Identifier
Created
Classification
Origin
06BAGHDAD1568
2006-05-12 13:08:00
CONFIDENTIAL
Embassy Baghdad
Cable title:  

IRAQ: IMPLEMENTATION OF ARAB LEAGUE BOYCOTT

Tags:  KBCT EINV ECON PGOV PREL ABLD IZ 
pdf how-to read a cable
VZCZCXYZ0016
OO RUEHWEB

DE RUEHGB #1568/01 1321308
ZNY CCCCC ZZH
O 121308Z MAY 06
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4396
INFO RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
C O N F I D E N T I A L BAGHDAD 001568 

SIPDIS

SIPDIS

STATE PASS TO NEA, EB, L, TREASURY, COMMERCE/BIS/OAC, AND
USTR

E.O. 12958: DECL: 05/11/2016
TAGS: KBCT EINV ECON PGOV PREL ABLD IZ
SUBJECT: IRAQ: IMPLEMENTATION OF ARAB LEAGUE BOYCOTT
STATUTES

REF: A. SECSTATE 66895 B. BAGHDAD CLASSIFIED O-I:

4/5/2006 C. BAGHDAD SBU O-I: 4/25/2006 D.
BAGHDAD SBU O-I: 11/28/2005 E. BAGHDAD
CLASSIFIED O-I: 1/26/06 F. 2006 BAGHDAD 765

G. 2005 BAGHDAD 3411 H. BAGHDAD CLASSIFIED
O-I: 1/24/06

Classified By: Deputy Chief of Mission David M. Satterfield for reasons
1.4 (b) and (d)

C O N F I D E N T I A L BAGHDAD 001568

SIPDIS

SIPDIS

STATE PASS TO NEA, EB, L, TREASURY, COMMERCE/BIS/OAC, AND
USTR

E.O. 12958: DECL: 05/11/2016
TAGS: KBCT EINV ECON PGOV PREL ABLD IZ
SUBJECT: IRAQ: IMPLEMENTATION OF ARAB LEAGUE BOYCOTT
STATUTES

REF: A. SECSTATE 66895 B. BAGHDAD CLASSIFIED O-I:

4/5/2006 C. BAGHDAD SBU O-I: 4/25/2006 D.
BAGHDAD SBU O-I: 11/28/2005 E. BAGHDAD
CLASSIFIED O-I: 1/26/06 F. 2006 BAGHDAD 765

G. 2005 BAGHDAD 3411 H. BAGHDAD CLASSIFIED
O-I: 1/24/06

Classified By: Deputy Chief of Mission David M. Satterfield for reasons
1.4 (b) and (d)


1. (C) Summary. In response to the Department's request for
information regarding Iraq's practices to harmonize
implementation of U.S. laws (ref A),Post provides the
following summary of previous reporting on the Arab League
Boycott (ALB). Although Iraq's enforcement of the ALB is
inconsistent and ad hoc, Iraq does have an Arab League
Boycott Office in the Ministry of Foreign Affairs and a
boycott law from 1956 that remains on the books. Post will
engage the incoming government regarding this issue. End
summary.

--------------
PARTICIPATION/COOPERATION WITH THE ALB
--------------


2. (C) Ref A asked Post to determine whether Iraq requires
participation in or cooperation with the ALB or other
international boycotts. We determined that there has been
sporadic enforcement of the secondary aspects of the ALB by
some Iraqi ministries. Most cases have been resolved, but
Post is aware of two current unresolved cases.


3. (C) Pepsi has been trying to register its trademark since
2003 at the Ministry of Industry's Trademark Office. In
November 2005, Pepsi made another follow-up visit to the
Trademark Office but was still unable to register its
trademark because, despite CPA Order 80's suspension of ALB
provisions in Iraq's trademark law, the Trademark Office's
procedures ask for an Arab Boycott Declaration. New
information (ref B) indicates, however, that the Ministry of
Industry and Minerals (MIM) is developing operating
instructions for the Trademark Office that omit explicit

reference to the Arab League Boycott. MIM plans to present
these instructions to the Council of Ministers Economic
Committee for a decision shortly. However, given that the
government is in a state of transition, it is unclear how
long it will take the committee to act once MIM has presented
it with the new instructions.


