US embassy cable - 03KUWAIT5188

S E C R E T KUWAIT 005188 
 
SIPDIS 
 
NOFORN 
 
EB/ESC/TFS FOR GGLASS AND NROTHSTEIN; S/CT FOR SFOX; IO/PHO 
FOR APEREZ 
 
E.O. 12958: DECL: 11/12/2013 
TAGS: EFIN, ECON, ETTC, PREL, KU, IZ 
SUBJECT: (C) GOK RESPONSE ON IRAQ ASSETS IN BAHAMAS BANK 
 
REF: A. SECSTATE 311703 
     B. KUWAIT 5001 
     C. KUWAIT 4840 
     D. SECSTATE 310891 
     E. 2002 KUWAIT 4266 AND PREVIOUS 
 
Classified By: CHARGE D'AFFAIRES FRANK C. URBANCIC, 
Reasons 1.4 (b), (d) and (e) 
 
1. (C) In a 6 November meeting with the Minister of Finance, 
Ambassador delivered the substance of Ref A demarche on the 
$85 million in Iraqi assets frozen in a Bahamian bank.  The 
Minister said that a joint Ministry of Foreign 
Affairs/Central Bank of Kuwait team had been established and 
was investigating the issue.  The panel will deliver its 
report within two to three weeks.  Econ Chief repeated the 
demarche on 9 November to the MFA Americas Department deputy, 
who confirmed that the investigation was underway and that 
the Ministry would report back to the Embassy as soon as 
possible.  Econ Chief again delivered the message on 12 
November at MFA.  It should be noted that during OFAC 
Director Richard Newcomb's 4-5 October visit to Kuwait (Refs 
B and C), Central Bank officials said that they would abide 
by the relevant UN sanctions committee's decision on whether 
or not contested Iraqi assets should be transferred to the 
Development Fund for Iraq (DFI).  However, they said they 
needed some time to review the commercial banks' claims 
before forwarding that information to the UN for review. 
 
2. (S/NF)  COMMENT.  Post will continue its follow up on 
this.  Certainly, our hand in pressing such issues would be 
strengthened considerably were OFAC to offer reciprocity on 
information exchanges with the GOK.  During the October 
visit, GOK requested and OFAC promised to provide, 
transactions data that the GOK says are needed to meet OFAC's 
request for assistance regarding Kuwait Finance House 
operations.  Specifically, OFAC agreed (Ref C) to forward 
detailed information (e.g., dates and amounts) on 
transactions carried out by the Kuwait Finance House on 
behalf of Lajnat al-Dawa al-Islamiya (LDI).  Post has not 
succeeded in obtaining that information from OFAC (most 
recent request made by email on 2 November).  Further, GOK 
complained of delayed action on an OFAC pledge to respond to 
the Revival of Islamic Heritage Society's petition to lift 
the freeze on its Afghani and Pakistani assets (Ref E).  This 
matter was first raised during OFAC's May 2001 visit and 
revived for the May 2002 trip to Kuwait.  Regarding LDI 
issues, our interlocutors report that once OFAC provides the 
promised information on the disputed transactions, the GOK 
will begin its investigation.  With respect to these matters, 
clearly the ball now is in OFAC's court. 
URBANCIC