Viewing cable 10BAKU127, AZERBAIJAN: WHO OWNS

Viewing cable 09ANKARA226, ELDERLY AMERICAN SMUGGLED OUT OF IRAN

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Reference ID Created Released Classification Origin

09ANKARA226

2009-02-11

13:01

2010-12-01

23:11

CONFIDENTIAL

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RUEHGB/AMEMBASSY BAGHDAD 1397

RUEHKB/AMEMBASSY BAKU 1592

RUEHRL/AMEMBASSY BERLIN 4298

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RUEHDE/AMCONSUL DUBAI 0229

RUEHIT/AMCONSUL ISTANBUL 5366

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Wednesday, 11 February 2009, 13:03

C O N F I D E N T I A L SECTION 01 OF 04 ANKARA 000226

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SENSITIVE

LONDON FOR GAYLE

BERLIN FOR PAETZOLD

ASHGABAT FOR INGBORN

BAKU FOR MCCRENSKY

BAGHDAD FOR BUZBEE

DUBAI FOR IRPO

EO 12958 DECL: 06/02/2019

Embassy

Ankara

Viewing cable 10BAKU127, AZERBAIJAN: WHO OWNS WHAT VOL. 2 - THE MINISTER

OF



10BAKU127 2010-02-25 05:05 2010-12-06 15:03 SECRET Embassy Baku

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COMMERCE FOR D.STARKS

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DEPT PLEASE PASS TO USTR FOR C. MORROW AND P. BURKHEAD

EO 12958 DECL: 02/24/2020

TAGS ECON, EINV, EIND, ETRD, KCOR, PINR, PGOV, RS, KS, IR,

TU, AJ

SUBJECT: AZERBAIJAN: WHO OWNS WHAT VOL. 2 - THE MINISTER OF

EMERGENCY SITUATIONS, BELUGA CAVIAR, AND FRUIT JUICE (C-RE9-02494; C-RE9-

02493; C-RE9-02492)

REF: BAKU 54

Classified By: Charge dâ€™Affaires Don Lu, a.i., for reasons 1.4(b) and ( d).

Â¶ 1. (S) SUMMARY: This cable is the second in a series that profiles the most powerful families in Azerbaijan, both in terms of economic and political power. This issue features Minister of Emergency Situations

Kamaladdin Heydarov and his family. Heydarov was previously Chairman of the

State Customs Committee, and his hand-picked successor now operates that agency, one of the most corrupt operations in Azerbaijan. The Heydarov family, which controls a business empire in Azerbaijan ranging from fruit juice production to real estate development, is the second most powerful commercial family in Azerbaijan, after the Pashayev family (into which

President Aliyev married). End Summary.

The Man Behind the Power

------------------------

Â¶ 2. (S) Kamaladdin Heydarov is the most powerful member of this family, and some observers have said he might be even more powerful than the

President himself. (COMMENT: Post does not believe this is true, although

Heydarov controls more visible assets and wealth within the country than the President. End Comment.) His father, Fattah Heydarov, is a Member of

Parliament from the mountainous Qabala district, which serves as a home base for the family outside Baku. Fattah was Secretary of the Ordubad (and later Julfa) District Party Committee during Soviet times, and served as

Minister of the Welfare Service of Nakhchivan from 1976 to 1978 and later as Nakhchivanâ€™s Minister of Culture from 1983 to 1995.

Â¶ 3. (S) Kamaladdin Heydarov was Chairman of the State Customs Committee for nine years, and since 2006 has been head of the para-military Ministry of Emergency Situations (MES), which acts as a super-Federal Emergency

Management Agency, Fire Marshall, health and safety inspector, and overall regulator of many aspects of the economy. Born in 1961, he holds a degree in Geology and International Law from the Azerbaijan State University. He held executive positions in a number of private and public enterprises prior to his appointment at the ripe old age of 35 as Chairman of the State

Customs Committee (SCC), an agency that is notoriously corrupt, even by

Azerbaijani standards. Heydarovâ€™s rise to power was partly a result of the strong relationship between his father Fattah and former President

Heydar Aliyev (also from Nakhchivan), but also partly a result of

Heydarovâ€™s strong management skills. As he gained wealth for the ruling party, Heydar Aliyevâ€™s respect for him grew, until finally he was entrusted with the valuable role of Chairman of the SCC.

Â¶ 4. (S) The State Customs position allowed him to gain his massive wealth, as significant illicit payments were paid â€œup the food chainâ€ in an elaborate and well-orchestrated system of payoff and patronage. Heydarov likely still enjoys a sizeable income from the SCC, as it is controlled by his loyal successor. When President Ilham Aliyev appointed Heydarov as

Minister of Emergency Situations in 2006, he was replaced at the SCC by his

Deputy Aydin Aliyev. Aydin Aliyev is not related to President Aliyev, and

Heydarov is Aydin Aliyevâ€™s sole benefactor, a symbiotic relationship in which Aliyev presumably gives undying loyalty (and a hefty cut) to the powerful Heydarov in order to retain his position. When Charge first met

Heydarov in 2007, the Minister had been in office for less than a year but had a chest full of military ribbons that would rival the U.S. Chairman of the Joint Chiefs. Presumably he transferred them directly from his old

State Customs uniform.

The Ministry of Everything Significant (MES)

--------------------------------------------

BAKU 00000127 002 OF 004

Â¶ 5. (SBU) The Ministry of Emergency Situations (MES) has consistently proven itself to be one of the most powerful ministries in Azerbaijan. It is suspected to have the largest revenue of any Ministry. It even has its own para-military unit, consistent with other such ministries in the CIS.

Heydarov mentioned to a visiting Washington VIP in 2008 that his ministry had recently taken control of an anti-aircraft battery near Baku in which he had served as a young conscript during Soviet times. The Ministry now controls the fire departments and other emergency services, fire code inspections, state grain reserves, and construction licensing. This last area of responsibility (perhaps the most important for foreign entities operating in Azerbaijan) also covers building inspectors who can interfere with, delay, or stop any construction project they declare to be

â€œunsafe.â€ In fact, MES staff have previously warned American and other foreign businessmen that their purview covers anything that is associated with temperature, pressure, or isotopes -- categories broadly interpreted to include just about everything under the sun.

Â¶ 6. (SBU) It is often said mockingly that in Azerbaijanâ€™s judicial system, one can only win a case if one is friends with the judge - or if introduced by Benjamin Franklin (read: significant cash). Of course being known to the judge as politically powerful is another path to courtroom victory. The path to certifying a buildingâ€™s safety is likely similar, and the true structural integrity of Bakuâ€™s recent construction boom is suspect. In 2007, a multi-story high-rise under construction crashed to the ground, killing several workers. In January 2010, three workers were killed when they fell from a building under construction on high-rent Neftchiler

Prospect (reftel). Suspect construction is widespread in Baku, as new, speculative real estate ventures in central Baku (including high-rise buildings) are largely vacant, while practical buyers bid up the prices of flats in â€œStalin-kaâ€ buildings that pre-date independence. These older buildings, which tend to be low-rise, are thought to have had higher construction standards and generally be safer and more dependable.

Â¶ 7. (S) These types of market developments do not bode well for the reputation of MES, which is widely viewed as a cash cow for Bakuâ€™s elite, and the Heydarov family in particular. If an event such as an earthquake led to widespread destruction of property, it is assumed that outrage would be private, rather than public, and would not boil over into attacks on contractors or corrupt bureaucrats, as was the case after the 1999 earthquake in Istanbul. Some less powerful contractors would become easy targets, but the true architects of disaster such as Heydarovâ€™s MES would find a way to use its resources and the tools of the state to escape any reprisal.

His Boys and Their Toys

-----------------------

Â¶ 8. (S) Kamaladdinâ€™s two sons, Nijat Heydarov and Tale Heydarov, have recently expressed a desire to purchase two Gulfstream jets, valued at $20 million each. The family also owns an Airbus A319 corporate jet that is presently undergoing cabin completion in Basel, Switzerland. According to initial reports, ownership of the Gulfstreams would be shared between

â€œShams al Sahra FZCOâ€ (registered in Dubai to Tale and Nijat) and Mr.

Manouchehr Ahadpur Khangah, with Shams al Sahra and Kangah each holding 50 percent of each jet. Khangah was not previously known to the Embassy, but according to information from Gulfstream appears to be a citizen of both

Iran and Azerbaijan (unclear if he also holds other passports). Purportedly as part of Patriot Act compliance, Gulfstream asked the Heydarovs for information that would confirm the lawful sources of their wealth. The

BAKU 00000127 003 OF 004

Heydarovs provided Gulfstream an overview of their family holdings, and it appears they own more businesses than any other Azerbaijani family, including companies in food canning, construction materials, concrete, asphalt, chemicals, bricks, textiles, CD and DVD production (since licensed

CDs or DVDs are generally unavailable on the local market, these are certainly all pirated), milk processing, tourism, gypsum materials, leather, agriculture, pianos, alcohol and spirits, juices, banking, insurance, and construction.

Â¶ 9. (C) One Embassy contact, XXXXXXXXXXXX referred to Khangah as the Chief

Executive Officer or â€œfront manâ€ of a substantial portion of the

Heydarov family conglomerate. This contact noted that while Khangah is listed as the official owner of various businesses, they are very much

Heydarov-owned operations in which Khangah functions more as a manager.

This source added that Khangahâ€™s role was mirrored by an unnamed Turkish citizen who controls another segment of the family businesses.

Â¶ 10. (C) Many of the family,s operations are part of the â€œGilan,â€

â€œQabala,â€ â€œJala,â€ or â€œUnited Enterprises International (UEI)â€ family of companies. Gilan Holdings is omnipresent in Baku, as the company is one of several major real estate developers and has been in the forefront of Bakuâ€™s highly speculative real estate market. Observers compare Gilan to Dubai World or Nakheel, although admittedly on a smaller scale. The Heydarovs have largely cornered the fruit juice market in

Azerbaijan, maintaining extremely high prices for locally produced juices and watered-down juice drinks, while making life difficult -- with the help

of State Customs -- for cheaper competitors from Turkey, Ukraine and

Russia. When USAID tried to support the production and distribution of pomegranate products in Azerbaijan, they quickly learned that no one sells pomegranate juice, concentrate, or derivatives from Azerbaijan without

Heydarovâ€™s permission. Azerbaijanâ€™s economy is largely dominated by monopolistic interests, and observers suggest that the Heydarovs are at the top of this mountain of non-competition. It is rumored that the Heydarovs also have interests in the local Pepsi bottler, the local license for Red

Bull, British American Tobacco, Japan Tobacco, and Imperial Tobacco.

Heydarov has readily admitted to visiting U.S. delegations that he owns and operates the Caspian Fish Company which controls the lucrative (and previously Russian Mafia-controlled) Beluga Caviar production in

Azerbaijan.

Â¶ 11. (S) The Heydarovs are also active in cultural endeavors. Kamaladdin

Heydarov is a composer and has written a song about former President Heydar

Aliyev that was sung by Azeri singer Aghadadash Aghayev. His wife is ethnic

Korean, and he himself is quite the Koreaphile; he is President of the

Azerbaijan Taekwondo Federation and owner of the recently opened high-end

Korean restaurant â€œShilla.â€ Korean diplomats have confirmed that

Heydarov was the protector for several major business deals, but have complained that many of these deals have gone awry after the Korean firms refused to pay adequate patronage to Heydarov.

Â¶ 12. (C) Heydarovâ€™s son Tale is the President of The European Azerbaijan

Society (TEAS), and has made rounds to U.S. embassies in European capitals from his London base. The â€œsocietyâ€ purports to be an independent advocacy group, but its talking points very much reflect the goals and objectives of the GOAJ. In recent meetings, Tale and his cohorts have raised â€œArmenian aggressionâ€ in Nagorno-Karabakh and â€œdouble standardsâ€ of U.S. human rights and democracy reporting in the region, and complained about efforts of the U.S. Congress to provide humanitarian assistance within the Nagorno-Karabakh enclave. Tale and/or Nijat also own the Qabala Football Club -- perhaps as a small-scale effort to replicate the Chelsea antics of Russiaâ€™s Roman Abramovich. The Qabala squad is a virtual United Nations team, with

BAKU 00000127 004 OF 004 players from across Europe, Latin America and Africa -- the best team money can buy, at least for central Azerbaijan. Both sons were educated in London and presently live there. Tale holds a B.A. in International Relations and

History from the London School of Economics and an M.A. in Security and

Global Governance from Birkbeck College, while Nijat holds a B.A. in

Politics and East European Studies from University College London and an

M.A. in Management, Organizations, and Governance from the London School of

Economics. Some newspapers have reported that Tale might return to Baku to become a Member of Parliament later this year.

Itâ€™s Good to Be King

--------------------

Â¶ 13. (C) The familyâ€™s influence is strongest in the regions of Qabala,

Masalli, and Lenkeran. Postsuspects that Heydarov continues to control the tate Customs Committee and wield influence over the Ministry of Taxes, the

Ministry of Ecology and Natural Resources, and Ministry of Economic

Development, which is now led by a former Ministry of Taxes official.

Additionally, of course, Heydarov profits significantly from widespread activities of the Ministry of Emergency Situations. That ministry, according to observers, may be the most sought after employer in official

Baku, as Heydarov has made a reputation for paying salaries on time and in full. Employees benefit from perks of MES employment, such as the ability to enroll children in one of Bakuâ€™s best-looking and best-financed public schools. Measures like these, contacts report, create a loyal following for the minister among his minions.

Turf Wars: Donâ€™t Cross Kamaladdin

---------------------------------

Â¶ 14. (S) Embassy contacts note that Kamaladdin Heydarov is currently in a

â€œfight over grainâ€ with Minister of Agriculture Ismat Abbasov, and wants Abbasov replaced by Member of Parliament Eldar Ibrahimov.

Historically, those who have fought with Heydarov have always fared poorly:

Farhad Aliyev and Heydar Babayev were (in succession) driven out as

Minister of Economic Development in part after falling on Heydarovâ€™s bad side. Both were billed as reformers, and the economic reforms they were seen to propose stood to hurt Heydarovâ€™s interests at the State Customs

Committee and the Ministry of Emergency Situations. In addition, some opposition newspapers had begun to call them potential candidates for the position of Prime Minister. Feeling threatened by their reform activity and growing power, Heydarov allegedly put his foot down. Both were removed from government and their business interests were seriously damaged. Rumors circulated in 2009 that Heydarov may have even been behind the assassination of Air Force Chief and Deputy Defense Minister General Rail

Rzayev. The rumors point to the widely-reported forced landing of

Heydarovâ€™s helicopter after it took off without obtaining flight clearance.

Â¶ 15. (U) The next issue of â€œWho Owns Whatâ€ will profile the family of

Ziya Mammadov, the Minister of Transportation. With so much of the nationâ€™s oil wealth being poured into road construction, the Mammadovs also control a significant source of rent-seeking. His holdings extend to the buses that run throughout Baku. A recent television report asked if the

Mammadovs controlled mysterious construction company ZQAN Holding; the reporter pointed out the letters of ZQAN matched the initials of father

Ziya, mother Qanira, son Anar, and daughter Nigar. A ZQAN representative brushed this aside as innuendo. LU

Viewing cable 10STATE17894, DEMARCHE: CONTINUED CONCERN OVER SYRIAN

SUPPORT



10STATE17894

2010-02-26

00:12

2010-12-06

21:09

SECRET

Secretary of

State

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S E C R E T STATE 017894

SIPDIS

EO 12958 DECL: 02/25/2020

TAGS PREL, PGOV, PTER, MASS, IS, LE, SY

SUBJECT: DEMARCHE: CONTINUED CONCERN OVER SYRIAN SUPPORT

TO HIZBALLAH

REF: A) 2009 STATE 129636

Classified By: NEA A/S Jeffrey D. Feltman for reasons 1.4 (b) and (d)

Â¶ 1. (U) This is an action request. Please see paragraph four.

Summary

-------

Â¶ 2. (S) We previously demarched Britain, France, and Turkey on our increasing concerns over Syriaâ€™s continued provision of advanced weapons to Hizballah (Ref A). In London, Paris and Ankara the demarches were taken seriously and all governments pledged to raise their concern with Syrian officials. French diplomats noted that they routinely deliver the same message to the Syrians, but that Damascus denies involvement. This issue now needs to be reinforced with these governments and brought to the attention of Saudi Arabia, Jordan, and Qatar. Under Secretary Burns visited

Damascus on February 17 and stressed U.S. concerns about weapons transfers to Hizballah directly with Syrian President Bashar Asad, who bluntly stated that he knew of no new weapons systems going to Hizballah. In light of disturbing and weighty evidence to the contrary -- that Syria currently provides Hizballah with advanced ballistic missiles and other weaponry -- we want France, Britain, Turkey, Saudi Arabia, Jordan, and Qatar to make a renewed push to echo our concerns with Syria, given that Syria continues to ignore warnings that its transfers of advanced surface-to-surface and surface-to-air weapons to Hizballah could jeopardize prospects for an agreement with Israel or spark a conflict significantly more destructive than the 2006 Israel-Hizballah war. Syriaâ€™s actions clearly jeopardize regional stability and could risk drawing Damascus into any future war between Israel and Hizballah.

Â¶ 3. (S) The Syrian leadership views military support to Hizballah as integral to Syriaâ€™s security and as a bargaining chip in its negotiations with Israel over the return of the Golan Heights, as well as a possible stick to bring the Israelis back to the table. While our commitment to principled engagement with Syria -- as demonstrated by Under Secretary

Burnsâ€™ recent visit -- remains strong, we must enlist additional French,

British, Turkish, Saudi, Jordanian, and Qatari support to help dissuade

Syria from expanding its ties to Hizballah any further, especially via the transfer of additional sophisticated weaponry.

Objectives

----------

Â¶ 4. (S/REL FRANCE, BRITAIN, TURKEY, SAUDI ARABIA, JORDAN, AND QATAR)

Drawing on paragraphs 2 and 3 for context, we request that Embassies in

Paris, London, Ankara, Riyadh, Amman, and Doha pursue the following objectives with senior French, British, Turkish, Saudi, Jordanian, and

Qatari officials at the highest appropriate levels.

-- Highlight that Under Secretary Burns visited Damascus on February 17 as part of our ongoing engagement with Syria. Reiterate our commitment to sustained, principled engagement with Syria. We plan to continue our dialogue with Syria and look forward to the arrival of our new ambassador in Damascus once the confirmation process is complete.

-- Stress that in addition to discussing bilateral issues of mutual interest, Under Secretary Burns conveyed to President Asad a number of our priority concerns with Syria, specifically cross-border weapons smuggling into Lebanon destined for Hizballah.

-- Note that in response, Asad claimed that Syria could not be Israelâ€™s policeman and that he knew of no new weapons systems being smuggled from

Syria to Hizballah.

-- Underscore that, contrary to President Asadâ€™s statements, we are aware of current Syrian efforts to supply ballistic missiles to Hizballah.

-- We also note President Asadâ€™s recent comments -- during a February 25 joint press conference with his Iranian counterpart -- that support for

Hizballah was a â€œmoral and legal duty.â€

-- Express deep concern that Syriaâ€™s expanding military ties to

Hizballah, including the supply of ballistic missiles to Hizballah, jeopardize regional prospects for peace and stability. Specifically, Syrian transfers of increasingly sophisticated weaponry risk renewed conflict between Israel and Hizballah that may expand, unlike in 2006, into Syria.

-- Convey that arms shipments to Hizballah -- especially ballistic missiles

-- increasingly undermine Israelâ€™s confidence in Syriaâ€™s willingness and ability to deliver peace and diminish the value of an eventual Syrian-

Israeli accord, as Hizballah will not return the weapons it has already received.

-- Underscore that the next report on Security Council resolution 1701 will be discussed on March 12. Full implementation of Security Council resolution 1701, including the arms embargo and weapons-free zone, remains a priority for the United States. In light of the upcoming report, it is especially important to stress that Syriaâ€™s actions constitute serious violations of Security Council resolution 1701 -- which will be taken seriously by the international community -- and belie its claims to respect

Lebanonâ€™s sovereignty.

-- Express our appreciation for your host governmentâ€™s support on the critical issue of Syrian weapons transfers to Hizballah and note that we hope to continue our cooperation to prevent serious miscalculations by the

Syrian government.

-- Share the following S/REL FRANCE, BRITAIN, TURKEY, SAUDI ARABIA, JORDAN,

QATAR text verbatim:

(Begin releasable text.)

We would like to convey to you that we have information indicating that

Syria is providing increasingly sophisticated weapons to Hizballah, including from its own military stocks.

For example, we assess that Syria has provided or will provided guided short range ballistic missiles to Hizballah that could target two-thirds of

Israel, including Tel Aviv, from launch sites north of the Litani.

Our information also indicates that Syria has made advanced surface to air missile systems available to Hizballah and has probably provided training on these systems to Hizballah personnel.

(End releasable text.)

-- Urge France, Britain, Turkey, Saudi Arabia, Jordan, and Qatar to raise these concerns once again in their dialogue with senior Syrian officials.

We do not want to undermine our collective outreach to Syria. However, we are increasingly concerned that the Syrian government is making a strategic

miscalculation by incorrectly assuming that increasing Hizballahâ€™s military capability concomitantly bolsters Syriaâ€™s security and strength at the negotiating table with Israel, when the opposite is more likely to be true.

-- Syriaâ€™s desire for a deterrent against Israeli military action -- presumably a motivation for the transfer of ballistic missiles to Hizballah

-- is not producing a stable deterrent because there are no mechanisms to prevent unanticipated escalation. Not having control over Hizballahâ€™s missiles increases the risk of this danger.

-- Emphasize that Syriaâ€™s actions risk derailing our common efforts to bring peace to the region.

-- Note that we are raising our concerns with Syrian officials in Damascus and with the Syrian Ambassador here in Washington.

-- Also note our continuing strong commitment and support to the full implementation of resolutions 1747 and 1701, encouraging France, Britain, and Turkey to stress their continuing support for the full implementation of resolution 1701 -- in its entirety (including the arms embargo and weapons free zone) -- with senior Syrian officials.

-- These are U.S. concerns. We are not carrying somebody elseâ€™s

â€œwaterâ€ on this issue.

-- (For Turkey) Express that we greatly appreciate Turkeyâ€™s continued efforts to combat weapons smuggling. As conveyed by Under Secretary Burns when he was in Ankara on February 18, we urge Turkey to use its close ties with Damascus to underscore the repercussions that Syriaâ€™s continued provision of weapons to Hizballah has for regional stability and the broader goal of Middle East peace. We hope that Turkey will leverage its influence with Syria on this crucial issue.

