SIGNIFICANT PROBLEMS AT IRAQI PORTS OF ENTRY

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 004576

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/04/2016
TAGS: ECON ETLN EWWT EAGR ETRD PGOV IZ
SUBJECT: SIGNIFICANT PROBLEMS AT IRAQI PORTS OF ENTRY

Classified By: Edward W. Kloth, Acting Economic Minister
Counselor, for reasons 1.4 (b) and (d)


1. (C) Summary. The GOI is plagued by what seems a never
ending stream of problems involving imports of vitally needed
goods from petroleum products to grain. Smugglers, including
terrorists and militias, seem to have little difficulty
bringing people and weapons into the country. The Ports of
Entry (POE) system in Iraq is poorly managed, and corruption
is a major impediment to the passage of goods into Iraq. The
problems are legion, including inadequate and ineffective
control over cross border human and commercial traffic, and
multiple layers of corruption by officials, militias and
local political parties. There is no apparent central
government control of the system. Solving the systemic
problems will require considerable political authority that
is beyond the national government's power for the foreseeable
future. End Summary

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Who's in Charge
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2. (C) The organization of the existing Iraqi border
operations appear designed for failure and abuse. No central
national control over POEs exists. Authority over land Ports
of Entry (POE) resides in the Ministry of the Interior (MOI).
The Ministry of Transportation (MOTrans) has authority over
the sea and air POEs. Customs occupies space inside the
facilities of the ministry (MOI or MOTrans) in control of the
POE. As far as can be determined, Baghdad headquartered
ministries exercise no authority over customs/POE operations
in KRG administered northern Iraq. In most cases, but not
all, the MOI has the authority to hire and fire the
non-Kurdish POE director. In some cases, but not all, the
Baghdad headquarters of the General Commission for Customs
(GCC) has the authority to hire and fire the non-Kurdish
Customs POE directors. In most cases, ministries
headquartered in Baghdad have control over POEs in the
central region of Iraq, but have less control of POEs than
the local governor or mayor in Shiite areas in southern Iraq.
MOTrans has taken control of the sea POEs to extent that it
hires and fires Customs and Border Police (CBPolice) officers
inside the ports.

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Golconda of Cash
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3. (C) A POE is often the largest employer and non-oil income
generator in a particular governorate or town. The local
mayor or governor therefore usually assert considerable
influence over the staffing and practices of "their" POE.
Many POE employees are either members or the local militia or
tribe or both, and in the border areas the local
militia/tribe engages in cross-border smuggling.
Consequently having a militia/tribe member at the POE
provides: 1) income from salaries though salaries are low,
2) facilitation of smuggling activities, and 3) funds for the
local militia or political parties from a share of the bribes
extracted from other shippers or civilians.


4. (C) Even if the POE staff wanted to do so, border
facilities are ill-equipped to exercise effective control
over traffic because most facilities are not compliant with
minimal requirements (with the exception of Habur Gate and
other areas in northern Iraq) for such duties. Loading and
inspection docks are non-existent and inspections are
cursory. X-ray scanners at commercially operable POEs are
often deliberately "out-of-service" or lack the necessary
electricity. Manifest data is poor. Weigh scales and
inspection pits are non-existent. No formal structure for
broker offices exists. There is no formal badge system or
control of non-official people working in the POE. Officials
wear no uniforms. There is poor control of vehicular traffic
and human flow. Facilities and sanitation (with some
exceptions) are very poor.

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Fee for All
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5. (C) Officially a 5% customs levy is believed to be
collected everywhere, although no data is available from
northern Iraq. A parking or trans-shipment fee may be
occasionally charged. An additional 5% fee is charged in
POEs located in southern Iraq and is retained by the local
governor/mayor. Brokers negotiate with Customs officials
what will be paid for a shipment. Unofficially cash may be
demanded or offered upon entering a POE, at the 3-5 paperwork

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"checkpoints" inside the POE, for what are in any case
cursory inspections. Passports are often returned only after
money is paid. Under the Iraqi system customs officials are
allowed to retain 40% of confiscated "illegal" goods leading
to further abuses in the POE system.


6. (C) Such "unofficial" fees are inevitable because POE
budgets do not seem to be distributed to POEs for management
and maintenance. At a minimum, the budgeted amounts are
inadequate. POE directors are forced to obtain funds to
operate their POEs; however, it does not appear that much, if
any, of these funds are actually used for facilities
maintenance. (Note: Significant USG funds have been spent
for basic border facilities and equipment over the last two
years, but without regular maintenance, equipment inevitably
deteriorates and becomes inoperable. End Note.)

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No Good Deed Goes Unpunished
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7. (C) It has been reported that individuals who have tried
to make a difference and do their jobs have had family
members threatened, kidnapped, or simply disappeared. The
former Acting Customs Director General and his driver were
assassinated in June 2006 while driving to work. The current
Customs Director General's two sons were subjects of an
attempted (though failed) kidnapping. The pervading feeling
in the POEs is fear.

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The Way Forward
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8. (C) Comment. Internationally recognized best practices
(inspections, personnel control, etc. exist for each issue in
the current POE system. An interagency group, the Border
Security Enhancement Working Group (BSEWG),led by the
Department of Homeland Security, is currently addressing the
challenges of border control in Iraq. The BSEWG is working
with the GOI to have a strategy defined by May 2007. It has
also been reported that the Prime Minister's office is
currently exploring the possibility of creating a Port
Authority to manage the sea and air POEs. Although more
training would be useful, it would be a waste of time and
money, if the newly trained POE employees are not permitted
to use this training on the job. Infrastructure fixes and
process changes are simple and well known to professionals
inside Iraq, but corruption and incompetence throughout the
organizations involved, combined with the GOI's limited
authority outside the capital make it unlikely needed changes
can or will be made any time soon. End Comment.
KHALILZAD