RESPONSE TO ARAB LEAGUE BOYCOTT REPORTING

UNCLAS KUWAIT 001156

SENSITIVE
SIPDIS

STATE FOR NEA, TREASURY, COMMERCE/BIS/OIC, USTR FOR JASON
BUNTIN

E.O. 12958: N/A
TAGS: KBCT ECON KIPR EIND EINT ETRD XF KU
SUBJECT: RESPONSE TO ARAB LEAGUE BOYCOTT REPORTING
REQUIREMENTS

REF: STATE 120272


1. (U) Kuwait still applies a primary boycott of goods and
services produced in Israel and there is no direct trade
between Kuwait and Israel, but Kuwait does not require U.S.
firms to participate in or cooperate with either the
secondary or tertiary Arab League boycott. In September
1994, Kuwait along with all GCC countries, announced an end
to the enforcement of secondary and tertiary aspects of the
Arab League boycott of U.S. firms with commercial ties to
Israel, eliminating a significant trade barrier to U.S.
firms.


2. (SBU) Kuwait does not require U.S. firms to comply with
boycott requirements, it claims to have eliminated all direct
references to the boycott in its commercial documents as of
2000, and affirms that it has removed all firms and entities
that were on the boycott list due to secondary or tertiary
aspects of the boycott prior to 1991. Kuwait has a three
person boycott office (comprised of a director, staffer, and
secretary),which is part of the Ministry of Customs. The
director has been out of the office for more than a year on
medical leave. Kuwaiti officials regularly attend Arab
League boycott meetings, although whether they are active
participants remains unclear.


3. (SBU) In 2008, there were four reported cases of
prohibited boycott request allegations from Kuwait provided
to the Department of Commerce. In the year and a half since
Econcouns has been in Kuwait and the two years that
Commercial Counselor has been in Kuwait, we have only been
approached once by a U.S. firm about a possible
boycott-related case. After consultation with the Department
of Commerce, we advised the U.S. firm that the language did
not appear to be a boycott violation. The German Ambassador
recently claimed that he understands from German firms that
boycott-related language still appears in some tender
documents, though we have no confirmation of this from U.S.
companies.


4. (SBU) Given the overall problems with Kuwait's tendering
practices, including frequent retendering and regulations
that stress price over quality (once a certain threshold is
passed),post has no evidence to suggest the Arab League
boycott poses a significant barrier to U.S. businesses
seeking to operate here. Post has not conducted any Arab
League Boycott outreach during 2009. We have a pending
request to meet with the acting head of the office and will
report further following that discussion.


********************************************* *********
For more reporting from Embassy Kuwait, visit:
visit Kuwait's Classified Website at:

http://www.intelink.sgov.gov/wiki/Portal:Kuwa it
********************************************* *********
JONES