Riggs National Corporation & Subsidiaries - Page 38




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         payments.  See supra note 16.  In comparison, as was noted supra             
         note 17, the Central Bank’s letter of September 6, 1985 (Joint               
         Exhibit 692-ZN(22)), states the Central Bank was transmitting DARF’s         
         covering phase II CGA interest payments that had been made by the            
         Central Bank in January, March, April, and June 1985.  Indeed, one           
         of the Central Bank schedule pages in Exhibit 692-ZN(22) covers              
         various interest payments made to petitioner and other foreign               
         lenders on January 16, 1985.  In preparing this schedule page                
         covering those January 16, 1985, interest payments, the Central Bank         
         used an exchange rate of 3,381 cruzeiros to $1 (U.S.), not an                
         exchange rate of 7,772 cruzeiros to $1 (U.S).19  As was previously           
         discussed, the latter exchange rate of 7,772 cruzeiros to $1 (U.S.)          
         applicable on September 27, 1985, was used in preparing the Central          
         Bank schedules in Exhibit 692-ZN(23).  See infra appendices A and            
         B.                                                                           
              Notwithstanding petitioner’s argument to the contrary, the              
         Central Bank schedules that Mr. Oliveira (a FIRCE division head)             

               19   This Central Bank schedule page (in Exhibit 692-ZN(22))           
          reflects that with respect to the Jan. 16, 1985, phase II CGA               
          interest payment of $18,465 (U.S.) to petitioner, the Central               
          Bank computed the “grossed-up interest paid” to be 83,240,220               
          cruzeiros.  Considering the gross-up formula the Central Bank               
          employed, we calculate the Central Bank on Jan. 16, 1985, had               
          used an exchange rate of 3,381 cruzeiros to $1 (U.S.).  In other            
          words, that was the applicable exchange rate the Central Bank               
          used in order to compute as follows that amount of “grossed-up              
          interest paid” on its $18,465 (U.S.) net interest remittance to             
          petitioner:                                                                 
               83,240,220 cruzeiros = $18,465 (U.S.) X 3,381 (cruzeiros per dollar)   
                              1 - 25% withholding tax rate                            





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