The city reports that lawsuits have been filed in Manhattan State Supreme Court against the governments of Turkey, the Philippines, India and Mongolia. The suit seeks payment of back taxes, charges and interests totaling $106.2 million.
According to city documents, Turkey is the biggest offender, with a $70-million tax bill hovering over its head. The bill amounts drop off precipitously from there, with the Philippines in arrears for $17.7 million, India in the hole for $16.4 million and Mongolia owing $2.1 million.
According to corporation Counsel Michael A. Cardozza, this is no new problem, and one of the overdue bills--accrued by the Philippines--goes back as far as 1974, he notes. Turkey's outstanding bill goes as far back as 1980, Cardozza claims.
The tax-exempt status of foreign governments taking up residence in other countries is covered by the Vienna Conventions on Diplomatic and Consular Relations. Part of the Diplomatic Relations and Immunities Act of 1967, the law specifies exemptions only for portions of the properties used for "the mission or the consular post or as the residence of the head of the mission."
But, the suits claim that each of the countries violated the exemptions with special uses. In Turkey's case, the city alleges, 821 United Nations Plaza was being used for unspecified commercial purposes. In the case against the Philippines, the city claims that 556 Fifth Ave. was used to house such enterprises as the Philippines National Bank, Philippines Airlines and a restaurant.
India, whose arrears date back to 1985, allegedly housed staff other the mission head at 235 E. 43rd St. The same claim is being levied against Mongolia for its use of 6 E. 77th St.
"We are proud to be the host city of the United Nations," Bloomberg said in a prepared statement. But "one thing we simply cannot afford is to be taken advantage of by our guests, especially considering our fiscal condition."
Not surprisingly, embassy spokespeople are at odds with the suit, and one has stated that a settlement is in the offing.
"The lawsuit is an unfortunate diversion," Turkish consul general Omer Onhon tells GlobeSt.com. "Turkey has acknowledged that it has a certain obligation to the City ofNew York, though much smaller than alleged. In fact, Turkey and the city have already agreed on the broad outlines and many details of a comprehensive settlement on this issue. It only remains to determine the method and timing of payment." Details of the settlement were not revealed.
But not all embassies stated such a broad degree of cooperation. "By advise of our counsel, under New York State statutes and the Convention, we are not obligated to pay New York City real property taxes," says Joe Jimeno, deputy consul general for the Philippines Embassy. Calls to the Indian Embassy were not returned by deadline. A "no-comment" was raised from the Mongolian Embassy.
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