ANTI-ISRAEL BOYCOTT INCIDENT WITH LIBYAN NATIONAL

C O N F I D E N T I A L TRIPOLI 000972

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/18/2017
TAGS: KBCT ECON ELTN PREL PGOV EINV LY
SUBJECT: ANTI-ISRAEL BOYCOTT INCIDENT WITH LIBYAN NATIONAL
PROCUREMENT AUTHORITY

REF: 10/07 MILLER-MASON-DAVISON EMAILS CLASSIFIED BY: Chris Stevens, DCM, Embassy Tripoli, Department of State. REASON: 1.4 (b),(d)

1.(C) Summary: A U.S. company was recently presented with a Libyan government contract containing Israel boycott language. The U.S. company refused to sign the contract and ultimately succeeded in having the language removed, facilitating completion of the deal. End Summary.

2.(C) In the process of negotiating a multi-million dollar spare parts contract with U.S. company Oshkosh Trucks (of Oshkosh, WI),Libya's National Procurement Authority (NPA) presented a draft contract containing language requiring a comprehensive boycott of Israel. The language was expansive, barring any business contact with or investment in Israel, and calling on the U.S. company to abide by all laws and decisions related to the Arab League's (AL's) boycott action. Oshkosh representatives refused to sign the contract and walked away from the deal. After doing so, they contacted post and met with Econoff to discuss options. Econoff confirmed Oshkosh's judgment that it could not legally sign a contract containing such language, nor could it empower an agent do so on its behalf. Econoff also reminded Oshkosh of its obligation to report the incident to the Department of Commerce.

3.(C) In the end, Oshkosh's hard line did not scuttle the deal. Just hours before they were due to depart the country, the team was called back to the bargaining table by the NPA and was informed that the offensive language had been removed in its entirety. To reinforce the decision and avoid potential for subsequent misunderstanding, the parties agreed on and signed only an English-language version of the contract (i.e., without a signed Arabic translation).

4.(C) Charge d'Affaires subsequently raised the issue with MFA Secretary for the Americas Dr. Ahmed Fituri, stressing that such SIPDIS contract stipulations would undermine GOL efforts to attract U.S. business. (Note: Senior GOL officials have repeatedly expressed disappointment that more U.S. firms are not rushing to re-enter the Libyan market. End note.) Fituri responded that the GOL and private entities are compelled by Libyan law stemming from the AL resolution to include such language. Drawing a comparison between the "unilateral" American imposition of sanctions on Libya in the 1980's and 1990's, he argued that it would be "hypocritical" of the USG to insist that Arab states not enforce implementation of the anti-Israel boycott.

5.(C) Comment: This is the second instance of GOL boycott enforcement we have heard of in the past month. (The earlier case involved two German firms that were reportedly asked to sign letters attesting that they were in compliance with the Israel boycott as a pre-condition for securing required stamps on export documents from the Libyan People's Bureau in Berlin.) The fact that the Libyan government partner in the Oshkosh deal ultimately relented and removed the offensive language suggests that the GOL is willing to be pragmatic when seeking products or services that it deems to be particularly important. Post will continue to be alert to new incidents, and will remind U.S. companies of their obligations under U.S. law, as well as continue to impress upon the GOL the desirability of ending this practice. STEVENS 0 11/18/2007 3573 KBCT,ECON,ELTN,PREL,PGOV,EINV,LY ANTI-ISRAEL BOYCOTT INCIDENT WITH LIBYAN NATIONAL PROCUREMENT AUTHORITY A U.S. company was recently presented with a Libyan government contract containing Israel boycott language. The U.S. company refused to sign the contract and ultimately succeeded in having the language removed, facilitating completion of the deal.