US embassy cable - 03AMMAN7178

C O N F I D E N T I A L AMMAN 007178 
 
SIPDIS 
 
TREASURY FOR GENERAL COUNSEL 
TREASURY FOR DAS JZARATE 
TREASURY/OASIA FOR MILLS/DEMOPOLUS 
NSC FOR ADNAN KIFAYAT 
 
E.O. 12958: DECL: 11/04/2008 
TAGS: EFIN, ETTC, PTER, JO, IZ 
SUBJECT: JORDAN: TRANSFER OF IRAQI ASSETS TO DFI 
 
REF: AMMAN 7025 (NOTAL) 
 
Classified By: Ambassador Edward W. Gnehm.  Reasons 1.5 (b) and (d). 
 
1.  (C)  In follow-up to his October 29 conversation with 
King Abdullah (ref), the Ambassador raised the urgent need 
for Jordan to transfer frozen Iraqi assets to the Development 
Fund for Iraq (DFI) by telephone with Prime Minister Fayez on 
November 2 and in November 3 meetings with Deputy Prime 
Minister Muhammad Halaiqa and Planning Minister Awadallah. 
With the GOJ clearly having received the U.S. message, these 
three (including perhaps others) met themselves on November 3 
to discuss how to respond to the message Awadallah also heard 
forcefully reiterated by his interlocutors in Washington last 
week.  The Ambassador expressed the U.S. Government's 
frustration that Jordan was not being more responsive on this 
important issue. 
 
2.  (C)  Following the internal meeting, DPM Halaiqa told the 
Ambassador that a decision had been made to transfer some 
funds to the DFI, although he did not indicate an amount.  He 
said frozen Iraqi funds were left over after the GOJ had paid 
Jordanian banks on suppliers claims submitted to the 
"technical committee" in accordance with the April 24 law. 
Halaiqa said this was because some claimants had not been 
able to document their claims because paperwork from the 
Iraqi side was lacking. 
 
3.  (C)  Halaiqa said that the technical committee would 
expedite its work and that an amount would be transferred to 
the DFI "soon."  He hoped that the United States would 
support Jordan in working with Iraqi authorities to 
compensate Jordanian suppliers if additional claims 
materialized or were legitimized by the committee.  In 
addition, he said that Jordan hoped for the United State's 
support in not lumping the Central Bank's $1.5 billion in 
claims on its Iraqi counterpart into a comprehensive 
multilateral treatment of Iraq's debt.  (Awadallah noted that 
the claims did not result from export or development credits, 
but were instead resulted from Iraqi failure to make payments 
due in cash upon delivery of goods.) 
 
4.  (C)  Comment:  It is clear that the GOJ has heard the 
U.S. message.  Over the last week, the new government has 
moved smartly to address our concerns on these issues. 
Recognizing that it falls short of our requirement that all 
frozen funds be transferred to Iraqi control, there is 
progress in the Jordanian position: 1) it is the first we 
have heard that claims under the April 24 law would be less 
than the approximately $500 million in frozen Iraqi assets, 
and 2) it implies Jordanian acceptance that frozen assets 
will not be used to reduce the $1.5 billion central bank 
claim.  This should allow a transfer to the DFI to be made in 
the near future, and we will continue working with the 
Jordanians to ensure that this happens and in a substantial 
amount.  Post would welcome any further Washington guidance. 
GNEHM