OPENING OF ISLAM QALA BORDER CROSSING POINT

C O N F I D E N T I A L KABUL 001458

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E.O. 12958: DECL: 06/01/2019
TAGS: EFIN EINV ETRD AF IR
SUBJECT: OPENING OF ISLAM QALA BORDER CROSSING POINT

Classified By: Deputy Ambassador Ricciardone for Reasons 1.4 (b) and (d
).

CUSTOMS FACILITIES OPENING ALONG AFGHAN-IRANIAN BORDER


1. (SBU) On June 15, the port at Islam Qala (IQ) will be
ready for operations. The Embassy's Border Management Task
Force is prepared to host an opening ceremony, between June
15 and July 1, for the USD 20 Million Border Crossing Point
at IQ, built by the Army Corps of Engineers (ACE). The
German government has also contributed a small amount (about
one percent of the project total) for road construction. IQ
is a small town along Afghanistan's northwestern border with
Iran. The current facility at IQ barely handles the current
traffic volume that generates more than 25 percent of customs
revenue for the entire country and more than any other
province in Afghanistan. The new facility dramatically
increases this capability.


2. (SBU) Once the facilities are finished, this USG funded
project will help the GIRoA to enhance revenue generation, to
interdict illicit materials, and to strengthen overall
security in the surrounding area. The new facilities will
have increased overall capacity, and several technological
enhancements will facilitate trade while minimizing the
transit of illegal materials. The new Border Control point
at IQ will be the largest in the country and will accommodate
many years of growth.

SIGNIFICANCE FOR REVENUES, TRADE


3. (SBU) Reliable figures for trade volumes are difficult
to obtain. For example, the Afghan Chamber of Commerce and
Industry (ACCI) estimates 2008 imports from Iran at around
USD 800 million, vs. exports totaling USD 4 million. GIRoA's
Central Statistics Office (CSO) puts Afghan exports to Iran
at about USD 9 million, with imports totaling about USD 138
million. While trade volumes with Pakistan are larger, trade
with Iran consists mostly of higher-value industrial goods,
much of which are in evidence in Herat's industrial park
(NOTE: We and USTR recently visited the largest bottling
factory in Herat while exploring potential ROZ opportunities.
All the capital equipment in the factory was Iranian.) This
trade in higher value (though lower volume) goods also
accounts for the large share of customs revenues generated by
Iran-Afghan trade. Increasing the capacity of Border Control
Posts, especially at IQ, will likely lead to a further
increase in much needed customs revenue.

IRAN ANGLE


4. (C) One unresolved issue is that of Iranian
participation in the IQ opening. When other BCPs have opened
in Afghanistan, the neighboring country has always
participated. For example, the Sher Khan Bandar bridge
opening not only had Tajik participation, but saw high-level
USG participation (former Commerce Secretary Gutierrez
attended). We anticipate Front Office attendance at the IQ
opening. As of yet, we are unaware of any local or national
Afghan invitations to Iranian officials to participate in the
opening. Absent Washington objection, we intend to inform
the GIRoA at the national level, and Herat Governor
Nuristani, that we would pose no objection should he wish to
extend an invitation to the Iranians, in keeping with normal
Afghan practice at other border crossing points.
EIKENBERRY