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