LIBYA: SECTION 565 WAIVER OF PROHIBITION AGAINST CONTRACTING

UNCLAS TRIPOLI 001055

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR NEA/RA

E.O. 12958: N/A
TAGS: KBCT PHUM AL ABLD ECON AMGT ASUP AFIN PREL LY
SUBJECT: LIBYA: SECTION 565 WAIVER OF PROHIBITION AGAINST CONTRACTING
WITH FIRMS COMPLYING WITH AL BOYCOTT

REF: A) STATE 166398, B) 06 TRIPOLI 623, C) TRIPOLI 972


1. (SBU) The Government of Libya (GOL) does not maintain
diplomatic relations with Israel. Local firms are required by
national law to comply with the boycott, and would therefore not
be able to sign the required U.S. certification without exposing
themselves to civil and/or criminal penalties. Post accordingly
requests a waiver of of the Arab League boycott certification.


2. (SBU) Post continues to raise the Arab League boycott issue
in its meetings with the Ministry of Foreign Affairs and the
Ministry of Economy and Trade. Most recently, in the fall, the
Charge' pressed the MFA's Secretary for the Americas on the
issue, noting that AL boycott language in Libyan contracts would
undermine GOL efforts to attract U.S. business. The MFA
official replied that the GOL and private entities are compelled
by Libyan law stemming from the AL resolution to include
language requiring compliance with the AL boycott


3. (SBU ) The Ministry of Trade and Economy informed Post that
the GOL does not enforce the boycott. While this may be GOL
policy, as a practical matter boycott language continues to
appear in contract language, and is sometimes enforced,
sometimes not. As detailed ref C, for example, a U.S. company
was presented with a draft contract by Libya's National
Procurement Authority (NPA) containing language requiring the
company to acknowledge that it observed a comprehensive boycott
of Israel. The language was expansive, barring any business
contact with or investment in Israel, and requiring the U.S.
company to abide by all laws and decisions related to the AL's
boycott action. Representatives of the U.S. company refused to
sign the contract; the NPA subsequently removed the
boycott-related language in its entirety. To reinforce the
decision and avoid potential misunderstanding, the parties
agreed on and signed an English-only iteration of the contract.
In an additional example, two German firms were reportedly asked
to sign letters attesting that they were in compliance with the
anti-Israel boycott as a pre-condition for securing required GOL
stamps on export documents from the Libyan People's Bureau in
Berlin (Libyan Embassy-equivalent).

STEVENS