MercoPress. South Atlantic News Agency

Argentine assets under “preventive seizure”

The Argentine government confirmed this Tuesday the “preventive seizure” by a United States judge of Argentine assets following a demand by defaulted bondholders.

Argentine Cabinet Chief Alberto Fernández tried to downplay the news by saying that they are "forfeiture requests over Argentine diplomatic assets" which can't be embargoed.

The "preventive seizure" involves the residence in Maryland of the Argentine Naval Attaché.

"These measures are intended to put pressure on Argentina" that is currently trying to negotiate a 75% face value cut of Argentine sovereign defaulted bondholders. It is estimated the standing bond debt defaulted since December 2001 is equivalent to 88 billion US dollars.

Argentine Ambassador in Washington Jose Bordon said that the Argentine government is "absolutely convinced" that these kinds of assets are protected by the Diplomatic Assets Convention.

However Mr. Bordon admitted that "financial pressure groups" are specialists in these "complicating" actions and anticipated Argentina would be appealing the judicial action. Last week similar preventive seizures were made effective involving Argentine Armed Forces and Navy funds in US banks.

Meanwhile Argentine president Nestor Kirchner in the political trail in the province of Buenos Aires described the situation as "fireworks" recalling that the Vienna Convention protects diplomatic assets.

President Kirchner also insisted that Argentina's offer to bondholders is "definitive and will not be changed; paying more means people without jobs and homelessness in Argentina".

However the Buenos Aires Stock market this Tuesday plunged 7,8% following concerns about growing tense relations with the IMF and the G-7 group of industrialized countries that this last week end said Argentina must act constructively in its rescheduling negotiations with bondholders.

"We call on Argentina to implement policies in line with its IMF program. Argentina should engage constructively with its creditors to achieve a high participation rate in its restructuring", said the official G-7 release.