835.512 Insurance Tax/12
The Chargé in Argentina (White) to the Secretary of State
[Received September 18.]
Sir: I have the honor to refer to my despatch No. 2190 of August 11 concerning the matter of the imposition by the Argentine Government [Page 792]of a tax on marine insurance written abroad, wherein I reported an interview with Dr. Iriondo, Interim Minister of Finance on this subject. Representatives of the insurance companies have told me confidentially that they had received indirect information to the effect that Dr. Iriondo had expressed an opinion subsequently to the effect that the law which is considered by the Department and by the insurance companies as objectionable was of very slight merit. Dr. Iriondo is no longer Acting Minister of Finance and his place has been taken by Dr. Piñedo.
Shortly after the accession of Dr. Piñedo, I received a communication from the Foreign Office, copies and translation of which are enclosed. This note professes to be in reply to the first brief memorandum which I left with the Minister for Foreign Affairs and it makes no allusion to the far more lengthy memorandum that I presented to Dr. Iriondo and to which I alluded in my despatch No. 2190 above referred to. The reply of the Minister of Finance does not attempt to face the more important aspects of this question, being mostly devoted to endeavoring to prove that foreign insurance companies should be taxed to compensate for the taxation imposed upon local companies. In the last paragraph, however, under Point 3 it is stated that the law is not yet in force and that in deciding upon the regulations putting it into effect, the recommendations of this Embassy in regard to maritime insurance can be taken into consideration.
In this connection, I might observe that no Government is willing to admit that it is in error and the Argentine Government is no exception; so that perhaps the last paragraph referred to is really the most significant part of the note. Inasmuch, however, as no reference was made to my more lengthy memorandum, I surmise that possibly the official in charge of drafting the note was likely favorable to the new law and submitted it to the Minister without his first studying the matter very thoroughly.
At any rate, I requested another interview with the new Minister of Finance which took place yesterday. I explained to him that the memorandum to which reference was made in his note had been supplemented by a longer one to which no reference was made and that I therefore took it upon myself to hand him a second copy for his study. I also pointed out that in his letter it was stated that the Argentine Insurance Associations were in favor of the new law, a statement which I compared with the one in my memorandum to the effect that the Argentine Insurance Associations on the 5th of April, 1932, expressed their opposition and stated that the tax would have “the absurd result that a person buying merchandise abroad assured by the seller with foreign insurance agents against the risk of a journey to the Argentine would find himself obliged to pay a tax for a motive [Page 793]that could not be explained, on merchandise while it was in transit outside of the Republic.”
I also stated that I presumed that the Argentine Government could hardly propose to levy a tax on merchandise outside of its jurisdiction. He agreed with me that this would be a difficult matter. I then said that according to estimates made by the insurance companies that from that portion of the tax which would fall upon merchandise in the Argentine, the returns would be negligible. I also said that the difficulties with the Customs Office in the importation of goods would be infinite inasmuch as the Customs would have the right to detain merchandise on which a policy of insurance could not be produced; further, that insurance was often effected by large foreign companies so as to cover their goods in transit all over the world and it would be necessary to prove to the Argentine Customhouse what portion covered Argentine business. I mentioned other considerations all of which were set forth at greater length in my memorandum, and also added that Great Britain, Holland, Switzerland and Norway were all protesting against this law. He said that my note was the first knowledge he had of the matter. I said that I hoped the law would not be put into effect and that it would be better still to have it revoked. The Minister said that my request, he thought, would be considered with considerable good will (con bastante buenavoluntad).
This, therefore, is where the matter rests for the present. Meantime, the new law has not been enforced.
- File translation revised.↩