AMBASSADOR MEETS WITH ICAO'S TCB DEPUTY DIRECTOR ON

UNCLAS MONTREAL 000572 SIPDIS SENSITIVE SIPDIS FROM USMISSION ICAO DEPT FOR IO/T, EB/TRA, NEA/RA, AND NEA/ARN FAA FOR BOGOSIAN AND FELDMAN E.O. 12958: N/A TAGS: EAIR ETRD ECON PREL ICAO CA SY UNDP SUBJECT: AMBASSADOR MEETS WITH ICAO'S TCB DEPUTY DIRECTOR ON SYRIAN ARAB AIRLINES This cable is Sensitive but Unclassified. Please handle accordingly. ¶1. (SBU) Summary and Action Request (para 9): The Deputy Director of ICAO's Technical Cooperation Bureau (TCB) Bachar Hakim, visited the Ambassador on May 17, 2006 to inform him of TCB's recommendations to Syrian Arab Airlines on the replacement of ten aging Boeing aircraft, which are currently grounded. This cable reports on the status of this project and seeks instructions from the Department. ¶2. (SBU) On May 17, 2006, Bachar Hakim, Deputy Director of ICAO's TCB visited Ambassador Bliss in the U.S. Mission. Mr. Hakim is a Canadian citizen of Syrian descent who will be retiring from ICAO probably in July 2006. Mr. Hakim is experienced, articulate and forthcoming. ¶3. (SBU) Mr. Hakim reported on the status of a TCB project in Syria, involving Syrian Arab Airlines, which is owned by the government but operates on a commercial basis. The TCB project is entirely funded by the Syrian Government which involves technical advice from TCB and UNDP. TCB and UNDP are paid a fee for their technical advice as a percentage of the contract. TCB receives three percent of the contract price. ¶4. (SBU) Syrian Arab Airlines (Syrian Air) has operated a fleet of approximately 22 aircraft, of which ten aging Boeing 727's and 747's have now been grounded for safety reasons. Syrian Air would like to replace the grounded aircraft with either Airbus or Boeing aircraft. It likely will be Airbus aircraft since most of the remaining active fleet consists of A-320's and A-340's. Because of U.S. laws and regulations on exports to Syria, to which ICAO adheres, Syrian Air has been advised that the purchase or lease of Airbus or Boeing aircraft would require suppliers to obtain an export license from the United States. A license would be required for a "dry lease" (where the aircraft is operated by Syrian air) or a "wet lease" (where the aircraft is operated and maintained by a third party). However, Syrian Air has been further advised that if a "wet lease" is provided in accordance with nine conditions that meet the requirements of the "Export Administration Regulations, Part 740.15, License Exception", then an export license would not be required. Such operating conditions include, among others, complete operational control of the aircraft by the supplier, no change in routes without supplier consent, and no maintenance within Syria. ¶5. (SBU) Accordingly, TCB has recommended that Syrian Air "wet lease" up to six aircraft from a third party for a period of nine months to one year. At the same time, its supplier would initiate the U.S. export license process for a "dry lease" of replacement aircraft. At the end of the "wet lease" contract, Syrian Air would either continue the "wet lease" or, if the export license is approved, "dry lease" the aircraft from the supplier, presumably Airbus. Syrian Air also is exploring the purchase of Russian aircraft, which is being aggressively promoted by the Russian Government. ¶6. (SBU) Mr. Hakim points out that in the 2002-2004 time period, TCB worked with Syria in providing for international expert training and the procurement of firefighting equipment from two U.S. companies, Oshkosh and Emergency One, for which export licenses were obtained. In addition, Boeing has routinely obtained on an ongoing basis export licenses to provide spare parts for Syrian Air's Boeing aircraft. ¶7. (SBU) Mr. Hakim also noted that in a recent meeting, the Syrian Minister of Transport recommended that Mr. Hakim meet with Syrian President Assad. If and when such a meeting is arranged, Mr. Hakim offered to serve as a conduit for any message the USG wished to convey either on this issue or any other. Ambassador Bliss passes this information along without comment. ¶8. (SBU) On another but related issue, Mr. Hakim noted that on request from the Government of Cuba, TCB is assisting the Instituto de Aeronautica de Cuba (IACC) in the procurement of 4 MA-60 turbo prop aircraft manufactured by China. ICAO's role is limited to reviewing technical specifications on the aircrafts' civilian use, assisting the supplier in the preparation of export license applications (the aircraft has more than 10 percent U.S. components) and following up with a letter from ICAO Council President Kotaite seeking a favorable answer on the applications. The applications have been submitted to the Department of Commerce. ¶9. Action requested: Please advise whether further information is required and whether Ambassador Bliss should respond to Mr. Hakim on the issues raised in the meeting, and if so, what his response should be. Bliss/Marshall