US embassy cable - 03ANKARA3794

C O N F I D E N T I A L ANKARA 003794 
 
SIPDIS 
 
 
STATE EUR, NEA AND PM 
 
 
E.O. 12958: DECL: 06/10/2013 
TAGS: EPET, PREL, IZ, TU 
SUBJECT: KDP'S CONTINUED PRACTICE OF CHARGING FEES AT 
BORDER THREATENS TO STALL EFFORTS TO FACILITATE FLOW OF 
GOODS TO IRAQ 
 
REF: ANKARA 3731 
 
 
(U) Baghdad minimize considered. 
 
 
(U) Classified by Ambassador W. Robert Pearson.  Reasons: 
1.5 (B and D). 
 
 
1. (U) This is an action request.  See para 4. 
 
 
2. (C) Recent reports that the KDP intends to continue 
charging taxes/fees for goods crossing the Turkish-Iraqi 
border threatens to stall our ability to facilitate the flow 
of goods to Iraq and could hamper our overall reconstruction 
efforts.   It is our understanding that CPA Ambassador Bremer 
and other US officials in Iraq have called on all Iraqi 
groups to implement a &tax holiday8 while we attempt to 
devise a uniform plan for the entire country.  Despite this 
request, GOT officials, Turkish businessmen and sources in 
Iraq report that Kurdish groups continue to charge fees for 
trucks coming across the border.  The local KDP 
representative confirmed these reports June 9 and said the 
KDP intends to continue the practice, although under a 
slightly different formula.  (reftel). 
 
 
3. (C) We view the KDP,s insistence on continuing charging 
fees along the border as an unilateral move by one Iraqi 
group that would appear to run counter to the CPA,s policy 
of a &tax holiday8 and, if left unchecked, could threaten 
our larger objective of increasing the flow of goods to Iraq. 
 While the local KDP rep assures us there are no fees on 
World Food Program (WFP) shipments entering Iraq from Turkey, 
WFP Ankara told us the WFP is required to pay the KDP $20 per 
truck and that only aid shipments entering Iraq from Turkey 
are subject to fees.  Last week, a truckers' strike against 
an attempt by the KDP to increase fees temporarily halted UN 
shipments from Turkey to Iraq, as the Financial Times 
reported.  While trucks carrying fuel and LPG via the Ground 
Line of Communication (GLOC) between Turkey and Iraq 
reportedly are presently not being charged fees, we have no 
assurances this will not change down the road if Kurdish 
groups continue to be permitted to implement their own fee 
system.  Furthermore, we suspect that some GOT officials are 
hiding behind the fee issue before agreeing to implement the 
necessary procedures (including new import guidelines) that 
will facilitate the flow of goods and services between Turkey 
and Iraq.  As long as the Kurdish groups in the north 
continue to &run8 an independent fee collection policy 
along the border, we can expect the Turks to drag their feet 
on implementing the steps they need to take to open up their 
side of the border. 
 
 
4. (C) Action request:  Embassy will continue to press the 
GOT hard to open its border fully to two-way trade.  It is 
already open to the flow of humanitarian assistance.  We 
recommend that Washington agencies and the CPA continue to 
press hard on senior KDP and other Iraqi leaders to implement 
the &tax holiday8 plan.  If these groups resist, we 
recommend that Washington consider instructing US officials 
in Iraq to immediately assume administrative and security 
control of the Turkish-Iraqi border crossings to ensure 
proper implementation of Coalition policy. 
PEARSON