UAE'S IRAQI DEBT FORGIVENESS ON HOLD

S E C R E T ABU DHABI 000087

SIPDIS
NOFORN
STATE FOR NEA/I AND NEA/ARP
AMEMBASSY ANKARA PASS TO AMCONSUL ADANA

E.O. 12958: DECL: 2020/02/20
TAGS: PGOV EFIN PREL IZ AE
SUBJECT: UAE'S IRAQI DEBT FORGIVENESS ON HOLD

CLASSIFIED BY: Richard G. Olson, Ambassador; REASON: 1.4(B),(D)


1. (S/NF) Summary: Foreign Minister Sheikh Abdullah bin Zayed told
the Ambassador and visiting Treasury Deputy Secretary Wolin on
February 15 that the UAEG has decided to postpone any final action
on Iraqi debt forgiveness until after the March 7 elections. On
other issues, the MFA reports the UAEG will provide security and
intelligence support for the GOI in advance of the elections. One
MFA official noted UAEG concern about recent staffing changes at
the Iraqi Embassy in Abu Dhabi. The former Iraqi charge claims FM
Zebari is replacing Sunni personnel in the Gulf with Kurds in
advance of the elections. End Summary.



DEBT FORGIVENESS ON HOLD

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2. (S) During a February 15 meeting with visiting Treasury Deputy
Secretary Wolin and the Ambassador (other issues reported septel)
that the UAE had put its Iraqi debt forgiveness efforts on hold
until after Iraq's March 7 elections. AbZ said he would likely
sign the final paperwork to complete the process, although he noted
that he would need to be designated to sign the documents on behalf
of the Government of Abu Dhabi, which holds all of the debt (to the
best of the UAE's knowledge).




3. (S) MFA Director of Legal Affairs Abdullah Al Naqbi previewed
the decision in a February 11 with EconOff. Al Naqbi said the
official story is that the UAE is still reviewing the file, but
"between friends" he could confirm that the UAE is awaiting the
election outcome. He said the UAE was frustrated with the debt
forgiveness effort, as Iraq had never provided any of the requested
information about UAE debt obligations. Although the UAE had found
that the Abu Dhabi Department of Finance and some Abu Dhabi banks
held Iraqi debt totaling approximately $7 billion, Iraq had never
confirmed, documented or refuted that total.



OTHER SUPPORT CONTINUES

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4. (S) While not specifying the UAE's concerns about the elections
outcome (a decision that would be taken high above his paygrade),
Al Naqbi said the UAE was carefully watching Iraqi actions in
advance of the election. He confirmed that the UAE had recently
signed an agreement to provide the GOI with military personnel and
equipment (e.g. radars) to support the elections. Al Naqbi said
the offer was made in the context of the UAE-Iraq joint
military-intelligence commission. (Note: Separately, Abu Dhabi
Shipbuilding (ADSB) told the Ambassador on Feb. 11 that the UAE
Armed Forces has donated 24 ADSB RIBS to the "Iraqi Riverine
Force." End Note.) In response to EconOff's question, Al Naqbi
said the UAE Ambassador to Iraq remains on the ground and is not
reporting any concerns about GOI access.



EMBASSY STAFF REMOVED

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5. (S/NF) Al Naqbi added that the UAE had noted, and intel forces
had prepared a report on, the recent staffing changes at the Iraqi
embassy in Abu Dhabi. Al Naqbi said the embassy used to be staffed
with Sunnis, "like the Iraqi community here," but that many of
those officials had departed.




6. (S/NF) On January 28, PolOff met with Iraqi ChargC) D'Affaires
(Third Secretary) Ahmed Hussain Jaber and two new Iraqi Political
Officers, none of whom seemed particularly well-informed or had
ever been to the UAE MFA. Previous ChargC) Intisar Abbas, who was

abruptly called back to Baghdad in mid-January, told PolFSN that
Jaber will soon be replaced by FM Zebari's brother-in-law. Abbas
alleged that Zebari is replacing many diplomats in the region with
Kurds in the run-up to March elections.




7. (S) Comment. The decision to hold off on final debt forgiveness
(after almost two years) is likely indicative of the UAE's concern
over Iraq's sectarian politics, and broader wariness about Iranian
influence in Iraq. End Comment.
OLSON