US embassy cable - 03AMMAN4098

C O N F I D E N T I A L AMMAN 004098 
 
SIPDIS 
 
E.O. 12958: DECL: 07/04/2008 
TAGS: ECON, EFIN, PREL, PTER, IZ, JO, UNSC 
SUBJECT: JORDANIAN ACTION ON IRAQI ASSETS 
 
REF: A. STATE 186972 
     B. STATE 173353 
 
Classified By: Ambassador Edward W. Gnehm.  Reasons 1.5 (b) and (d). 
 
1.  Summary.  According to a senior Jordanian finance 
ministry official, the GOJ -- using an April 24 law under 
which the GOJ took ownership of $463 million in funds frozen 
in Iraqi bank accounts -- is working hard to reimburse 
private Jordanians who have submitted claims for unpaid 
deliveries of goods to Iraq before the new Parliament meets 
July 15.  The ministry had not received Secretary Snow's 
recent letter, but will examine it closely and reply.  End 
Summary. 
 
2.  (c)  Econ/C called on Finance Ministry Secretary General 
Moh'd Abu Hammour July 2 to discuss Jordan's actions and 
intentions vis a vis official Iraqi assets frozen in 
Jordanian banks.  Abu Hammour, who is the number two official 
in the Ministry of Finance, said that he had not seen the 
letter from Secretary Snow to Finance Minister Marto (ref a). 
 He read the letter carefully and said he would discuss it 
with Minister Marto.  It was Jordan's highest priority, he 
said, to comply with all UN Security Council resolutions. 
 
3.  (c)  Abu Hammour said that he had been put in charge of 
the inter-ministerial technical committee that is 
implementing the April 24 law (text of law emailed to 
NEA/ARN) under which the Government of Jordan took ownership 
of Iraqi assets frozen in Iraqi banks.  Other members of the 
committee come from the Central Bank, Ministry of Industry 
and Trade, Ministry of National Economy, and Ministry of 
Planning.  Abu Hammour said the total amount of frozen assets 
was JD 328 million ($463 million).  The funds were for the 
most part held in commercial bank accounts in the name of 
Iraqi embassy employees, not official GOI institutions or 
high-level officials.  Nevertheless, it was clear that the 
accounts had been managed on behalf of the Saddam Hussein 
government. 
 
4.  (c)  Approximately, 60-70% of the frozen accounts were in 
the Jordan National Bank, the Amman branch of the Rafidain 
Bank, and the Housing Bank.  The remainder was spread among 
smaller banks.  Abu Hammour said that the largest Jordanian 
bank, the Arab Bank (of which he is a board member) did not 
have any such accounts and had been careful to avoid doing 
business with Iraq. 
 
5.  (c)  Under the terms of the April 24 law, approximately 
130 private Jordanians have submitted claims to the technical 
committee for reimbursement out of the frozen funds.  These 
claims amount to 60-70% of the JD 328 million total.  These 
claims were for goods that had been delivered to Iraq under 
the terms of the bilateral oil for goods protocol, but for 
which payment had not been authorized by the Iraqi government 
(acting through the embassy employees) before the accounts 
were frozen at the start of the war.  The committee is moving 
quickly to validate claims and make reimbursements before the 
new Parliament comes into session July 15, after which he 
feared political interference by deputies. 
 
6.  (c)  Abu Hammour also noted that the April 24 law 
entitled the Central Bank of Jordan to submit claims against 
the frozen funds.  However, it was Abu Hammour's feeling that 
the CBJ's JD1.1 billion claim should be dealt with 
multilaterally along with other official claims under Paris 
Club procedures.  (Indeed, Abu Hammour was personally worried 
-- please protect -- that paying private claims under the 
April 24 law would expose the Jordanian government to claims 
by a future Iraqi government.) 
 
7.  (c)  Comment.  As shown by Jordan's cooperation with the 
Treasury-led interagency team that came to Amman to track 
Iraqi assets, Abu Hammour is undoubtedly correct that Jordan 
does not want to get on the wrong side of the United States 
or UN resolutions on this subject.  It does not seem, 
however, that the April 24 law has been examined in light of 
the UNSCR 1483 requirement to turn frozen GOI funds over to 
the Development Fund for Iraq.  The Jordanians might be able 
to argue that the April 24 law constitutes a "prior judicial 
judgment" under para 23(b) of the resolution (which the 
Security Council approved May 22).  Post would be pleased to 
facilitate further communications with the Jordanians on this 
subject. 
GNEHM