Citibank denied interest payments on Finmeccanica contract

US BANKING giant, Citibank has asked Panama to pay $300,000 in interest payments for the partial payment of contracts that were signed with the Italian conglomerate Finmeccanica during the Government of Ricardo Martinelli (2009-2014).

The Bank got a quick response from the  Ministry of Economy and Finance saying that under the contracts, the financing was the responsibility of the contractor and not the government.

“Being that they were contracts under the turnkey modality, the financing of the work corresponds to the contractor,” the ministry said.

It said  that the credit line was negotiated between the contractor and CitiBank Europe.

Panama signed contracts with three affiliates of Finmeccanica: Selex, Telespazio and Agusta Westland, for the purchase of 19 radars, a digital mapping system and six helicopters

The total amount of the contract was $250 million. The transaction was part of a “memorandum of understanding” agreed upon on June 30, 2010, between Martinelli and then-Italian Prime Minister Silvio Berlusconi.

Panama has sought to void the contracts because the equipment provided has not functioned properly and because there have been allegations that the contracts were inflated because they contained substantial bribes for Martinelli government officials.