SRSG AND AMBASSADOR KHALILZAD DISCUSS IRAQI

C O N F I D E N T I A L BAGHDAD 003931

SIPDIS

E.O. 12958: DECL: 12/02/2018
TAGS: PGOV PREL IZ
SUBJECT: SRSG AND AMBASSADOR KHALILZAD DISCUSS IRAQI
CHAPTER 7 AND UNAMI'S FUTURE

Classified By: Ambassador Ryan C. Crocker for Reasons 1.4 (b) and (d).


1. (C) Summary: UNAMI SRSG Staffan de Mistura and U.S.
Permanent Representative to the UN Ambassador Zalmay
Khalilzad strategized ways to assist Iraq with Chapter 7
status as well as UNAMI's future in Iraq at a December 2
meeting. Ambassador Khalilzad pointed out three separate
issues with Chapter 7: security concerns; Iraq's desire to
return to pre-Kuwait invasion status without restrictions and
the protection of Iraqi assets from pending lawsuits. The
GOI is concerned that with the price of oil dropping, it will
not have the resources it needs for developing its economy.
It does not want money held in the Development Fund for Iraq
to be used to settle claims. Both agreed it would be useful
if Russia could take the lead on pressing the UN to keep Iraq
under Chapter 7 status with regard to protecting its
financial assets against lawsuits. De Mistura then went on
to describe UNAMI's future as concentrating on elections,
disputed internal boundaries, rule of law, women's issues,
detention and torture, disarmament, demobilization and
reconciliation, and the constitutional process. End Summary.


2. (C) On December 2, UNAMI SRSG Staffan de Mistura met
with U.S. Permanent Representative to the UN Ambassador
Zalmay Khalilzad. Much of the discussion centered on
developing a strategy to assist Iraq with Chapter 7 issues.
Ambassador Khalilzad sought de Mistura's advice on what Iraq
needs to do to get out from under Chapter 7. Iraq wants to
return to pre-Kuwait invasion status regarding sanctions and
does not want to be viewed as a continuing threat.
Ambassador Khalilzad emphasized that the U.S. was trying to
help Iraq normalize and that he could provide a team to work
with a UNAMI team to assess the various sanctions and how
Iraq has overcome the need for them. He then separated out
the financial protections of Chapter 7 that Iraq still wanted
to remain intact. He said Iraq was concerned that its $60
billion in the Development Fund for Iraq (DFI) would be
subject to Saddam-era lawsuits. Iraq is especially concerned
since the price of oil has dropped and its ability to provide
services and even security from its oil revenue is in
jeopardy. Ambassador Khalilzad suggested that Russia take
the lead in pushing the Security Council to allow Iraq to
continue to protect its assets.


3. (C) De Mistura opined that the best way for Iraq to get
out from under Chapter 7 was to let it lapse. He said this
method would preclude either side from having to take
affirmative action, either to renew it or to end it. He said
that because Chapter 7 was part of the UNSCR that is set to
expire at the end of the year, doing nothing would
automatically allow it to end. As to the financial issue,
the Iraqis would need to submit a very narrow, very targeted
letter requesting protection of the funds in the DFI from
lawsuits. The letter should include an acknowledgment of
legitimate claims, the desire to further investigate other
claims, and the need for Iraq to use the DFI money for
development. The request for protection should be limited to
one year to give time for Iraq to investigate the claims
against it. De Mistura also agreed that Russia take the lead
in the Security Council, but stated the Iraqis must make
their case to the Russian, not the U.S. or the UN.


4. (C) De Mistura then turned the discussion to UNAMI's
future in Iraq. He said that in the next six months the
focus would be on elections. He listed the many election
events that could possibly occur in Iraq -- provincial
Qevents that could possibly occur in Iraq -- provincial
council elections in January, the Basrah region formation
referendum, Kirkuk's provincial council elections, status of
Kirkuk referendum, KRG elections, KRG constitution
referendum, and district elections. De Mistura commented
that while it was doubtful all events would take place in the
next six months, it does indicate that 2009 will be the year
of elections.


5. (C) Ambassador Khalilzad queried the SRSG as to where
UNAMI will be able to do more. De Mistura listed rule of
law, women's issues, detention and torture issues, public
sector reform, constitutional issues and disarmament,
demobilization and reconciliation. Ambassador Khalilzad
commented that the reconciliation effort was the most
important. He also asked if there had been much progress on
constitutional reform. De Mistura replied that nothing had
really been done, despite the recent discussions in the
Council of Representatives on holding a constitutional
referendum soon. De Mistura expressed concern over the
future of the PRTs and UNAMI's ability to expand. Ambassador
Crocker assured the SRSG that the EMBASSY and MNF-I were both
committed to sustaining the PRTs.
CROCKER