IRAQI ASSETS IN JORDAN - INVITATION TO THE CPA

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 002198

SIPDIS

CPA FOR WETHINGTON, VARDAMAN
TREASURY FOR ZARATE, MILLS, DEMOPULOS

E.O. 12958: DECL: 03/23/2014
TAGS: EFIN PREL IZ JO
SUBJECT: IRAQI ASSETS IN JORDAN - INVITATION TO THE CPA

REF: A. VARDAMAN-LAWLESS EMAIL (03/21/04)

B. LAWLESS-PELOFSKY-SCHEDLBAUER EMAIL (03/12/04)

C. HALE-SCHEDLBAUER EMAIL (03/11/04)

D. BAGHDAD 25

E. AMMAN 1539

Classified By: AMBASSADOR EDWARD W. GNEHM. REASONS 1.5 (B, D).


1. (U) This is an action message. See last Para.


2. (C) SUMMARY: The Government of Jordan (GOJ) late on
March 11 passed to Embassy a list of Iraqi counterparties
earlier requested by Iraqi and CPA officials to review Iraqi
assets frozen in Jordan. The local Rafidain Bank manager has
stated his satisfaction with the information and CPA's Office
of the General Counsel confirmed (Ref A) that the information
the GOJ provided was sufficient. Although the main reason
for CPA's proposed trip to Jordan (Ref D) may seem to have
been obviated by the GOJ action, senior Jordanian officials
have heard conflicting information from Iraqi counterparts on
Baghdad's level of satisfaction. In the interest of forging
strong Jordan-Iraq relations and ensuring continuing
Jordanian cooperation on the return of Iraqi assets, Embassy
believes an Iraqi/CPA team should proceed to Amman. A
face-to-face exchange will help resolve questions, secure the
transfer of all remaining frozen Iraqi assets to the DFI, and
develop the strong and positive relationship that we all
believe is essential in Jordanian-Iraqi relations in the
future. END SUMMARY.


3. (C) Late on March 11, Minister of Finance Mohammad Abu
Hammour delivered to the Embassy a list of 113 transactions
detailing Iraqi counterparties in Jordan-Iraq commercial
dealings, as the USG had earlier requested (Ref E). A member
of the technical committee reviewing the information
explained to Acting ECON/C that the source of some of the
information is sensitive, in that Jordanian banking laws
offer broad protections to account holders. He asked that
the source of the information -- the Ministry of Finance --
be protected.


4. (SBU) The same day, Acting ECON/C delivered the list to
the manager of the Amman branch of the Rafidain Bank, Mr.
Hasan Aba-Thar, who reviewed the contents (Ref C). Mr.
Aba-Thar reviewed the information on counterparties and said
it met the needs of the Iraqi side. The information would be
used to confirm independently the counterparty information
his bank employees had already been able to assemble, he
asserted. When asked, he said that he was satisfied with the
number of accounts listed. He said that he would report the
information back to the CBI on the next business day.


5. (SBU) March 12, Embassy sent copies of the
counterparties list to CPA and to NEA/ARN (Ref B),and
subsequently followed up with John Vardaman of the CPA Office
of the General Counsel. According to initial reviews of the
documents provided, CPA Office of the General Counsel
confirmed that the information the GOJ provided was
sufficient to conduct a meaningful review of individual
Jordanian commercial claims against Iraq (Ref A).


6. (C) In a more recent conversation with the Ambassador
and CPA Deputy Administrator Amb. Richard Jones (details
septel),Foreign Minister Marwan Muasher said that he had
heard conflicting reactions to GOJ actions on Iraqi assets.
While the U.S., including in testimony to Congress, had
welcomed the GOJ's actions, Iraqi Foreign Minister Zebari was
less warmly receptive. Iraqi Finance Minister Kamel
al-Keylani seemed cool to Jordan's actions to date and
insisted on a higher level of cooperation from Jordanian
authorities, including on unspecified amounts beyond the USD
550 million in Iraqi assets initially identified. Muasher
stressed to Ambassadors Gnehm and Jones that he was very
emphatic with his Iraqi interlocutors that Jordan desired
only the very best of relations with the new Iraq and he
committed himself and the GOJ to do whatever was necessary to
resolve any and all problems, including the assets claims
issue. When al-Keylani said that they (the Iraqis) were
aware of a larger number of accounts in Jordanian banks with
assets the Iraqis believed should be seized, Muasher urged
al-Keylani to give him more specific information and he
promised to pursue a Jordanian government investigation into
those assets.


7. (C) ACTION REQUEST: We strongly believe a CPA/Iraqi
team visit to Amman, as we have previously discussed, should
proceed. While the information provided by the GOJ appears
adequate and responsive to CPA/Iraqi requests, in and of
itself it does not get us to the bottom line we all seek --
mutual resolution of any existing Jordanian claims that then
leads to the immediate transfer of all remaining frozen Iraqi
assets to the DFI. Abu Hammour has told us that he would
hold off paying further commercial claims against the Iraqi
trade ledger accounts, but he has repeatedly stated that he
is under growing pressure to pay off proven claims. It is in
the long-term interest of the USG to resolve this matter
expeditiously (Ref D),which in turn facilitates strong
Jordan-Iraq relations and continuing Jordanian cooperation on
many fronts. The CPA/Iraqi team visit, with Muasher's
involvement, would also help clear up any lingering
misunderstandings and forge a more direct dialogue on assets
-- thus easing us out of a mediating role. We would hope a
visit could move all parties a big step closer to reaching
closure on this matter.
GNEHM