ASSETS: JORDANIANS SAY $50 MILLION MORE TO DFI,

C O N F I D E N T I A L SECTION 01 OF 02 AMMAN 000784

SIPDIS

TREASUARY FOR DAS ZARATE
NSC FOR KIFAYAT

E.O. 12958: DECL: 01/30/2009
TAGS: EFIN ETTC IZ JO
SUBJECT: ASSETS: JORDANIANS SAY $50 MILLION MORE TO DFI,
NEED IRAQI TEAM QUICKLY

REF: A. AMMAN 203


B. 2003 AMMAN 8573 AND PREVIOUS

Classified By: David Hale, CDA. Reasons 1.5 (b) and (d).


1. (C) Summary. Finance Minister Abu Hammour committed to
transfer an additional $50 million to the Development Fund
for Iraq (DFI) in early February and to finalize a list of
pending and paid claims against frozen Iraqi funds so that an
Iraqi team that could travel to Amman -- ideally in
mid-February -- to finalize a review of the claims. In the
meantime, Abu Hammour said he had no choice but to pay out an
additional $15 million in claims to Jordanian banks in early
February, but only in return for a guarantee that money would
be returned to the GOJ if information from the Iraqis showed
it had been erroneously paid. Abu Hammour also promised that
$50 million from the joint SOMO-Jordanian refinery account
would be transferred to the DFI in early February. Post will
hold Abu Hammour to all these commitments, but it is
imperative that the Iraqi side also moves quickly to form the
team and send it to Amman once the needed information is
ready. End Summary.

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Additional $50 million to DFI
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2. (C) Meeting with the Charge and CPA advisor Haydar
al-Uzri January 29, Finance Minister Muhammad Abu Hammour
said that he would transfer another $50 million to the
Development Fund for Iraq account in early February,
following the Eid holiday (the Jordanian government is closed
February 1-4). By early March at the latest, he hoped to be
in a position, after working with the promised Iraqi
government team (see below),to make a final payment that he
now expected to be approximately $150 million.

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List of Claims Nearly Complete
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3. (C) Abu Hammour also provided al-Uzri and the new
Rafidain regional bank manager for Jordan, Hasan Abu-Thar
(phonetic),with a list of the pending claims.
Unfortunately, the list did not identify specific Iraqi
government counter-parties for the claims, which al-Uzri
stressed was necessary information to constitute an effective
Iraqi team. Abu Hammour agreed that Abu-Thar would work with
the Ministry staff in the 2-3 days immediately following the
Eid to add this information to the list. Based on this
information, al-Uzri hoped it would be possible to quickly
assemble an Iraqi team that would come to Jordan to review
pending and paid claims.

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Some Claims May be Paid
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4. (C) Meanwhile, Abu Hammour said that the Jordanian
technical committee had approved 113 new claims for payment
out of Iraqi assets frozen in Jordan, with a value of about
JD11 million ($15.5 million). He said he had held off from
paying these since early December despite enormous pressure
from members of Parliament and businesspeople who "need their
money back" and are "paying interest of 15-18%." Having
stalled for as long as he could, Abu Hammour claimed he had
no choice but to pay the claims after the Eid holiday.
However -- Abu Hammour took great pains to stress -- every
bank that received a payment was required to give the
Ministry a "financial guarantee with collateral" that the
money would be returned immediately upon request of the
Ministry. "At any time," he said, the "Iraqis could have the
money back" if they showed that a payment had been
incorrectly made. Abu Hammour felt that this gave strong
protection to Iraqi and Jordanian interests and also
highlighted the high-standards the Jordanians were applying
in reviewing claims.

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SOMO Account
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5. (C) On the joint SOMO-Jordanian Refinery company
account, Abu Hammour also confirmed that he would instruct
the Jordan National Bank to transfer $50 million of the $77
million in the account to the DFI immediately after the Eid.
The remaining $27 million would be used, as agreed with the
SOMO representative, to settle prior claims against the
account that were consistent with the purposes for which the
account was established.

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Comment
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6. (C) We will keep the pressure on Abu Hammour to see that
the additional information on Iraqi counter-parties is added
to the list of claims quickly immediately after the Eid, and
that the Minister follows through with the two $50 million
transfers to the DFI (bringing the total to $235 million
including the SOMO account). But, at the same time, CPA and
the Iraqis need to act quickly to use the information from
the list to form a team that can come to Amman and speak
authoritatively about individual claims. Abu Hammour
reminded us that he and PM Fayez had told us they could not
refrain from paying claims indefinitely (although, al-Uzri
pointed out, the information needed to form an Iraqi team had
still not been provided in full.) The financial guarantees
provided by the banks seem to protect Iraqi financial
interests, nevertheless, it is vital that this matter be
closed quickly so that it not develop into more of a negative
in the growing Jordanian-Iraqi relationship.
HALE