TFIZ01: OFAC LICENSE REQUEST DENIAL LETTER

UNCLAS AMMAN 002374 SIPDIS SENSITIVE TREASURY FOR OFAC FOR DAVID MILLS E.O. 12958: N/A TAGS: EFIN ETRD ETTC PREL JO SUBJECT: TFIZ01: OFAC LICENSE REQUEST DENIAL LETTER DELIVERED REF: 03/17/03 OFAC LETTER FROM MILLS TO DCM ¶1. (U) This cable contains an action request. Please see para. 5. ¶2. (SBU) As per instructions REF, econoff delivered letter to Dr. Muwaffak Haddadin, Director General, Arab Company for Drug Industries and Medical Appliances (ACDIMA),on April 16. The letter, a copy of which was provided to post by OFAC, informed Haddadin that his request for a license to unblock $4.5 million frozen in an account of Iraq-based Rafidain Bank at the Bank of New York had been denied. ¶3. (SBU) After reading the letter, Haddadin said he "expected" the response. He explained that the sum in question represented installments and interest on an outstanding loan due to ACDIMA from Iraq-based Arab Company for Antibiotics Industries (ACAI). He said ACDIMA loaned $9 million to the Iraqi company, in which it has a 36% stake, in 1995 for infrastructure improvements and equipment purchases. ACAI had not made a payment on the loan since 2001, Haddadin said, and the funds have since been blocked pursuant to U.S. sanctions regulations regarding Iraq. He said that although the action was not a surprise, he was unclear as to what options might be available to ACDIMA at present or what options the company might have once sanctions are lifted. Haddadim added that he was unsure as to whether or not the Iraqi company was even functioning at this point. ¶4. (SBU) ACDIMA is jointly owned by 15 Arab governments. The largest shareholders are the governments of Iraq and Saudi Arabia, each with a 17% stake. Headquartered in Amman, the company has offices and factories in Iraq, the UAE, Saudi Arabia, Tunisia, Syria, and Jordan. The company is a producer of pharmaceuticals, veterinary medicines, and dental materials, and is an importer of medical equipment and supplies. ¶5. (SBU) Haddadin requested Embassy assistance in working with the Department of Treasury to provide further information to ACDIMA regarding possible next steps. We would appreciate OFAC's advice regarding this request. GNEHM