Reporting Deadline

------------------

Â¶ 5. (SBU) Embassies are requested to report the results of this demarche to Syria desk officer Andrew Abell and Lebanon desk officer John Duchak by

March 3, 2010. CLINTON

Viewing cable 10DAMASCUS168, V/FM MIQDAD DENIES SUPPLYING BALLISTIC

MISSILES TO



2010-12-06

21:09

SECRET

Embassy

Damascus

10DAMASCUS168

2010-02-25

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DEPARTMENT FOR NEA/FO, NEA/ELA

NSC FOR SHAPIRO/MCDERMOTT

LONDON FOR LORD

PARIS FOR NOBLES

EO 12958 DECL: 02/25/2019

TAGS PTER, PREF, PREL, IS, LE, SY

SUBJECT: V/FM MIQDAD DENIES SUPPLYING BALLISTIC MISSILES TO

HIZBALLAH, DIRECTS U.S. DEMARCHE TO ISRAEL

REF: A. STATE 17307 B. TEL AVIV 404

Classified By: CDA Charles Hunter, for reasons 1.4 b,d.

Â¶ 1. (S) Summary: Responding to Ref A demarche, Syrian Vice Foreign

Minister (V/FM) Miqdad expressed surprise the U.S. was sharing such a strong message in the wake of Under Secretary (U/S) William Burnsâ€™ positive February 17 visit. He argued Israel represented the major threat to stability in the region and that the U.S. should be directing its message toward Israeli officials. Syria, he claimed, wanted peace and was working with Turkey and the U.S. toward that end. Flatly denying any Syrian role in the supply of weapons to Hizballah, The most sophisticated weapons

Damascus supported Lebanese independence while Israel violated Lebanese sovereignty on a daily basis. Miqdad argued Syria wanted to preserve the positive results of U/S Burnsâ€™ recent visit and promised to convey the message. He also pledged to review our request for assisting the Center for

Victims of Torture and agreed to follow up Chargeâ€™s request for official written notification of the governmentâ€™s decision to allow the Damascus

Community School (DCS) to reopen. End Summary

--------------------------------------

Miqdad: Direct Your Message to Israel

--------------------------------------

Â¶ 2. (S) Charge and Pol/Econ Chief delivered Ref A demarche to Syrian Vice

Foreign Minister (V/FM) Faisal al-Miqdad on February 25. A clearly surprised Miqdad listened attentively and took detailed notes, interrupting twice to confirm whether the demarche concerned the transfer of ballistic missiles and to clarify whether the message represented a U.S. or an

Israeli â€œwarning.â€ Charge explained the message reflected Washington concerns that SEMEP Mitchell and U/S Burns had shared previously with

President Asad. Addressing the substance of the demarche, Miqdad argued that Israel itself could not have sent a stronger warning. The message, he continued, â€œshows the U.S. has not come to a mature position (that would enable it) to differentiate between its own interests and Israelâ€™s.â€

Syria was â€œof courseâ€ not in the mood to increase tensions or escalate,

â€œbecause we believe in peace.â€ Toward that end, Syria was doing its best with Turkey and the U.S. to achieve peace. Syria was not taking steps to escalate. Unless Israel had plans to escalate against Syria or Lebanon,

â€œthereâ€™s no need to worry,â€ said Miqdad.

Â¶ 3. (S) Referring to Hizballah Secretary General Hassan Nasrallahâ€™s

February 16 speech, Miqdad emphasized that Hizballah was responding to

Israeli threats and clearly conveyed Hizballahâ€™s intent to respond only if Israel attacked first. Syria believed in and supported the role of

UNIFIL, and was using its contacts with the Lebanese Government to

â€œinsistâ€ on Lebanonâ€™s full cooperation with UNIFIL. Miqdad insisted

Israel, not Syria or Lebanon, was issuing provocative threats and using

Hizballah as a pretext. The Syrian government had been pleased to hear

Lebanese PM Haririâ€™s remarks expressing concerns about Israeli provocation, including the violation of Lebanese airspace and assassinations. The U.S. message, summed up Miqdad, â€œshould be directed to Israel not to escalate.â€

----------------------------------------

Denial of Supply of Weapons to Hizballah

----------------------------------------

Â¶ 4. (S) Charge replied that the U.S. message had come in the context of improving bilateral relations, which depended on a frank and candid exchange of assessments of regional developments. The U.S. was issuing neither threats nor ultimatums, but rather it sought to convey what it believed to be a shared interest in avoiding conflict. Miqdad commented that it was â€œstrangeâ€ the U.S. had chosen to deliver â€œharsh words while weâ€™re trying to build better relations.â€ He promised to convey the message to his superiors but reiterated Syriaâ€™s desire to avoid escalation. â€œYou may hear about weapons going to Hizballah,â€ he claimed, â€œbut they are absolutely not coming through Syria.â€ The real threat to stability was coming from

Israeli officials who had threatened recently to attack Damascus and to change the Syrian regime. â€œPlease convey to Washington, while we take note of your demarche, this message should be directed at Israel,â€ he said.

Â¶ 5. (S) Charge replied that, as U/S Burns had conveyed to President Asad, the U.S. was urging all parties in the region, including Israel, to exercise restraint and support Lebanese independence. â€œThis is our commitment,â€ Miqdad responded, â€œwe shall not interfere (in Lebanon).â€

The Lebanese should be allowed to decide for themselves on how to resolve their own issues; those who would interfere want to disturb the peace after

Lebanon successfully conducted national elections and formed a consensus government. â€œWeâ€™re confident the Lebanese can deal with their own situation,â€ he said. Charge rejoined that the military capabilities of a non-state actor like Hizballah represented a major concern because

Hizballah responded only to its own leadership and not to government authorities.

Â¶ 6. (S) Miqdad said this issue should be discussed in the overall framework of the situation. He then contended the provision of U.S. weapons to the region represented a destabilizing factor. â€œThe most sophisticated weapons are coming to Israel, to be used against whom?â€ he asked. When the U.S. pressed Israel to stop threatening its neighbors, the situation would stabilize. â€œWe want peace. Itâ€™s the only solution. We are the ones who are threatened,â€ he declared. Charge replied the whole region was threatened. Miqdad said the U.S. and Syria needed to worked toward peace. â€œYou should address your message to the people who donâ€™t want peace,â€ he added, noting the results of U/S Burnsâ€™ visit should be preserved and continued to improve relations. Syria had responded positively to U/S Burnsâ€™ message because it felt more confident of

Washingtonâ€™s desire to move forward.

---------------------

CVT and DCS Follow-Up

---------------------

Â¶ 7. (C) Charge affirmed the U.S. shared this intent and wanted to maximize the opportunity by staying in close contact. In that context, he raised

PRMâ€™s pending request to Miqdad to assist the Center for the Victims of

Torture to receive approval to begin a proposed project in Syria; Miqdad agreed to look at the matter and requested Embassy follow-up. Likewise, on

the issue of visas for the next group of DHS circuit riders, Miqdad asked that the circuit riders not apply for visas until he had had a chance to intervene. (Note: Embassy will provide Miqdad with a list of the circuit riders.)

Â¶ 8. (C) Charge also asked Miqdad for advice on how to proceed regarding

Damascus Community School (DCS). FM Muallim had instructed the Embassy to

â€œstart hiring teachers,â€ but the MFA had not yet provided any written notification of President Asadâ€™s decision to allow the school to re-open.

There also remained the issue of whether Syrian students would be allowed to enroll. Miqdad agreed that this matter required a response and advised the Charge to follow up with him in the coming week. (Note: Miqdad reported he would be traveling to Libya for two days to discuss bilateral relations.)

-------

Comment

-------

Â¶ 9. (S) In the midst of hosting a quick-notice visit by Iranian President

Ahmedinejad (who openly criticized the Secretaryâ€™s Congressional testimony expressing concern about Syria and Hizballah), the SARG might interpret our demarche as an attempt to divert the spotlight from the show of mutual support between Tehran and Damascus. Miqdadâ€™s surprise that we would raise this issue so forcefully on the heels of U/S Burnsâ€™ visit may have been genuine, but the abject denial of any Syrian role in supplying arms to Hizballah and the verbal counter-attack against Israeli provocation were standard (if disingenuous) responses. Yet even a seasoned diplomat like Miqdad could not restrain a raised eyebrow at our mention of the transfer of ballistic missiles to Hizballah. We expect the specificity of this concern could well prompt further discussions among Syrian officials,

Hizballah, and the visiting Iranian delegation.

Â¶ 10. (S) Miqdad notably did not respond to our concern about a possible

Hizballah revenge operation for the assassination of Imad Mughniyeh. While

Miqdad and Syrian officials might take some comfort in UNIFILâ€™s role in preventing the spillover of recent tensions in south Lebanon, a Hizballah operation against Israeli targets could easily result in a situation in which UNIFIL found itself unable to contain rising escalation. One point we might stress in the future: Syriaâ€™s desire for a deterrent against

Israeli military action -- presumably a motivation for the transfer of ballistic missiles to Hizballah -- will not increase stability because there are no mechanisms or rules of the road to prevent and/or manage unanticipated escalation. Not having control over Hizballahâ€™s missiles or influence over Hizballahâ€™s military plans to avenge Mughniyeh increases this danger. Our demarche might resonate more fully here if we can persuade other key countries, such as Turkey, Saudi Arabia, Qatar, Jordan, France, and others, to underscore their concerns about regional instability, to which Syriaâ€™s supply of ballistic missiles to Hizballah is directly contributing.

Â¶ 11. (S) Leaving aside the substance of Miqdadâ€™s response to the demarche, his agreement to meet us on two hoursâ€™ notice on a Syrian holiday (the Prophetâ€™s birthday) and during the Ahmedinejad visit is worth noting. Miqdadâ€™s Chief of Staff is typically the recipient of

Embassy demarches; CDAâ€™s only other meeting with Miqdad apart from appointments involving Washington visitors was to discuss the Vice

Ministerâ€™s trip to the U.S. last September. His future willingness to meet directly with us -- which FM Muallim instructed him to do to follow up on DCS issues -- will serve as one more barometer of the SARG commitment to engagement in the weeks and months ahead. HUNTER

Viewing cable 10PARIS207, FRENCH MFA ON RUSSIA, BALKANS, AFGHANISTAN,

IRAN,


Reference

ID

Created Released Classification Origin

10PARIS207

2010-02-22

14:02

2010-12-06

21:09

CONFIDENTIAL//NOFORN

Embassy

Paris

VZCZCXRO2986

PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR

DE RUEHFR #0207/01 0531431

ZNY CCCCC ZZH

P 221431Z FEB 10 ZDK

FM AMEMBASSY PARIS


INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 04 PARIS 000207

NOFORN

SIPDIS

E.O. 12958: DECL: 02/11/2020

TAGS: PGOV PREL RS GG SR BK AF IR AM FR

SUBJECT: FRENCH MFA ON RUSSIA, BALKANS, AFGHANISTAN, IRAN,

CAUCASUS

PARIS 00000207 001.2 OF 004

Classified By: Political Counselor Andrew R. Young, Reasons 1.4 (b), (d

).

Â¶ 1. (C/NF) SUMMARY: During separate discussions with OSD

Assistant Secretary for International Security Affairs

Alexander Vershbow and EUR Deputy Assistant Secretary Spencer

Boyer in early February, Roland Galharague, MFA

A/S-equivalent for Continental Europe, adopted a defensive posture about the potential sale of Mistral class ships to

Russia; expressed skepticism about the depth and durability of Russia's support for sanctions against Iran; acknowledged

Putin's dominance in Russia while proposing, as a means to strengthen Medvedev, that we respond positively to his proposals for reforming European security and holding an OSCE summit; asserted that Serbia cannot win back Kosovo and also win entry into the EU; expressed pessimism about the future of Nagorno-Karabakh negotiations and about the impact of instability in Iran on Azerbaijan, Turkmenistan, and Armenia; and claimed that Bosnia and Afghanistan could become difficult issues for trans-Atlantic relations this year because of the USG's alleged disengagement from Bosnia and its alleged failure to consult adequately with European NATO allies on strategy in Afghanistan. END SUMMARY.

-----------------------------------------

MISTRAL: FRENCH ADOPT A DEFENSIVE POSTURE

-----------------------------------------

Â¶ 2. (C/NF) When asked about the potential sale of Mistral class ships to Russia, Galharague inquired as to why the USG seems to be singling out France for criticism on this issue.

"I recently spoke to my Dutch counterpart," he reported, "and he said you have not approached him on this subject" despite recent Dutch (and Spanish) efforts to make similar sales.

Furthermore, the Mistral is not "top end" military equipment,

Galharague argued, describing it instead as a combination

between "a truck and an oil ship" with some helpful navigation tools. It will not contribute significantly to

Russian military capabilities. Russian leaders have been over-selling the military significance of the Mistral in order to quell domestic opposition to its purchase from abroad. Some Russians consider the sale a harbinger of the end of shipbuilding in their country, and claim the ship could be built at home but would simply take longer. The production and sale of armaments is a major industry in

Russia, possibly second only to oil and gas. In his February

10 press conference, the Chairman of Russia's National

Security Council, Nikolai Patrushev, seemed "very reticent" about the possible sale, according to Galharague.

Â¶ 4. (C/NF) Asked about Georgia's reaction to the possible sale, Galharague insisted that France has maintained "very good" relations with Tbilisi. The GOF "strategy" for Georgia to recover its lost territory is to persuade the Tblisi government to engage with the leaders of the secessionist territories and to continue on their path toward EU accession. The demands of accession -- such as internal democratic reforms and good relations with their neighbors -- will serve Georgia and the region well. Nonetheless,

Galharague acknowledged that Tbilisi has good reason to fear

Russia, given their recent history. This ship will not, however, affect their strategic situation, Galharague argued:

"The Russians have already invaded Georgia without the ship."

Â¶ 5. (C/NF) While acknowledging that Georgia and the Baltic countries feel threatened by Russia -- with reason --

Galharague concluded that Russia is not a threat to us and there is no reason we should not sell equipment to them which does not fall into the realm of restricted armaments. The

Mistral class ship does not contain high end or sensitive technology, he insisted.

-------------------------------------------

RUSSIA'S COMPLICATED RELATIONSHIP WITH IRAN

-------------------------------------------

Â¶ 6. (C/NF) The Russians are currently benefiting from their helpful statements on Iran while realizing full well that

China will water down any sanctions proposals, Galharague asserted. When praising Russia's new stance, he argued, we should be cognizant of their complicated relationship with

Iran. Russians have an interest in strong ties with Tehran, especially because Iran is still a primary market for Russian arms sales. On the other hand, were Iran to normalize its relations with western governments, it could develop into a major Russian rival for gas sales to the European market. To balance various and competing elements of its relationship with Iran, Russia has an interest in serving as a

"go-between" in the conflict between Iran and the west. In fact, Galharague claimed, Russian leaders were furious when

Turkey recently started to seize that mantel.

PARIS 00000207 002.2 OF 004

---------------------

MEDVEDEV VERSUS PUTIN

---------------------

Â¶ 7. (C/NF) When discussing the comparative influence of

President Medvedev and Prime Minister Putin, Galharague claimed that Medvedev, whose initial gut reactions to events clearly differ from those of Putin, is trying to assemble his own power bases independent of the former President. In the meantime, "power still rests with Putin," Galharague assessed. Putin, not Medvedev, constantly juggles and balances competing domestic interests in Russia. As a case in point, Galharague cited the Russian government's reaction to the financial crisis. After the government painstakingly established a mechanism for determining how to divide stimulus funds among various economic sectors and private

interests, Putin simply decided unilaterally who would receive state support. In general, Galharague observed,

Putin much prefers to focus on domestic issues rather than foreign policy. Putin prefers cutting deals in the murky

Russian business world to delving into the complexities of international politics.

--------------------------------------------- -------------

STRENGTHEN MEDVEDEV BY RESPONDING TO HIS SECURITY PROPOSAL

--------------------------------------------- -------------

Â¶ 8. (C/NF) Galharague described the long-standing French effort to strengthen Medvedev by respecting his official role as president of Russia, regardless of Putin's competing power and influence. "We treat Medvedev as president and address presidential issues with him." They also seek to validate

Medvedev's initiatives, regardless of the substantive content, in order to reward his efforts to put new ideas forward. As an important example, Galharague mentioned

Medvedev's proposal for revamping European security architecture. Medvedev invested a lot of political capital in this effort, Galharague argued, and we should provide a positive response, even if we do not accept the proposals.

For this reason, President Sarkozy sent Medvedev a letter of acknowledgment after receiving the proposal. Tying this approach to USG policy toward Russia, Galharague several times asked how the USG plans to measure the success of the

"reset" with Russia? The French, he said, would like to know whether the USG has established benchmarks for progress, and they wonder how START negotiations might fit into this equation.

-------------------------------------------

EUROPEAN SECURITY: GOF SUPPORTS OSCE SUMMIT

-------------------------------------------

Â¶ 9. (C/NF) Galharague stated that the French largely agree

with us about how to address questions of European security, except in one area: they support the idea of an OSCE summit.

While Paris concurs with the USG analysis that the Russian proposals for reforming Europe's security institutions contain a number of "unacceptable" elements, he argued that we must understand that "we're playing a game of judo -- we do not want to give the Russians a pretext to claim they're being ignored." He added that the Russians are adept at manipulation. "We constantly feel like we have a better hand but they're playing a better game -- it's the same in business and economic arenas." Claims of disrespect by western nations resonate in Russian domestic politics, to our detriment, he warned. Therefore, we must emphasize the positive elements of the Russian proposal and communicate a sincere willingness to engage. An OSCE summit can help with these aims, Galharague argued, and at the same time support the Corfu process. A summit would need to involve at least a minimum number of substantive issues, such as regional conflicts or the status of conventional forces in Europe, but by agreeing to move ahead with the summit we would put the onus back on Russia.

--------------------------------------------- -----

BALKANS: SERBS CAN'T WIN IN BOTH KOSOVO AND THE EU

--------------------------------------------- -----

Â¶ 10. (C/NF) Galharague asked that the USG work together with the EU to discourage the Serbians from proposing a new U.N. resolution on Kosovo, stating that Serbian Foreign Minister

Jeremic "seems to believe Serbia can win on Kosovo and win EU entry. We need to let him know this is not true." Right now, Galharague reported, "the Serbs are furious with us (the

French)" in response to the demarche the GOF delivered in

Belgrade in early February (reftel) about Serbia's possible plans for a U.N. resolution. "We delivered the message in very forceful terms." In fact, the Serbs interpreted the demarche as a major change in position, Galharague reported.

PARIS 00000207 003.2 OF 004

The EU had thus far maintained the position that the issues of Kosovo and Serbian entry into the EU were not formally linked. "There was no formal conditionality," Galharague said, adding that the Serbs now understand that to be a member of the EU they must eventually recognize Kosovo. "We told them we do not want another Cyprus," he explained, referring to Cyprus' controversial EU accession in 2004 as a divided island where EU legislation remains partly

"suspended" in the northern part of the island which is outside of the government in Nicosia's control. Nonetheless,

Galharague predicted the Serbs will likely go ahead with the

U.N. resolution in any case, and the USG and the EU will be forced to oppose it.

Â¶ 11. (C/NF) Furthermore, Galharague asserted, before the

Serbs join the EU, they will need to resolve key issues with

Kosovo in the fields of justice, police, customs, transport, agriculture, and also any differences over names and terminology. The best way for Serbia to address issues related to Kosovo is by working with the European Union Rule of Law Mission in Kosovo (EULEX). "At the end of the day, though," he reiterated, "Serbia must recognize Kosovo if it wants to join the EU."

------------------------------

PESSIMISTIC ABOUT THE CAUCASUS

------------------------------

Â¶ 12. (C/NF) The Nagorno-Karabakh negotiations appear to be at a "dead end," Galharague averred, adding that "Minsk (The

Minsk Group) is going nowhere fast." He noted that the

French government is not in a position to push the Armenians at the moment because French citizens of Armenian origin

"represent about 500,000 votes" and French regional elections

will take place in March. Other factors may soon impact the

Caucasus region, he warned, such as instability in Iran.

Azerbaijan, Armenia, and Turkmenistan all have important trade and energy ties with Iran and they could be immediately affected by the Iran sanctions bill currently making its way through the U.S. Congress. At the same time, the effort to impose harsher U.N. sanctions may offer us an opportunity to further engage with those three countries about their approach to Iran.

--------------------------------------------- ----

FUTURE USG-EU FLASHPOINTS: BOSNIA AND AFGHANISTAN

--------------------------------------------- ----

Â¶ 13. (C/NF) When assessing potential issue areas where the

USG and EU may differ during 2010, Galharague focused first on Bosnia. He said the French are disappointed that the USG appears to have put all plans and actions on hold pending the elections in October. Indeed, he implied that U.S. and EU officials have differing assessments of the need for continual engagement with the conflicting parties in Bosnia.

Bosnian parties will not make progress without unity between the U.S. and the EU. When the Americans disengage, even temporarily, Galharague claimed the Bosnians perceive it immediately and react accordingly: "The Americans are giving up, so why should we do this (make compromises)?" The USG, the Spanish EU presidency, and High Representative Ashton should lead the charge in engaging this year -- "we need U.S. backing now," he urged. As a lever to press the Bosnians forward on constitutional issues, the EU may be able to use the ruling by the European Court of Human Rights, which declared that the Bosnian Constitution does not conform with

European human rights standards.

Â¶ 14. (C/NF) Galharague described Afghanistan as the second potential trans-Atlantic flashpoint in 2010: "There is an emerging feeling the war is not jointly owned and managed."

President Obama waited eight months to make a decision and, during that period, at no point did European opinion factor into his deliberations, according to Galharague. DAS Boyer firmly disagreed, citing USG consultations and discussions with French officials in Paris and in Washington, DC.

Galharague acknowledged these discussions took place, but claimed the question Americans posed to their European NATO allies was not "What do you think?" but "How many troops can you put on the ground?" More recently, he said, the USG has begun contemplating engagement with elements of the Taliban without consulting European NATO allies. The French would like to know, for instance, what this engagement might mean for our future relations with Pakistan and India.

Â¶ 15. (C/NF) In purely political terms, Galharague explained that Afghanistan has developed into a difficult issue, especially in France. With the French death toll in

Afghanistan having reached 40, he noted, local politicians have found themselves increasingly faced with grieving families, to whom they must explain the purpose of the war.

PARIS 00000207 004.2 OF 004

"The perception is that we're there because the Americans are there," he said. "We're not sure where we're going and we're not being asked or consulted." Initially, the majority of

Europeans supported the war in Afghanistan, invoking Article

Five of the NATO Charter and committing a "fairly high" amount of troops and resources. But now "no one knows the purpose" of the war. "Perhaps the French government should have made a better show of the consultations" that did take place, Galharague admitted, "but to display them you have to have them."

Â¶ 16. (C/NF) EMBASSY COMMENT: Galharague is not ultimately responsible for the Afghanistan-Pakistan region, which is handled by a separate cell within the MFA, so his comments

may not reflect the views of those who regularly engage with the USG on this issue. Notably, when discussing public and official perceptions of the war in Afghanistan, he made no mention of SRAP Holbrooke's two visits to Paris in the last three months, or post's constant exchanges about Afghanistan with French officials at the senior and working levels.

Galharague focused on a perception of minimal consultation, which he admitted could persist regardless of reality. END

COMMENT.

Â¶ 17. (U) ASD Vershbow and DAS Boyer have cleared this cable.

