US embassy cable - 03ANKARA3055

C O N F I D E N T I A L ANKARA 003055 
 
SIPDIS 
 
 
STATE FOR E, EB, EUR/SE, NEA/NGA 
NSC FOR QUANRUD AND BRYZA 
 
 
E.O. 12958: DECL: 05/09/2013 
TAGS: PREL, ETTC, TU, IZ 
SUBJECT: MFA DEMARCHE ON OFF CONTRACTS 
 
REF: A. ANKARA 2813 
     B. STATE 122029 
 
 
Classified by Acting EconCouns Bob Silverman, Reason 1.5 (b,d) 
 
 
1. (C) Head of Department for Middle East Bilateral Economic 
Affairs Akif Ayhan called in econoff together with the 
British DCM May 8 to deliver the following demarche regarding 
Turkey's pending Oil for Food (OFF) contracts.  Ayhan said he 
had delivered the same demarche earlier to the Russian, 
Chinese, French, and Germans (because Germany chairs the 661 
Committee) together, noting that the demarche was tailored to 
what the GOT considered to be "like-minded" countries on this 
issue.  Ayhan said Turkey's UN mission would deliver the same 
points in New York in the coming days. 
 
 
2. (SBU) Following is the text of the non-paper give to 
econoff: 
 
 
--We witness an emerging understanding in the Security 
Council for a review of Iraq's sanctions regime. 
 
 
--If sanctions are suspended, phased out or removed, this 
will impact on the commercial interests and commitments 
emanating from the implementation of the UN Oil for Food 
(OFF) Programme. 
 
 
--Turkey expects that the rights of the Turkish companies 
will be effectively preserved in this process. 
 
 
--Many companies belonging to various countries have several 
contracts in the "pipe-line" under the OFF Programme.  An 
arrangement is needed in the UN to make such contracts 
operative. 
 
 
--We deem it crucial to take into account the following 
points during the consideration of the OFF Programme at the 
UN Security Council: 
 
 
-All pending contracts without any exception already signed, 
financed, approved or being processed within the framework of 
the OFF Programme must be kept under the UN guarantee and 
gradually executed.  This would be assured by a new UNSC 
Resolution.  In particular, any nullification as regards the 
execution of those contracts with Letters of Credit will 
adversely affect the companies concerned. 
 
 
-The current practice on priority contracts and goods under 
the UN Resolution no 1472 should be carried out in an 
evenhanded manner.  In this respect, Iraq Programme Office 
(OIP) and other UN agencies should make sure that the 
priority criteria are applied objectively.  (The Turkish 
companies' OIP-approved contracts containing priority items 
amount to 700 million US dollars of which only 73 million US 
dollar worth portion is listed on the UN priority contracts.) 
 
 
-Deliveries to Iraqi private sector companies and to 
international organizations should be subject to UN 
authorization any more. Such a modification presents urgency. 
 
 
      Apart from the foregoing, war reparation claims of 
several companies for the losses incurred due to the Iraqi 
military conflict have to be addressed. 
 
 
3. (C) Comment: Ayhan also said the GOT was interested in the 
 latest draft text on the lifting of sanctions.  Ref b 
arrived after this meeting.   We will meet with Ayhan early 
next week to deliver ref b points. 
PEARSON