US embassy cable - 03ANKARA3225

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 003225 
 
SIPDIS 
 
 
DEPT FOR EB/ESC, IO/UNP, EUR/SE, NEA/NGA 
EUCOM FOR J3, J5 AND POLAD 
 
 
E.O. 12958: DECL: 05/14/2013 
TAGS: ETRD, ETTC, IZ, PREL, TU 
SUBJECT: GOT OFFICIALS ON IRAQ SANCTIONS LIFT RESOLUTION, 
TURKISH TRADE  OUTSIDE OF OFF (SBU) 
 
 
REF: A. STATE 122029 
     B. ANKARA 3055 
     C. STATE 104141 
     D. ANKARA 3190 
     E. ANKARA 3058 
     F. ANKARA 3156 
 
 
(U) Classified by Acting Deputy Chief of Mission Stuart Brown 
for reasons 1.5 B, D. 
 
 
1. (C) Summary:  Senior MFA officials and the Energy Minister 
reacted 
positively to demarches by the Ambassador and others on the 
UN Security 
Council draft Iraq sanctions lift resolution.  However, other 
MFA and 
Foreign Trade officials stressed the GOT's strong view that 
all pending, 
signed contracts under the Oil for Food Program, not just 
those approved 
and funded by the UN, should be implemented.  They also 
reacted negatively 
to the proposal to cut the proportion of oil proceeds to be 
dedicated to 
compensation claims.  Foreign Trade acknowledged that about 
USD 500 
million in annual trade took place under a bilateral MOU with 
the former 
GOI, all outside OFF.  The MFA's spokesperson on May 15 
publicly called for lifting sanctions on Iraq.  End Summary. 
 
 
2. (C) Following up on ref E demarche, Ambassador asked 
Energy 
Minister Guler for Turkish support for the US-UK-Spanish 
Sanctions 
Lift Resolution at the UN Security Council (Ref D).  Also, 
Acting 
DCM raised the issue with MFA Deputy U/S Kilic, and Dep 
PolmilCouns 
did the same with MFA's Americas department.  Guler and MFA 
officials 
reacted positively, and promised to discuss the issue further 
within 
their government.  The Ambassador also raised the resolution 
with 
MFA Undersecretary Ugur Ziyal May 13, emphasizing that if the 
Turks 
want to improve the bilateral relationship, they must take 
concrete 
actions to show support for our larger objectives (ref F). 
One such 
action would be a strong public statement supporting our 
efforts in 
New York, and actively lobbying other UNSC members to push 
for approval 
of the resolution.  Ziyal took the message on board and said 
he would 
discuss with others. 
 
 
3. (C) Other MFA and Foreign Trade officials were less 
forthcoming.  Econoff 
met with Tevfik Mengu, Director General for Agreements at the 
Foreign Trade Undersecretariat, on May 13, and with Akif 
Ayhan, Head of Department in MFA,s 
Bilateral Economic Affairs Division, on May 14, to deliver 
ref A points. 
On the relationship of the UNSC resolution to the Oil for 
Food (OFF) Program 
and MFA,s recent nonpaper on this subject (ref B), Econoff 
maintained that 
the resolution would maintain the UN SYG,s authority to 
prioritize OFF 
contracts and would provide for implementation of 
previously-approved/ 
funded OFF contracts. 
 
 
4. (C) Both Mengu and Ayhan maintained that all OFF contracts 
signed by 
the former Iraqi government, not just those approved/funded 
by the UN, 
should be implemented and that all should be given high 
priority.  They 
presented Econoff with the following statistics on Turkey,s 
pending OFF 
contracts: 
 
 
-- Total:  USD 1.9 billion; 
-- Approved by UN (not all are funded):  USD 1.3 billion; 
-- Approved/funded by UN:  USD 196 million (308 contracts); 
-- "Priority" contracts for food, medicine, hospital 
construction (not 
all are approved, funded):  USD 660 million; 
-- Food contracts (not all approved, funded):  USD 220 
million. 
5. (C) They also commented that the allocation of five 
percent of oil 
proceeds to the UN Compensation Commission was insufficient 
to address 
outstanding compensation claims.  Both asked for further 
details as to how non-approved/funded OFF contracts would be 
handled under the resolution, 
and more broadly, how the Iraqi Assistance Fund would operate. 
 
 
6. (U) In a public statement issued May 15, MFA called for 
removal of sanctions 
on Iraq, and for UN Security Council action to create a 
framework for 
international cooperation in Iraq.  MFA noted the importance 
of protecting 
the rights of Turkish companies which had won contracts under 
OFF.  PM Erdogan's foreign policy advisor told us May 15 that 
the PM would not be echoing the MFA statement. 
 
 
7. (C)  In an earlier meeting May 8 on Turkish-Iraqi trade 
pursuant to ref C , 
Mengu said that Turkey,s Memorandum of Understanding with 
the GOI governed 
bilateral trade worth USD 500 million annually over the last 
several years, 
all outside the OFF Program.  This trade took the form of a 
barter of Iraqi 
oil for Turkish consumer and industrial goods.  Turkey owes 
Iraq about USD 
250 million in goods under this arrangement, and intends to 
negotiate payment 
in goods when the new Iraqi administration is ready to 
discuss this matter. 
On the issue of a second border crossing with Iraq, Mengu 
stated flatly that 
the Habur crossing, with a capacity of 1500 trucks daily in 
both directions, 
is not fully utilized.  He opined that there is no need for a 
second crossing. 
PEARSON