RIVKIN

Viewing cable 09ALGIERS1077, BOUTEFLIKA TO WARD: WE WANT A STRATEGIC



SECRET

Embassy

Algiers

09ALGIERS1077

2009-12-06

07:07

2010-12-03

21:09

VZCZCXYZ0001

OO RUEHWEB

DE RUEHAS #1077/01 3400757

ZNY SSSSS ZZH

O 060757Z DEC 09

FM AMEMBASSY ALGIERS


INFO RUCNMGH/MAGHREB COLLECTIVE IMMEDIATE

RUEHBP/AMEMBASSY BAMAKO IMMEDIATE 1048

RUEHNM/AMEMBASSY NIAMEY IMMEDIATE 1989

RUEHNK/AMEMBASSY NOUAKCHOTT IMMEDIATE 6814

RUEHEG/AMEMBASSY CAIRO IMMEDIATE 1259

S E C R E T ALGIERS 001077

SIPDIS

E.O. 12958: DECL: 12/06/2019

TAGS: PREL PGOV PTER PBTS KPAL KWBG US IR IZ IS

AF, XA

SUBJECT: BOUTEFLIKA TO WARD: WE WANT A STRATEGIC

RELATIONSHIP

Classified By: Charge d'Affaires a.i. William Jordan; reasons 1.4 (b) and (d).

Summary

-------

Â¶ 1. (C) U.S. Africa Command (AFRICOM) Commander General

William Ward met Algerian President Abdelaziz Bouteflika

November 25, during Ward's first visit to Algeria since assuming command of AFRICOM. Ward said AFRICOM's strategy was to assist African nations in providing for their own security needs, not do the job for them. The U.S. recognized

Algeria's leadership in the region, and AFRICOM was prepared to assist Algeria and its neighbors combat terrorism.

Bouteflika said Algeria wanted to be a strategic partner, not an adversary. Our military relationship already included training and technical cooperation. End-use-monitoring requirements infringed on Algeria's national sovereignty and therefore imposed some limits on military engagement. But the U.S. and Algeria shared a common goal in combating terrorism. Terrorism in the region had taken a dangerous form, and Sahel countries were prepared to address the problem jointly. More needed to be done to ensure the participation and commitment of Mali's political leadership in the regional struggle. Bouteflika told Ward the Malian president needed to understand he could not be friends with both the thieves and their victims at the same time.

Trans-Sahara heads of state still planned to convene a security and development summit in Bamako but had yet to set

a firm date. Bouteflika also reviewed Egyptian-Algerian tensions in the aftermath of a World Cup qualifying match,

Western Sahara, the negative repercussions of Israeli settlement activities, Iran, Iraq and Afghanistan. On the soccer issue, he made a point of telling Ward that the king of Morocco -- in contrast to the strain with Egypt -- had sent him a very warm congratulatory message after the game.

At the end of the meeting, Bouteflika invited Ward to return to Algeria in the near future. End summary.

Addressing Common Challenges

----------------------------

Â¶ 2. (C) Visiting Africa Command (AFRICOM) Commander General

William Ward met with Algerian President Abdelaziz Bouteflika

November 25 at the presidential residence. With Bouteflika were Chief of Staff of the Algerian National Popular Army

(ANP) Lieutenant General Ahmed Gaid-Salah, Ministry of

National Defense (MND) Director of External Relations and

Cooperation General Nourredine Mekri, ANP Chief of

Organization and Logistics Major General Abdelhamid Ghriss and a translator. The Ambassador, General Ward's foreign policy advisor, Dr. Raymond Brown, the DATT and Poloff

(notetaker) accompanied General Ward to the meeting, which lasted two hours. Ward emphasized that his visit to Algiers was symbolic of our countries' growing bilateral relationship. Africa Command's mission was to assist African nations address their own security challenges, not to do it for them. The purpose of his visit, Ward said, was to listen to Algeria's perspective on enhancing our cooperation as we seek ways to work together to address common challenges in

Africa. Ward recognized that these challenges were complex and required development and political solutions, not just military intervention. Going forward, we sought to cooperate in areas that Algeria determines are priorities. AFRICOM welcomed the regional counterterrorism efforts Algeria has engaged in with neighboring Sahel countries. Algeria is

leading the effort; we will work with Algeria and its neighbors to assist in eliminating the terrorist threat in the region.

Â¶ 3. (C) President Bouteflika said that the United States and

Algeria shared a common objective and the will to work cooperatively in the fight against terrorism. Bouteflika noted the U.S. and Algeria started to work more closely together during the Clinton administration when both sides came to realize they were fighting the same problem.

Bouteflika underscored that after 9/11, Algeria was the first

Arab and Muslim country to send a message of solidarity to

President Bush. Subsequently, despite the unpopularity of some Bush policies, political and economic relations between our countries improved. Today, relations were excellent, he said, noting that Algeria was the United States' second largest trading partner in the Middle East after Saudi Arabia and our largest trading partner in Africa. President Obama's new approach to U.S. foreign policy was "a breath of fresh air" and well regarded by developing world countries. But this meant there were also high expectations for his administration. Bouteflika predicted that our bilateral relationship would continue in a positive direction. He commented that the U.S. and Algeria were moving forward with cooperation, recognizing the value of dialogue across all leadership levels. In this regard, Bouteflika declared he was ready to assist Ward and invited him to visit Algeria again.

Military Cooperation

--------------------

Â¶ 4. (S) Bouteflika attached importance to Algeria's military-military cooperation with the United States but noted that U.S. end-use monitoring requirements contravened

Algeria's national sovereignty. Nonetheless, we had made progress on training and technical cooperation. Bouteflika

said the capabilities of U.S. and Algerian forces were well understood in the region. Bouteflika argued that frank, direct talks were the key to a successful military dialogue, as well as recognizing that, in some cases, there would be limits on the extent of cooperation. "Tell us what you want, and we will tell you what we can do." Algeria, he continued, wanted to be a strategic partner for the U.S. in the region, not an adversary.

Â¶ 5. (S) General Ward thanked Bouteflika for his candid assessment of our mil-mil relationship. He said the

President, secretaries of State and Defense, and US Joint

Chiefs of Staff, all recognized the value of the US-Algeria partnership. Bouteflika responded that he would help us to consolidate that partnership. Ward argued that to enhance our partnership, Algeria needed to tell us how we can contribute best to achieve mutual objectives. Despite the bad things sometimes said about AFRICOM, Ward said with a smile, his command had not been created to take over Africa.

Without missing a beat, Bouteflika replied with an even bigger smile that he had been unsure about this himself until

Ward came. Ward said that, as we continue our military dialogue, we want to do the things Algeria tells us are important. Ward affirmed Algeria had long recognized the challenge of extremism and demonstrated its ability to fight back. AFRICOM would do its part to support Algeria and its neighbors in this effort. Addressing Bouteflika's point on end-use-monitoring requirements, Ward suggested focusing our efforts in areas where cooperation was possible, i.e., training and equipping. He acknowledged that some U.S. laws and regulations may preclude for now Algeria's participation in other forms of engagement.

Civil-Military Relations

------------------------

Â¶ 6. (S) Bouteflika underscored that Algeria's military

"absolutely" respected the authority of civilian leadership.

"This is not at all like Turkey," he said. Bouteflika asserted that the army was forced to take drastic measures during the violence of the 1990s in order to save the country. This was a difficult period, but constitutional rule had been restored. "The house is now in order," he stressed, "and I can tell you that the army obeys the civilians. There is one constitution and all obey it."

Bouteflika acknowledged, however, that the problems of the past still haunted the country. He cited foreign press reports referring to Algeria as a dictatorship and argued that the term was sometimes used carelessly. The Algerian constitution had established the rule of law. In 2004 it was decided that there was no more historical "revolutionary legitimacy". The only legitimacy was the constitution.

"Anyone can be a candidate for election, in accordance with the constitution, even a general." He paused, then grinned and said, "but the generals realize the difficulties and none has been a candidate yet."

Counterterrorism

----------------

Â¶ 7. (C) Bouteflika said terrorism in Africa had taken a dangerous form. The situation in Somalia was hopeless, he commented. Meanwhile, the Sahel region presented a complex set of issues. Fortunately, most Sahel countries were determined to cooperate and have the capability to fight the threat if they work together. Mauritania expressed a clear commitment as did Niger, although Bouteflika recognized U.S. concerns with President Tandja. Mali's full cooperation remained elusive, however. Mali's policies have failed to create stability in the north. The result is a lawless environment in which smuggling, along with arms and drug trafficking, enable terrorism. Bouteflika said the region was prepared to tackle this problem, and bilateral and regional efforts were already underway. In this regard,

Algeria was closely monitoring U.S. military assistance to

Mali and Niger.

Â¶ 8. (S) Ward told Bouteflika that he planned to visit Bamako after Algiers and would encourage Mali's leaders to cooperate in the region's counterterrorism efforts. The U.S. was providing military assistance to Mali, and we hoped it complemented the work Algeria was doing. Ward emphasized that, ultimately, defeating terrorism was the responsibility of the region. Bouteflika expressed his appreciation for

U.S. assistance to Mali and said Algeria also provided aid, including some equipment. Bouteflika urged the U.S. to tell

Malian President Amadou Toumani Toure that "he cannot be a friend to the thieves and victims at the same time." Many in

Mali's security services shared the same concern, Bouteflika asserted. In the past, he said, Algeria has waited for the chance to debrief terrorist suspects held in Mali, only to find out later that Malian officials were conducting negotiations for the terrorist's release back to the terrorist organizations at the same time. "It is difficult to cooperate in these conditions," he said. Despite difficulties, Bouteflika said regional leaders still planned to convene a security and development summit in Bamako. All agreed on the need for the summit, he said, but there was still no set date. Bouteflika said that Algeria would be open to sharing information with the U.S. regarding Algeria's cooperation with its neighbors. General Ward said AFRICOM would do the same for Algeria regarding U.S. initiatives in the region.

Egypt and Soccer

----------------

Â¶ 9. (C) Bouteflika shared his perceptions of Egypt's anti-Algerian nationalism following the November 18 World Cup qualifying match. Bouteflika said the Egyptian media had overreacted to the situation and that Algeria did not plan to

respond. Algeria could not afford to confuse its historical relationship with Egypt (past, present and future) with the outcome of a soccer match. He said Algeria and Egypt had a number of common political and economic interests and that his country had no desire to have a political crisis over the results of a soccer match. Some have urged Bouteflika to respond publicly to Egyptian claims. "I understand the

Egyptians are responding to local conditions," he said, "but we won't take the same tack." Arab League Secretary General

Amr Moussa, Bouteflika asserted, asked to visit Algiers to mediate the issue. Bouteflika told Moussa there was nothing to discuss in Algiers and suggested Moussa might best mediate tensions by working with Cairo to influence Egyptian opinion.

Â¶ 10. (C) Bouteflika noted that the aftermath of the game had been interesting. Moroccan King Mohamed VI sent Bouteflika a very warm message congratulating Algeria on its victory.

Bouteflika said he chose not to publicize the letter, in order not to create problems for Morocco in its relations with Egypt. He said Arab political frustrations were sometimes expressed through soccer. Algeria would continue to support Egypt's reconciliation efforts with the

Palestinians. No one expects a change in Netanyahu's approach to negotiations, he said. Thus, now was an opportune time to work on reconciliation and encourage Palestinians to speak with one voice. Algeria also supported Egypt's position on Gaza, which was dictated by Egypt's proximity to

Gaza and its domestic political environment. "If we were in their position, we would have applied the same policy."

Bouteflika said he would prefer to see Egypt concentrate its energies on these issues "rather than against us."

Palestine

---------

Â¶ 11. (C) Bouteflika noted that Senator Mitchell had said the

U.S. was committed to the peace process because it was in the

U.S. interest. It was important not to confuse U.S. interests with Israeli interests -- although the two sometimes overlapped -- or Arab interests. Bouteflika lamented current settlement activities, which, he said, undermined peace negotiations. Before negotiations could succeed, settlement activity had to stop first. He added that this included Jerusalem. Any solution that did not take

Jerusalem into account would certainly produce future conflict with the Arab and Muslim world. Bouteflika commended President Obama for trying his best to start a new process for negotiations. But President Abbas' and PM

Netanyahu's meetings in Washington failed to reinvigorate the process. Bouteflika regretted that no serious negotiation effort has been produced since Oslo, and current efforts in

Washington seemed to have no impact.

Western Sahara

--------------

Â¶ 12. (C) Bouteflika commented that U.S. policy on Western

Sahara was inconsistent. Some problems dated back to the

Clinton administration, there was improvement under President

Bush, but now the State Department seemed to be backsliding.

The U.S., Bouteflika argued, was a moral authority and had to show consistency in the principles its foreign policies reflected. "You cannot have one set of principles for

Palestine and another set for Western Sahara," he cautioned.

Bouteflika remarked that the principle in question -- the right to self-determination -- was clear-cut. UNSYG Personal

Envoy Christopher Ross was in charge of finding a solution based on this principle, he said. Now was not the time to adopt a position favoring Morocco's autonomy plan as the solution to the issue. Bouteflika recounted his support for the Baker Plan, and subsequent disappointment when U.S. policy appeared to shift in favor of the Moroccan position on

autonomy. Trust was essential, he urged. Algeria wanted a frank, loyal relationship with the United States. It did not want to be a competitor but a full-fledged partner in contributing to solutions in Africa, the Middle East and the

Muslim world.

Iran

----

Â¶ 13. (C) Bouteflika declared that the U.S. and Algeria shared the same position on Iran, the only difference being that

Algeria believed we need to first ensure Iran's efforts are peaceful but then let them pursue peaceful use of nuclear energy without constraints. He had no doubt that the U.S. was capable of reaching a peaceful agreement with Iran and believed the U.S. was in a better position to deal with Iran than either France or Britain. Bouteflika said Algeria appreciated President Obama's patient approach with Iran and had no interest in seeing Iran's influence in the Muslim and

Arab world increase.

Iraq/Afghanistan

----------------

Â¶ 14. (C) In Iraq, Bouteflika appreciated U.S. and Arab efforts, which were making some progress. Algeria's interest was in the unity of the Iraqi people, ensuring Iraq's sovereignty and maintaining the country's territorial integrity. Bouteflika remarked that a difficult road lay ahead in balancing these priorities and questioned whether the U.S. would have enough time before leaving Iraq to see if a democracy or dictatorship takes root. He recounted an anecdote of a vulture that picks up a snake, struggles to keep the snake from strangling it and finally decides to let the snake go. "The same is true in Iraq," he said.

"Sometimes it's best to leave things alone."

Â¶ 15. (C) Afghanistan was a different matter. Bouteflika said the world has noted the amount of time President Obama has taken to consider his next step in Afghanistan. Any decision, Bouteflika acknowledged, will be a thorny and difficult one. If President Obama decides to send an additional 40,000 troops, he will need some guarantee he can win. Bouteflika commented this option was plagued by too many unknowns, and the U.S. could find itself in the same position as the Russians. On the other hand, Bouteflika continued, if Obama sends fewer troops and fails, he will be blamed for not doing enough. A decision to withdraw from

Afghanistan might trigger a conflict between the administration, Congress and the American people. Bouteflika believed whatever decision the U.S. makes will influence the debate on Afghanistan in partner nations. Meanwhile, questions concerning stability in Pakistan and control of that country's nuclear arsenal further complicated matters.

Peace in the region, he concluded, concerned all nations and, therefore, Afghanistan was an international problem.

Comment

-------

Â¶ 16. (S) The Ward-Bouteflika meeting was significant in a number of respects. The Algerian president spoke repeatedly of his readiness to build a strategic relationship with the

US. He transmitted clear readiness for closer coordination and contact on Sahel counter-terrorism issues. The simple fact of the meeting with the president was itself a green light to the military bureaucracy on stepped-up bilateral military cooperation. Not least, the warm and high-level official reception provided a powerful antidote to the persistent negative mythology about Africa Command since the command's rollout. It was also noteworthy that, in the presence of three generals, including the chief of staff,

Bouteflika spoke assertively to Ward about civilian control of the military. He described the revolutionary origins of

military influence in Algeria, said this so-called revolutionary legitimacy ended in 2004, and the military now obeys the civilians and they all obey the constitution. In the course of his regional political review, Bouteflika delivered Algeria's views on Western Sahara in familiar terms. But in doing so, he also struck an unusually positive note about Morocco and the king's message. Clearly, in the context of the high emotions stirred in Algeria over the controversial World Cup contest with Egypt, Mohammed VI's message of congratulations struck a chord with Bouteflika.

JORDAN m ...

Viewing cable 09DAMASCUS804, IS NOW THE TIME TO RAISE HIZBALLAH WITH

SYRIA?



09DAMASCUS804

2009-11-19

09:09

2010-12-06

21:09

SECRET//NOFORN

Embassy

Damascus

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DE RUEHDM #0804/01 3230900

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RHEFDIA/DIA WASHINGTON DC PRIORITY


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RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL PRIORITY

S E C R E T SECTION 01 OF 03 DAMASCUS 000804

NOFORN

SIPDIS

DEPARTMENT FOR NEA/FO, NEA/ELA, S/CT


PARIS FOR NOBLES

LONDON FOR LORD

E.O. 12958: DECL: 10/07/2029

TAGS: PTER PREL LE IZ IS SY

SUBJECT: IS NOW THE TIME TO RAISE HIZBALLAH WITH SYRIA?

Classified By: CDA Charles Hunter, Reasons 1.4 b and d.

Â¶ 1. (S/NF) Summary: Syria's determined support of Hizballah's military build-up, particularly the steady supply of longer-range rockets and the introduction of guided missiles, could change the military balance and produce a scenario significantly more destructive than the July-August 2006 war.

If rockets were to rain down on Israeli civilians in Tel

Aviv, Israel would still have powerful incentives, as it did in 2006, to keep Syria out of the conflict, but it might also face compelling reasons for targeting Hizballah facilities in

Syria, some of which are in and around populated areas.

Syria's current strategic mindset appears to assume Syria could avoid involvement in a new conflict, based largely on its 2006 experience. Syrian leaders also appear convinced that arming Hizballah will increase Syria's leverage in bringing Israel to the negotiating table. As Washington weighs how to approach Syrian officials in upcoming

engagement efforts, discussing Hizballah from the perspective of the regional strategic landscape may help to facilitate a

"big picture" conversation in which we could challenge these assumptions and focus Damascus on the importance of taking cooperative steps with the U.S. now. Though raising this subject could well distract from a cooperative approach that shows signs of progress after months of investment, we believe sounding a warning, probably in a one-one-on meeting with President Asad, would be worth considering in pursuit of a broader, more strategic dialogue. End Summary.

----------------------------------

Is the Strategic Balance Changing?

----------------------------------

Â¶ 2. (S/NF) Syria's determined efforts to re-arm Hizballah during and after the July-August 2006 war between Israel and

Hizballah have consistently grabbed Israeli headlines, most recently with Israeli Chief of Staff Ashkenazi's November 10 revelation that Hizballah possessed 320-kilometer range rockets. Jane's Defense Weekly reported October 28 on

Hizballah's deployment of the first guided surface-to-surface

M600 missile on Lebanese soil, with a range of 250 kilometers and circular error probability of 500 meters. Public estimates put Hizballah's stockpile as high as 40,000 rockets and missiles, reinforcing assessments by some experts that this build-up may portend a shift in the military balance between Israel and its northern nemesis. Hizballah SecGen

Nasrallah's recent claims of possessing a capability to

"destroy" the IDF may overstate the case for domestic and regional propaganda purposes, but reporting in other channels confirms Nasrallah's bragging on November 11 that Hizballah can sustain fire on Tel Aviv and reach "all of Israel." This capability, if fully used, would represent a quantum leap over the damage and psychological terror Hizballah rockets caused in northern Israel during the 2006 war.

Â¶ 3. (S/NF) There is overwhelming evidence that shows Syria provided not just logistical and other support in moving the weapons, but was the main source of the weapons. Syria's integration of Hizballah into its military doctrine, moreover, means that Hizballah operatives and facilities enjoy a growing footprint in Syria.

Â¶ 4. (S/NF) At least two potential consequences flow from

Hizballah's increased capabilities and Syria's role in creating them: (1) If there is another war between

Hizballah and Israel, it will be far deadlier than the 2006 conflict; (2) as in 2006, there would be compelling reasons for Israel to want to keep Syria out of any future war if possible, but there might be a countervailing need to hit

Hizballah and perhaps targets in Syria, some of which are located in populated areas.

---------------------------------

Agreeing to Disagree on Hizballah

----------------------------------

DAMASCUS 00000804 002 OF 003

Â¶ 5. (S/NF) U.S.-Syrian discussions on Hizballah have tended to "agree to disagree" after hitting the wall of conflicting views on the legitimacy of armed resistance and Israeli occupation. Syrian officials, including President Asad, emphasize their political link to Hizballah and flatly deny that Syria is arming Hizballah. They then defend the right to armed resistance in response to prolonged Israeli occupation of Syrian and Lebanese territory. When convenient, Syrian officials claim they no longer have responsibility for Hizballah, noting "we are out of Lebanon."

President Asad and FM Muallim have also suggested that the challenge of disarming Hizballah would be solved after Syria and Israel signed a peace treaty. This agreement would lead naturally to a deal between Lebanon and Israel, thereby

removing the rationale for Hizballah's resistance movement and setting the stage for the transition of Hizballah to a purely political party.

Â¶ 6. (S/NF) The Syrian government's strategic view of relations with Hizballah is difficult to assess with high confidence. According to various contacts, President Asad appears to be focused on the possibility of a new conflict between Israel and Syria, but many suggest he believes that the red lines of the 2006 war would be preserved. According to this model, Syria could avoid direct involvement as long as Israel refrained from striking targets on Syrian soil.

Syria also seems to be hedging its bets through improved relations with Turkey, France, and Saudi Arabia, which,

Syrian officials probably hope, would object to Israeli attacks against Lebanon and/or Syria.

Â¶ 7. (S/NF) Asad nonetheless appears more convinced than ever that arming Hizballah is necessary for Syrian security and perhaps as a stick to bring the current Israeli government back to negotiations on the return of the Golan. Syrians remain resistant to the notion that Syria bears responsibility for managing a potentially explosive situation that could draw Damascus into a war neither sought nor winnable. They have ably deployed a force field of cognitive dissonance to resist arguments linking Syria's arming of

Hizballah and the future prospects of Syrian-Israel peace negotiations. Israel, they insist, remains the problem, and only a more active U.S. role can bring and sustain a resolution. According to the prevailing Syrian view, however, U.S.-Syrian relations must normalize before the U.S. can play the role of a credible honest broker.

----------------------------------------

The Cooperative Approach Shows Potential

----------------------------------------

Â¶ 8. (S/NF) As the interagency continues to plot future plans to engage Syrian officials and thinks about how to recruit other countries to support our efforts, we face a choice not only about the level of our engagement, but about the approach itself. Up to now, U.S. efforts have largely focused on developing a cooperative relationship on issues of mutual interest, such as Iraq and U.S. sanctions. Our four month pursuit of military-to-military cooperation on Iraqi border security represented, in effect, a first step toward establishing a broader and higher-level dialogue on Iraqi security issues, including Syrian support of foreign fighters. After the August 19 bombings Baghdad rendered implementation of this initiative impracticable, discussions in late-September shifted toward a possible CT dialogue.

