US embassy cable - 03ANKARA3731

C O N F I D E N T I A L ANKARA 003731 
 
SIPDIS 
 
 
STATE FOR EUR/SE, NEA/NGA AND EB/ESC 
 
 
E.O. 12958: DECL: 06/09/2008 
TAGS: EPET, PREL, ETRD, IZ, TU 
SUBJECT: FACILITATING TURKEY-IRAQ FUEL OIL FOR GASOLINE/LPG 
BARTER DEAL 
 
REF: ANKARA 3537 
 
 
(U) Baghdad minimize considered. 
 
 
(U) Classified by DCM Robert Deutsch.  Reason: 1.5(b,d). 
 
 
1.  (C) In separate June 9 meetings, Ambassador and EconCouns 
urged MFA U/S Ziyal and Foreign Trade U/S Kayalar, 
respectively, to facilitate GOT approval of the pending 
SOMO-Delta Petroleum barter deal (reftel), under which SOMO 
would export fuel oil to Turkey in return for benzine 
(gasoline) and LPG.  Ziyal said he would try to accelerate 
the approval process, while Kayalar predicted Turkey would 
put in place import procedures for products from Iraq, 
including fuel oil, by the end of this week.  As in previous 
meetings on this subject, Embassy officials stressed that 
implementation of this deal would bring significant 
humanitarian and economic benefits to Iraq, and offered an 
opportunity for the Turks to demonstrate their helpfulness on 
Iraq (while advancing Turkish economic interests). 
 
 
2.  (C)  We have received conflicting information from GOT 
officials on whether the lack of import procedures is the 
only hold-up in implementing this deal.  Some MFA officials 
have suggested that approval will be linked to U.S. success 
in reducing or eliminating the truck "fees" being extracted 
by local groups on the Iraqi side of the border. Foreign 
Trade U/S Kayalar, on the other hand, said the deal could go 
through immediately once the GOT established proper import 
procedures, though he added that the "fees" issue needed to 
be resolved. 
 
 
3.  (C) Pol-Mil officer spoke with local KDP rep Safeen 
Dizayee today on the issue of fees being charged by Kurds at 
the border.  Dizayee said the KDP leadership understands 
there needs to be uniform, transparent procedures in place, 
but that those procedures and the fees charged need to take 
into consideration the Kurds' concerns about revenue, and the 
fact that 80 percent of their income and the source of pay 
for some 200,000 KDP employees came from these revenues.  He 
said the KDP would be briefing a new fee plan based on 
categories of goods and truck size to Turkish Customs 
officials in Silopi, Turkey on either June 9 or June 10.  His 
bottom line was that, while the Kurds would exempt U.S. 
military and UN shipments, Turkish businessmen would have to 
pay the same fee as U.S., UK, Saudi or any other businessmen. 
 He did not know how import fees worked in the South. 
Pol-Miloff responded that the USG was concerned about any 
measures, including high fees charged passing trucks, that 
hindered the flow of needed goods into Iraq. 
 
 
4.  (C) Embassy will continue to press the GOT to take the 
steps necessary to allow this barter deal to proceed, 
including following up with the Prime Minister's staff. 
Also, Delta Petroleum is in regular contact with Finance 
Minister Kemal Unakitan, who has been supportive.  We suggest 
this issue should be on the agenda for U/S Ziyal's visit to 
Washington next week. 
PEARSON