US embassy cable - 03ANKARA3827

UNCLAS SECTION 01 OF 02 ANKARA 003827 
 
SIPDIS 
 
 
DEPT FOR NEA/NGA - NJENSEN AND EUR/SE 
DEPT PASS TO USAID FOR OFDA 
 
 
SENSITIVE 
 
 
E.O. 12958: N/A 
TAGS: ETRD, ENRG, EAID, PREL, TU, IZ 
SUBJECT:  Turkish Customs Undersecretary on Iraqi Border 
Crossing, Fuel Smuggling 
 
1.   (U) Baghdad minimize considered. 
 
 
2. (SBU) Summary:  Turkey's Customs Undersecretary told 
us that two-way crossings at Habur total about 1,500 
vehicles daily, and that he expects this traffic to more 
than double in the near future.  Following a stoppage at 
the border prompted by a Kurdistan Democratic Party 
attempt to collect higher fees from truckers last week, 
traffic is now flowing smoothly.  Turkish Customs 
continues to confiscate smuggled fuel oil coming from 
Iraq.  Despite reports thatThe Prime Minister announced 
that Turkey hads decided today to opened its borders to 
Iraqi imports, but Foreign Trade sources have told us 
that it will take at least several days to implement 
this.  MFA noted interest in reestablishing air 
transport links with Baghdad, and asked for the U.S. 
view on whether bilateral trade and transport agreements 
negotiated with the old regime in Iraq are still valid. 
End Summary. 
 
 
3. (SBU) Econ Counselor, Econoff and Econ Specialist 
discussed Turkish-Iraqi trade and the Habur border 
crossing with Customs Undersecretary Nevzat Saygilioglu 
and with Acting Director General for EC and External 
Relations Sebahattin Kocas on June 11.  Econ Counselor 
thanked Saygilioglu for Turkish cooperation in securing 
the flow of humanitarian supplies to Iraq, and stated 
that U.S. authorities were working to create a uniform 
trade and tariffunify trade policy throughout Iraqwith 
all of Iraq's neighbors, including Turkey. 
 
 
4. (SBU) Saygilioglu stated that, with sanctions lifted, 
Turkey's only border crossing with Iraq at Habur was now 
handling a combined flow of about 1,500 vehicles daily 
(though Turkey has yet to establish procedures to allow 
imports from Iraq).  Customs has extended its working 
hours to a daily 07:30 to 01:00 schedule.  Saygilioglu 
predicted that traffic between Turkey and Iraq would 
increase in the near future to 3,000 to 4,000 vehicles 
daily.  He offered his "personal" opinion that a second 
border crossing would be necessary, but noted that an 
interagency group would decide whether or not to pursue 
this project.  A second crossing would require up to 35 
kilometers of new roads. 
 
 
5. (SBU) Saygilioglu acknowledged that border operations 
had been disrupted last week by Kurdish Democratic Party 
attempts to raise fees to USD 120 per truck, but that 
KDP had apparently reduced its demand to USD 20 per 
truck.  Traffic is now flowing smoothly across the 
border. 
 
 
6. (SBU) While agreeing with the U.S. goal of 
encouraging Turkish-Iraqi trade relations, Saygilioglu 
complained about Iraqi smuggling of fuel oil into 
Turkey.  He said that Turkish prices for this product 
were currently 15 times higher than those in Iraq and 
that this provided the stimulus for smuggling. EconCouns 
suggested that importing cheaper fuel should be positive 
for Turkey.  However, Saygiliogluhe condemned the trade 
as subjecting Turkish businesses to "unfair" competition 
and pointed out the poor quality of smuggled fuel.  He 
stated that Customs had confiscated 100 tons of such 
fuel on June 10. 
 
 
7. (SBU) The Undersecretary stated that Customs 
facilities at Habur were in need of extensive 
renovation, and that the GOT was considering use of the 
build-operate-transfer (BOT) model to secure private 
sector investment.  He pointed out that the BOT model 
had been successfully used to build customs facilities 
on the Greek and Iranian borders. 
 
 
8. (SBU) Following our meeting at Customs, PM we 
received reports that the government had decided 
toErdogan told the press that the GOT had opened the 
border to Iraqi imports, implementing the UN sanctions 
lift resolution.  However, Foreign Trade Director 
General for Agreements clarified to us on June 12 that, 
while this decision has been taken in principle, many 
details have yet to be worked out and the opening to 
Iraqi imports will not be implemented for at least 
several days.  Other sources told us the government was 
still waiting for the Turkish military to bless the 
decision. 
 
 
9. (SBU) In a separate meeting, MFA Ambassador Okcun 
told Econ Counselor that the GOT is organizing a visit 
to Baghdad by Turkish airline representatives to survey 
the airport, Turkish airline offices and discuss the 
possibility of renewing air links with Baghdad.  He also 
said Turkey hopes to find out soonasked whether 
itsTurkey's bilateral trade and transport agreements 
with Iraq were still considered valid. 
Pearson