OPENING OF ISLAM QALA BORDER CROSSING POINT

C O N F I D E N T I A L KABUL 001458 SIPDIS DEPT FOR SRAP, SAGSWA, SCA/FO, SCA/RA, AND SCA/A DEPT PASS FOR AID/ANE DEPT PASS USTR FOR DELANEY AND DEANGELIS DEPT PASS OPIC DEPT PASS FOR TDA FOR STEIN AND GREENIP USOECD FOR ENERGY ATTACHE CENTCOM FOR CSTC-A NSC FOR JWOOD TREASURY FOR MHIRSON, ABAUKOL, AWELLER, AND MNUGENT COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH 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