Identifier
Created
Classification
Origin
05BAGHDAD4107
2005-10-04 17:49:00
CONFIDENTIAL
Embassy Baghdad
Cable title:  

UPDATE ON SYRIAN RETURN OF IRAQI ASSETS

Tags:  EFIN PREL SY IZ 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L BAGHDAD 004107 

SIPDIS

NSC FOR ABRAMS/DORAN/POUNDS TREASURY FOR GLASER/LEBENSON;
EB/ESC/TFS FOR SALOOM; NEA/I/ECON

E.O. 12958: DECL: 10/04/2015
TAGS: EFIN PREL SY IZ
SUBJECT: UPDATE ON SYRIAN RETURN OF IRAQI ASSETS

REF: DAMASCUS 4765 (NOTAL)

Classified By: DCM David M. Satterfield for reasons 1.4 (b) and (d).

C O N F I D E N T I A L BAGHDAD 004107

SIPDIS

NSC FOR ABRAMS/DORAN/POUNDS TREASURY FOR GLASER/LEBENSON;
EB/ESC/TFS FOR SALOOM; NEA/I/ECON

E.O. 12958: DECL: 10/04/2015
TAGS: EFIN PREL SY IZ
SUBJECT: UPDATE ON SYRIAN RETURN OF IRAQI ASSETS

REF: DAMASCUS 4765 (NOTAL)

Classified By: DCM David M. Satterfield for reasons 1.4 (b) and (d).


1. (C) Emboff met Dr. Saladin H. Al-Hadithi, Director
General, Iraqi Fund for External Development (DFI),Ministry
of Finance, October 4 for his take on his recent trip to
Damascus to discuss the current status of Iraqi funds in
Syrian banks (reftel; Saladin headed the GOI team). The main
purpose of his trip had been to better understand why and to
whom the Commercial Bank of Syria (CBS) had decided to pay
out $463.2 million of Iraqi assets without GOI consultation.
$266 million was given to Syrian public sector claimants and
$237.7 million to Syrian private sector claimants (total of
$503.8 million). Syria, for reasons still unclear, pulled
back $39.9 million from the initial payout and transferred it
to the Iraq DFI ($503.8-39.9=$463.1 million). The Syrians
also flagged another $800 million claims by Syrians on Iraq.
Saladin was skeptical on this number. He asked what Syria
would have, that Iraq would pay $800 million for.


2. (C) Saladin noted that while the GOI was pleased with the
August 5 transfer of $261 million, he was concerned with the
missing/unaccounted $463.1 million that the CBS had already
given away. Saladin sent a note to the Syrians expressing
concern over the $463.1 million and requested a follow-up
meeting so that the two sides could review all these
payments. Saladin said that if this cannot be settled at his
level, then it would go to the respective countries Ministers
of Finance. If this doesn't work, Iraq is prepared to have
third party mediation or arbitration. He said that this
procedure had been agreed upon by both sides in a July 21
memorandum of understanding signed by the Iraqi Minister of
Oil and the Syrian Minister of Finance (Saladin declined to
provide a copy). He noted that the MOU did not contain any
deadlines, so he expected that it would take some time to
resolve. Nonetheless, he expected that there would be another
round of bilateral talks soon, probably in Damascus.


3. (C) Comment: Saladin was quite adamant about the $503.8
million cited above and not the $580 million pay out figure
cited in reftel. While not directly related to his meetings
last month in Damascus, he told us that Syrian-Lebanon Bank
in Beirut transferred this summer $71 million to the DFI (in
three tranches: $45 million, $15 million and $11 million).

Khalilzad