KDP'S CONTINUED PRACTICE OF CHARGING FEES AT

C O N F I D E N T I A L ANKARA 003794

SIPDIS


STATE EUR, NEA AND PM


E.O. 12958: DECL: 06/10/2013
TAGS: EPET PREL IZ TU
SUBJECT: KDP'S CONTINUED PRACTICE OF CHARGING FEES AT
BORDER THREATENS TO STALL EFFORTS TO FACILITATE FLOW OF
GOODS TO IRAQ

REF: ANKARA 3731


(U) Baghdad minimize considered.


(U) Classified by Ambassador W. Robert Pearson. Reasons:
1.5 (B and D).



1. (U) This is an action request. See para 4.



2. (C) Recent reports that the KDP intends to continue
charging taxes/fees for goods crossing the Turkish-Iraqi
border threatens to stall our ability to facilitate the flow
of goods to Iraq and could hamper our overall reconstruction
efforts. It is our understanding that CPA Ambassador Bremer
and other US officials in Iraq have called on all Iraqi
groups to implement a &tax holiday8 while we attempt to
devise a uniform plan for the entire country. Despite this
request, GOT officials, Turkish businessmen and sources in
Iraq report that Kurdish groups continue to charge fees for
trucks coming across the border. The local KDP
representative confirmed these reports June 9 and said the
KDP intends to continue the practice, although under a
slightly different formula. (reftel).



3. (C) We view the KDP,s insistence on continuing charging
fees along the border as an unilateral move by one Iraqi
group that would appear to run counter to the CPA,s policy
of a &tax holiday8 and, if left unchecked, could threaten
our larger objective of increasing the flow of goods to Iraq.
While the local KDP rep assures us there are no fees on
World Food Program (WFP) shipments entering Iraq from Turkey,
WFP Ankara told us the WFP is required to pay the KDP $20 per
truck and that only aid shipments entering Iraq from Turkey
are subject to fees. Last week, a truckers' strike against
an attempt by the KDP to increase fees temporarily halted UN
shipments from Turkey to Iraq, as the Financial Times
reported. While trucks carrying fuel and LPG via the Ground
Line of Communication (GLOC) between Turkey and Iraq
reportedly are presently not being charged fees, we have no
assurances this will not change down the road if Kurdish
groups continue to be permitted to implement their own fee
system. Furthermore, we suspect that some GOT officials are
hiding behind the fee issue before agreeing to implement the
necessary procedures (including new import guidelines) that
will facilitate the flow of goods and services between Turkey
and Iraq. As long as the Kurdish groups in the north
continue to &run8 an independent fee collection policy
along the border, we can expect the Turks to drag their feet
on implementing the steps they need to take to open up their
side of the border.



4. (C) Action request: Embassy will continue to press the
GOT hard to open its border fully to two-way trade. It is
already open to the flow of humanitarian assistance. We
recommend that Washington agencies and the CPA continue to
press hard on senior KDP and other Iraqi leaders to implement
the &tax holiday8 plan. If these groups resist, we
recommend that Washington consider instructing US officials
in Iraq to immediately assume administrative and security
control of the Turkish-Iraqi border crossings to ensure
proper implementation of Coalition policy.
PEARSON