Riggs National Corporation & Subsidiaries (f.k.a. Riggs National Bank and Subsidiaries) - Page 35

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          private ruling that ultimately was issued by the Brazilian IRS to           
          the Central Bank are discussed more fully infra.                            
               During the phase II negotiations, some foreign lenders,                
          including Citibank, wanted the BAC to negotiate the withholding             
          issue with the Brazilians.  The BAC decided that it could not               
          negotiate the withholding issue with the Brazilians, as the                 
          withholding issue, although important to a number of foreign                
          lenders, did not concern all of the foreign lenders.14  Even those          
          BAC members, like Citibank and Lloyd's Bank, that  would                    
          substantially benefit from being able to claim potential foreign            
          tax credits realized that they could not afford to be accused of            
          using their positions on the BAC to further their own individual            
          interests at the expense of other foreign lenders.15  The BAC,              
          instead, advised the Brazilians that the withholding issue was a            
          very important issue to a number of foreign banks, and that the             
          Brazilians would have to resolve the withholding issue as a matter          
          of the applicable Brazilian law. The BAC further created a                  
          subcommittee to study the withholding issue.                                

          14        Some foreign lenders operated in countries which did              
          not allow foreign tax credits with respect to Brazilian                     
          withholding tax payments.  Still other lenders were not in a tax            
          position to benefit from claiming potential foreign tax credits.            
          15        To a significant extent, Citibank sought to segregate             
          the activities and functions of Rhodes (the Citibank senior                 
          executive who acted as the BAC's chairman) from the individual              
          concerns and matters which Citibank pursued during the phase II             
          restructuring negotiations.  At various BAC meetings, other                 
          Citibank employees (principally the top employees of Citibank-              
          Brazil), and not Rhodes, would represent and present Citibank's             
          position.                                                                   



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