COMMERCIAL LAW DEVELOPMENT PROGRAM (CLDP) ASSISTANCE TO

UNCLAS SECTION 01 OF 02 BAGHDAD 001875

SENSITIVE

SIPDIS

DEPT FOR INL, NEA/I
JUSTICE PASS TO PHIL LYNCH, ANDREW NORMAN

E.O. 12958: N/A
TAGS: IZ
SUBJECT: COMMERCIAL LAW DEVELOPMENT PROGRAM (CLDP) ASSISTANCE TO
COME TO IRAQ.


1. (U) SUMMARY: On his recent visit, Marc Tejtel, U.S. Department
of Commerce Deputy Chief Counsel of the Commercial Law Development
Program (CLDP),through discussions and cooperation with CLA,
Treasury, ROLC, INL, ECON, and Iraqi officials, initiated project
proposals for commercial capacity-building programs in multiple GoI
institutions, to include the Higher Judicial Council (HJC),the
National Investment Commission (NIC),the Iraqi Ministry of Trade
(MOT),the Shura Council, and the Administrative Court. With
increased awareness of the convergent interests of various Embassy
sections and the interdependency of GOI competencies in contracting,
arbitration, legislative drafting, and dispute resolution, CLDP's
new Iraq presence holds promise to further Embassy objectives in
growing a better foreign investment environment in Iraq. CLDP's
activities also help to reinforce our capacity building efforts
under the Economic and Energy, as well as the Law Enforcement and
Judicial Cooperation Committees (JCC) of the Strategic Framework
Agreement. END SUMMARY.

BACKGROUND


2. (U) Commercial law practices were unpredictable in the prior
regime; investments were barred under sanctions and for investors
that engaged Iraq prior to 1990, contractual negotiations often fell
through, obligations were sometimes not observed, and corrupt
practices ensured minimal transparency. In this risky environment,
investment and development were stymied, antiquated laws reflecting
the needs of an inward-looking socialist system remained on the
books, and the expertise of the judiciary in resolving international
commercial law suits languished. Furthermore, although Iraq's
current oil contracts contain several clauses referring disputes to
international arbitration, Iraq still has yet to ratify the
International Convention on the Enforcement and Recognition of
International Arbitral awards. Failure to ratify this Convention,
compounded by the lack of judicial capacity in resolving commercial
disputes, poses a serious impediment to investment.


3. (U) CLDP has various initiatives throughout the world, including
commercial law modernization and judicial capacity building in
Bahrain, Kuwait, Oman, Qatar, the UAE, and Yemen. The program has
enabled the development of international arbitration procedures in
Tunisia, Intellectual Property Law development in Manila, fair trade
practices in Ukraine, and expanded customs capabilities in Oman,
among many other programs.


COMMERCIAL LAW COURSES OFFERED TO THE IRAQ JUDICIARY.


4. (U) Mr. Tejtel met with Chief Judge Medhat on June 22, 2009 to
discuss judicial education opportunities in commercial law. On
behalf of CLDP, he proposed a one-year intensive course, with
approximately twenty participants, culminating in a study tour to
the United States for participants to view the courts of the
practitioner instructors. Chief Judge Medhat found this approach
appealing and offered classroom space for the program at the
Judicial Education Development Institute (JEDI). CLDP will submit a
formal proposal for the program within three weeks. At a later
meeting with INL and the JEDI curriculum project board, Chief Judge
Jaffer of CCC-I Rusafa, submitted a list of HJC priorities in
commercial law judicial education, to wit: "international sales,
international trade companies and its registrations, banking
operations, letter[s] of credit, documentary credit, safe deposit
rent, international transportation, arbitration, electronic crimes,
Qrent, international transportation, arbitration, electronic crimes,
[and] electronic signature."

SHURA COUNCIL CAPACITY BUILDING INITIATIVES PROPOSED.


5. (U) CLA and Mr. Tejtel discussed the potential for a study tour
to France or Tunisia for the Shura Council to see a working model of
an organization that reviews laws for constitutionality and
coherence. During the study tour, CLDP hopes to arrange a meeting
between the head of the Administrative Court of Iraq and experts to
explore potential initiatives to strengthen Iraq's administrative
law adjudication.

