ONE STEP FORWARD FOR ADEN SHIPPING INDUSTRY

C O N F I D E N T I A L SANAA 001676 SIPDIS E.O. 12958: DECL: 07/09/2013 TAGS: ECON ETRD PTER YM ECON COM SUBJECT: ONE STEP FORWARD FOR ADEN SHIPPING INDUSTRY REF: A) SANAA 1155 B) SANAA 505 Classified By: Classified by A/DCM S. Alexander for reasons 1.5 (b) and (d). ¶1. (U) Deputy Minister of Finance Ahmed Ghaleb confirmed to Pol/econoff on July 9 that the ROYG had placed fifty million USD in an escrow account at HSBC in accordance with the January agreement with Lloyds' to lower transshipment insurance rates for Yemen (Reftel A). However, Ghaleb added, the insurance rates have not yet been lowered because the underwriters still are not satisfied with some of the technical details of the escrow account. ¶2. (C) Comment: Embassy worked directly and with the donor community to put pressure on the ROYG to fulfill its terms of the deal. That, along with a June 10 Financial Times article criticizing the ROYG's handling of the matter, finally moved the ROYG to fulfill the terms of the agreement. While this is a positive step for the shipping industry, as Reftel A points out, HSBC was originally not on the approved list of banks by Lloyds. The choice of HSBC by the ROYG suggests that continued political maneuvering may still be negatively affecting the return of shipping to Aden. End Comment. HULL