INTERIM GOI RESPONSE TO DRAFT UNSYG REPORT

C O N F I D E N T I A L BAGHDAD 001828 SIPDIS E.O. 12958: DECL: 07/06/2019 TAGS: PREL UNSC IZ KU SUBJECT: INTERIM GOI RESPONSE TO DRAFT UNSYG REPORT REF: A. SECSTATE 56261 ¶B. KUWAIT 570 ¶C. BAGHDAD 1643 Classified By: Acting Political Counselor Peter Vrooman for reason 1.4 (d). -------------- Summary/Overview -------------- ¶1. (C) Deputy Pol/C on June 22 passed MFA North America Office Director Mohammed Al-Hamaimidi a copy of the draft UN paper outlining relevant facts for the preparation of the UNSYG's Iraq UNSCR Report. Caveating that he could not provide the authoritative GOI response to the UN paper, Al-Hamaimidi commented on several aspects and provided Deputy Pol/C with a copy of what appears to be an early draft of the GOI's formal response. We have e-mailed this document to NEA/I/POL and USUN. This cable summarizes the GOI draft responses and conveys Al-Hamaimidi's comments. Deputy Pol/C emphasized in a follow-up July 2 conversation with al-Hamaimidi that the U.S. is committed to using its best efforts to support Iraq as it takes the steps necessary to return to the status it held prior to the adoption of the UNSCRs, but emphasized that it is the UN Security Council that must lift the resolutions, not the USG. This cable was going to press when we received State 68248. We have passed the nonpaper outlining U.S. Iraq UNSCRs ideas to Deputy Foreign Minister Labid Abawwi and will meet him July 8 to seek GOI views and priorities regarding our suggested recommendations. End Summary/Overview. -------------- Compensation -------------- ¶2. (C) Al-Hamaimidi told Deputy Pol/C that the compensation issue was of particular concern to the GOI. He said the continued loss of five percent of oil revenues in compensation payments is a serious economic hardship for Iraq, which is experiencing budgetary shortfalls. He reminded Deputy Pol/C that under the Security Agreement, the U.S. is obligated to lift Chapter VII restrictions from Iraq. Deputy Pol/C acknowledged the U.S.'s Security Agreement commitments, and said the US would live up to all of them, but he reminded Al-Hamaimidi that Article 25 obligates the U.S. to use its best efforts to support Iraq as it takes the steps necessary to fulfill its UNSCR obligations. There are a number of outstanding issues between Iraq and Kuwait, he said, stressing that the U.S. is working hard with both countries for a favorable resolution. He pointed out that it is the UN Security Council that must lift the resolutions, not the USG. ¶3. (C) The GOI draft paper notes that Prime Minister Maliki sent a letter to the Security Council on December 7, 2008, formally requesting that the five percent compensation rate be reduced as much as possible, since "such a high percentage (compensation rate) creates a financial burden for Iraq at a time when it is in dire need of those funds to rebuild its infrastructure." The paper then notes that the Security Council has already reduced the compensation rate from 30% to 25%, and then from 25% to 5% "without considering this issue with Iraq or Kuwait, based on the difficult situation in Iraq." The paper also proposes that the $24 billion in unpaid UN compensation Commission (UNCC) awards be forgiven and that the UN paper explicitly state this. (Note: The Iraqis proposed the total forgiveness of the outstanding $24 billion at the May 31-June 6 UNCC meeting in Kuwait (ref B).) The GOI would also like to add a sentence stating that it has fulfilled its obligations on compensation and the Secretary-General welcomes negotiations between Iraq and Kuwait to reach a quick settlement due to Iraq,s economic situation. Q ¶4. (C) Comment: Al-Hamaimidi's comments and the draft paper reiterate themes we have heard from other GOI officials: that reducing -- or preferably eliminating -- compensation payments is a priority national objective; that the $24 billion in unpaid UNCC awards should be forgiven; and that final settlement modalities should be negotiated bilaterally. The paper seems to suggest that the Security Council unilaterally reduced the compensation rate before and that it can (and should) do so again. Al-Hamaimidi emphasized a history of bilateral negotiations with Kuwait, arguing that the countries, issues can be worked out without the UN process. Deputy Pol/Cs said that Iraq should show support for Kuwaiti sovereignty by publicly reiterating acceptance of the UNSCR 833-demarcated land border. End comment. -------------- Kuwaiti Missing/Archives -------------- ¶5. (C) The GOI paper asserts that a UNSYG report in 2003 (S/2003/813) endorsed ending the special envoy assigned to oversee this process and transferring this issue from the UN to Iraq and Kuwait to be resolved bilaterally. The paper also notes that the remains of 236 Kuwaitis and others have been identified, that thousands of Iraqis were killed by Saddam, and that investigating and finding all these mass graves is extremely