US embassy cable - 05KUWAIT4317

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 004317 
 
SIPDIS 
 
STATE FOR NEA/ARPI SWALKER, LONDON FOR LTSOU, JEDDAH FOR 
AMBASSADOR JEFFREY AND MAGGIE HABIB 
 
E.O. 12958: DECL: 10/02/2010 
TAGS: PGOV, PREL, KU, IZ, KUWAIT-IRAQ RELATIONS 
SUBJECT: LATEST FIGURES ON GOK COMPENSATION CLAIMS AGAINST 
IRAQ 
 
Classified By: Deputy Chief of Mission Matthew Tueller.  Reasons 1.4 (b 
) and (d) 
 
1. (U) Summary. In an October 2 meeting with Economic 
Counselor, the Chairman of the GOK's Public Authority for 
Assessment of Compensation for Damages Resulting from Iraqi 
Aggression made the following points: (1) USG should help 
ensure continued UN oversight of the claims process; (2) all 
Kuwaiti claims have been adjudicated by the UN; (3) GOK 
supports the UN decision to prioritize the repayment of 
Kuwait's individual and environmental claims ahead of oil 
sector and government claims; (4) GOK expects all claims will 
be paid in full over time but prefers to work modalities with 
UN oversight rather than bilaterally with Iraq.  End Summary 
 
 
2. (SBU) Economic Counselor met on October 2 with Khalid 
Al-Mudaf, Chairman of the GOK's Public Authority for 
Assessment of Compensation for Damages Resulting from Iraqi 
Aggression, to get an update on the status of GOK claims 
against Iraq and to inform Al-Mudaf of the upcoming visit to 
Kuwait by Ambassador James Jeffrey, Senior Advisor and 
Coordinator on Iraq.  Al-Mudaf clarified the status of 
compensation claims as reviewed by the UN Claims Commission 
(UNCC), explaining that all Kuwaiti claims had been 
adjudicated by the UNCC.  The claims were considered under 
four broad categories: (1) individual (including personal and 
non-oil business claims), (2) GOK (ministerial--excluding 
oil), (3) environmental, and (4) oil sector. 
 
3. (U) Al-Mudaf provided a spreadsheet detailing the latest 
figures (all in USD): 
 
--Individual: 
  --Claimed  19,659,942,009 
  --Awarded   8,400,259,088 
  --Received  7,411,910,823 
 
--Government: 
  --Claimed 113,460,307,509 
  --Awarded   8,282,839,022 
  --Received  2,168,909,519 
 
--Environment: 
  --Claimed  16,655,537,302 
  --Awarded   3,786,231,496 
  --Received    175,706,901 
 
--Oil Sector: 
  --Claimed  28,060,947,690 
  --Awarded  20,716,039,817 
  --Received    441,236,549 
 
--TOTAL: 
  --Claimed 177,836,734,510 
  --Awarded  41,185,369,423 
  --Received 10,197,763,792 
 
4.  (U) Al-Mudaf stated that the UNCC's governing council, 
comprised of all 15 UNSC member states, decided in June to 
prioritize the repayment of individual and environmental 
claims before resuming repayment of GOK and oil sector 
claims.  Expressing GOK support for the prioritization, 
Al-Muhad asserted that repayment of environmental claims was 
a top GOK priority.  He expressed hope for similar 
prioritization by Iraq, and would welcome USG assistance in 
conveying to the ITG the urgency of addressing the 
environmental claims given the negative impact on public 
health (Note: Al-Mudaf referred to a Harvard University 
public health study.  The study asserted a twenty-fold 
increase in the death rate among Kuwaitis exposed to the 
environmental damage of the war and its aftermath versus 
Kuwaitis who spent that time as refugees abroad.) 
 
5. (C) Al-Mudaf expressed disappointment with the UN's 
decision in 2003 to reduce the percentage of Iraq's oil and 
gas revenues withheld for payment of UNCC adjudicated claims 
from 25 percent to 5 percent.  The Chairman thought it ironic 
that the percentage withheld today "under the occupation" is 
one-fifth that withheld when Saddam Hussein was in power.  He 
urged continued USG support to prevent further rate 
reductions.  His deputy, Mohammad Okasha, expressed similar 
disappointment with the UN's awarded amounts.  Okasha 
lamented that the UN apparently had not taken into 
consideration the GOK's stringent accounting requirements for 
claimants when determining the final awarded amounts.  He 
stressed that the GOK applied stringent accounting measures 
with claimants to ensure accuracy and accountability, but 
that the UNCC arbitrarily had reduced the claims' values, in 
his view. 
6. (C) Both interlocutors expressed concern with UNCC plans 
to cease oversight of the process by 2007, which would 
require Kuwait and Iraq to resolve matters bilaterally. 
Noting that it would "take a generation for relations to 
normalize" between Kuwait and Iraq, Al-Mudaf said the GOK 
would prefer to have continued UN oversight of the 
politically sensitive claims process.  He urged USG 
engagement with the UN to ensure that organization's 
continued involvement. 
 
7. (C) Both Al-Mudaf and Okasha said they anticipated 
Kuwait's securing full repayment for the awarded amounts 
despite the expected lengthy repayment timeline.  Al-Mudaf 
pointed out that at the current 5 percent rate, the 
environmental claims would not be resolved until 2016.  He 
added that per the UNCC decision, repayment of government 
claims would begin in 2016, only after full repayment of 
environmental claims, and that the government claims would 
require another 24 years to be paid in full. 
 
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Visit Embassy Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
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LEBARON