Identifier
Created
Classification
Origin
06KUWAIT4609
2006-12-10 09:38:00
CONFIDENTIAL
Embassy Kuwait
Cable title:  

FINANCE MINISTRY TALKS TAXES, AID, AND DIALOGUE

Tags:  PGOV PREL EFIN BEXP ETRD IZ KU 
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PP RUEHDE RUEHDIR
DE RUEHKU #4609/01 3440938
ZNY CCCCC ZZH
P 100938Z DEC 06
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 7827
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0757
RUEHDM/AMEMBASSY DAMASCUS PRIORITY 3047
RUEHFR/AMEMBASSY PARIS PRIORITY 1041
RUEHJM/AMCONSUL JERUSALEM PRIORITY 1298
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004609 

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/09/2011
TAGS: PGOV PREL EFIN BEXP ETRD IZ KU
SUBJECT: FINANCE MINISTRY TALKS TAXES, AID, AND DIALOGUE
WITH IRAN

REF: A. STATE 192459

B. KUWAIT 4584

Classified By: Economic Counselor Tim Lenderking for reasons 1.4 (b) &
(d).

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004609

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/09/2011
TAGS: PGOV PREL EFIN BEXP ETRD IZ KU
SUBJECT: FINANCE MINISTRY TALKS TAXES, AID, AND DIALOGUE
WITH IRAN

REF: A. STATE 192459

B. KUWAIT 4584

Classified By: Economic Counselor Tim Lenderking for reasons 1.4 (b) &
(d).


1. (C) Summary. On December 9, Econcouns met with acting
Assistant Undersecretary of Finance Khalid Al-Rubeian to
discuss Kuwait's new draft tax law, the December 7
designations by the United States of three Kuwaitis for
support to Al-Qaida, and assistance to the Palestinians.
Al-Rubeian said the tax law is still with the Council of
Ministers and has not yet been submitted to Parliament, and
welcomed USG comments on the draft. He said two of the three
Kuwaitis designated for terrorist activity were "well-known
radicals." Al-Rubeian said all GOK assistance to the
Palestinians is channeled through the Islamic Development
Bank, which is responsible for monitoring usage of the funds,
and controls were tight to ensure funds were used for the
purposes stated. Remarking on the just-released Iraq Study
Group report, Al-Rubeian said U.S. dialogue with Iran and
Syria would help calm tensions in the region. End Summary.

Help on Taxes
--------------


2. (SBU) On December 9, Econcouns and Econoff (notetaker)
met with acting Assistant Undersecretary of Finance Khalid
Al-Rubeian. Ishaq Abdulkarim, Director of the Ministry of
Finance's International Economic Cooperation Department, also
attended the meeting. Al-Rubeian was appointed to his
position on December 3 following the resignation of Mustafa
Al-Shammali, but was unsure if he would remain in the
position permanently. He expected a decision to be made in
the near future.


3. (SBU) Reading from a November 30 internal Finance
Ministry memo, Al-Rubeian said the new draft tax law is
currently with the Council of Ministers and has not yet been
presented to Parliament. Al-Rubeian said USG comments on the
draft would be welcome. Econ/C noted the importance of the
tax issue to the American business community in Kuwait and

stressed USG hoped that the law follow OECD norms for taxing
foreign companies. Post will coordinate with Washington
agencies for comment on the draft law.

Terror Designations
--------------


4. (SBU) Econcouns noted the December 7 decision by the USG
to designate five individuals (Ref A),three of whom are
Kuwaiti, for their support of Al Qaida. The designations
received some local media coverage on December 9, and both
Al-Rubeian and Abdulkarim were aware of the action.
Abdulkarim commented that Hamid Al-Ali and Jaber Al-Jalamah
were "well-known radicals," but neither man knew of Mubarak
Mushakhas Sanad Al-Bathali. They offered no further comment.

Aid to the Palestinians
--------------


5. (SBU) Econcouns expressed USG appreciation for continued
GOK financial assistance to Iraq, Lebanon, Yemen, and the
Palestinians (Note: On October 31, the GOK announced
additional $30 million in assistance to the Palestinians,
coupled with $50 million announced last August. End Note).
Econcouns asked specifically how the GOK ensured that funds
destined for the Palestians did not end up in the hands of
Hamas. Al-Rubeian noted that the Kuwait Fund is the lead
agency for Kuwait foreign assistance, and said all GOK
assistance to the Palestinians is channeled through the
Islamic Development Bank (IDB),which is responsible for
monitoring its usage and disbursal. He said the Kuwait Fund
has offices and personnel in Lebanon and other countries
through which it can directly monitor Kuwaiti aid, but there
are no offices or personnel in the Palestinian territories.
Al-Rubeian noted Kuwait's preference to use the IDB for aid
to the Palestinians. He said GOK funds are used only for
audited, named projects and not disbursed in cash.
Al-Rubeian said he would forward details about GOK assistance
to Post.

Dialogue with Iran and Syria
--------------


KUWAIT 00004609 002 OF 002



6. (C) Al-Rubeian raised the recently-released Iraq Study
Group report, arguing that a dialogue between the U.S. and
Syria and Iran would be a step in the right direction in
reducing regional tensions. He argued in particular that by
engaging Iran directly the U.S. would undermine Iran's
ability to demonize the United States as an aggressor nation.
He said the Iranian regime played "the Great Satan card" to
promote internal cohesion in Iran and distract Iranians from
focusing on their own woes. Abdulkarim concurred, relating
that while visiting Iran in 2005 he was struck by the misery
of most Iranians; he said Iranians are eager to get out from
under the yoke of radical clerics.

Expanding France-Kuwait Ties
--------------


7. (SBU) Exiting the meeting, Al-Rubeian noted that the
Finance Minister had accompanied the Amir on his recent visit
to France. Al-Rubeian noted that the French were very
cognizant of Kuwait's historic ties to Britain and the U.S.
"and the English-speaking world" and were keen to expand ties
to Kuwait. Al-Rubeian said the French had done some strong
lobbying on Airbus during the visit but did not have details.
In press reports, the Amir signaled Kuwait's interest in an
open and fair tendering process and that the final selection
of aircraft will be based on Kuwait Airway's needs assessment
regarding route expansion and competitive factors. (Note:
See Ref B for further discussion the Amir's visit to France.
End Note.)

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For more reporting from Embassy Kuwait, visit:
http://www.state.sgov.gov/p/nea/kuwait/?cable s
Visit Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait/
********************************************* *
LEBARON