WATER ABLAZE - Patagonia Sin Represas

of the transaction volume and the brokers, consultants and lawyers
together pocket a similar sum.
In the USA, the leasing of an object – for example, a German
sewage works for a period of 99 years – is treated in the same way as
an acquisition and is therefore tax-deductible. The U.S. trust is thus
granted a legal status which unambiguously makes it the owner of the
sewage works as an economic asset. This is necessary in order to obtain
such tax advantages in the USA. On conclusion of the deal, the U.S.
trust pays the full “purchase price” directly to the German municipality
or else to an intermediary bank, the so-called “performance of contract
bank”. At the same time, the municipality leases back the object and
receives ownership rights and usufructary rights which derive, however,
from the U.S. trust’s legal status. In Germany, the object remains local
authority property, not only under commercial and civil law, but also
in rem. German politician-protagonists are always particularly keen
to underline this in their attempts to make it perfectly clear that they
have not sold the object, e.g. a sewage treatment plant, but merely
“leased it out”. They point out that the municipality is still named in
the cadastral register. Although this is true, it would have no bearing
whatsoever on any legal disputes because the contracts were concluded
under U.S. law (case law).
This paradoxical twin-ownership construction allowing for a double
tax write-off is a peculiar set up which undoubtedly flies in the face of
reason. The experts, however, are proud of their highly complex model
and emphasise that twofold write-offs of this nature are not prohibited
under the various legal systems.
All CBL contracts are kept top secret. The public has no access at
all to the documents and can only speculate as to the details of the
arrangements. There is every reason to believe that the U.S. trust not
only owns the object in economic terms but also as an in rem asset.
Recent incidents have shown that the U.S. trust probably has the actual
physical control of the property. The creditworthiness of cities and
provincial states is usually stated in the contract. In 2001 and 2002, for
instance, Dortmund concluded CBL contracts involving its suburban
railway and the Westphalia Hall. When the rating agency Standard &
117