of overall export revenues
for Iceland. End note.) Their size and importance is one
reason the aluminum industry should not be excluded from
rebuilding the country, said Minister of Industry Katrin
Juliusdottir. Minister of Finance, Steingrimur Sigfusson,
also acknowledged that it would be healthy for some aluminum
projects to go forward as they would create additional jobs
and revenue for the state. (Note: the Minister of Finance
was referring to continuation of projects already under way -
construction of a new smelter for U.S. company Century
Aluminum and expansion of the Swiss-Canadian Alcan smelter.
End note.)
Justification for Tax Increase
------------------------------
¶4. (C) The Minister of Economic Affairs, Gylfi Magnusson,
told CDA that increasing tax revenue is essential to close
the fiscal gap and stimulate the economy. He noted that the
tax base has eroded in the last year, especially in the
corporate sector. Aluminum companies argue that the proposed
energy tax of one ISK per kWh (0.8 cents) targets the
industry unfairly and will force the businesses to cut back
on operations. (Note: this tax would apply to all consumers
of electricity, not just the aluminum industry. Aluminum
companies, however, would shoulder the majority of the tax
burden since they utilize about 80% of the nation's
electricity. End note.) Minister of Industry Juliusdottir,
however, asserted that the GOI will not allow taxes to
suffocate industries. She and other Ministers told CDA that
the one ISK per kWh (0.8 cents) mentioned in the first draft
of the budget had merely been an example, but was too high.
As of November 9, the GOI is proposing a tax of 12 aurar (0.1
cents) per kWh. (Note: Reykjavik households pay about seven
to eight ISK (about six cents) per kWh for electricity, and
the aluminum companies pay undisclosed lower amounts. Energy
prices for aluminum firms differ based on agreements signed
with the government. End note.) Finance Minister Sigfusson
reiterated that all must share the burden of rebuilding the
economy, and while aluminum companies may not be happy about
it the GOI hopes the final solution will be considered fair.
Foreign Minister Skarphedinsson assured CDA that he was
working to broker a compromise that would enable the firms to
continue to operate in Iceland and not close off potential
future investment into the country.
Future Direction
----------------
¶5. (C) The GOI recognizes the importance of creating a more
comprehensive, standardized environment to attract FDI.
Minister of Industry Juliusdottir told CDA that she intends
to create a clearer, more general framework for FDI rather
than negotiating with companies on a case-by-case basis.
Investors should know what to expect, she said, regarding the
legal environment, financial environment and taxation.
Simultaneously, Minister of Finance Sigfusson is working on
creating a long-term vision for the country's future
development. He acknowledged the need to harmonize
incentives and the duration of investment agreements, and is
considering introducing possible deductions for new
investment and incentives for start-up periods. Last week,
Sigfusson introduced two bills to parliament providing
incentives for Icelandic high tech and research and
development companies.
Comment
-------
¶6. (C) GOI officials understand the importance of FDI in
rebuilding the nation's economy. Though the government has
been slow to implement changes to create an attractive
investment climate, it recognizes that steps need to be taken
to attract, or keep, investment. Plans to create a clearer,
comprehensive framework for FDI and to introduce incentives
are two examples. In addition, as CDA stressed in meetings
with the Ministers, it is important that key industry players
be included in process. The government appears to have
accepted the notion as several aluminum representatives, who
earlier approached the Embassy in frustration after being
kept out of the discussions, recently thanked the Embassy for
getting them a seat at the table and nudging the government
away from the initial tax proposal. The reduction of the
proposed energy tax from one ISK (0.8 cents) to 12 aurar (0.1
cents) resulted from consultative talks between the GOI and
the Association of Icelandic Employers, of which the aluminum
companies are the largest members. While current plans and
proposals are still subject to change, the ideas under
consideration and initiation of dialogue are steps in the
right direction for U.S. firms. End comment.
WATSON