This new focus provides an alternative mechanism to continue discussions on Iraqi security issues such as foreign fighters. Syrian officials appear willing to go along with this approach, as long as the emphasis is on building bilateral relations first. After months of investment, our engagement efforts are close to enabling both sides to exchange positive gestures. This cooperation should help to the stage for more focused discussions on a broad range of issues and strategic choices about the future direction of

DAMASCUS 00000804 003 OF 003 the relationship.

Â¶ 9. (S/NF) During this process, U.S. officials have carefully placed markers on key issues, including human rights, IAEA compliance, Bank Aman, Lebanon (e.g., border demarcation), and Palestinians (pushing Hamas to accept the

Quartet principles), and the new embassy compound. We have addressed these issues mainly in discussions with Vice

Foreign Minister Miqdad and the Syrian Embassy in Washington

(with less dialogue between Embassy Damascus and the Syrian

MFA). Our view is that the cooperative approach will have

more chance of success if we continue to use these channels to deal with such issues, until the relationship can sustain discussion at higher levels that will yield a higher probability of favorable progress.

Â¶ 10. (S/NF) Against this backdrop, sending U.S. officials to focus on Syrian relations with Hizballah could distract significantly from our efforts to build a cooperative foothold. There is unlikely to be common ground or any breakthroughs, and a new focus on Hizballah-related issues could further set back our efforts to re-energize the engagement process, not least by spurring the Syrians to demand a reciprocal change in U.S. behavior, e.g., lifting sanctions. Focusing our higher political-level discussions on the issue of foreign fighters provides a more familiar subject with a higher chance for initial progress.

--------------------------------------------- --

But Hizballah's Arsenal Poses Urgent Challenges

--------------------------------------------- --

Â¶ 11. (S/NF) While the near-term chances for a successful dialogue on Syria's strategic relationship with Hizballah are much lower, the stakes -- the possibility of a regional conflict and significant obstacles to achieving comprehensive peace -- are just as, if not more, urgent. Sharing our concerns about the dangers of Syria's arming of Hizballah, probably best done privately in a one-on-one session with

President Asad, could serve to establish the basis of a more frank exchange about Syria's role, and enable us to challenge potentially dangerous Syrian assumptions as part of a wider strategic dialogue. Recent revelations about Syria's role in weapons shipments create some urgency in turning Syrian attention toward ending these supplies and restraining

Hizballah from making good on its provocative rhetoric.

Â¶ 12. (S/NF) We don't expect these points immediately to

change Syrian behavior or its relations with Hizballah, but we believe sounding this warning would put President Asad and others (such as Turkey and France) on notice that Syria's actions have created a situation in which miscalculation or provocative behavior by Hizballah could prove disastrous for

Syria and the broader region. This message could likewise underscore our belief that Syria needs to demonstrate a more active role in achieving peace with Israel and better relations with the United States. Even if a war between

Israel and Hizballah does not materialize in the immediate future, we should try find a way to use our ongoing cooperative engagement with Syrian officials to help them recognize their overriding interest and responsibility in preventing this unappealing scenario altogether.

HUNTER

Viewing cable 08TUNIS193, PRESIDENT BEN ALI MEETS WITH A/S WELCH:

PROGRESS


Reference

ID


08TUNIS193

2008-03-03

16:04

2010-12-07

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SE C R E T TUNIS 000193

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Embassy

Tunis

SIPDIS

NOFORN

SIPDIS

STATE FOR NEA/FO (WELCH, GRAY) AND NEA/MAG (HOPKINS, HARRIS)

STATE ALSO FOR S/WCI (WILLIAMSON, GOREY)

NSC FOR ABRAMS, YERGER

E.O. 12958: DECL: 02/28/2018

TAGS: PREL PTER PHUM PGOV KPAL KDRG KDEM TS

SUBJECT: PRESIDENT BEN ALI MEETS WITH A/S WELCH: PROGRESS

ON COUNTER-TERRORISM COOPERATION, REGIONAL CHALLENGES

Classified By: Ambassador Robert F. Godec for reasons 1.4 (b) and (d)

-------

Summary

-------

Â¶ 1. (S/NF) President Ben Ali and NEA Assistant Secretary

David Welch discussed regional and bilateral issues in a wide-ranging, warm and open meeting on Thursday, February 28.

In response to A/S Welch's remarks and requests, President

Ben Ali:

-- promised counter-terrorism cooperation "without reservation," including US access to a terrorist in Tunisian custody;

-- said the GOT would accept the ten remaining Tunisian detainees in Guantanamo on the basis of the constitution;

-- welcomed the Annapolis peace process, adding that

Palestinian Authority President Mahmoud Abbas is "optimistic" a deal will be concluded and plans to visit Tunis in March; and,

-- said there is "no reason" for an Arab League Summit in

Damascus unless there is a Lebanese president and opined that the meeting might be postponed or representation downgraded.

Â¶ 2. (S/NF) Welch and Ben Ali also covered US-Libyan relations, relations between Morocco and Algeria, the situation in Iraq and the challenge of Iran. The constructive session underscored again that Tunisia is prepared to play a moderate, but not a leadership, role on regional problems. Overall, Ben Ali was clearly pleased with

Welch's visit and it received wide media coverage. End

Summary.

--------------------

Meeting: The Setting

--------------------

Â¶ 3. (S/NF) During his February 27 - 29 visit, NEA A/S David

Welch met with President Zine El Abidine Ben Ali for one hour

45 minutes at the Presidential Palace in Carthage on

Thursday, February 28. Foreign Minister Abdelwaheb Abdallah and Ambassador Godec were also present. The Director of

Tunisia's External Communications Agency (ATCE), Oussama

Romdhani, was the interpreter.

--------------------------------------------- ------------

Bilateral Relations: CT Cooperation "Without Reservation"

--------------------------------------------- ------------

Â¶ 4. (S/NF) Ben Ali began by emphasizing the excellent,

"strategic" relations between the United States and Tunisia.

He continued, however, that he understood the United States had concerns about cooperation on counter-terrorism. Ben Ali said he had ordered Minister of

Interior Rafik Belhaj Kacem and other senior officials to cooperate with the United States "without reservation" on counter-terrorism.

Â¶ 5. (S/NF) The President stressed that Tunisia cooperated with the United States on terrorism out of conviction, and said broader, deeper international cooperation is essential.

Many countries, he said, have suffered as the result of terrorism. He expressed regret, however, over the human rights criticism Tunisia has faced as the result of its efforts to combat terrorism. Some governments have a

"double standard," he said, on the issue. He added "some embassies" in Tunis and human rights groups had taken positions that were "not friendly" over such cases such as the imprisonment of activist Mohammed Abbou and of the

"Zarzis group." (NB. The "Zarzis group" refers to six

Tunisians detained in 2003 for allegedly preparing to commit terrorist attacks. The six were pardoned by Ben Ali in 2006 following international pressure.) Ben Ali acknowledged that there had been some problems with human rights in Tunisia, but stressed the GOT is addressing them. For example, he said, "tens" of police officers have been tried for corruption and other abuses. He said he would welcome the US

Embassy receiving further information. He stressed that the

GOT is committed to freedom and human rights, but no one is above the law.

Â¶ 6. (S/NF) A/S Welch thanked Ben Ali and expressed appreciation for his commitment to cooperation on counter-terrorism. He said he had two specific requests: 1) access for US officials to interview Tunisian terrorist

Noureddine Taam and 2) a commitment to accept the Tunisian detainees in Guantanamo on the basis of earlier assurances on treatment. Ben Ali responded that the United States would have immediate access to Taam. (NB. Additional details reported in GRPO channels.) He continued that the GOT would accept the detainees and do so on the basis of the Tunisian constitution. (NB. The Tunisian constitution offers guarantees on human rights, humane treatment and respect for

international commitments.) Ben Ali emphasized again that on counter-terrorism and intelligence Tunisia would "cooperate with the United States without inhibitions" and the cooperation would be "total."

-------------------------------------

Libya: Trying to Improve US Relations

-------------------------------------

Â¶ 7. (S/NF) A/S Welch said the United States is improving relations with Libya, but from time to time has difficulties with leader Muammar Qadhafi. Welch asked that Ben Ali communicate to Qadhafi that the United States wants to continue to improve relations. Ben Ali replied that Qadhafi also wants better relations, but there remain "anti-American radicals" in the government. Qadhafi plans, according to Ben

Ali, a cabinet reshuffle that would address the problem and we should see how the situation evolves. Qadhafi, Ben Ali opined, is "not a normal person" and had experienced disappointments over the failure of Arab and African unity.

Ben Ali promised to raise the US interest in improving relations with Qadhafi in person or by phone.

--------------------------------------------

Middle East: The Peace Process Needs Support

--------------------------------------------

Â¶ 8. (S) Welch stressed that President Bush's highest priority this year is progress toward two states, Palestine and

Israel, living side-by-side in peace. While Palestinian

Authority President Abbas and Prime Minister Olmert genuinely want peace, some of the Palestinian and Israeli people and leaders are skeptical. Welch stressed that all countries interested in peace need to make every effort to help move the process forward.

Â¶ 9. (S) Ben Ali agreed on the importance of the Annapolis

process, adding he had spoken with Abbas who is "optimistic" an agreement will be reached by the end of the year.

Nevertheless, progress will remain very difficult. Ben Ali stressed Fatah and Hamas must try to reach an understanding.

He noted that Abbas will visit Tunisia in March and there is a proposal for a Fatah-Hamas meeting in Tunis. Ben Ali said he will wait to hear Abbas' views before proceeding on the proposal.

--------------------------------------------- -------

Arab League Summit: Not Without A Lebanese President

--------------------------------------------- -------

Â¶ 10. (S) Welch asked Ben Ali about his views of Syria and the proposed Arab League Summit. Ben Ali responded that Syria is a source of concern. He said Syria is acting for Iran and the latter is fueling regional problems. He said he had met

(on February 18) with Syrian Foreign Minister Walid Mu'allim who handed over an invitation from President Bashar Asad to attend the summit in Damascus. He said he told Mu'allim that

Syria should help resolve the problems in Lebanon. Ben Ali emphasized the complexity of the situation in Lebanon, noting the unhelpful involvement of many regional actors. He added that there was some support for inviting Iran to the Damascus

Summit. Ben Ali said, however, that he saw no reason for the summit unless there is a Lebanese president in attendance.

Welch agreed. Ben Ali continued the summit may be postponed, or representation downgraded from the Chief of State level.

He noted other states in the region, including Morocco,

Jordan, and Saudi Arabia agreed. In any event, Ben Ali said he would not attend such a summit.

---------------------

Iraq: Bleak Situation

---------------------

Â¶ 11. (S/NF) Ben Ali said the situation in Iraq is "bleak," but

we must face it. The only party benefiting currently is

Iran, and suggested that Turkey's current actions against the

PKK are making matters worse. Welch noted there is some progress on the security situation and the political front in

Iraq.

-------------------

Region: "Explosive"

-------------------

Â¶ 12. (S) Looking more broadly, Ben Ali noted that Tunisia was happy it was part of the Maghreb, and not part of Levant or

Gulf. He opined that the situation in Egypt is

"explosive," adding that sooner or later the Muslim

Brotherhood would take over. He added that Yemen and Saudi

Arabia are also facing real problems. Overall, the region is

"explosive."

-------------------------------------

Maghreb: Resolving the Western Sahara

-------------------------------------

Â¶ 13. (S) On the Maghreb, Ben Ali suggested extremism is a real and growing problem. Morocco, he said, was at the "beginning of the beginning" of its problem. It had ignored, he added, the issue for too long and former King

Hassan II had refused to discuss it. Nevertheless, Morocco was a strategic partner for Tunisia and the GOT was working to strengthen cooperation. On Algeria, Ben Ali, said the problem was a "little better" and may be at the beginning of the end. Ben Ali said Tunisia has strong and direct cooperation on counter-terrorism with Algeria. Welch noted that Morocco and Algeria trust Tunisia more than they trust each other. Welch agreed that there is a terrorism problem in Morocco.

Â¶ 14. (S) On the Western Sahara, Ben Ali said the Algerians are responsible for the ongoing impasse. Welch agreed, saying the issue was blocking progress in the region. He said the Algerians need to accept that there is not going to be an independent state in the Western Sahara. Ben Ali said the problem is complex, and will take years to resolve. He added it cannot be settled through the UN Security Council.

He noted Tunisia had tried to convene a Maghreb meeting on it in Tunis. While Morocco and Libya had agreed to attend,

Algeria refused, saying there was nothing to discuss.

--------------

Iran: A Threat

--------------

Â¶ 15. (S) Welch noted that President Bush considered Iran a threat "yesterday, today and tomorrow." Noting the recent

National Intelligence Estimate on Iran, Welch underscored that while the Iranians "may have put the gun in the closet, they are still trying to make the bullet." Nevertheless, he added, there are signs economic pressure is working. Ben Ali concurred. Welch said the chances of a third Security

Council resolution are good and President Bush wants a diplomatic option.

Â¶ 16. (S/NF) Ben Ali replied this is "quite wise" of President

Bush. He stressed he opposed the use of force, and that "a second front is not needed." Economic pressure on Iran will take longer, but it is working. Ben Ali added that he "does not trust" the Shia.

----------------------------------

Invitation: President Bush Welcome

----------------------------------

Â¶ 17. (S) President Ben Ali closed the meeting stressing his open invitation to President Bush to visit Tunisia before or

after his time in office. Welch expressed his appreciation to Ben Ali for the meeting.

------------------------------

Comment: Warm and Open Ben Ali

------------------------------

Â¶ 18. (S/NF) Throughout the meeting, President Ben Ali was warm, open, and occasionally animated (at which point he sometimes slipped into Tunisian dialect). His quick and strong assurances on counter-terrorism cooperation were welcome, and may be an important step forward on what has been a troubling issue. Significantly, the President's promise was followed within hours by action from GOT officials. The key test will be whether cooperation continues and is both broad and deep. Similarly, the

President's commitment on Guantanamo detainees was welcome.

Â¶ 19. (S/NF) On regional issues, Ben Ali showed again that he is a moderate. While the Tunisians will not take the lead on foreign policy challenges, they will help where they can

(e.g., support for the Annapolis process). Finally,

President Ben Ali was clearly very pleased to see A/S Welch and to exchange views with him. The meeting and visit got broad, major media coverage in Tunisia. End Comment.

Â¶ 20. (SBU) A/S Welch did not have a chance to clear this cable.

GODEC

Viewing cable 08DAMASCUS427, FRENCH CONSIDER THEIR DAMASCUS VISIT A

SUCCESS



08DAMASCUS427

2008-06-16

16:04

2010-12-07

21:09

CONFIDENTIAL

Embassy

Damascus

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RHEHNSC/NSC WASHDC

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C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 000427

SIPDIS

NEA/ELA

E.O. 12958: DECL: 06/15/2018

TAGS: PGOV PHUM PREL PTER SY

SUBJECT: FRENCH CONSIDER THEIR DAMASCUS VISIT A SUCCESS

Classified By: CDA Todd C. Holmstrom for reasons 1.5 b/d

Â¶ 1. (C) Summary. The SARG worked to portray the June 15 visit by two French presidential envoys as a vindication of Syria's hard-line policy of "resistance." The French themselves say the visit was successful as it furthered the GOF's priority of ensuring President Asad participate in the Mediterranean

Union summit in Paris on July 13. According to our French colleagues in Damascus, Asad told them that he was optomistic a new cabinet would be formed in the next week or two in

Beirut; the SARG supported both the Egyptian effort to broker a cease-fire between Israel and Hamas, and would soon host

Abu Mazen in an effort to heal the Fatah - Hamas rupture.

Asad declined to be engaged on human rights and detained political prisoners. And he stated flatly that the SARG would make no effort to engage the USG until after the election in November. End summary.

Â¶ 2. (U) The June 15 one-day visit of secretary general of

President Sarkozy,s office, Claude Gueant, and Sarkozy,s chief diplomatic advisor, Jean-David Levitte, was front page news in Syria,s state-owned papers. The lead editorial in

Al-Thawra commented that the visit showed that the SARG,s policy &of resistance8 had succeeded and France was therefore compelled to reengage Syria on the SARG,s terms.

The reporting of the quasi-independent Al-Watan, which coordinates its political commentary closely with the security services, implied the visit highlighted a fracture in U.S. ) French policy towards Syria.

Â¶ 3. (C) In contrast, Nicolas Suran, DCM at the French embassy, categorized the visit as a success and offered us the following readout. The two presidential advisors had a one and a half hour meeting with President Bashar Al-Asad followed by a meeting and then lunch with FM Walid Muallem.

Both meetings were focused on Syria,s participation in the upcoming July 13 Mediterranean Union summit in Paris.

According to Suran, Levitte and Gueant were able to answer

Asad and Muallem,s concerns regarding the proposed

Mediterranean Union making Asad,s participation more likely.

Suran said, baring unfavorable regional developments, Asad would attend the summit next month in Paris. It was agreed that FM Muallem will visit Paris in early July to prepare for

Asad,s visit later the same month. Suran qualified the SARG commitment as &progress8 given the fact that just a month and a half ago Asad was not planning to attend and was echoing others, criticisms of both the summit and the

proposed Union.

Â¶ 4. (C) Suran said discussions covered the full range of regional issues as well. On Lebanon, Asad said the SARG had very little ability to influence the political process at this point and that a failure would be a result of internal maneuvering by Lebanese politicians. Nonetheless, both Asad and Muallem were optimistic that a new cabinet would be formed in the next week or two. Asad said Syria would remain committed to the Turkey brokered talks with Israel. Asad reportedly told the French that Syria was actively supporting

Egypt,s attempt to conclude a cease fire between Hamas and

Israel. Syria was also working at Palestinian reconciliation and would host Palestinian President Mahmud Abbas in the next four or five days in an attempt to further the process, according to Suran.

Â¶ 5. (C) Suran said Gueant and Levitte raised human rights and detained political prisoners with Asad. Following his now standard practice, Asad demurred and asserted that both issues were &internal affairs8 and not to be discussed with visitors. Suran commented that, nonetheless, neither

Gueant nor Levitte were put-off by Asad,s answer but were instead encouraged that Asad,s manner seemed to allow the issue to remain on the table. Suran reminded us that when then

President Chirac visited Damascus in 2000 Asad did release Riad Turk from jail in answer to Chirac,s direct appeal. Suran commented that a similar result would be possible if Asad,s July 13 visit to Paris were to be successful.

Â¶ 6. (C) Suran said the only area the Syrians were not responsive on was a request to stop arms shipments to Hezbollah, and to take more positive actions to improve Iraq,s security. According to Suran, Asad linked the requests to the USG and asserted the SARG felt no need to provide concessions to the current Administration. According to Suran, both

Asad and Muallem were adamant that they had

DAMASCUS 00000427 002 OF 002 written off the Bush Administration and would make no gesture or concession towards the U.S. until a new administration was in the White House.

Â¶ 7. (C) Comment. Based on both their public and private statements, it is apparent that the Syrians believe they are dealing from a position of strength not only with the French but also the western world writ large.

Still the Syrians are ready for their isolation to end. As Suran commented,

Asad has not visited a western capitol in years and so is obviously anxious to be received in Paris for the PR value if nothing else.

HOLMSTROM

Viewing cable 09TELAVIV1324, GOI DISCUSSES LEBANON AND SYRIA WITH HOF



09TELAVIV1324

2009-06-18

08:08

2010-12-07

21:09

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TAGS PREL, LE, SY, UN, IS

SUBJECT: GOI DISCUSSES LEBANON AND SYRIA WITH HOF

Classified By: Deputy Chief of Mission Luis G. Moreno, reason 1.4 (b) a nd

(d)

Â¶ 1. (C) SUMMARY. On June 10, Fred Hof, Special Advisor for Regional

Affairs in the office of Special Envoy Mitchell, held a series of meetings

with GOI officials from the MFA and MOD to discuss the situation in Lebanon and Syria and the possibilities for progress towards opening negotiations with each. The Israeli officials expressed cautious optimism over the election results in Lebanon, but did not believe they would lead to major changes in the power balance in Lebanon, or serious reduction of Hizballah influence. However, both Amos Gilad, Pol-Mil Director in the MOD and Nimrod

Barkan, Director of the MFA Political Research Division (INR equivalent), told Hof that the Lebanese election results took Syria by surprise, and were a blow for Syrian President Asad. The officials were split over the prospects for Israeli peace with Syria. Alon Ushpiz, Chief of Staff for the

MFA Director General, believes Syria is only interested in a process that gives it international legitimacy. However, in a separate meeting, Gilad called Syrian/Iran ties a â€œmarriage of convenienceâ€ which could possibly be broken with a peace agreement with Israel and incentives from the United States. On Ghajar and Shebaâ€™a, there was consensus within the

GOI that Ghajar can be resolved, but doing so will not have much utility, while Israeli will only agree to discuss Shebaâ€™a within the context of

Syria. End Summary.

----------------------------

Lebanon Elections Hurt Syria

----------------------------

Â¶ 2. (C) The Israeli officials said that it is too soon to tell what the results of the elections in Lebanon will really mean. Nimrod Barkan told

Hof that he does not see the elections as damaging for Hizballah, as their popularity among the Shia remained solid. He added that if Hizballah could maintain its blocking third within the GOL as established in the Doha

Agreement, the Lebanese government would remain paralyzed. In another meeting, Amos Gilad assessed that the elections results were largely due to huge amounts of Saudi Arabian money and the Maronite Patriarch throwing his support to March 14, and not because of a fundamental shift in Lebanese society.

Â¶ 3. (C) On the other hand, both Gilad and Barkan agreed that the elections were a blow to Syria, which was completely caught off-guard by the results.

The Syrian presidential advisors on Lebanon, they said, are now in trouble.

Barkan explained that the Syrians were so convinced the pro-Syrian March 8 would win the elections that they thought they could minimize their interference and still win. They wanted to appease France and the United

States, and not irritate Saudi Arabia, and thought they could do so at no cost. In this way, Barkan said, French and American actions and rhetoric in support of March 14 were productive.

--------------------------------------------- -------

Hizballah Still Planning to Avenge Mughniyahâ€™s Death

--------------------------------------------- -------

Â¶ 4. (S) Barkan emphasized that Hizballah still plans on avenging the death of Hizballah operations chief Imad Mughniyah, and that Israel has already thwarted two terror attacks in third countries. Barkan said Israel has very sensitive intelligence that Hizballah has completed operational planning for a third attack outside Israel, but so far Nasrallah has not decided whether to give the order to carry it out, despite Iranian pressure to launch the attack. Barkan said he had personally drafted the MFAâ€™s post-

Lebanon election statement, which included a warning the GOL that Israel will hold them responsible for any attacks â€œemanating from Lebanonâ€ and not just attacks from Lebanon. Gilad also told Hof that Hizballah had shown restraint in the face of Iranian pressure due to the elections, especially during the Gaza operation. Barkan and Gilad both emphasized that they did

not know if Hizballahâ€™s calculus would change post-election. Gilad warned

Hof that the next round of fighting with Hizballah would likely involve rockets falling on Tel Aviv, and if this happens Israel will respond harshly throughout Lebanon.

