1. (U) Action Request - see paragraphs 8, 12.



2. (C) SUMMARY: The Ambassador discussed Iraq -- and,
briefly, Afghanistan -- with Foreign Minister Shaykh Dr.
Mohammed Sabah September 30 (other topics septels). The
Minister was keenly interested in how the Madrid donors
conference will be structured, and how contributions will be
handled. He was reassured to hear the USG stands by the
principle of compensation contained in UNSCR 1483. He said
his government was lobbying in New York in favor of Iraqi
participation in the OIC summit in Kuala Lumpur. Noting the
POTUS letter to the Amir asking for continued support to Iraq
and Afghanistan, the Minister wanted to know what the USG has
in mind. Dr. Mohammed also raised a shipload of live sheep
from Australia that is creating difficulty. END SUMMARY.



3. (U) PARTICIPANTS: The Ambassador, accompanied by DCM and
Pol Chief (Notetaker), called on Foreign Minister Shaykh Dr.
Mohammed Sabah al-Salem al-Sabah September 30. MFA Americas
Dept. Director Amb. Khaled al-Babtain and his Deputy Ayham
al-Omar sat in.

(U) IRAQ


--------------------------





4. (C) Compensation: Drawing on cleared press guidance
prepared for the 9/29 Noon Briefing, the Ambassador began by
assuring the FM that US policy remains unchanged from the
position enshrined in UNSCR 1483, in which we fought
successfully to preserve the principle of Iraq's obligation
to pay compensation for the depradations of its occupation of
Kuwait. Dr. Mohammed appreciated the clarification. He
noted that he had been bombarded with concerns at diwaniyas
(following over-reactions by local media and parliamentarians
to remarks made by CPA Administrator Bremer - ref A), and had
responded: "without the US, we would have no compensation to
talk about." He said the Council of Ministers had discussed
calling on the media to "cool it," as their hysteria was no
way to build a positive relationship with the new Iraq. He
commented that most of the verbal attacks were from "the
usual suspects."



5. (C) OIC Summit: The Minister confirmed that his
government is working in New York in support of allowing the
Iraqi Governing Council (GC) to participate in the upcoming
OIC summit in Kuala Lumpur. He said that the GC had
indicated Malaysia and Cuba were being difficult, and the GOK
had expressed its displeasure to those two governments.
Cuba's objection was to language in the summit communique
condemning the Saddam regime for its mass killings and
welcoming UNSCR 1500; the GOK had postponed the new Cuban
ambassador's presentation of credentials as a show of
displeasure. Malaysia's problem was protocolary: it is
hosting a summit, and Iraq has no head of state. He added
that Venezuela had opposed GC participation at the most
recent OPEC meeting, but had finally acquiesced to the will
of the majority.



6. (C) New UNSCR: The Ambassador shared 9/29 NEA press
guidance on the status and prospects of a new UNSCR on Iraq.
Dr. Mohammed was encouraged by the EC's statement indicating
that there need not be a firm deadline for establishing a
sovereign Iraqi government. He was interested in the
Secretary's reference to a six-month period for producing a

SIPDIS
new constitution; the Ambassador replied that he did not
believe it was a deadline. The FM also wondered whether
France was moving away from abstention, towards supporting a
resolution; the Ambassador assured him that is what we would
like.



7. (C) Madrid Conference: Dr. Mohammed sought clarification
of the structure of the Madrid donors conference on Iraq, and
of the mechanism for managing contributions that countries
may pledge. Specifically, he wanted to know: who would
chair the conference, whether contributions would be
funnelled through the Iraq Development Fund (IDF) -- or if
not, through what mechanism, managed by whom --, and who
would represent Iraq. He also wanted to know what the CIC's
role, if any, was in relation to the IDF, and how oil
revenues would be handled once the Oil-For-Food Program
ceased operation. The Ambassador promised to seek
clarification.



8. (C) ACTION REQUEST: Please provide answers to the
questions in paragraph 7, that we can share with MFA.



9. (C) Kuwait Airways-Iraq Air Court Case: The Ambassador
raised the UK court case in which Kuwait Airways is suing
Iraq Air, and asked that the GOK request a six-month delay,
without which Iraq Air would face bankruptcy (refs B, C).
Dr. Mohammed seemed unaware of the October 1 court date; he
stated that an out-of-court settlement of $150 million had
been agreed. The matter involved insurance companies and was
"quite complicated." He encouraged the Ambassador to contact
the Minister of Finance, who has responsibility for Kuwait
Airways, directly.



10. (C) Australian Sheep: the FM raised the issue of a
shipload of live sheep from Australia that had been denied
entry into Saudi Arabia on grounds of disease. He said his
Australian counterpart had phoned him about this, asking
Kuwait to receive the shipment and process it in its
slaughterhouses, the meat to be distributed free of charge in
Iraq as a donation from Australia. This was a very awkward
matter for Kuwait: there is a GCC rule against landing cargo
in one state that has been banned from another. Furthermore,
the local press play is highly negative: it is being called
"the shipment of death," portrayed as poisoned meat for
Iraqis to be sent through Kuwait. The Australians are very
generous people, Dr. Mohammed remarked, but the whole idea
makes no sense: Iraq exports livestock - "you can buy a
sheep there with a banana". Amb. Babtain interjected that
the problem may be about to move off of Kuwait's doorstep:
he understood the Australians were thinking about
re-approaching the Saudis or sending the sheep to Africa.

(U) AFGHANISTAN


--------------------------





11. (C) POTUS Letter: The Minister mentioned President
Bush's recent letter to the Amir, asking Kuwait to continue
to provide support to Iraq and Afghanistan. He wanted to
know what the USG has in mind. On Afghanistan, he recalled
that Kuwait has so far pledged a total of $30 million; the
Ambassador reminded him that half that amount was
balance-of-payments support and half was for a road project.
The Ambassador noted that the President's $87 billion
supplemental budget request to Congress includes money for
Afghanistan, and that we are doubling our aid to Afghanistan
this year. He promised to try to provide more information on
our aid strategy for Afghanistan.



12. (C) ACTION REQUEST: Please provide fuller information on
our aid strategy for Afghanistan and how the GOK could fit
in, for delivery to MFA.



13. (U) Baghdad, Kabul minimize considered.
JONES