US embassy cable - 05KUWAIT3085

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Identifier:	05KUWAIT3085
Wikileaks:	View 05KUWAIT3085 at Wikileaks.org
Origin:	Embassy Kuwait
Created:	2005-07-12 06:39:00
Classification:	UNCLASSIFIED//FOR OFFICIAL USE ONLY
Tags:	ECON BEXP KU
Redacted:	This cable was not redacted by Wikileaks.

UNCLAS KUWAIT 003085 
 
SIPDIS 
 
SENSITIVE 
 
USDOC FOR 4520/ITA/MAC/OME/CLOUSTAUNAU/COBERG 
 
E.O. 12958: N/A 
TAGS: ECON, BEXP, KU 
SUBJECT: GOK LIKELY TO REACTIVATE OFFSET PROGRAM SOON 
 
REF: 2004 KUWAIT 4366 
 
This cable is sensitive but unclassified; please protect 
accordingly.  Not for Internet distribution. 
 
1.  (U) At a July 11 signing ceremony between Boeing and the 
Ministry of Finance for an offset program project (reftel), 
the Minister of Finance said that Kuwait "has to go along 
with the program," indicating that the offset program, 
suspended in September 2004, would be reactivated.  (Note: 
The signing ceremony was for an offset project dating from a 
contract between Boeing and the GOK in the 1990's. End Note.) 
 In September 2004, the Council of Ministers decided to 
suspend implementation of the offset program for all new 
government contracts in the military and civilian sectors 
pending further review by the Ministry of Finance.  A 
six-month review of the program was to take place, at the end 
of which the offset program would either be modified, 
reinstated or discontinued.  No contracts awarded during the 
review period will carry an offset requirement. 
 
2. (SBU) Ministry of Finance Offset Program Department 
Director Mazan Madooh confirmed to Econ Officer after the 
signing ceremony that the program would likely be reactivated 
soon.  He said that the Ministry of Finance would bring its 
recommendation to the next Council of Ministers meeting on 
July 17 and that the Council could choose to reactivate the 
program on that date or shortly thereafter.  He said that 
there would be a one-to-two month grace period before the 
program actually goes into effect again.  Asked about the 
potential for an offset requirement in the project to develop 
Kuwait's northern oilfields (Project Kuwait), Madooh said 
that he did not think that there would be an offset 
requirement and that all projects involving exploration and 
development of natural resources would be exempt from offset 
requirements. 
 
******************************************** 
Visit Embassy Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
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TUELLER