------------------------------------

Can Syria Separate Itself from Iran?

------------------------------------

Â¶ 5. (C) Hof also held a meeting with senior MFA staff, including Deputy

Director General for Coordination (Director General Chief of Staff) Alon

Ushpiz, Minister Liebermanâ€™s Chief of Staff Naor Gilon, and Deputy

Minister Ayalonâ€™s Chief

TEL AVIV 00001324 002 OF 003 of Staff David Siegel. Ushpiz asked Hof if the United States really sought peace with Syria in the near term, or if it saw Israeli engagement with

Syria as a way to put pressure on the Palestinian track, create space in the Arab world, and gain influence with Syria. Hof replied that all of those goals could be pursued simultaneously, including peace. During the proximity talks in Turkey conducted under the Olmert government, Ushpiz said that President Bush gave PM Olmert the approval to hold talks through

Turkey, but said the United States would not get involved, so Israel went as far as it could. Israel was also unsure about proceeding because, they said, the GOI remained skeptical regarding Syriaâ€™s intentions to withdraw itself from its alliance with Iran in exchange for peace.

Â¶ 6. (C) Amos Gilad, on the other hand, told Hof that the GOI defense establishment assesses that Syria may be serious about removing itself from

Iran and withdrawing support for Hizballah in exchange for reconciliation with the West, especially the U.S., and the return of the Golan Heights.

Gilad asserted that peace with Syria is critical to achieving Israel-

Palestinian peace due to Syriaâ€™s ability to support spoilers. Therefore, he asserted, it was worth it for Israel to make the attempt. In the talks through Turkish mediation, however, Gilad said that Israel had been too forthcoming about its security requirements, and too enthusiastic, and

Syria was not ready. He also noted that Israeli security requirements with

Syria had changed radically since the last talks in 2000, as Israel no longer fears a Syrian surprise armor attack across the Golan but rather is concerned about Syrian missile attacks on Israeli cities, so those issues would need to be renegotiated.

Â¶ 7. (S) Negotiations with Syria may succeed, Gilad said, because Iran was a marriage of convenience for Syria. He believes Syria would much rather be close to their fellow Arabs and the rest of the international community, if given the chance. Gilad stressed that both the Iranians and the Arab Sunnis despise the ruling Alawite minority in Syria - he recalled that Sadat used to call the Alawites â€œpagansâ€ - and said the Iranians would like to get rid of the Asad regime at the appropriate time. Gilad noted that Syria did not inform Iran of its nuclear reactor, which was built entirely with North

Korean assistance, and did not notify Iran in advance of its proximity talks with Israel. In addition, he said, the Golan Heights have remained

Israelâ€™s quietest front, evidence that Syria can uphold its commitments as long its commitments are clear.

Â¶ 8. (C) While Syria may want peace, Gilad cautioned that it may be impossible for Syria to extricate itself from Iran and Hizballah, even if it tried. Hizballah is now an integral part of Syriaâ€™s defense concept, and is a more effective fighting force than the Syrian army. But in the end, Gilad stated, Israel only has two choices with Syria: war or peace.

--------------------------------------------- -----

Hof: Small Steps Needed Towards Talks with Lebanon

--------------------------------------------- -----

Â¶ 9. (C) Turning to the prospects for moving toward peace with Lebanon,

Barkan and Gilad separately told Hof that the GOI had examined the question of renewing the 1949 armistice commission, at the USGâ€™s suggestion, and there were many questions, including some basic legal questions posed by

MFA lawyers. Hof replied that much of the armistice agreement is obsolete, but the armistice allows for mutually agreed modifications, and recognition of its basic legitimacy among the Lebanese, and the fact that it is mentioned in the Taif Agreement, could create cover for talks.

Â¶ 10. (C) Hof suggested an incremental strategy for Lebanon, expanding existing, low-level mil-mil trilateral contacts with UNIFIL gradually until they eventually can encompass some political progress. Small steps were needed because the Lebanese peopleâ€™s attitude toward Israel had hardened over the past 30 years, Hof explained, and we need to get them back to seeing peace with Israel as a realistic prospect.

Â¶ 11. (C) Gilad, Barkan, and the senior MFA officials separately told Hof that Israel was ready to move forward with resolving the issue of the northern end of the village of Ghajar, but doubted that resolving the issue would lead to real progress and risked boosting Hizballah. Hof replied that

Ghajar can be an important step as long as any Israeli public message is carefully calibrated to emphasize that Israel is fulfilling its 1701 obligations, and that other parties should do the same, and not as a benefit to the Lebanese moderates. It is a small step, Hof said, but the kind of small step needed in this process.

TEL AVIV 00001324 003 OF 003

Â¶ 12. (C) On Shebaâ€™a Farms, all the GOI officials separately repeated the long-standing position that Shebaâ€™a must be resolved in the context of

Syria and not Lebanon. Shebaâ€™a, they said, was simply a pretext for

Hizballahâ€™s claim to represent â€œresistance to occupation,â€ and if it were resolved Hizballah would simply find another pretext. Hof agreed that it was a pretext, but thought it would be useful to make Hizballah publicly shift their pretext. Issues like the seven Lebanese villages in northern

Israel, Hof explained, are not taken seriously in Lebanese society, but the

Lebanese claim to Shebaâ€™a Farms is. Forcing Hizballah to shift its excuse for retaining an armed force could help expose them to Lebanese society as

Iranian surrogates willing to fight to the last Lebanese.

Â¶ 13. (U) Fred Hof has cleared this message.

********************************************* ******************** Visit

Embassy Tel Avivâ€™s http://www.state.sgov.gov/p/nea/telaviv

Classified Website:

*********************************************

CUNNINGHAM

********************

Viewing cable 09DAMASCUS880, SYRIAN-IRANIAN SHOW OF SOLIDARITY MASKS



09DAMASCUS880

2009-12-22

03:03

2010-12-07

21:09

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TAGS PREL, IR, LE, IZ, TU, SY

SUBJECT: SYRIAN-IRANIAN SHOW OF SOLIDARITY MASKS

TENSIONS

OVER IRAQ, YEMEN, AND WAR WITH ISRAEL

DAMASCUS 00000880 001.2 OF 004

Classified By: CDA Chuck Hunter for reasons 1.4 b and d.

Â¶ 1. (S/NF) The successive visits of three high-level Iranian officials to

Damascus in early December appear at first glance to reaffirm strong

Iranian-Syrian security ties and other forms of bilateral cooperation, but they may, in fact, mask deepening rifts over Iraq, Yemen, and the possibility of war with Israel. Syrian observers suggest the a shifting balance of power between Iran and Syria. The Iranian government, challenged domestically by anti-regime protests and abroad by building pressure over its nuclear program, has sought Syriaâ€™s help just when Syria has begun to enjoy other strategic options, such as its relations with Turkey and Saudi

Arabia. Asadâ€™s government proved willing to host the visits, sign a defense MOU, and allow Hamas Politburo Chief Khaled Meshaal to visit

Tehran, all the while continuing close cooperation with Iranian security services and Hizballah operatives. But Asad reportedly resisted Iranian arguments for closer bilateral coordination in Iraq and Yemen and flatly rejected being drawn into a war between Iran and Israel. End Summary.

-----------------------------------------

Reaffirmation of Staunch Syrian-Iran Ties

-----------------------------------------

Â¶ 2. (C) On the surface, the early-December visits of three Iranian officials -- National Security Advisor Saeed Jalili on December 3, Vice

President and head of the Environmental Department Mahammed-Javad

Mahamadzideh on December 5-6, and Minister of Defense Ahmad Ali Vahidi on

December 8-11 -- represented a concerted reaffirmation by both countries of their strong security ties and their commitment to expanded relations. Set against a backdrop of rising international pressure on Iran over its nuclear program and an exchange of threats between Israel and Iran, the visits signaled continuing cooperation in confronting Israeli policies.

Asad publicly praised Iranâ€™s support for resistance against Israeli occupation after his December 3 meeting with Jalili. According to the

Syrian press, Jalili also met with Palestinian leaders based in Syria, including Hamas Politburo Chief Khaled Meshaal, whom he invited to visit

Tehran the following week. Though less focused on security issues, the visit of VP Mahammadzideh affirmed both countriesâ€™ commitment to expanding economic cooperation and working together on responding to climate change. On December 11, Vahidi and his Syrian counterpart, Ali

Habib, expressed a desire for a deepening of defense and military ties, formalized in a memorandum of understanding calling for â€œefforts aimed at the establishment of a comprehensive regional security pact,â€ and establishing recurrent meetings of the Joint Defense Cooperation Committee.

Â¶ 3. (S/NF) The public showcasing of these three visits contrasted with the secrecy with which Iranian Revolutionary Guard Commander/al-Quds Force

Ghassem Soleimani conducted his. Reportedly accompanying Jalili, Soleimani returned to Damascus after a long absence, perhaps a reflection of lingering tensions between Iran and Syria that erupted after the February

2008 assassination of Hizballah military strategist Imad Mugniyah in the

Syrian capital. XXXXXXXXXXXX spoke very reluctantly about Soleimaniâ€™s presence in Damascus, saying only that â€œhe was here,â€ and â€œwhen he visits, itâ€™s usually significant.â€ XXXXXXXXXXXX reported seeing Jalili and Soleimani at a XXXXXXXXXXXX meeting with Syrian officials that included

FM Muallim, as well as unspecified members of Hizballah. â€œSoleimani represents the DAMASCUS 00000880 002.2 OF 004 business end of the resistance,â€ commented XXXXXXXXXXXX, also reluctant to discuss the sensitive issue of Iranian-Syrian-Hizballah military cooperation.

Â¶ 4. (S/NF) Taken collectively, the Iranian visits over eight days were meant to dispel doubts that Syria would or could abandon its ties to Iran, according to XXXXXXXXXXXX The visits allowed the Syrian government to project an image of strength at a time when Israel was rejecting Syriaâ€™s demand for a commitment to withdraw to the June 4 lines and a return to

Turkish-facilitated proximity talks prior to moving to direct peace negotiations. In a joint press conference with Jalili, FM Muallim supported

Iranâ€™s right to enrich uranium and to use nuclear energy for peaceful purposes. Moreover, the Iranian visits coincided with the introduction of a law in the Knesset to require a national referendum on any peace treaty.

â€œIran provides us diplomatic cover as well as the military might to back up our demands for peace,â€ argued Haidar. â€œIn return, weâ€™re providing

Iran support when the West is pressuring Iran on its nuclear program,â€ he said.

----------------------------------

But Did Iran Wear Out Its Welcome?

----------------------------------

Â¶ 5. (S/NF) Whatever Syrian rationale there may be for showcasing military ties to Iran, many Syrian observers are emphasizing the shifting balance of power in their bilateral relationship. According to XXXXXXXXXXXX Iran, not

Syria, sought the visits as a sign of Syrian reassurance. â€œBe assured,â€ commented XXXXXXXXXXXX â€œthey needed these visits far more than we did.â€

Summing up a view heard repeatedly around Damascus, â€œthings in our relations with Iran are starting to return to normalâ€ after a long period of Syrian dependence, XXXXXXXXXXXX asserted. He added, â€œU.S. isolation and the invasion of Iraq made it necessary to adopt such extreme measures.

But now, things are moving back to equilibrium.â€

Â¶ 6. (S/NF) By the time of Vahidiâ€™s visit, some Syrian officials were quietly grousing that the Iranians were â€œtoo needy.â€ The Syrian government wanted to extend support to a loyal Iranian ally, according to

XXXXXXXXXXXX, but the dramatic display of multiple Iranian visits in a short period of time â€œwas Iranâ€™s doing.â€ The Syrian government, said

XXXXXXXXXXXX, perceived a note of panic in the Iranian requests and some

were saying Syriaâ€™s renewed relations with Saudi Arabia, its deepening ties to Turkey, and even Washingtonâ€™s desire to re-engage Syria had made

Iran â€œjealous.â€

Â¶ 7. (S/NF) While the Syrian government responded positively to Iranian requests for public statements of support on the nuclear issue and against

Israel, it remained silent after the Iranian Minister of Defenseâ€™s arrival statement denounced Iraq, Saudi Arabia, Israel and the United

States. By the time Vahidi arrived on December 8, press contacts noted, the

Syrian governmentâ€™s attitude had shifted to â€œletâ€™s get this over with,â€ according to XXXXXXXXXXXX. Indeed, at the same time Vahidi was parading his 20-car motorcade around Damascus, several other visits were occurring, including one by the Turkish military commandant and President

Sarkozyâ€™s Middle East advisors, Nicolas Gallet and Jean-David Levitte.

Most of Presidential Media Advisor Bouthaina Shaabanâ€™s December 10 press conference was dedicated not to Syrian-Iranian relations, but to Syriaâ€™s ties to other countries, according to press contactsXXXXXXXXXXXX.

DAMASCUS 00000880 003.2 OF 004

----------------

Signs of Discord

----------------

Â¶ 8. (S/NF) Going beyond atmospherics XXXXXXXXXXXX reported several disagreements between Jaliliâ€™s delegation and their Syrian counterparts.

On Iraq, Jalili reportedly proposed a â€œjoining of Syrian and Iranian effortsâ€ to influence the upcoming Iraqi elections. â€œThey (the

Iranians) basically asked us to focus on co-opting Shia politicians and to drop our support for the Sunnis and former Baathists,â€ arguing that the center of gravity in Iraq lies with the Shia. On this issue XXXXXXXXXXXX reported, Syrian officials expressed great reluctance and continued to insist on the reintegration of former Iraqi Baathists into the political system. Some Syrian officials XXXXXXXXXXXX agreed that Syria needed to extend the range of its political connections in the Iraqi Shia community, said XXXXXXXXXXXX. But Iranâ€™s vision for Iraq was â€œa Shia-dominated state made of up of mini-states,â€ an outcome the Syrian government opposed, he said. The SARG continues to desire a stronger centralized power base in Baghdad.

Â¶ 9. (S/NF) On Yemen, Vahidiâ€™s public remarks rebuking Saudi Arabia for interfering in its neighborâ€™s affairs drew sharp criticism from Syrian officials during the Iranian Defense Ministerâ€™s meetings XXXXXXXXXXXX

Vahidi was clearly trying to drive a wedge between Damascus and Riyadh, but

â€œit didnâ€™t work,â€ he said. Asad stopped short of publicly contradicting the Iranian official during his visit, but he reassured Saudi

King Abdullahâ€™s son Abdul Azziz, in Syria to pay personal condolences after the death of President Asadâ€™s brother Majd, that Syria fully supported Saudi Arabiaâ€™s efforts to defeat the Huthi separatists.

â€œThere werenâ€™t any newspaper reports of Iranian ministers here (paying condolences),â€ noted XXXXXXXXXXXX.

Â¶ 10. (S/NF) More significantly, Syria reportedly resisted Iranian entreaties to commit to joining Iran if fighting broke out between Iran and

Israel or Hizballah and Israel. XXXXXXXXXXXX said Iranian officials were in

Syria â€œto round up alliesâ€ in anticipation of an Israeli military strike. â€œIt (an Israeli strike on Iran) is not a matter of if, but when,â€ XXXXXXXXXXXX said, reporting what Syrian officials had heard from their Iranian counterparts. The Syrian response, he continued, was to tell the Iranians not to look to Syria, Hizballah or Hamas to â€œfight this battle.â€ â€œWe told them Iran is strong enough on its own to develop a nuclear program and to fight Israel,â€ he said, adding, â€œweâ€™re too weak.â€ The Iranians know Syria has condemned Israeli threats and would denounce Israeli military operations against Iran. â€œBut they were displeased with Asadâ€™s response. They needed to hear the truth,â€

XXXXXXXXXXXX said.

Â¶ 11. (S/NF) Asked what advice Syria was giving Iran, XXXXXXXXXXXX replied that Syria, along with Turkey and Qatar, was preparing for an Israeli-

Iranian military exchange in the near future. â€œMilitary officials tell me they have noticed Israeli drones snooping around our sites,â€ he explained, noting some Syrian officials saw Israeli reconnaissance as an indication that Israel might seek to disable anti-air radar stations as part of a plan to fly bombers over Syrian territory en route to Iran. â€œWe expect to wake up one morning soon and learn the Israeli strike took place.

Then we expect an Iranian response. At that point, we, Turkey, and Qatar will spring into action to begin moderating a

DAMASCUS 00000880 004.2 OF 004ceasefire and then a longer-term solution involving both countriesâ€™ nuclear programs. Thatâ€™s the best scenario.

All the others are bad for us and the region,â€ summed up XXXXXXXXXXXX.

â€œWe would hope the U.S. would recognize our diplomatic efforts to resolve a regional crisis and give us some credit for playing a positive role.â€

------------------

Comment: So What?

------------------

Â¶ 12. (S/NF) Many Syrian and some diplomatic observers believe Syria is in the process of re-calibrating its relations with Iran and is seeking to avoid choices that would constrain the countryâ€™s flexibility as it faces an uncertain regional setting. Does, however, Syriaâ€™s instinct for selfsurvival and desire for less dependence on Iran represent anything other than a shift of emphasis as long as Damascus insists on maintaining its military relations with Iran, Hizballah, and Hamas? Some analysts here argue that Syriaâ€™s improved relations with Turkey, France, and Saudi

Arabia afford Damascus a greater range of choices in dealing with the West, the Arab world, Israel, and Iran. This school asserts that better ties with the U.S. would further increase Syriaâ€™s range of options and its potential to move farther away from Iran. Even if Damascus and Tehran maintained some semblance of their political-military relationship, the extent of their ties would be constrained by Syriaâ€™s competing equities in deepening relations with others, including the U.S. Others argue that a wider range of options would only perpetuate Syriaâ€™s decision-averse orientation; if the Iranians canâ€™t pin down Syria on matters of war and peace, then what chance would the United States have? Syria could pocket openings offered by Washington and simply use our gestures to play rivals off one another.

Â¶ 13. (S/NF) At the end of the day, it may be impossible to assess

Syriaâ€™s intentions with any confidence until the regional context becomes clearer. In the meantime, the U.S. should take a modicum of quiet satisfaction that Syria is showing signs of wanting to moderate Iranâ€™s influence in its affairs, even though expecting the relationship to end altogether remains unrealistic. If Syriaâ€™s improved relations with

France, Saudi Arabia and Turkey can initiate cracks in the Syrian-Iranian axis, then perhaps discrete U.S.-Syrian cooperation could add further stress to these fault lines. A willingness to offer concrete deliverables as evidence of a U.S. desire for improved relations would force Syrian officials to calculate how far they would go in response, providing us with a more accurate measure of their intentions. At a minimum, increased

Washington interest in Syria would increase Tehranâ€™s anxiety level and perhaps compound Syrian-Iranian tensions, at a time when Syrian officials themselves may be unsure how they will react to unfolding events.

HUNTER

Viewing cable 07MADRID1021, SCENESETTER FOR SECRETARY RICE'S JUNE 1 VISIT

TO



07MADRID1021

2007-05-25

11:11

2010-12-07

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TO THE SECRETARY FROM AMBASSADOR EDUARDO AGUIRRE; ALSO FOR

Embassy

Madrid

EUR DAN FRIED, E-ES, KEN MERTEN, EUR/WE

E.O. 12958: DECL: 06/30/2016

TAGS: OTRA PREL SP

SUBJECT: SCENESETTER FOR SECRETARY RICE'S JUNE 1 VISIT TO

MADRID

Classified By: Ambassador Eduardo Aguirre for reasons 1.4 b & d.

Summary

Â¶ 1. (C) Dear Secretary Rice: I welcome you to Spain on behalf of our 367 American and Spanish colleagues serving the United

States at Mission Spain. Your visit is a milestone in our work, together with you, to overcome the differences over

Iraq with the Spanish government and convince them that further strengthening cooperation coincides with Spain,s national interest. At the same time, your visit can serve as a catalyst to encourage Spain to become an even more active

)- but responsible -- member of a Transatlantic partnership, marked by cooperative efforts on our shared values, including counter-terrorism and promoting democracy, freedom and human rights throughout the world. This means that you will need to speak frankly to the Spanish government about Cuba, despite their desire to avoid the issue. The issue need not be the central one in a rich agenda on a wide variety of fronts in which we work closely with Spain; however, Cuba must be an element of your discussions on democracy, and

Spain,s own special responsibility as a democracy leader that has successfully undergone the transition from dictatorship to thriving democracy. Your discussions will also include Kosovo, Afghanistan, Spain,s OSCE Chairmanship,

Russia, Iran, Iraq, Latin America and the Middle East.

Moratinos will raise a thorny child-custody case involving a

Spanish woman currently jailed for contempt of court in New

Jersey. Your interview with the Spanish press will provide an opportunity to reach out to the Spanish people and

underscore the significant value of our alliance and convey our views on issues on which we differ. We see this visit as a great opportunity to advance our relations with Spain, and the Spanish government shares this view. END SUMMARY

Â¶ 2. (C) The Spanish government has long awaited your first visit as Secretary of State and views it as a sign of the importance of strong U.S.-Spain relations. They will use your visit to counter criticism that the Zapatero government has shattered the transatlantic relationship. Per the Spain strategy you approved two years ago, we have sought to move this government away from visceral and reflexive anti-U.S. policies and sentiments, carving out areas in which

Zapatero,s government can offer support for the President,s broad global agenda. We have made clear to the Zapatero government that the price of our willingness to publicly promote good bilateral relations is real contributions on world issues. While we have made some positive headway, the

Zapatero government has not hesitated on occasion to pursue an agenda counter to our own when deemed in the Socialist party,s domestic political interest. Your visit should encourage Spain to be an even more active member of a transatlantic partnership that works cooperatively in pursuit of shared values on freedom, democracy, human rights and development.

What is Working

Â¶ 3. (C) On the positive side over the past two years, Spain contributed $22 million to the Basrah Children,s Hospital and offered a further $28 million in new money at the recent

Iraq Compact meeting. The Zapatero government established a robust presence in Afghanistan that includes allowing the

Spanish military to lead a PRT and co-lead a Forward Support

Base in Western Afghanistan. Spain has contributed some 150 million Euros in Afghan reconstruction funds. Spain also has

1100 troops deployed along the Lebanon-Syria-Israel border as

part of UNIFIL. The government allowed a sale of military aircraft to Venezuela to die. They support Turkey,s membership in the EU and have said that they will not pose problems on Missile Defense. We have superb two-way cooperation on counter-terrorism, counternarcotics, non-proliferation and military issues. This includes the use of two vital bases in southern Spain near the Straits of

Gibraltar, where we maintain over 2000 personnel that serve as major logistical hubs for the flow of troops and materiel into the Iraq and Afghanistan theaters. The GOS also very much appreciates US coordination with Spain on Western

Sahara, since Spain sees near-by North Africa as vital to its national security interests.