STUDY TOUR TO EXPOSE IRAQIS TO UAE INTERNATIONAL ARBITRATION
CENTER.


6. (U) In cooperation with CLA, CLDP is tentatively arranging an
"International Arbitration and the Judicial Enforcement of Arbitral
Awards" study tour for members of the Shura Council International
Arbitration Drafting Committee and key GOI officials in positions to
advance legislation that could assure investors that arbitral awards
would be recognized in Iraq if merited. The objective of the
program is outlined by CLDP's preliminary project proposal : "To
help key decision-makers in the Iraqi judiciary and in key
ministries reach a consensus on the importance for Iraq of the

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judicial enforcement of international arbitral awards, and to pave
the way, as a result, towards Iraq's eventual signing of the New
York Convention." CLDP has also proposed a DVC on Arbitration with
a Tunisian expert judge to dispel any misconceptions held by Iraqis
about the international arbitration process and the role of the
judiciary. CLA is assessing the implications of the current lack of
international arbitral awards recognition dispute resolution
capacity within the current Iraqi legal framework.

CLDP SUPPORT FOR THE NATIONAL INVESTMENT COMMISSION (NIC)


7. (U) CLDP, CLA, and ROLC met with Dr. Sami Al-Araji, Chairman of
the National Investment Commission (NIC),who requested CLDP's
support in three primary ways. First, he expressed that technical
assistance discussed between the Minister of Industry and Minerals
and CLDP a year ago is now more urgently needed. Last year, when
CLDP met in Dubai with Iraqi's Minister of Industry and Minerals and
Dr. Sami, the Minister requested that CLDP train the general
counsels of Iraq's State-Owned Enterprises (SOEs). CLDP reports in
its Project Proposal Draft that "[t]he Minister envisions joint
ventures as the most realistic way for key SOEs, [which currently
employ approximately 650,000 Iraqis], to receive the managerial,
technological, and capital they desperately need to create jobs in
the short term, and to be eventually privatized." CLDP offered to
train 10-12 General Counsels in the legal basics of joint-venture
formation and negotiation through a series of workshops and seminars
taught over a six-month period. Funding is now available and CLDP
agreed to provide this assistance, but will be unable to start the
program until the fall.


8. (U) Dr. Sami also requested Mr. Tejtel's assistance in arranging
meetings with potential investors and risk guarantee and financial
institutions during his upcoming visit to the States with the Prime
Minister. CLDP agreed to facilitate contracts with possible
investors.


9. (U) NIC is seeking funding to retain the services of an
international organization or law firm to prepare tender contracts
with selected bidders for a planned Infrastructure Investment
Program, which the NIC is currently preparing to submit to the
Council of Representatives (COR). CLDP suggested that NIC approach
the World Bank as a potential funding source if this program is
passed by the COR.

MINISTRY OF TRADE COMMERCIAL ATTACHE TRAINING DISCUSSED.


10. (U) CLDP initiated discussions with Abdul Hadi K. Al-Hamiri,
Director General and Advisor to the Ministry of Trade, who is
interested in training for commercial attachs. CLDP offered their
expertise in training lawyers and helping develop procedures,
processes, and standard documents to ensure that import contracts,
as well as government procurement, comply with international best
practices. Dr. Al-Hamiri and Mr. Tejtel will continue discussions
over email regarding potential training initiatives.


11. (U) COMMENT: The CLDP project proposals resulting from the
CLDP Deputy Chief Counsel's visit will further Embassy priority
objectives and provide synergistic effects. As became evident
through meetings with various sections and GOI institutions, lack of
capacity in one GOI function, such as dispute resolution, tends to
compound difficulties in other GOI functions. Equally, as Iraq
continues in its efforts to draft new laws meeting international
standards, capacity building can dispel misconceptions and create
competencies in areas to facilitate the drafting of more
Qcompetencies in areas to facilitate the drafting of more
sophisticated provisions, which are needed to give investors and
potential trade partners confidence in Iraq's obligations and
stability. CLDP's training cross-cuts various ministries, further
reinforcing our capacity building message under the Strategic
Framework Agreement, including the Economic and Energy and Law
Enforcement and Judicial Cooperation JCCs. End comment.