4. (SBU) Post recently learned of a second case of secondary
enforcement of the ALB (ref C) involving problems that Eli
Lilly USA is having with Kimadia, a Ministry of Health (MoH)
state-owned enterprise and main drug supplier in Iraq.
Kimadia has barred Lilly's participation in a recent $10
million insulin tender because Eli Lilly does business with
Israel. Post will raise this issue with the new Minister of
Health at the earliest opportunity, once government formation
is complete.


5. (SBU) General Electric has resolved enforcement problems
with the Ministry of Oil relating to one of its supply
contracts. Although the Ministry of Oil initially insisted
on including ALB language in the contract, it later agreed to
remove the language (ref D). In November 2004, the Ministry
of Trade published several decisions adding or removing ships
to/from an ALB blacklist of ships banned from Iraqi ports
because they had docked in Israel. This appeared in the
Official Gazette, but Post is unaware of any similar list
having been published since 2004.

-------------- --------------
STATUS OF SUPPLIERS OR VENDORS COMPLYING WITH ALB
-------------- --------------


6. (SBU) Post requested a waiver for 2006 of Section 565 of
the Foreign Relations Authorization Act, Fiscal Years 1994
and 1995 (Public Law 103-236) (ref E, Note: This O-I item is
SBU, but was sent with the BAGHDAD Classified O-I on
01/26/06). Section 565 prohibits the Department of State
from entering into any contract which expends funds
appropriated to the Department of State with a foreign person
that complies with the Arab League Boycott of Israel. Post
requested this waiver as a precautionary matter, given the
unsettled status of ALB implementation in Iraq, to ensure
that there is no obstacle to carrying on diplomatic functions
of the embassy.

--------------

EXISTENCE OF BOYCOTT LAW IN IRAQ
--------------


7. (SBU) Post provided the Department with a copy of Iraq's
boycott law in April 2005 via e-mail to NEA/I and L. This
basic law for ALB implementation in Iraq is officially known
as Law No. 34 of 1956 ratifying the Unified Law on the
Boycott of Israel Regulations. CPA Orders 39 and 80
effectively repealed ALB provisions in the areas of company
registration and trademark registration but did not directly
touch upon Law No. 34.

--------------
EXISTENCE OF AN ARAB LEAGUE BOYCOTT OFFICE
--------------


8. (C) Iraq's Arab League Boycott Office is located in the
Ministry of Foreign Affairs (MFA) (ref F). This office
employs four or five individuals and is part of the MFA's
Arab League Office. The Director of the Arab League Boycott
Office is Hikmat Alani. The MFA's Boycott Office is the
primary conduit for boycott-related information between the
ALB main office in Damascus and other ministries. In a
meeting March 2, 2006, Hikmat told EmbOffs that the MFA
merely transmits requests for verification from Iraqi
ministries to the ALB office in Damascus. Enforcement is
left up to the ministries.

-------------- --------------
STEPS THE GOI HAS TAKEN TO CORRECT ALB ENFORCEMENT
-------------- --------------


9. (C) The GOI has resolved several cases of ALB
enforcement, including the removal of ALB language in General
Electric's contract (as referenced in para 5). In addition,
companies that have business relationships with Israel,
including Royal Jordanian Airlines, General Electric, and
Caterpillar, do operate in Iraq without legal hindrance.
Also, HSBC, which opened branches in Iraq last year, has
branches in Israel as well. However, there has been little
follow-through in the unresolved trademark issue involving
Pepsi, despite at least seven meetings with the GOI on this
issue. In one instance, Trade Minister Abd al-Basit Kareem
(ref G) noted he would send instructions requesting
non-enforcement of the ALB to the Council of Ministers (CoM),
but he failed to provide Post a copy of these instructions or
to inform the Embassy of the CoM decision on this issue.
This issue has been raised by the Ambassador and Deputy Chief
of Mission with the highest levels of the GOI during the past
year (ref H),but there has been little follow-through on the
part of the GOI. Most recently (ref B),as noted in para 3
above, the MIM has taken some steps to draft operating
instructions to omit references to the Arab League Boycott.
Post plans to keep engaging the GOI on the Pepsi trademark
issue, as well as on the newly reported problems that Eli
Lilly is having with Kimadia and the Ministry of Health.
KHALILZAD