Â¶ 4. (C) In addition, our economic relationship with Spain is strong and mutually beneficial. The Spanish economy has boomed in the last decade as a result of structural reforms,

EU aid, and membership in the Euro zone. The commercial relationship is dominated by a very strong U.S. direct investment presence, although two-way trade remains a relatively minor percentage of each country,s exports and imports. Many of the U.S. Fortune 100 firms are present and

MADRID 00001021 002 OF 005 doing well. The American Chamber of Commerce estimates that about five percent of Spain,s annual GDP comes from U.S. investment. In recent years, U.S. portfolio investors have bought significant shares in major Spanish firms. Spanish firms have rediscovered America and are now investing in the

United States, especially in the banking and renewable energy sectors, and Spanish construction companies have also won important contracts in the U.S.

Â¶ 5. (C) Spain cooperates closely with the United States in the fight against terrorism finance, co-chairing the Financial

Action Task Force with us. Following intensive intervention by the USG and private industry, the Spanish government is giving increased attention to intellectual property rights issues. Other areas where we work closely with the Spanish include NASA,s Deep Space Network, and close partnerships in port security programs such as Megaports and the Container

Security Initiative.

What Still Needs Work

Â¶ 6. (C) However, our challenge has been to channel the efforts of a unpredictable Spanish Foreign Minister who portrays himself as a self-styled &bridge8 between the U.S. and difficult world players--such as Syria, Cuba, Iran and some

Palestinian elements. Additionally, President Zapatero plays to a largely leftist, pacifist support base, and uses foreign policy to win domestic political points rather than giving attention to core foreign policy priorities or embracing broader strategic goals.

Â¶ 7. (C) This has lent an erratic &zig-zag8 quality to the bilateral relationship. Moratinos, recent visit to Cuba highlighted the difficulty of maintaining a smooth and stable pattern as did his earlier outreach to Syria and Iran.

Zapatero,s reversal of his Defense Minister,s commitment to deploy 150 troops to staff the ISAF XI headquarters reflects

PSOE,s increasing sensitivity to Spanish public concerns about growing dangers in Afghanistan during this highly charged political season here ) with local/regional elections May 27 and national elections by March 2008.

Kosovo independence is a sensitive issue for the GOS, which maintains troops in KFOR, because of concern about the impact of such an evolution on Spain,s own complex federal vs. regional struggle. For this reason, a UNSC Resolution explicitly authorizing independence will be essential for

Spain to maintain its troops there.

Proposed policy agenda

Â¶ 8. (C) We want to challenge the Zapatero government to do better in the U.S.-Spain relationship as a result of your visit. In your meetings with King Juan Carlos, Zapatero and

Moratinos, we suggest you frame our goals with Spain over the following months along several interrelated themes that make clear the need to act responsibly in NATO, Latin America and the Middle East in order to be seen as a reliable partner.

We suggest the following themes:

--Spain should work more closely in coordination with us in

Europe and around the world on the freedom or democracy agenda. Spain has achieved a remarkable transformation since the end of dictatorship 30 years ago. It is one of the leading democracies in Europe and has the 8th largest economy in the world. Spain is now an active player in Europe, Latin

America and the Middle East, including Iran. But Spain needs to act in concert with the EU, NATO and the U.S. on key issues. There is too much at stake for Spanish freelancing, as in the Middle East, Cuba and Russia. The transatlantic community needs Spain,s support on Kosovo, Missile Defense,

NATO transformation, and Iran. The price of leadership and respect, which Spain seems to desire, is the willingness to devote the resources, assume responsibility, share burdens and act jointly with other powers. We welcome Spain,s commitment to stay the course in the pivotal struggle in

Afghanistan. We know it is a delicate political issue in this electoral season but it is the right thing to do and a responsible policy. Spain,s OSCE chairmanship is important on all of these issues and we want to ensure close consultations so that Russian attempts to weaken key OSCE functions are curtailed.

--Spain needs to help in countering anti-Americanism by publicly emphasizing cooperation. The U.S. and Spain cooperate on a myriad of issues that matter to the Spanish

people, including the fight against terrorism and international organized crime, Middle East, North Africa, human rights and support for democracy. We urge the Spanish government to work with us to allay anti-American sentiments

MADRID 00001021 003 OF 005 in Spain, not just cooperate with us behind the scenes.

Spain,s changing population and proximity to North Africa make it a prime target of Islamic extremism regardless of its relationship with the U.S. It is essential that we emphasize our shared values of democracy, human rights, freedom and opportunity for immigrants. Furthermore, during this difficult election period, we do not want our bilateral relations to become a casualty of the political crossfire. We understand electoral politics, but not at our expense.

--Spain should capitalize on its role as a democratic leader.

The U.S. welcomes Spain,s contributions on Afghanistan and

Iraq, defense ties and counter-terrorism; these form the basis of our good bilateral relations. Spain,s success in the transition from dictatorship to thriving democracy makes it a worldwide leader in the areas of democracy-building and institution-building. Spain should deploy that expertise more actively in concert with our shared goals. Our respect for Spain,s exemplary democratic transition makes it all the more perplexing and disconcerting that Spain has embarked upon a policy of outreach to the Raul Castro regime, validating his succession with no clear message about the need for democratic transition. Nevertheless, we want to continue working with Spain in support of human rights and market-based economic policies in Latin America, including

Cuba, and we urge Spain,s leadership to act in more positive ways and to demonstrate publicly Spain,s own values.

Â¶ 9. (C) We believe that folding our concerns about recent

Spanish foreign policy moves into a broader, positive agenda can help advance our goals as we navigate the waters of a very difficult and volatile political season in Spain.

The Political Environment

Â¶ 10. (C) You arrive just after the May 27 regional and local elections. Current polls show that the results will likely provide momentum for both Zapatero,s Socialist Party and

Mariano Rajoy,s Popular Party going into national elections by March 2008. In the regional elections, the Socialists could gain seats and join in coalition governments in three current PP regions. With Socialist victories in several regions last year, Zapatero could have a strong base of support going into the national elections. However, the PP is expected to strengthen its support in its traditional regional strongholds. On the national level, while support for Zapatero has diminished since its peak after the March

2004 elections, Rajoy has not been able to capitalize and his ratings remain low and are falling.

Assessment of Zapatero

Â¶ 11. (C) Though polls show Zapatero,s support down from the high just following the March 2004 elections and considerable concern about his ETA policies, he stands a good chance of surviving national elections in early 2008, albeit with some of his support drifting to smaller, leftist parties in the

Parliament.

Â¶ 12. (C) Zapatero focuses almost exclusively on domestic policy; his foreign policy instincts are governed by the exigencies of their domestic political impact. With a largely left of center, pacifist public which is strongly opposed to the Iraq war, the Aznar government and Bush Administration policies, Zapatero loses nothing by taking the U.S. to task on key issues. However, Zapatero now recognizes that the

Spanish public believes that Spain,s leaders must maintain good relations with the U.S. After his first volatile year in office, he has sought to improve the tenor and substance of U.S.-Spain relations while still maintaining the politically acceptable policy of offering criticism of U.S. policies as part of the role of what he calls a &loyal ally.8 We suggest you encourage Zapatero to continue to view a positive agenda with the U.S. as a necessary element of his political strategy and emphasize that the U.S. will not keep silent when his government pursues policies that run counter to our shared values and interests.

Rajoy as PP leader

Â¶ 13. (C) Your meeting with PP leader Mariano Rajoy will be interpreted in Spain as a symbol of continued U.S. ties with a partner that supports U.S. foreign policy goals. However, we need to make clear to Rajoy that the U.S. will continue to work with the current government as long as it is in power because of our major long-term interests in Spain, including in the war on terrorism and in Afghanistan. The Spanish media will scrutinize the length of your meeting with Rajoy in comparison with your session with Zapatero for signs of

MADRID 00001021 004 OF 005 any political signals we are trying to send.

Â¶ 14. (C) Recent polls indicate that Rajoy thus far has not been able to galvanize support for his candidacy for Spain,s

Presidency, despite some very meaty issues that could be developed to the PP,s advantage. One of the most crucial of these controversial issues is Zapatero,s policy toward the

Basque terrorist group ETA, which the PP viscerally opposes and which has driven hundreds of thousands of protesters into the streets. The PP points to the December 30 attack at the

Madrid airport which killed two Ecuadorian citizens as proof that ETA will not renounce violence. The PP remains strong in its traditional strongholds, however, and the ETA issue has become increasingly worrisome to a number of Spaniards.

However, recent polls show that Rajoy himself has not galvanized support for his candidacy for Spain,s Presidency.

If PP turns out a large number of voters for the regional and local elections, Rajoy nonetheless will come to your meeting buoyed with the hope of a strong challenge to

Zapatero in the national elections. Bitterness over the March

11 terrorist attacks and the Aznar government,s handling of the issue, however, remains a liability for Rajoy, and

Spanish politics at the national level are bitter and divided.

Role of the King

Â¶ 15. (C) Your meeting with King Juan Carlos will demonstrate

U.S. respect for the Spanish state and its people. Though prohibited from playing a direct role in foreign policy, Juan

Carlos has helped behind the scenes. For example, he helped smooth relations with the U.S. after tensions in the months following the 2004 Spanish elections. In November of that year, President and Mrs. Bush invited the King and Queen for a pre-Thanksgiving lunch at Crawford, which was widely interpreted here as a sign of respect for the Spanish state.

Juan Carlos is well versed on foreign policy issues and will welcome your review of the key issues you plan to discuss with Zapatero and Moratinos. He should also hear our strong concerns on issues like Cuba and Syria. On a personal note, you might congratulate the King on the birth of Crown Prince

Felipe,s second daughter, Sofia, born on April 29, 2007.

Dealing with Moratinos

Â¶ 16. (C) We no longer hear last year,s rumors of Moratinos, imminent departure from his post as Foreign Minister and he

seems entrenched in his position. He seeks a role on the world stage andtries to capitalize on his old ties in the

Middle East, as well as Spain,s presence in Lebanon and

Afghanistan, to play a role on Israel-Palestinian issues,

Lebanon, Syria and Iran. We have sought to find ways to keep

Moratinos in contact with senior USG officials on a range of issues as a means to help channel his efforts. Spain,s chairmanship of the OSCE puts Moratinos in the unusual position of having a voice and interest in core transatlantic issues related to Central and Eastern Europe, Russia and the

Caucasus. Moratinos, penchant for trying to &mediate8 needs to be tamed as Russia issues come to the fore; we have already seen evidence of Spain,s willingness to try to excuse or mitigate Russia,s recent threats to cut off CFE.

Moratinos has denied that his comments that he supports

Missile Defense discussion in the OSCE, but Russian Embassy contacts have told us that Moratinos supports the idea.

Â¶ 17. (C) Moratinos' recent trip to Cuba is one of the most prominent of Moratinos, miscalculations with the U.S. In addition to private protestations, I published an op-ed in

Spain,s leftist daily newspaper El Pais, laying out U.S. goals for democracy in Cuba. He has pushed the Human Rights dialogue promised during his visit so that it could take place just before your visit to Madrid. Moratinos will argue this justifies his Cuba policy. However, your visit should make clear to Moratinos the harm his trip has done to this effort, an objective he and Zapatero continually claim they share with us. Moratinos wants your brief bilateral before the working luncheon to be kept to a small group, where he wants to corral the issues of Cuba, Kosovo and Afghanistan

(his proposal for an international neighbors conference).

These are the three issues he deems most sensitive from the

Spanish side. In your working luncheon, issues will including

US-Spain bilateral relations (including excellent counter-terrorism, defense, non-proliferation cooperation);

Transatlantic issues, including Spain,s Chairmanship of the

OSCE, Russia and Moscow,s proposals for OSCE to discuss

Missile Defense, to Russia (Missile Defense); and finally,

Latin America, Iran, Iraq, Lebanon and the Middle East peace process. Iran will be in the Spanish news during your visit; while you are here, Larijani may be meeting with Solana at a

MADRID 00001021 005 OF 005 location organized by the Spanish. Moratinos will also want to discuss the way forward on Western Sahara, and he is pleased at our cooperation in security the latest MINURSO resolution calling for direct talks between Morocco and the

Polisario.

Â¶ 18. (C) Two important bilateral issues fall in the judicial area. Moratinos has said he will raise with you the child custody involving Spanish citizen Maria Jos Carrascosa who is currently jailed for contempt of court in Bergen County,

New Jersey for failure to return her child to the US as required by a New Jersey court decision. During this political season in Madrid, the case has become a cause celebre, with pictures of Carrascosa ) viewed as a mother separated from her child - in handcuffs entering the New

Jersey prison. The GOS agrees that this is a case for the courts and both governments agree that mediation of the dispute is the appropriate response. However, Moratinos for political reasons has to show the government is doing something about the case. On our side, you should note continued USG concern about the court case against the three

US servicemen charged with alleged &war crimes8 in the case of the death of Spanish TV camerman Jose Couse in the

Palestine Hotel in Baghdad in 2003. The GOS has been helpful behind the scenes in getting the case appealed by the Spanish

Prosecutor. The case now moves to the appeals tribunal of the National Court, which will rule on the substance of the charges. We want continued vigilance and cooperation by the

GOS until the case is dropped.

Â¶ 19. (C) Moratinos holds you in very high regard and values the contacts that he has had with you. Your efforts and those of other senior USG officials, along with mine, to help guide Moratinos on key issues such as handling Russia in the

OSCE and on the full range of Middle East issues, can prove effective. The more outreach the better, as we try to play to his desire to have a role on major issues while helping to direct some of these efforts toward policies that work to support US global objectives.

Â¶ 20. (U) You may want to congratulate Moratinos on the upcoming celebration of the 50th anniversary of the

Commission for Cultural, Educational and Scientific Exchange between the United States and Spain (the Fulbright

Commission) and express how you look forward to hearing more about the events planned to take place in Washington to commemorate this major milestone. The Spanish Fulbright

Commission, the second largest in Europe, is a truly binational organization with the majority of funding provided by the Spanish central government, as well as regional autonomous communities and private sector entities.

Â¶ 21. (C) In all, you will find a rich agenda with Spain, which your visit can advance substantially. Again, welcome to

Madrid. We are looking forward to your visit on June 1.

AGUIRRE

Viewing cable 10MADRID80, AMBASSADOR SOLOMONT'S JANUARY 22, 2010

MEETING



10MADRID80

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SUBJECT: AMBASSADOR SOLOMONT'S JANUARY 22, 2010 MEETING

WITH SPANISH PRESIDENT ZAPATERO

Classified By: Ambassador Alan D. Solomont, Reasons 1.4(b),(d).

Â¶ 1. (C) Summary: In a wide-ranging two-hour meeting with the Ambassador

January 22, President Zapatero praised USG humanitarian efforts in Haiti, reiterated his personal commitment to resettle as soon as possible five detainees from Guantanamo, pledged Spanish support on Iran and Afghanistan, and endorsed the Ambassador,s efforts to promote job creation both in the

U.S. and Spain through enhanced economic ties and investment. Zapatero told the Ambassador that his government considered him special and would open "all doors" to him. He pledged to work towards concrete deliverables leading to a U.S.-EU Summit and said Spain was open to an expanded USG presence at the Rota Naval Base for Africom objectives.

Zapatero made a strong case for Spain,s ongoing participation in the G-20, noting that he appreciated D/NSA Froman,s openness to Spain,s

possibleparticipation if the EU reduces its institutional membership.

Zapatero expressed sincere admiration for President Obama and his belief that the President's election had transformed the U.S. standing and image in the world. He also evinced a deep fascination with the U.S. political system and recent electoral developments, noting his life-long obsession with politics. End Summary.

Bilateral Relations

-------------------

Â¶ 2. (C) The Ambassador thanked Zapatero for receiving him so quickly after his arrival in Spain, and for the warm welcome by his cabinet, in particular NSA Leon, Foreign Minister Moratinos, and Interior Minister

Rubalcaba. The Ambassador said President Obama, NSA Jones, and the USG appreciated Spains expressed desire to work closely and collaboratively with the United States. He welcomed Zapateros upcoming visit to Washington to participate in the forthcoming National the Prayer Breakfast as well as

King Juan Carlos, mid-February visit to the White House. Despite the negative press Zapatero had received for attending a "religious" event, the

Ambassador noted the close connection between religious and political values in promoting the cause of justice, compassion and service to a cause greater than ourselves.

Â¶ 3. (C) The Ambassador said his priorities are to strengthen the GOS-USG partnership; explain USG policies to the Spanish public, particularly on our mutual interests in Afghanistan; and to promote job creation through enhanced investment and economic activity, both in the U.S. and in Spain.

He thanked President Zapatero for publicly praising USG humanitarian efforts in Haiti, which are an important expression of American values.

Zapatero said not only he but the European Parliament and the whole world recognized that the U.S. is doing an exemplary job in Haiti. He lauded the U.S. military forces, and thanked the Ambassador for his condolences for Spanish casualties in Haiti.

The Ambassador also welcomed ongoing law enforcement and counter-terrorism cooperation with Spain and thanked Zapatero for the warm reception DHS

Secretary Napolitano had received during her three visits to Spain over the past year.

Guantanamo

----------

Â¶ 4. (C) In view of the mixed signals and confusing messages from Interior

Minister Rubalcaba and other GOS senior officials, the Ambassador said he wanted to express clearly and concisely the importance of Spain following through on its commitment to take five detainees at Guantanamo. He welcomed

Leon,s clarification that Spain would act quickly, including taking the detainee from Yemen which it had agreed to. Zapatero reiterated his personal commitment. The

Ambassador stressed the need for the GOS to follow through and to be consistent in its public messages. Zapatero acknowledged that Spain's

desire to be helpful on Guantanamo was in response to its desire to have the USG close the facility, and said he would talk to Minister Rubalcaba to ensure the government was speaking with one voice on this important matter.

Iran

----

Â¶ 5. (C) On Iran, the Ambassador said we appreciated Foreign

MADRID 00000080 002 OF 003

Minister Moratinos, public comments about the importance of sanctions as a diplomatic tool. He briefed on U/S Burns recent meetings with EU Foreign Ministers to lay the ground for a UNSC resolution. While we were not closing the door to dialogue, Iran had not been responsive and the international community must stand together in bringing pressure to bear on

Iran. Spain,s leadership in the EU is very important on these key foreign policy challenges.

Economy and Climate Change

--------------------------

Â¶ 6. (C) On the economic front, the Ambassador noted the great potential for investments in alternative energy, infrastructure, and banking both in the U.S. and Spain. Spanish companies had benefited from their investments in the United States, receiving significant USG support and tax credits.

U.S. companies similarly wanted to compete on a level playing field in Spain, with two companies in particular poised to make hundreds of millions of dollars in renewable energy investments in

Spain. Ambassador noted his and Senator Menendez,s plans to reinvigorate the US-Spain Forum, which is an important vehicle for enhancing economic and investment opportunities. He also emphasized our desire to work closely with Spain on climate change, and noted his conversation with Teresa

Ribera, Spain,s point person on climate change, and her efforts to achieve Latin American support for a global comprehensive climate change agreement. Zapatero said he was pleased to learn of the Ambassador,s keen interest and direct involvement in promoting enhanced economic ties. He said we needed a model of cooperation to spur investment in both directions, and noted that he had proposed to the White House the establishment of a high level Forum for Trade and

Investment to help U.S. and Spanish businesses. The Ambassador noted that there were already a number of vehicles for achieving progress on this front, including the US.-Spain Foundation chaired by Senator Bob Menendez.

U.S.-EU Summit

--------------

Â¶ 7. (C) Regarding Spain,s desire for a U.S-EU summit during its EU

Presidency, the Ambassador said the matter was under consideration at the highest levels of the U.S. government, but that no commitment had been made. We are hoping for a specific response soon. While it is a White House call, what matters most is coming up with deliverables to ensure the meeting was substantive rather than symbolic. He noted that a prospective

E.U.-U.S agreement on data protection and information-sharing would be of great interest to Washington. Zapatero reiterated on several occasions the importance of having a Summit in Madrid, noting that Spain and the U.S. have many common interests and that there are many ways Spain can exert its leadership and influence in the world. He mentioned Latin America, North

Africa, and Turkey's accession to the EU as key areas of cooperation. He said he appreciated the U.S. expectation for Summit deliverables, recalling that

President Obama during one of their first encounters had observed the cumbersome process of the many U.S.-European organizational architectures.

Zapatero agreed that while regular meetings among U.S. and European leaders were important, concrete results needed to emerge from such meetings. He added that NSA Leon was working closely with the NSC on a Summit menu we could find attractive.

Â¶ 8. (C) Zapatero said that he was pleased to finally have the Ambassador in Madrid and promised that the Spanish government would ensure he had a successful tenure. "All doors are open to you. I have told my team that the U.S. Ambassador to Spain and personal representative of President Obama is not just another Ambassador but rather someone special," he said. "We want to reinforce our excellent relationship with the United States and for you to know that my government is one you can count on and trust."

Â¶ 9. (C) On the Middle East, Zapatero said Spain appreciated the imperative of bucking up the Palestinian Authority leadership and getting them back to the negotiating table, notwithstanding Israeli,s unhelpful actions on settlements. The Ambassador briefed on Special Envoy Mitchell,s diplomatic endeavors, in particular his efforts to get the

Palestinians to return to the bargaining table. Although critical of

Israel's settlements policy, Zapatero noted that

MADRID 00000080 003 OF 003 if any Israeli leader could forge a peace agreement with the Palestinians, it was PM Netanyahu, who had little incentive for returning to power other than achieving a lasting, sustainable peace agreement.

Â¶ 10. (C) Zapatero said he was pleased the U.S., as the world,s leading power, wanted to nurture and strengthen its alliance with Europe. The West would do well to bear in mind our long term strategic mutual interests in dealing with emerging powers such as China and India. Zapatero expressed particular anxiety regarding China, underscoring that it was a huge player and the West should be watchful of its growing

influence on the world stage. He hoped the U.S. appreciated Europe's importance. The Ambassador reassured Zapatero the U.S. fully appreciated the importance of Europe as our partner.

Â¶ 11. (C) Zapatero praised President Obama,s leadership and influence throughout the world. The Ambassador agreed that President Obama had positively influenced America,s standing in the eyes of the world. He said the U.S. looks first to astrong, united Europe for assistance, and sees

Spain as an essential partner. Europe is the most reliable partner for the

United States, which cannot solve the world,s problems alone. As President Obama said, now is the time for all of us to take our share of responsibility for a global response to global challenges.

Afghanistan

-----------

Â¶ 12. (C) Zapatero reiterated that Spain would continue its responsibilities in Afghanistan. He lamented that it has not been easy convincing Spanish public opinion about the objectives in Afghanistan, and welcomed the Ambassador,s assistance.

Africom

-------

Â¶ 14. (C) In response to the Ambassador,s gratitude for use of

Spanish military bases, Zapatero acknowledged the strategic importance of the Rota Naval base, querying if the USG remained interested in basing

Africom or one of its components there. Zapatero noted Spain,s continuing concerns about Al Qaeda in the Lands of the Maghreb (AQIM). Ambassador undertook to get a status report, underscoring the importance of the

African continent. Zapatero thanked the USG for its intelligence support in

Mauritania and Mali with a view to getting Spanish hostages released from

AQIM.

