PSI: SHIPOWNERS ALMOST THERE, FOCUS SHIFTS TO MFA

C O N F I D E N T I A L ATHENS 000303

SIPDIS

SIPDIS

ISN/CPI JANE PURCELL, L/OES ASH ROACH

E.O. 12958: DECL: 02/09/2017
TAGS: MNUC PARM PREL PHSA EWWT KNNP KTIA GR
SUBJECT: PSI: SHIPOWNERS ALMOST THERE, FOCUS SHIFTS TO MFA

REF: ATHENS 175

Classified By: AMBASSADOR CHARLES RIES. REASONS 1.4 (B) AND (D).


1. (C) SUMMARY: In a February 9 meeting with Ambassador,
Union of Greek Shipowners (UGS) President Nikos Efthymiou
expressed a desire to conclude a U.S./Greece shipboarding
agreement as soon as possible, said the UGS had not been
consulted on the latest text provided to the Embassy by the
MFA (reftel),and agreed in principle on the May 13, 2006,
draft of article 13 with the request that the U.S. provide in
a separate letter or MOU language explaining normal U.S.
practice to treat injuries or damages to U.S. personnel and
equipment as self-insured. Efthymiou promised to convey to
the MFA that UGS concerns on liability had in principle been
resolved but warned that the MFA might be hung up on
third-party arbitration language out of concern for
Parliamentary-opposition reaction to a shipboarding agreement
with the U.S. END SUMMARY.

GREEK PARTICIPATION BOOST FOR PSI
--------------


2. (C) During the meeting, also attended by UGS legal counsel
Anna Bredima-Savopoulou, Ambassador stressed to Efthymiou the
importance of concluding a PSI shipboarding agreement as soon
as possible, both because of its importance in support of
U.S. and Greek shared commitment to stop possible shipment of
WMD and because concluding an agreement with Greece -- one of
the world's largest commercial maritime powers -- would
provide a boost to the PSI program. Ambassador noted recent
U.S. conclusion of agreements with Cyprus and Malta and
stressed the advantages that a shipboarding agreement would
have for Greek shipowners, including provision for GoG veto
of any U.S. boarding of a Greek vessel provided the GoG
responded within the required two-hour timeframe. Ambassador
also expressed bewilderment and disappointment at the January
24 MFA text, which appeared to be practically a restatement
of the Greek position of a year ago and did not reflect the
results of negotiations last spring or Efthymiou's visit to
Washington last May. In particular, the MFA text did not
build on the provisionally agreed text of May 11, 2006.

UGS "NOT CONSULTED" ON LATEST TEXT
--------------


3. (C) Efthymiou claimed the shipowners had not been
consulted on the recent text provided to the Embassy by the
MFA and said that the UGS believed it was "almost there" on
an agreement last May during Efthymiou's visit to Washington.
The agreement was not concluded then, however, because,
first, the UGS had introduced a hold-harmless clause to
protect Greek owners and seamen from legal responsibility for
any damage or injury incurred by U.S. security forces to
which the U.S. side would not agree and, second, because the
GoG itself was not ready to finalize an agreement. Efthymiou
said he believed there continued to be concerns in the GoG
about how Parliamentary opposition PASOK would react to a
shipboarding agreement concluded with the U.S. that did not
contain provisions for enforcement of liability claims by an
outside, third party.

ALMOST THERE
--------------


4. (C) Efthymiou, nevertheless, said the UGS understood U.S.
concerns about binding arbitration, and there was "no
question" the UGS wanted to tie up the agreement as soon as
possible. After Ambassador explained U.S. opposition to
inclusion of a hold-harmless clause in the May 2006 draft
since it would a priori absolve Greek shipowners and
operators of responsibility for possible criminal acts,
Efthymiou said the UGS was willing to drop insistence on a
hold-harmless clause if the U.S. side would consider
providing a letter or MOU (possibly referenced in the
preamble) that explained normal U.S. practice to treat
damages U.S. forces might suffer as self-insured. Legal
counsel Bredima-Savopoulou also requested that, at the advice
of their London lawyers, an inclusion of the word "negligent"
be included somewhere in the text. (NOTE: Although we did
not/not discuss placement of the word with
Bredima-Savopoulou, we believe it might fit in the first
sentence of paragraph two modifying actions subject to
administrative procedures, after the word "improper." Thus,
the sentence would read: "Any other claim for damage, harm,
injury, death, or loss which is suffered by the Security
Forces of the Boarding Party in contravention of this
Agreement, or as the result of any improper, "negligent," or
unreasonable action taken by that Party, may be settled
through any administrative procedure available to the
claimant." END NOTE.)


5. (C) Ambassador deferred to Washington's judgment on
precise wording of the text but said he thought it would be
possible to include the word "negligent." Ambassador also
commented that it may be possible to provide a letter or MOU
explaining U.S. policy on self-insurance of damages, but he
expressed concern about reference to such a letter or MOU in
the shipboarding agreement preamble due to the possible
political optics in the Greek Parliament. Efthymiou and
Bredima-Savopoulou did not contest this reasoning.

NEXT STEPS
--------------


6. (C) Ambassador said he would consult further with
Washington on UGS outstanding concerns, and
Bredima-Savopoulou said she would consult with MFA legal
advisor Fani Livada. Following these consultations,
Ambassador would respond formally to the MFA on its January
24 text. Efthymiou said he had "no problem" with Ambassador
telling the MFA that the UGS and the Embassy had discussed
outstanding issues.

RIES