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Dafey

China can seize assets if PHL defaults on payment

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Dafey
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Senior Associate Justice Antonio Carpio expressed concern over the Chico River irrigation loan agreement between the Philippines and China, saying the latter could seize oil and gas-rich Philippine assets in the West Philippine Sea (WPS) if the country defaults on payment.

"In case of default by the Philippines in the repayment of the loan, China can seize, to satisfy any arbitral award in favor of China, patrimonial assets and assets dedicated to commercial use of the Philippine government," Carpio explained in a presentation shared with reporters.

Carpio said that this is expected to be the "template" for all other loans to the Philippines. 

Citing paragraph 8.1 of the Loan Agreement, Carpio said the Philippines "expressedly waived any sovereign immunity" over all its assets except for some, including "public or governmental use as distinguished from patrimonial assets and assets dedicated to commercial use."

He explained that the term "patrimonial assets and assets dedicated to commercial use" includes the oil and gas within the Philippine exclusive economic zone (EEZ) in the WPS.

"This includes the rich gas fields in Reed Bank," he stressed.

As the agreement is "governed by Chinese Law," Carpio said that, in case of a dispute, "arbitration shall be conducted by the China International Economic Trade Arbitration Commission (CIETAC) under CIETAC arbitration rules."

He also noted that the award of CIETAC is "final and binding" and that the arbitration shall be held in Beijing.

According to Carpio, the term “patrimonial assets and assets dedicated to commercial use” is "defined under Chinese law, interpreted by a Chinese-majority tribunal in Beijing, and enforced by the Chinese Government in the Philippines."

He added that "China will always have a majority in the arbitral panel," citing CIETAC rules.

The 20-year loan deal for the Chico River Pump Irrigation Project was inked by Department of Finance Secretary Carlos Dominguez and Ambassador Extraordinary and Plenipotenciary of China Zhao Jianhua last April 10, 2018.   

The P3.6-billion agreement had been described by former Bayan Muna party-list Representative Neri Colmenares as "onerous" and highly favorable to China.

 

https://www.msn.com/en-ph/news/national/carpio-on-chico-river-irrigation-loan-china-can-seize-assets-if-phl-defaults-on-payment/ar-BBV7Fsu?ocid=spartandhp

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SkyMan

And by can they mean will.  And it really may not require a loan default.

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BossHog

Well, it happened to Sri Lanka and they lost their two major ports to the Chinese "debt trap".

Remember reading an article in Forbes a few months back suggesting how a similar situation won't happen here. Not sure if I can agree with all the assertions and conclusions in this piece but, hey, I'm not an economist.

https://www.forbes.com/sites/panosmourdoukoutas/2018/11/26/china-cannot-turn-the-philippines-into-another-sri-lanka/#128c34fc6ee9

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streak03

Hey, all that needs to happen is the next administration declare the contracts invalid , like they usually do..hahaha

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Headshot

Maybe the countries that owe China money will just nationalize all Chinese holdings and deport any Chinese nationals they don't want around. Many countries have done that to the US in the past. It isn't like China could attack all of those countries to get their holdings back. And, if they did attack, I'm sure the other countries of the world would not let that stand.

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towboat72

Only one that does not seam to realize that the Philippines are going to get shafted on this deal is DU 30,he thinks they are great terms.

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to_dave007

Not really any different than what other imperial powers have done in last 150+ years.

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Davaoeno
49 minutes ago, to_dave007 said:

Not really any different than what other imperial powers have done in last 150+ years.

And very much what a current superpower does.

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MickyG

Kenya just lost its major port to the Chinese for defaulting.

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to_dave007
1 hour ago, MickyG said:

Kenya just lost its major port to the Chinese for defaulting.

You state that as a matter of past and completed fact..  though my internet searches suggest it is still up in the air and undecided.

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oztony

Kenya Faces Losing Key Port to China Over Railway Loan

BY DOMINIC KIRUI, SPECIAL TO THE EPOCH TIMES

January 23, 2019 Updated: January 23, 2019

MOMBASA, Kenya—The Kenyan government may lose not only some key assets but also have its sovereign rights undermined if it defaults on repaying a loan it owes to China’s Export and Import Bank (Exim).

Details have emerged in recent weeks that show Kenya’s assets would serve as collateral and would be seized by Beijing upon failure to repay the loan.

China would take over the Port of Mombasa and the Kenya Ports Authority at large if Kenya fails to repay a loan from the Exim Bank to build the Standard Gauge Railway (SGR), according to a leaked letter from the Office of the Auditor General.

The Port of Mombasa. Media reports indicate that China is threatening to take it over if Kenya doesn’t pay back its loan to build the SGR, on Jan. 15. 2019. (Dominic Kirui/Special to The Epoch Times)

While speaking to reporters on live television in Mombasa on Dec. 28, Kenyan President Uhuru Kenyatta defended his decision to borrow from China and strongly denied any possibility of Kenyan assets being seized by the communist country.