G-20

----

Â¶ 15. (C) Zapatero emphasized Spain,s overriding goal to continue its participation in G-20 meetings. The Ambassador relayed D/NSA Froman,s consideration in principle to accept Spain as the fifth European country if the EU reduces its institutional membership from two to one. He cautioned that this must be done in the context of what the

EU is willing to accept and with the understanding that we do not want to open up G-20 membership. The Ambassador said that Froman believes that

Spain understands that it cannot be a formal member of the G-20 but might be allowed to be a permanent participant, if the EU agrees. Froman also

noted that it was important for Spain to have an effective G-20 Sherpa.

Zapatero said he appreciated Froman,s openness to Spain,s participation.

Domestic Politics

-----------------

Â¶ 16. (C) Discussion then turned to Spanish and American domestic politics.

Zapatero spent considerable time querying the Ambassador on the U.S. political system, including the January 19 Massachusetts senatorial election outcome. The Ambassador described the body politic's mandate for change and the public's impatience. In the U.S. as everywhere the political imperative of addressing everyday struggles people have, with respect to jobs, was paramount. Zapatero agreed, describing himself as a passionate, life-long student of politics who continued to be impressed and fascinated by the American political scene.

SOLOMONT

Viewing cable 07PARIS3919, FM KOUCHNER'S SEPT. 19-21 VISIT TO WASHINGTON



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KPAL

SUBJECT: FM KOUCHNER'S SEPT. 19-21 VISIT TO WASHINGTON

Classified By: Ambassador Craig Stapleton for reasons 1.4 (B & D)

Â¶ 1. (C) The Bernard Kouchner who arrives in Washington Sept.

19 remains both an extremely popular French politician and one of the few of President Sarkozy's ministers who has retained a margin of independent authority. Kouchner, the most prominent of the Socialists who accepted positions in the Sarkozy government, continues to lead the polls as

France's most popular political figure. (With a 69% favorable rating, he is well ahead of other ministers -- and even of Sarkozy himself, who comes in at 64%). At a time when other ministers have receded so deeply into Sarkozy's shadow as to become invisible, Kouchner remains very much in charge on a number of issues -- Darfur, Lebanon, and Kosovo, for example. While other Ministers are routinely contradicted by the President (including the Prime Minister, whom Sarkozy has referred to publicly as his "collaborator," a fancy term in French for staffer), Kouchner's voice is strong and authoritative. That said, and despite the good personal rapport with Sarkozy, who admires him as a man of conviction and concrete accomplishment, Kouchner will not have an easy time managing his portfolio in the era of a hyperactive President who wants to be seen as in charge of everything. Kouchner's one stumble since assuming office -- when his briefing to Parliament on the Government's

engagement of Libya over the Bulgarian medics demonstrated near-perfect ignorance of the facts -- is not necessarily his last. Sarkozy and Kouchner appear to be fashioning a coherent foreign policy -- based on a realistic view of what

France brings to the table, a less ideological approach to issues, greater pragmatism in achieving objectives, and less aversion to working closely with the U.S. The byword for

France's re-positioning vis-a-vis the U.S. will continue to be "convergence, not alignment."

APPARENT MIND-MELD WITH SARKOZY ON FUNDAMENTALS: THE

TRANSATLANTIC RELATIONSHIP, IRAN

--------------------------------------------- -------

Â¶ 2. (C) When Kouchner agreed to become Sarkozy's foreign minister, he knew he was signing up to work for a President who would favor more substantial transatlantic engagement and greater day-to-day cooperation -- including on the security dimension. It is an orientation he shares. Sarkozy's will clearly be the decisive voice on how far France is willing to go on a "reform of NATO and France's relationship with it," as he put it in his major foreign policy speech of August 27.

But we judge that Kouchner will not be the one applying the brakes, despite the Gaullist reflexes of many of the Quai's old hands. Kouchner, like Sarkozy, is ready to break the mold where he is convinced it serves France's interests as a medium-sized power that should maximize the twin advantages of a leading position in the EU and a close, cooperative relationship with the U.S. Both feel fully empowered to engineer change at the beginning of their respective terms, at a time when the opposition is weak, and the blowback from daring initiatives such as Kouchner's visit to Iraq has been minimal. While Sarkozy has very definitely set the direction and tone on Iran policy, and the Elysee is managing the outreach to Tehran, Kouchner is clearly comfortable with the hardening of the French line: Three weeks after Sarkozy publicly warned about the "catastrophic choice between an

Iranian bomb and a bombing of Iran (terming only the first of these "unacceptable"), Kouchner publicly observed on Sunday that given Iran's behavior, "we must prepare for the worst, in other words, war," and called for EU sanctions against

Tehran.

THREE KOUCHNER ISSUES: LEBANON, IRAQ AND KOSOVO

--------------------------------------------- --

Â¶ 3. (C) Even in comparison with the peripatetic Sarkozy,

Kouchner has been no slouch. Since assuming office in on May

19, he has made 19 visits abroad. He has personally associated himself with, and publicly taken the lead on, three issues in particular: Lebanon, Iraq and Kosovo.

Arriving in Washington, he will be coming off his fourth visit to the Middle East. Active across the clutch of Middle

East issues, he has taken headline-grabbing initiatives on

Lebanon and Iraq. In both cases, he has sought to keep a distance from the U.S., while working to achieve shared objectives. On Lebanon, his efforts to facilitate dialogue across the entire political spectrum have brought him close to U.S. and Chirac-era red lines, and a more risk-averse

PARIS 00003919 002 OF 006 reading of what is politically possible in Beirut has led him to different tactical conclusions. However, remaining in synch with the U.S. remains a guiding principle of his

Lebanon policy. Visiting Iraq, he announced France's return as an independent actor, not as reinforcement for the U.S.

Declaring that the U.S. "has lost the war," on the one hand, he re-engages France in Iraq on the other, calling for greater EU and UN involvement in support of political reconciliation and institutional reconstruction that would permit gradual U.S. military disengagement. On Kosovo, the pattern has been similar. A distinct voice and tactical

differences with the U.S. -- insisting on the need for the appearance of a credible negotiating process, including consideration of options other than independence -- are offset by a bottom-line requirement to work closely with the

U.S. to achieve a common strategic objective.

KEY POLICY ISSUES: WHERE THE FRENCH ARE COMING FROM

--------------------------------------------- -------

Â¶ 4. (C) We expect that, time permitting, Kouchner would want to address the range of Middle East issues, Darfur,

Afghanistan, Kosovo, and NATO. Herein follows a snapshot of where the French are on these and other possible subjects of discussion, and where differences over policy or analysis lie. Among Kouchner's top priorities since taking office are

Lebanon, Iraq, Israeli-Palestinian peace, and Iran.

Â¶ 5. (C) Lebanon: Kouchner surprised many by his quick plunge into Lebanese politics, organizing a national reconciliation process designed to secure agreement on a new president and a new national government consistent with

UNSCRs that preserve Lebanon's sovereignty and limit Syrian

(and Iranian) influence. Our partnership with France over

Lebanon remains a top priority for the French, but we have divergent views on the stakes involved (the French fear a return to civil war more than a rolling back of gains made over the past two years to limit Syrian interference) and on tactics (the French prefer to press the Lebanese to seek a candidate of "convergence" and are reluctant to give the lead to the March 14 majority). Kouchner in particular is wedded to a process that accords parliamentary speaker Nabih Berri a prominent role in reaching a solution, partly due to longstanding ties between the two men. He does not seem nave about Berri, but has been prepared to accord him a key role that we do not think is deserved. In his last visit to

Beirut, Kouchner challenged Berri to enter into dialogue with

March 14 without preconditions. A frank discussion of the limits of our continued partnership is needed as well as our

different views of the stakes and tactics to employ. The

French concede that the presidential election process will play out until late November, which argues for Washington and

Paris to stay in close and constant contact as the various

Lebanese factions seek to play us off against the other.

Â¶ 6. (C) Israeli-Palestinian Peace: Kouchner's just-concluded visit to Israel, the West Bank, Jordan, Egypt, and Lebanon gave him a chance to discuss our efforts at achieving progress on the Israeli/Palestinian negotiations and probe for a potential French role in our planned regional meeting in November. He will press for us to step up our efforts to ensure that Israel and the Palestinians are ready to present evidence of a concrete accord with tangible results rather than another declaration of principles. In addition to asking what role interested parties like France and the

Quartet can play in the regional meeting (about whose details the French are impatiently waiting), Kouchner has publicly discussed a possible role for Syria in such a gathering.

This seems to be an outgrowth of French policy on Lebanon, which includes offering Damascus a possible place at any regional meeting we would organize on Middle East peace, as well as a reopening of a bilateral dialogue with Paris in exchange for good behavior on Lebanon during the Lebanese presidential election period. Kouchner, who has publicly suggested an eventual visit to Damascus is possible if Syria behaves, will meet his Syrian counterpart in New York and probably hopes to have a clear message to deliver about possible Syrian participation in the November meeting (which

Kouchner wants to back a week to accommodate the Lebanese presidential election).

Â¶ 7. (C) Iraq: Kouchner's trip to Iraq confirmed his reputation for the dramatic. While its paternity is uncertain, it was clearly something that Kouchner wanted to do and believed in -- and one which Sarkozy wholeheartedly

PARIS 00003919 003 OF 006 supported. Nevertheless, France has dramatically "turned the page" in its relationship with Baghdad, and Kouchner has made good on his intention to spur the EU to play a more prominent role in Iraqi reconstruction as part of what he hopes will be a strong multilateral effort with the UN in the lead. The

French are still developing ideas, however, about what they might do bilaterally. Kouchner is deeply pessimistic about the Iraqi internal political situation but has not repeated his readiness to host a reconciliation process similar to the one he launched for Lebanon. Although he has repeatedly criticized U.S. military intervention to overthrow Saddam

Hussein (whom he nevertheless said deserved to be overthrown) and subsequent policy (he most recently said the U.S. has already been defeated in Iraq), Kouchner believes a continued

U.S. troop presence is vital to prevent the stark humanitarian situation becoming an all-out civil war. He advocates a phased withdrawal but only one accompanied by a rebuilt Iraqi army and police force.

Â¶ 8. (C) Iran: The Presidency has taken the lead on French policy regarding Iran, but Kouchner has recently and most bluntly warned that the confrontation over Iran's nuclear program could lead to military action ("war," in his words, which have left some of his handlers fretting). He and others in the French government repeatedly stress that pressing ahead with ongoing diplomatic efforts (including a possible third round of UNSC sanctions) must be exhausted before any potentially "catastrophic" resort to force.

Before seeing you, he will have met with Russian counterparts to explain France's tough line, including Paris, urging of other EU members to impose sanctions outside the UNSC if necessary. Indeed, France's public hard line seems to be causing others in the EU to rethink their reluctance to undertake such sanctions. Kouchner's ministry was involved

in quiet Iranian efforts to open a new channel to France in the nave hope of splitting France from the P-5 1. He might raise an idea floated by one of his subordinates of a senior-level U.S./French channel that might include the UK to discuss possible U.S. military action.

Â¶ 9. (SBU) Europe/European Security issues: Strengthening

European security is an important Sarkozy priority. He consistently claims that a strong European Security and

Defense Policy (ESDP) is "complementary" rather than

"competitive" with NATO. In his first major foreign policy speech on August 27, Sarkozy urged EU nations to accept a larger share of defense spending to overcome the shortage of

EU defense capabilities and cope with global security threats. He highlighted the imbalance in spending between EU nations, stating "we cannot carry on with four countries paying for security for all the rest." European Defense

Agency figures indicate that Britain, France, Italy, and

Germany account for 75% of EU defense expenditures; of these four, only Britain and France meet the NATO benchmark of 2% of GDP (NOTE: The latest French figures on defense spending vary between 1.96 and 2.42%, depending on whether the gendarmerie, a force to guarantee civil order, is included).

Â¶ 10. (S/NF) NATO/France: In one of his first acts as

President, Sarkozy launched a defense white paper commission to review France,s defense and security priorities; one component of the report (expected in March 2008) is a review of France,s relationship with NATO. The defense white paper could set the stage for a re-integration into the NATO military command. The public debate over a deeper French role in the Alliance was launched this month when Defense

Minister Morin gave a speech to defense sector experts in which he openly questioned customary French reticence about

NATO. At the same time, our interlocutors have uniformly cautioned against raising expectations and warned that we

should not expect to see any major policy shifts in the immediate future (likely not until the defense white paper is well under way). Many (including, significantly, Prime

Minister Fillon) remain concerned that abrupt moves toward

NATO could be controversial domestically, and argue that, at a minimum, ESDP needs to be strengthened in parallel.

Â¶ 11. (C) NATO/Afghanistan: France has approximately 1,000 military personnel based in Kabul, Afghanistan (with additional personnel deployed in surrounding regions such as

Tajikistan and the Indian Ocean). The GOF will beef up its training support to the Afghanistan National Army through deployment of 150 additional trainers for Operational

PARIS 00003919 004 OF 006

Mentoring and Liaison teams (OMLTs) by the end of this year.

For air support, the French have moved three French Mirage planes from Dushanbe to Kandahar this month, with an additional three scheduled to transfer in October. The

September 10 French-German summit reaffirmed plans by the two countries to support the German-led EU police training mission in Afghanistan, although bureaucratic delays, lack of funding and a change of personnel has delayed deployment of this mission. On July 30, SACEUR sent a letter officially requesting six medium lift helicopters to provide rotary-wing support in ISAF (to replace the U.S. helicopters which are scheduled to depart early 2008). This request is still under consideration by the GOF.

Â¶ 12. (C) NATO/Georgia: The GOF is ready to give a positive signal to Georgia at the NATO summit in Bucharest (April 2-4,

2008), but it prefers that NATO offer "something less than membership." France is opposed to a Georgia Membership

Action Plan (MAP) for several reasons, including: concern over creating additional tensions with Russia, a desire to

define the territorial limits of NATO and worries over

Georgia,s internal problems with separatist regions. The

GOF notes that NATO membership should not create new lines of division and that territorial conflicts should be resolved prior to membership (i.e. NATO required that Hungary sign a border treaty with Romania prior to becoming a member);

Georgia does not meet these criteria. Therefore, the GOF does not support the USG proposal to have the NAC visit

Georgia at the same time as the Secretary General,s visit at the beginning of October. The GOF is considering whether

NATO could define with Georgia a different kind of status and a different approach to security in their area, possibly combined with incentives including abolishing visa requirements with the EU. The GOF is convinced that Germany, no less than France, opposes NATO membership for Georgia.

Â¶ 13. (C) France-EU: President Sarkozy was instrumental in re-activating the moribund political reform process in the

European Union with the June negotiation for a shortened

"reform treaty" that will simplify some of the EU,s operating procedures, while side-stepping efforts towards deepened political integration that doomed the EU constitution in 2005. This "reform treaty" must be approved by the other EU members and could go through ratification over the course of 2008. The French will also take over the rotating EU presidency from July-December 2008 and they plan to focus on immigration, energy, the environment and European defense during their term. Sarkozy remains firmly opposed to

EU enlargement to include Turkey. Nevertheless, he has agreed to allow negotiations to open on 30 of 35 chapters, all those compatible with both membership and association.

He conditioned his position on EU support for a "Committee of

Wise Men" to reflect "without taboos" on the broader questions about the European future: i.e. what is the

European identity, what should the EU,s borders be, how to handle common issues, and how deep can political integration go. Sarkozy also promotes the formation of a looser

"Mediterranean Union" to coordinate policies and relations with the broad spectrum of countries of the Mediterranean basin. Sarkozy's tactical softening on Turkey surely sits well with Kouchner who personally favors Turkey's joining the

EU, something he has told us directly, and about which he has agreed to disagree with his President.

Â¶ 14. (C) France-Germany: Thus far, President Sarkozy appears to be keeping to the tradition of meeting regularly every couple of months with the German Chancellor. While the summit meeting in July with Merkel was reportedly more tense with disagreements over EADS and Sarkozy,s blunt criticism to German FinMin Steinbruck over EU monetary policy, our interlocutors reported that the two leaders reached general agreement on major issues at the most recent September 10 meeting. The French public supports a strong French-German relationship and expects the two leaders to work together closely. This was reinforced when both leaders were heavily involved in reaching agreement on the shortened EU "reform treaty" in June, activating hopes of a reinvigorated

"Franco-German" engine to lead the EU. In what the French saw as a major achievement of their Sept. 10 meeting, Merkel signed on to Sarkozy's proposal to convene a "Committee of

Wise Men" to reflect on the EU,s future. Merkel requested, and Sarkozy agreed, that presentation of the report should be delayed until December 2009, so that it would not be presented during the 2008 French presidency as a "French

PARIS 00003919 005 OF 006 vision," and it would coincide with timing for the next

European commission. Managing the relationship with Russia remains important for both France and Germany, with the GOF acknowledging that Germany faces a more acute challenge due to its closer proximity and greater energy dependence on

Russia.

Â¶ 15. (S/NF) Missile Defense: The GOF was very interested in the latest round of U.S. and Russian talks on missile defense in Paris on September 10, including progress on negotiations with Poland and the Czech Republic (NOTE: The next round of experts meetings is tentatively planned for early October prior to the meetings of Foreign and Defense Ministers in

Moscow). The GOF also agrees that many of Russia,s objections to the planned system are politically driven, reflecting an outdated Russian view in which it sees itself as increasingly encircled by NATO.

Â¶ 16. (C) CFE: At a recent meeting with Quad European

Political Directors, the French expressed support for the CFE regime and for moving forward towards ratification of the adapted CFE reaty. This included support for the current USG

"parallel actions" plan and the U.S. proposal to turn Russian forces in Moldova and Transnistria into an international force with a Russian component, as long as the requirement of eliminating ammunition was maintained. However, the GOF is pessimistic that such efforts would succeed in keeping Russia in the CFE. French Political Director Gerard Araud recently informed us that he had been told in Moscow that the

"decision is already taken" to suspend Russia's observation of CFE and he added that Kislyak had told him that no flank limits on Russia were acceptable because it was "humiliating" that they should have such limits on their own territory.

The GOF supports the upcoming CFE Seminar in Berlin in early

October as a chance to give the allies a chance to unify their positions and demonstrate solidarity for the U.S. parallel actions plan.

Â¶ 17. (C) Kosovo: Kouchner is working actively to build consensus within the EU on recognition of an independent

Kosovo after the December 10 Troika deadline. The GOF is reportedly optimistic about the possibility for consensus on recognition, but less so about the prospects for consensus on

the legal basis for an ESDP mission in Kosovo. Since a new

UNSCR would provide an agreed basis, France is still pursuing that possibility. Kosovo is on the agenda for Kouchner,s meetings with Russian Foreign Minister Lavrov in Moscow on

September 17-18, though we have been advised Kouchner will seek to gauge Russian flexibility, not make new proposals.

Â¶ 18. (C) Russia: Kouchner will have discussed a full range of topics with Russian Foreign Minister Lavrov in their meetings in Moscow September 17-18. Generally, the GOF advocates an approach towards Russia that falls between

"complacency and confrontation." While Chirac's insistence that the primacy of he Paris-Moscow relationship (in his multipolar world) was inconsistant with even private criticism of Russian behavior, either Sarkozy nor Kouchner have refrained from publicly pointing to official Russian

"brutality" (Sarkozy's choice of words). That said,

Kouchner's foreign ministry continues to remind us that

France and the rest of Europe are a lot closer to Russia than we are, and that it holds an important energy card that many

Europeans will ignore at their peril. In other words, France and Europe will have to continue to carefully manage Russia.

They will seek, in particular, to avoid aggravating Moscow before the Dec. 10 Kosovo Troika deadline. France recognizes that Russian resistance to MD is politically-driven. While welcoming the U.S. "parallel actions" proposal on CFE, the

GOF views prospects for keeping Russia in CFE as poor, and is focused on ensuring Allied unity. France agrees that NATO should send a positive signal to Georgia at the Bucharest summit; however, France is looking for options other than extending the MAP, due to Russia,s sensitivities but also

France,s uncertainty about entering into an Article V commitment to Georgia.

Â¶ 19. (C) Africa - Darfur: The Sarkozy government and

Kouchner in particular, have taken a strong interest in

African issues from the moment they took office. One of

Kouchner's first acts was to call for and then host the June

25 ministerial meeting on Darfur. France's efforts have played a positive role in energizing international action. A follow-up meeting on Darfur, to be hosted jointly by the UN

PARIS 00003919 006 OF 006 and AU, is to take place on September 21 on the margins of the UNGA, to be followed by a heads-of-state meeting of the

UN Security Council on September 25, to address Africa more generally. The latter will be chaired by President Sarkozy

(France being the UNSC President in September). The French have firmly supported the deployment of the hybrid UN-AU force in Darfur (UNAMID).

Â¶ 20. (C) Africa - Chad: The French have also developed a plan to place a peacekeeping mission in Chad and the Central

African Republic, which they see as sharing many of Darfur's problems that would protect refugee and IDPs. The mission would have a French-led EU military component and a UN civpol element. The French would like the UN Security Council to adopt a resolution approving such a mission (which is a legal necessity before the EU can go forward) prior to the

September 25 heads-of-state UNSC meeting, with initial deployment to follow shortly thereafter. One stumbling block has been the issue of UN funding for Chadian gendarmes who would serve with the mission. The U.S. and France have been working to resolve this funding issue, which largely centers on UN financing rules.

Â¶ 21. (C) Sarkozy,s vision for Africa: In a broader sense,

President Sarkozy has signaled his own vision of Africa, notably in a speech he gave in Dakar, Senegal, shortly after taking office. The speech was both praised and criticized in

France and in Africa -- on the one hand, it was quite frank in advising Africans that they would have to take more

responsibility for their own situations and to avoid attributing all of their problems to colonialism. On the other hand, some observers found Sarkozy's tone condescending and paternalistic, i.e., a vestige of the very colonial attitude that he was suggesting that Africans needed to put behind them. On balance, however, the speech, perhaps intentionally provocative, signaled France's continuing strong interest in Africa but also a hope that Africa and its

European partners could do business on a more pragmatic and less emotionally-charged basis than has been the case during much of the post-colonial period.

Â¶ 22. (S) Colombia: In June of this year, the French pushed

Colombian President Alvaro Uribe to release 200 FARC prisoners in an effort to move negotiations for the release of FARC hostages, namely Franco-Colombian Ingrid Betancourt, forward. While this prisoner release has not resulted in negotiations by the FARC, the French are now backing

Venezuelan President Hugo Chavez,s offer to negotiate a hostage deal between the Colombian government and FARC guerrillas. President Sarkozy has spoken by phone to Chavez twice over the past few weeks and Chavez will most likely visit France in the coming months. That said, the French want to show they are doing everything they can to liberate

Betancourt while publicly downplaying to the extent possible a role for Chavez. Ingrid Betancourt remains a major media personality in France and the GOF is under a great deal of political pressure to show the government "will leave no stone unturned." Sarkozy is likely aware that without a gesture from the FARC, the Colombians are unlikely to make any further concessions including prisoner releases.

Kouchner recently met with Colombian Foreign Minister Araujo, and Sarkozy will meet with Colombian president Uribe on the margins of the UNGA on September 25. Betancourt is reportedly high on the bilateral agenda.