difficult. ¶6. (C) Comment: This is another issue Iraq would like to address through bilateral negotiations. That said, the GOI is making a serious effort to make progress on recovering the remains of missing Kuwaitis and third country nationals (ref C). We are assisting this effort. DRL-grantee International Committee for Missing Persons is helping train Ministry of Human Rights investigative teams on mass grave exhumations and identification. Another DRL grantee, Civilian Research and Development Foundation, is working with scientists at Iraqi universities to establish a second lab for DNA processing (the GOI can currently only complete two DNA tests per day). The Ministry of Human Rights' lead on this issue, a dynamic officer on loan from the Prime Minister's Office, has, with our encouragement, invited Kuwait to send an inspection team to Iraq. The head of Kuwait's delegation has agreed in principle. This intensified engagement bodes well for future progress. End comment. -------------- Disarmament -------------- ¶7. (C) The GOI paper asserts that UNSCR 1762 and annexed letters from Secretary Rice noting positive Iraqi action on WMD is adequate documentation that Iraq has fulfilled its WMD UNSCR commitments. Al-Hamaimidi reiterated these points orally. Both the GOI paper's and Al-Hamaimidi's comments gloss over reference in both UNSCR 1762 and the annexed letters to additional actions Iraq needs to take. --- DFI --- ¶8. (C) The Development Fund for Iraq (DFI) was established in 2003 to hold proceeds of Iraq,s hydrocarbons exports and protect them from attachment, garnishment, and execution of judgments against Iraq. Currently, five percent of these revenues is contributed to a fund overseen by the UNCC to pay claims assessed against Iraq for damages caused during the first Gulf War. The mandate for the body that oversees the DFI has been extended to December 31, 2009, after which time the requirement to deposit hydrocarbon revenues into the DFI will expire along with the immunities , but Iraq will still have the obligation to pay five percent of its hydrocarbon revenues to the UNCC fund. The GOI paper had no comments on this section. --- OFF --- ¶9. (C) The Oil For Food program (OFF) was terminated in November 2003 and handed over to the Coalition Provisional Authority, which transferred authority for the program to the GOI in October 2004. Most of the funds were transferred to the DFI, but $872 million remains in the OFF account. The GOI paper asks that the UNSYG's Iraq UNSCR report show the current progress in resolving pending contracts and the GOI's willingness to cooperate with concerned parties to achieve this, on condition that the contract funds be transferred to the DFI as soon as possible (Note: In a May 26 meeting with EconOffs, Foreign Minister Zebari,s Chief of Staff, Srood Najib, said that he wants to reduce the number of disputed OFF contracts from 80 to 30 by the end of June and had urged cooperation from relevant ministries. He also noted that the Qcooperation from relevant ministries. He also noted that the Russians have not been helpful in resolving outstanding disputed contracts. End note.). -------------- 1518 Committee -------------- ¶10. (C) The UNSC established the 1518 committee in November 2003 to identify assets that should be frozen and transferred to the DFI. The committee targeted individuals and entities associated with the former regime, but has not met since December 2005. The GOI paper asks for removal of the third point for the UNSYG section, which states that the Security Council decided in UNSCR 1518 (2003) that the mandate of the committee be kept under review, and that the Council would consider authorizing the committee to undertake the additional task of observing Member States' fulfillment of their obligations in connection with the arms embargo on Iraq as reaffirmed in paragraph 10 or UNSCR 1483. The GOI report notes that to date, the committee has not been authorized to undertake any additional task in this regard. -------------- Other Relevant Mandates (cultural property) -------------- ¶11. (C) The draft report requires member states to work to return cultural property stolen from Iraq since August 1990. The GOI paper had no comments on this section. -------------- Comment -------------- ¶12. (C) Al-Hamaimidi's blaming Kuwaiti intransigence for the lack of progress on lifting Chapter VII restrictions from Iraq is consistent with what other GOI officials have been telling us. So is his preference for Iraq and Kuwait to resolve the range of outstanding issues bilaterally. Interestingly, Al-Hamaimidi told us that the GOI's preference would be to postpone the Security Council's Iraq UNSCR review until August or September, when the U.S. and U.K., respectively, would hold the UNSC Presidency (currently held by Uganda). This way, he explained, a facilitator experienced in the issue would lead the negotiations. He did not say Iraq planned to request a delay. HILL