Identifier
Created
Classification
Origin
07BAGHDAD1992
2007-06-17 16:36:00
CONFIDENTIAL
Embassy Baghdad
Cable title:  

MEETING WITH KRG NEGOTIATOR ROWSCH REGARDING

Tags:  ECON ENRG IZ PREL TU 
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VZCZCXRO7564
OO RUEHBC RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #1992 1681636
ZNY CCCCC ZZH
O 171636Z JUN 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1727
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY
C O N F I D E N T I A L BAGHDAD 001992 

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/16/2017
TAGS: ECON ENRG IZ PREL TU
SUBJECT: MEETING WITH KRG NEGOTIATOR ROWSCH REGARDING
REVENUE MANAGEMENT LAW


Classified By: AMBASSADOR RYAN C. CROCKER FOR REASONS 1.4 (b) and (d).

C O N F I D E N T I A L BAGHDAD 001992

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/16/2017
TAGS: ECON ENRG IZ PREL TU
SUBJECT: MEETING WITH KRG NEGOTIATOR ROWSCH REGARDING
REVENUE MANAGEMENT LAW


Classified By: AMBASSADOR RYAN C. CROCKER FOR REASONS 1.4 (b) and (d).


1. (C) SUMMARY: On June 11, Ambassador Crocker and Deputy
Chief of Mission Speckhard met with Dr. Rowsch Shaways, the
lead KRG negotiator in the effort to prepare a Revenue
Management law that the Council of Ministers can submit to
the Council of Representatives. Dr. Shaways delivered copies
of a draft of the law prepared by the GOI and a KRG draft of
the law to be delivered to the GOI for consideration. He
represented his impression that the KRG and GOI had reached
agreement on the broad principles but that final language had
yet to be agreed upon. Other topics of conversation included
security concerns in the KRG and the impact of recent
confrontations involving Turkish forces and members of the
PKK. END SUMMARY.

REVENUE MANAGEMENT LAW
-------------- ---


2. (C) Dr. Shaways said that during the last round of
negotiations with representatives of the GOI that he and Vice
President Adil Abd al-Mahdi had agreed upon the KRG proposal
on the disposition of revenue surpluses, but that he was
waiting to hear definitively from the Vice President on this
issue.


3. (C) Dr. Shaways noted KRG's concern regarding the
handling of surplus revenues, with the definition of "special
projects" referred to in the current GOI draft as a problem.
He suggested that while such projects could be beneficial to
the country of Iraq, he did not want the GOI to spend so much
money on these projects that it would needlessly diminish the
share of federal revenues to which the KRG and the
governorates would otherwise be entitled.


4. (C) Dr. Shaways identified potential concerns regarding
the "internal account" referred to in the GOI draft as
unimportant, but that a companion provision regarding the
facilitation by the Central Bank of Iraq (CBI) was important.
The KRG, he said wants the CBI to be able to facilitate the
establishment of a KRG account outside of Iraq. He also
stated that, while the KRG could agree to return to the GOI
surplus funds at the end of the year, it was very important
that the KRG play a role in how those surplus revenues would
be spent. Dr. Shaways stated that he had requested a meeting
with Vice President al-Mahdi to discuss the draft laws.


5. (C) The Ambassador noted that it was important to the
KRG, the GOI and to the USG that an agreement be reached soon
in light of the July 15 and September USG reporting
deadlines, and that reaching agreement on a draft of the
Revenue Management law was the best chance of demonstrating
progress. The Ambassador noted that this was understood by
the KRG Prime Minister and that both the KRG and the USG
needed to see agreement on the draft law in order for the USG
to continue its support of the GOI and KRG. (Note: Vice
President al-Mahdi, Advisor to the Prime Minister Dr. Thamir
Ghadban, and Dr. Shaways met with Deputy Chief of Mission
Speckhard on June 12 to address the above issues and prepare
a compromise draft Revenue Management law. The parties
appeared to agree on all issues and text with the exception
of a clause regarding federal expenditures for strategic or
national projects for the benefit of Iraq. The compromise
draft was being circulated to all parties for review. End
Note.)


6. (C) The Ambassador noted that the Kurds and the Shia
must not be perceived as uniting against the Sunnis and that
the Sunnis must play an important role in the government.

TURKISH BORDER ISSUE
--------------


7. (C) Dr. Shaways was asked if the KRG commercial
relationship with Turkey had been damaged by the recent
activities of the Turkish army. He replied that while the
commercial relationship with Turkey had not been impacted,
the people of the KRG were naturally afraid of Turkish army
activities. The Ambassador asked if the KRG could do
anything to curtail the cross-boarder movements of units of
the Kurdistan Workers Party (PKK). Dr. Shaways replied that
the PKK was being supplied by Iran and that there were too
few KRG troops to effectively manage PKK movements across the
boarder with Turkey. The Ambassador noted that it was very
important to show determination to work against PKK
activities in advance of the impending elections in Turkey.
He noted that there was significant pressure in Turkey for
military action in response to PKK activities. Dr. Shaways
noted that Kurdish Region Prime Minister Nechirvan Barzani
was scheduled to meet with a representative of the Turkish
Parliament to discuss these issues on June 20 and 21.
CROCKER