SAUDI ARABIA NOT IMPOSING SECONDARY OR TERTIARY

UNCLAS RIYADH 001551

SENSITIVE
SIPDIS

STATE FOR NEA/ARP, NEA/RA
STATE PASS TO USTR

E.O. 12958: N/A
TAGS: ECON ETRD KBCT PREL SA IS
SUBJECT: SAUDI ARABIA NOT IMPOSING SECONDARY OR TERTIARY
ARAB LEAGUE BOYCOTT

REF: A. SECSTATE 120272

B. RIYADH 1301

C. RIYADH 1382

D. GILLESPIE EMAILS OCTOBER


1. (SBU) In response to ref A on foreign government
applications of the Arab League Boycott (ALB),the Saudi
government (SAG) is not imposing secondary or tertiary
aspects of the ALB. Ambassador Smith and visiting AUSTR
Chris Wilson discussed the ALB with Minister of Commerce and
Industry Alireza, who categorically denied that Saudi Arabia
was doing so, explaining that, in Saudi Arabia's WTO Working
Party Report, the Saudi Government reiterated that it had
eliminated these two parts of the boycott. Alireza stressed
at the time that he wanted to be kept personally informed of
any allegations that any entity in Saudi Arabia was seeking
to enforce these aspects of the boycott (ref C). Moreover,
in numerous discussions with private sector contacts on this
issue, all have reported that the Kingdom had taken no action
towards reinstating (or otherwise implementing) a secondary
or tertiary boycott of Israel (ref B).


2. (SBU) Post thanks Commerce for sending detailed
information regarding four companies alleged to have issued
prohibited or permissible boycott-related requests in Saudi
Arabia (ref D). In addition to recent high-level engagement,
Post is formally sending information regarding the four
companies to the Ministry of Commerce and Industry and has
requested a meeting with the Ministry's Boycott office once
the SAG returns from the Hajj and Eid holiday December 5.


3. (SBU) In the interim, Post offers the following response
to ref A questions:

-- The SAG does not require U.S. firms to comply with the
secondary or tertiary aspects of the ALB.

-- Legally, Saudi Arabia ended its secondary and tertiary
boycotts of Israel through Council of Ministers Decision No.
5 of June 13, 1995.

-- The SAG does not, as a matter of policy, request that U.S.
firms comply with secondary and tertiary boycott requirements.

-- The SAG's boycott practices have not, as previously
reported, had an impact on U.S. businesses (ref B).

-- The SAG maintains an ALB office in the Ministry of
Commerce and Industry. Post will inquire about the offices'
duties and representation at the Arab League Central Boycott
Office meetings in Damascus once the requested meeting is
scheduled.

-- The SAG at the highest levels addresses all instances of
attempted boycott enforcement and takes this responsibility
seriously. The Minister of Commerce and Industry has asked
to be personally informed of any infringements and committed
to take corrective steps to address any issues.

-- Ambassador Smith and Emboffs have reached out to high- and
working-level SAG officials in the past year and have
received positive responses across the board.
SMITH