“You have even heard the Chinese government itself say that that is nonsense, that doesn’t exist. I am telling you—it doesn’t exist,” Kenyatta said.

The president promised to make a copy of the contract available to reporters the next day, but so far that hasn’t happened.

On Jan. 13, however, The Nation, Kenya’s largest independent newspaper, published excerpts from the March 2014 contract entered into by the Chinese and Kenyan governments. The excerpts show that the deal includes a clause that has been kept secret: The contract is to governed by Chinese law and any arbitration that might arise would be heard and/or resolved in Beijing.

A Nairobi-bound Standard Gauge Railway train leaves the Port of Mombasa with cargo on Jan. 15, 2019. (Dominic Kirui/Special to The Epoch Times)

Also of concern is a clause relating to Kenya’s sovereignty, according to The Nation: “Neither the borrower (Kenya) nor any of its assets is entitled to any right of immunity on the grounds of sovereignty.”

The Standard Gauge Railway is Kenya’s first major development project since independence, and in order to finance the first phase, from Mombasa to Nairobi, the government took out a 320 billion KES ($3.1 billion) loan from the Exim Bank. The construction of the second phase from Nairobi to Naivasha is almost complete and cost about 149 billion KES ($1.4 billion), while the third and final phase that runs from Naivasha to Kisumu will cost 350 billion KES ($3.4 billion). The second and third phases are also financed by loans from the Exim Bank.

One Kenyan politician has blasted those who brokered the deal with the Chinese, demanding that they be prosecuted. A former member of Parliament, Jakoyo Midiwo, says the representatives who signed the contract jeopardized Kenya’s sovereignty and left taxpayers with the burden of repaying the loan.

An aerial view of the SGR section at the port of Mombasa, on Jan. 15, 2019. (Dominic Kirui/Special to The Epoch Times)

“Why are there no criminal charges against the people who negotiated with the Chinese and never brought that negotiated document to Parliament, as per requirements of the Constitution? If it was someone from National Treasury or from the Attorney General’s office, he has done something criminal. You cannot go and negotiate on behalf of Kenyans a debt that is said to be the largest capital project ever undertaken in Africa,” Midiwo said on a local TV breakfast show.

He added, “When they were doing this construction, no Kenyan engineers were allowed. Everybody who worked on laying the rails was from China. We have issues with them only employing Chinese on the SGR.”

Debt Trap 

Concerns have been raised in the past about the debt trap Beijing is keen on setting for African nations, tempting them with mouthwatering deals for development projects across the continent.

In Zambia, the government entered into a contract for a development loan with China. Later, the Chinese took over the National Broadcasting Corporation, and now own 60 percent of the shares. This means Beijing can make major decisions on the operations of the broadcaster.

A crane picks up a container from a train and loads it onto a tractor at the Port of Mombasa, on Jan. 15, 2019. (Dominic Kirui/Special to The Epoch Times)

Also in Zambia, recent reports indicate that China is threatening to take over the Kenneth Kaunda International Airport, if the government fails to repay a loan on time.

In Ghana, the Ghana Independent Broadcasters Association (GIBA) is resisting what it says is an attempt by Chinese broadcasting company StarTimes to put it out of business and control the national broadcasting space. StarTimes made a deal with the Ghanaian government that will bring satellite TV to about 300 rural villages across the country.

“The agenda of StarTimes is not only aimed at profit or the indoctrination of Chinese culture (names, language, food, etc.) and programs, but a larger mandate to take over the control of the broadcast space in strategic African countries including Ghana, which is crucial for the China game,” GIBA said in a September 2018 press statement.

In December 2017, Sri Lanka was forced to give up control of its Hambantota port, which it had built with money borrowed from the Chinese, because it was struggling to make payments on the loan. Sri Lanka had to give the port and another 15,000 acres of land to China on a 99-year lease to settle the debt.

Back in Kenya, Kenyatta has vowed to borrow from China again as he believes it is the only sure way to develop.

“The problem with debt is if you use it to consume. I am confident that Kenyan debt, which is largely very solid, is for infrastructure development that will benefit not just our generation but future generations,” he said.

https://www.theepochtimes.com/kenya-faces-losing-key-port-to-china-over-railway-loan_2771232.html

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MickyG

Malaysia plus others have now unwound Chinese contracts as they are deemed as corrupt..

 

Years ago was here a rail deal with China in Luzon that cost a fortune and not one track has been laid?

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cookie47

Darwin Port was "leased" to a Chinese company for 99 years.

It encompasses a naval base as well.

Barack Obama wasn't very happy with the Australian government of the time.
Nor was was the public including me.

There are a number of articles on the web....

Sent from my Redmi Note 3 using Tapatalk

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samatm

I like this guy:   Chris Chapple..   Here's his take on  China Uncensored! 

 

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