(C) GOK RESPONSE ON IRAQ ASSETS IN BAHAMAS BANK

S E C R E T KUWAIT 005188

SIPDIS

NOFORN

EB/ESC/TFS FOR GGLASS AND NROTHSTEIN; S/CT FOR SFOX; IO/PHO
FOR APEREZ

E.O. 12958: DECL: 11/12/2013
TAGS: EFIN ECON ETTC PREL KU IZ
SUBJECT: (C) GOK RESPONSE ON IRAQ ASSETS IN BAHAMAS BANK

REF: A. SECSTATE 311703

B. KUWAIT 5001

C. KUWAIT 4840

D. SECSTATE 310891

E. 2002 KUWAIT 4266 AND PREVIOUS

Classified By: CHARGE D'AFFAIRES FRANK C. URBANCIC,
Reasons 1.4 (b),(d) and (e)


1. (C) In a 6 November meeting with the Minister of Finance,
Ambassador delivered the substance of Ref A demarche on the
$85 million in Iraqi assets frozen in a Bahamian bank. The
Minister said that a joint Ministry of Foreign
Affairs/Central Bank of Kuwait team had been established and
was investigating the issue. The panel will deliver its
report within two to three weeks. Econ Chief repeated the
demarche on 9 November to the MFA Americas Department deputy,
who confirmed that the investigation was underway and that
the Ministry would report back to the Embassy as soon as
possible. Econ Chief again delivered the message on 12
November at MFA. It should be noted that during OFAC
Director Richard Newcomb's 4-5 October visit to Kuwait (Refs
B and C),Central Bank officials said that they would abide
by the relevant UN sanctions committee's decision on whether
or not contested Iraqi assets should be transferred to the
Development Fund for Iraq (DFI). However, they said they
needed some time to review the commercial banks' claims
before forwarding that information to the UN for review.


2. (S/NF) COMMENT. Post will continue its follow up on
this. Certainly, our hand in pressing such issues would be
strengthened considerably were OFAC to offer reciprocity on
information exchanges with the GOK. During the October
visit, GOK requested and OFAC promised to provide,
transactions data that the GOK says are needed to meet OFAC's
request for assistance regarding Kuwait Finance House
operations. Specifically, OFAC agreed (Ref C) to forward
detailed information (e.g., dates and amounts) on
transactions carried out by the Kuwait Finance House on
behalf of Lajnat al-Dawa al-Islamiya (LDI). Post has not
succeeded in obtaining that information from OFAC (most
recent request made by email on 2 November). Further, GOK
complained of delayed action on an OFAC pledge to respond to
the Revival of Islamic Heritage Society's petition to lift
the freeze on its Afghani and Pakistani assets (Ref E). This
matter was first raised during OFAC's May 2001 visit and
revived for the May 2002 trip to Kuwait. Regarding LDI
issues, our interlocutors report that once OFAC provides the
promised information on the disputed transactions, the GOK
will begin its investigation. With respect to these matters,
clearly the ball now is in OFAC's court.
URBANCIC