Please visit Paris' Classified Website at: http://www.state.sgov.gov/p/eur/paris/index.c fm

Stapleton

Viewing cable 07BERLIN1767, TERRORISM ARRESTS DEMONSTRATE THREAT OF

HOMEGROWN



07BERLIN1767

2007-09-19

10:10

2010-12-08

21:09

CONFIDENTIAL

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PP RUEHAG RUEHROV

DE RUEHRL #1767/01 2621047

ZNY CCCCC ZZH

P 191047Z SEP 07

FM AMEMBASSY BERLIN


INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY

RUCNFRG/FRG COLLECTIVE PRIORITY


RUEAHLC/DEPT OF HOMELAND SECURITY WASHDC PRIORITY

RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY

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C O N F I D E N T I A L SECTION 01 OF 03 BERLIN 001767

SIPDIS

STATE FOR EUR/AGS, EUR/PGI AND S/CT

SIPDIS

Embassy

Berlin

E.O. 12958: DECL: 09/17/2017

TAGS: PTER PGOV PREL KHLS KJUS GM

SUBJECT: TERRORISM ARRESTS DEMONSTRATE THREAT OF HOMEGROWN

ISLAMIC EXTREMISM

REF: A. BERLIN 1681

Â¶ B. BERLIN 1398

Â¶ C. MUNICH 218

Classified By: DCM John M. Koenig for Reasons 1.4(b) and (d).

Summary

Â¶ 1. (C) The September 4 arrests of three terrorist suspects, two of whom are German citizens who converted to Islam, has given Germany its first high-profile case of homegrown

Islamic terrorism and focused attention on the southern

German area of Ulm/Neu-Ulm, which authorities have long identified as a hotbed of radical Islam. The arrests of

Gelowicz and Schneider, both ethnic Germans and life-long residents of Germany, have changed public perceptions concerning the threat of Islamic extremism in Germany and raised questions within political circles as to what potential measures should be taken to more closely monitor extremists. Furthermore, the news that the three suspects received instructions from Pakistan-based Islamic Jihad Union

(IJU) leadership has generated a new awareness and recognition of the need to increase surveillance capabilities as well as enhance cooperation with international partners.

The Interior and Justice Ministries are preparing legislation to strengthen the capabilities of prosecutors and increase the investigative powers of security officials to counter the homegrown terrorist threat. End Summary

Germany's First Homegrown Islamic Terrorists

--------------------------------------------

Â¶ 2. (U) The September 4 arrests of three suspects planning large-scale attacks in Germany has sent shockwaves through

Germany, given that two of the alleged terrorists, Fritz

Gelowicz and Daniel Martin Schneider, were German citizens with non-immigrant backgrounds who converted to Islam as teenagers (Ref A). Previous terrorist cases over recent history have typically involved individuals with immigrant backgrounds and/or dual nationalities who were generally raised as Muslims from birth. Although there has been at least one previous instance in which a German convert has taken up arms in the cause of Islam (e.g., Thomas "Hamza"

Fischer who died fighting in Chechnya in 2003), the current case is the first in which such converts were planning their attacks on German soil against German (and U.S.) targets.

Â¶ 3. (U) Media coverage and editorials immediately following the arrests have expressed shock at how Gelowicz and

Schneider, who had been raised in unremarkable typical German circumstances, managed to adopt an Islamic extremist ideology and plan violence against their fellow citizens. There has been much hand-wringing and anxious speculation on how many other potential homegrown terrorists in Germany might be planning similar attacks. A poll (by the national polling firm Emnid) taken shortly following the arrests indicated that 85 percent of the public believe the threat of terrorist attacks in Germany has increased. This same poll showed that

56 percent of the public believe a strengthening of security legislation is the best response to the new threat.

Â¶ 4. (U) As the arrests have highlighted the homegrown terrorist threat, there have been calls for government monitoring of German converts to Islam, who number in the thousands each year. Though not likely to see the legislative light of day (see Septel), this proposal is a reaction to the perception that converts often tend to be more zealous believers in their new faith compared to those

born into the religion. Minister Schaeuble, who leads the

Federal government's "German Islam Conference" initiative, which attempts to promote an intercultural dialogue with the

Muslim community, commented that "One thing is certain: fighting the abuse of Islam and exaggerated fundamentalism is, above all, a task for the Muslims themselves."

Ulm/Neu-Ulm - Centers of Radicalization

---------------------------------------

Â¶ 5. (U) The Federal Prosecutors Office has identified a number of German cities as centers of Islamic associations and potential sites for extremism, including Ulm, Neu-Ulm,

Braunschweig, Cologne, Berlin and Muenster. Of these, the neighboring cities of Ulm and Neu-Ulm have figured the most

BERLIN 00001767 002 OF 003 prominently over the past decade as breeding grounds for

Islamic extremists. Ulm, a mid-sized city (population

120,000) in Germany's relatively conservative southern state of Baden-Wuerttemberg, is a leading center for scientific research and birthplace of Albert Einstein. Ulm was rated as

Germany's most healthy city by the health-oriented magazine

"Healthy Living" in a nationwide survey last month. Neu-Ulm

(population 51,000) is located on the eastern side of the

Danube river in Bavaria.

Â¶ 6. (U) The cities received an influx of Muslim refugees from

Bosnia in the mid 1990s, adding to their existing Muslim communities which came mainly from Turkey. Despite their traditionally moderate take on Islam, Bosnian Muslims developed ties with international extremists who were often viewed as the first to respond in Bosnia's hour of need.

During the 1990s, the region was seen as a staging point for

Muslim extremist fighters going to Bosnia. More recently,

Ulm and Neu-Ulm have both hosted organizations that have played central roles in Germany's radical Islamist spheres.

Â¶ 7. (C) The Multicultural House (MCH) in Neu-Ulm was founded in 1996 and in the nine years that it was open attracted a series of noteworthy individuals and Islamic extremists including:

-- Mahmoud Salim, Osama Bin Laden's chief of financial operations who visited in September 1998.

-- Reda Seyam, alleged to be one of the planners of the Bali attacks of 12 October 2002.

-- Dr. Yehia Yousif, an Egyptian who first came to Germany in

1988 as a researcher but later became a jihad recruiter and hate preacher who took on a leading role at the MCH. Yousif left Germany in 2002 as investigations of his activities increased. Yousif's oldest son, who is alleged to have spent time in a Pakistan terrorist training camp, was deported after investigators found bomb-making instruction manuals in his apartment.

-- Khaled al-Masri was a visitor to the MCH.

-- Mohammed Atta, one of the 9/11 terrorist pilots, is reported to have visited the MCH.

-- Fritz Gelowicz is reported to have been a frequent visitor of the MCH.

Â¶ 8. (C) Following prolonged observation and investigation,

Bavarian officials finally closed the MCH on 28 December 2005 and banned it on grounds that it promoted activities hostile to the constitution. Bavarian authorities indicate that MCH members had used the facility as a recruiting station for global jihad and distribution source of extremist literature.

The ban was subsequently confirmed by the courts in January

2007 (Ref C).

Â¶ 9. (C) The Islamic Information Center (IIC), founded in 1999 and located in Ulm, has developed into a center of extremist activity particularly following the closure of the MCH.

Given its location in a different federal state,

Baden-Wuerrtemberg security officials monitoring the IIC have needed to overcome coordination issues with their counterparts in Bavaria to ensure that extremists cannot escape observations by merely crossing the Danube river.

Baden-Wuerttemberg authorities have listed the IIC as an extremist center since 2003. Fritz Gelowicz is reported to have joined the center in 2005 under the name Abdullah after following an introduction by his co-worker Tolga Duerbin.

Â¶ 10. (C) Authorities searched the IIC in conjunction with the

September 4 arrests and hope that materials collected will enable them to close the center. Baden-Wuerrtemberg Minister of Interior Heribert Rech commented that he is confident that these materials will be sufficient to close the IIZ permanently. Ulm's mayor has also expressed the desire to close the center.

Links to International Networks

-------------------------------

Â¶ 11. (C) All three of the terrorist suspects arrested

BERLIN 00001767 003 OF 003

September 4 are believed to have trained in Islamic Jihad

Union (IJU) camps in Pakistan, and shortly following the arrests IJU leadership issued a statement confirming that the three had indeed been operating under IJU direction. The confirmation of this connection between an overseas terrorist

organization and the Germany-based suspects demonstrates that the terrorist threat to Germany had reached a new level.

Previous Islamic terrorism cases in Germany have not reached this level of sophistication and organization.

Â¶ 12. (C) The arrests in Pakistan and subsequent deportations back to Germany of multiple German citizens, or those with

German residency permission, in the past few months has proven just how potentially widespread the links are between

Germany-based Islamic extremists and overseas terrorist leadership. Some of these individuals, such as Tolga

Duerbin, have been arrested on their return to Germany while others, such as Aleem Nasir and Nihad C., have been permitted to remain free. In any case terrorist training camp returnees are cause for concern among security officials.

Government Responses

--------------------

Â¶ 13. (U) In a September 16 interview Minister Schaeuble summed up how the arrests had changed the political debate, saying:

"We now know better than before that we are very much in the focus of Islamist terrorists." Since the arrests, Schaeuble has increased his calls for quick cabinet agreement on a number of legislative proposals to enhance the powers of the

Federal Criminal Police (BKA) in counterterrorism investigations, as well as to permit the surveillance of the computers of terrorism suspects (Ref B). This proposal for on-line computer investigations has been particularly controversial due to privacy concerns but Schaeuble has remained adamant, stating "We will not submit a BKA bill without including the option of on-line searches."

Â¶ 14. (U) Separately, the Justice Ministry has drafted a proposal that would significantly increase prosecutorial powers aimed at those who train in foreign terrorist camps as well as permit authorities to take earlier action against

those in the planning stages of a terrorist attacik (see

Septel for analysis).

Â¶ 15. (U) This cable has been coordinated and developed jointly with Consulates General Munich and Frankfurt.

TIMKEN JR

Viewing cable 05ISTANBUL890, REFLEXIVE TURKISH NATIONALISM ENSNARES

MASTERCARD



05ISTANBUL890

2005-06-01

11:11

2010-12-08

17:05

CONFIDENTIAL

Consulate

Istanbul

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L ISTANBUL 000890

SIPDIS

DEPT FOR EUR/SE, DS/DSS/OSAC AND DS/IP/EUR

ANKARA FOR RSO

E.O. 12958: DECL: 05/31/2015

TAGS: PGOV SOCI KISL ASEC TU

SUBJECT: REFLEXIVE TURKISH NATIONALISM ENSNARES MASTERCARD

This cable was coordinated with Embassy Ankara.

Â¶ 1. (SBU) Summary: After briefly basking in the reflected glow of last week's exciting UEFA Champion's League Final in

Istanbul between Milan and Liverpool, corporate sponsor

Mastercard has found itself dealing with a public relations nightmare in recent days following public criticism of

inclusion in its match city guide of critical commentary about both Turkey and its revered founder, Mustafa Kemal

Ataturk. The offending passages, first publicized in the liberal Islamist daily "Zaman," addressed the issue of

Turkish-Kurdish relations and the Armenian tragedy of 1915.

Mastercard briefly closed its office following death threats against its General Manager, and has since officially apologized, noting that the offending material had not been reviewed by any company officials, but instead emanated from the "Lonely Planet," which produced the bulk of the publication. The public reaction, which has also included calls for a boycott of the company by Turkish NGO's and the threat of public prosecution from the Istanbul Governor, highlights once again how close to the surface core nationalist reflexes and taboos are in the post-December 17th environment. End Summary.

Â¶ 2. (SBU) Shortlived Honeymoon: Mastercard officials, whose biggest problem last week was the deluge of calls they were receiving seeking tickets to the May 25th Milan-Liverpool match, faced a more serious crisis on May 30 when "Zaman" newspaper published extracts from the city guide the company distributed to its VIP guests and journalists. In the

"Lonely Planet" produced publication, which was written by an

Istanbul-based British journalist, brief reference was made to the issue of minorities in Turkey, with sections covering both the Kurds and the Armenians. The breezy narrative noted that "Ataturk banned any expression of Kurdishness in an attempt at assimilation," adding that major battles and atrocities followed in the 1920s and 1930s, with the deaths of more than 30,000 coming since 1984. On the equally sensitive Armenian issue, the guide noted that while most

Armenians had remained loyal to the Ottoman Empire, some had rebelled, engaging in terrorism that set off a powerful anti-Armenian backlash and the "widespread massacre of innocent Armenians in Istanbul and elsewhere."

Â¶ 3. (SBU) Harsh Reaction: The publication sparked harsh reaction from most quarters, with Istanbul Governor Guler denouncing the "insult" to Turkey and warning that "such a sponsorship firm needs to be more cautious." He added that officials would investigate the publication and determine if it constituted a criminal offense. NGO's were also quick to leap on the bandwagon, with the Consumers' Union calling for a boycott of the company if it did not officially apologize.

Turkish sports officials also expressed disappointment with the publication. More worryingly, anonymous callers phoned in death threats, and nationalist groups indicated that they would organize protests, resulting in closure of Mastercard's office early this week and the provision of extra security for General Manager Ozlem Imece.

Â¶ 4. (C) Damage Control: Since the story broke on May 30,

Mastercard has been engaged in damage control. In an initial announcement on May 30, the company admitted its mistake and noted it had contacted the "Lonely Planet" to demand the removal of "erroneous information" from the guide. When this did not quell the furor, the company went further a day later and officially apologized. In a public statement, General

Manager Imece observed that she had not known of some of the material that was to be included in the publication, and was

"deeply shocked" by it. Privately she has told us that the company was blind-sided by the furor, having been focused on security for their VIP guests last week. This, she said, was something that "no one expected."

Â¶ 5. (C) Comment: Given the sensitivities that exist here, inclusion of any material on topics such as Turkey's minority policy or the Armenian tragedy in a sporting guide was in retrospect a serious mistake. The harsh, instinctive reaction, however, shows the heightened sensitivities and hair-trigger nature of public discourse here since the

December 17th EU decision. Post RSO has reached out to

Mastercard, which is an active member of the OSAC Advisory

Council, to ensure that they are satisfied with the police response they have received and to provide assistance if needed. End Comment.

ARNETT

Viewing cable 09SARAJEVO103, BOSNIA - GOOD BOSNIAKS, BAD BOSNIAKS, GOOD



09SARAJEVO103

2009-01-27

09:09

2010-12-09

21:09

CONFIDENTIAL

VZCZCXRO2610

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DE RUEHVJ #0103/01 0270934

ZNY CCCCC ZZH

R 270934Z JAN 09

FM AMEMBASSY SARAJEVO



RHEHNSC/NSC WASHDC

RUEAIIA/CIA WASHINGTON DC

RHEFDIA/DIA WASHINGTON DC

RUEKJCS/JCS WASHINGTON DC


C O N F I D E N T I A L SECTION 01 OF 03 SARAJEVO 000103

SIPDIS

EUR/SCE FOR FOOKS, STINCHCOMB, HYLAND; NSC FOR HELGERSON

E.O. 12958: DECL: 01/22/2019

TAGS: PHUM PGOV PREL BK

SUBJECT: BOSNIA - GOOD BOSNIAKS, BAD BOSNIAKS, GOOD

MUSLIMS, BAD MUSLIMS

Embassy

Sarajevo

SARAJEVO 00000103 001.2 OF 003

Classified By: DCM Judith Cefkin, for reasons 1.4 (b) and (d).

Â¶ 1. (C) SUMMARY: Amid resurgence over the past two years of politics dogged by nationalist rhetoric, some Bosniak

(Muslim) political actors have sought to portray themselves as more capable of protecting Bosniak interests than their opponents. One aspect of this tussle is an increasingly-visible rift in the Bosniak community that centers on what it means to be a "good" or "bad" Bosniak.

"Good Bosniaks," according to this sentiment, are those who espouse conservative political and religious ideals. More moderate and secular ideals are, by implication, held by "bad

Bosniaks." Statements from the Islamic Community, particularly its leader, Reis Ceric, that label those who criticize Islamic Community as "Islamophobic" have sharpened this polarization among Bosniaks. Bosnia's largest-circulation and most influential pro-Bosniak daily,

Dnevni Avaz, has also increasingly championed "good Bosniak" causes and unscrupulously attacked Bosniaks and Bosniak institutions (including a rival, more secular Bosniak daily) that disagree with it. This press war, sparked largely by

Avaz's business interests, has helped the intra-Bosniak debate gain traction more quickly and more broadly than it might otherwise. Depending on the path the debate takes, it has the potential, over the longer-term, to steer Bosniak politics in a more conservative direction, which would complicate efforts to forge the compromises among Bosniaks,

Serbs, and Croats necessary to secure Bosnia's future. END

SUMMARY.

Protectors of Bosniak

---------------------

Â¶ 2. (C) In a time of international reluctance to engage heavily in Bosnia -- coupled with Bosnian Serb and Croat attempts to establish maximal autonomy for themselves --

Bosniak fears of isolation and abandonment have escalated.

The perception of the risks to the Bosniak community among average Bosniaks is genuine, grounded largely in the fact that Bosniaks were the most aggrieved ethnic group during the

1992-95 war and that their plight was ignored by the international community. Reflecting these fears, many

Bosniak political leaders over the past two years have campaigned on the idea that they are better able to protect

Bosniak interests than their rivals. At the same time, they have framed debate on specific policies within their Bosniak constituency in existential terms. Bosniak member of the

Tri-Presidency Haris Silajdzic has been the Bosniak political leader most willing to appeal to these fears -- in fact, he has often deliberately stoked them -) but others, including

Party for Democratic Action President Sulejman Tihic and

Social Democratic Party leader Zlatko Lagumdzija at times have also done so.

Reis Ceric Helps Mold Bosniak Identity

--------------------------------------

Â¶ 3. (C) At the same time, the Head of the Islamic Community,

Reis Ceric, has sought to promote a Bosniak political identity rooted in "victimization." He has regularly reminded Bosniaks that they are victims of genocide and that they suffered more than any other group in the 1992-95 war.

In a Hayat TV interview on January 11, the Reis claimed that following the break-up of the Ottoman Empire, Bosnian Muslims had been variously subjected to "phobias" against Turkey,

Islam, and Bosnia itself. He also alleged that media coverage of the alleged threat of Islamic terrorism in Bosnia is, itself, motivated by "Islamophobic" media and "is, in a way, a preparation for a new genocide on Bosniaks." The Reis has, by all accounts, succumbed to the political fray,

criticizing or praising Bosniak leaders as he feels appropriate. His public comments about Bosniak identity and

Bosniak suffering have clearly been aimed at shaping Bosniak political discourse as well as the positions adopted by the country's leading Bosniak political parties.

Â¶ 4. (C) The Reis has also sought to define Bosniak identity in religious terms and has publicly implied that to be a "good

Bosniak" one must be a "good Muslim." He has supported policies that are controversial among more secular Bosniaks, such as introducing religious education into kindergarten classes. Ceric has also made use of his public profile and media access to attack critics of his agenda, often implying that his position places him above criticism. In one

SARAJEVO 00000103 002.3 OF 003 interview, Ceric claimed that while he personally welcomed constructive criticism, criticism of Islam itself was impermissible. (Note: Ceric clearly intends to be the sole judge of when criticism of him or his administration becomes a criticism of Islam. His past responses to other critics inside and outside the Islamic Community suggest as much.

End Note.)

"Islamophobes" are Everywhere

-----------------------------

Â¶ 5. (C) The Islamic Community has increasingly condemned attacks against itself as anti-Islamic, and as undermining

Bosniaks in Bosnia. A November op-ed in the Sarajevo-based daily Oslobodjenje touched on some controversial projects undertaken by the Islamic Community, particularly the Reis' new offices -- now under construction -- which are rumored to be extremely costly. The article also criticized the Reis, as the head of the Islamic Community. In response, the

Islamic Community was quick to demonize its critics and imply that their opposition made them "bad Bosniaks." An Islamic

Community statement declared the paper's stance to be,

"...nothing but a continuation of the genocidal politics designed to wipe the BiH Muslim off the face of the Earth... the Reis' office is very much surprised by the Islamophobic editorial policy of Oslobodjenje." (Note: Ceric and the

Islamic Community may be using the "heavy artillery" of insinuating Islamophobia to defend a weak spot, specifically, the widespread perception that his administration has been fiscally irresponsible. End Note.)

Santa Claus Didn't Come to Town

-------------------------------

Â¶ 6. (SBU) Even Bosniak children are not immune to political efforts to shape the Bosniak identity. There has been a push to introduce Islamic religious education in all kindergartens, a move that one respected professor (known to be an outspoken critic of the Reis) from the Faculty of

Islamic Sciences defined as a "crime against children."

Similarly, the director of Sarajevo's state-funded preschools attempted to ban Djeda Mraz (Grandfather Frost) in 2007, arguing that Sarajevo is predominantly Muslim and that Djeda

Mraz is not part of the Muslim tradition. (Note: Modeled on

Santa Claus, Djeda Mraz emerged in Yugoslavia after World War

II as a secular figure who gave gifts to children of all religions. End Note) Secular-minded Sarajevo citizens saw the snubbing of Djeda Mraz as an attempt to define for children what it means to be "good" Muslims and organized protests and petitions against the proposed ban. The outrage of Sarajevo citizens was best captured in the editorial comment of FTV's news program 60 Minutes. The show's host, Bakir

Hadziomerovic, characterized the director of the public institution "Children of Sarajevo," Razija Mahmutovic, as the fiercest opponent of Djeda Mraz. Taking on an ironic tone,

Hadziomerovic sarcastically proposed that Mahmutovic

introduce the figure of "Santa Alija," in reference to the elder Izetbegovic. In both cases mentioned here (early religious education and banning of Djeda Mraz), the secular position lost out.

Popular Paper Religiously Pursues Bosniak Interests

--------------------------------------------- ------

Â¶ 7. (SBU) The definition of a "good Bosniak" as one who is politically and religiously conservative has also been increasingly propagated by the country's largest-circulation, pro-Bosniak daily, Dnevni Avaz. Over the past several months, Fahrud Radoncic, owner of Avaz and its associated businesses, has engaged in a crusade to "protect Bosniak interests," primarily as part of an effort to undercut its opponent, the more secular Oslobodjenje. While Avaz and

Oslobodjenje have had a long-running rivalry centered more on business competition than ideology, Radoncic's recent statements represent a clear raising of the stakes. In a TV interview on November 30, Radoncic accused his opponents -- including a number of media outlets -- of "destroying

Bosniaks" through attacks on, as he put it, the three key pillars of Muslim faith in Bosnia: the Islamic Community and

Reis Ceric; the memory of Alija Izetbegovic, as personified by his son Bakir; and Avaz itself. On December 30, Avaz labeled Ceric a true representative of the Bosniak people, adding "...those who attack Reis Ceric would like to see a situation like before, when the state was appointing the Reis

SARAJEVO 00000103 003.2 OF 003 so that he would listen to the state, thus destroying the institution of Islam and the Islamic Community."

Â¶ 8. (C) Radoncic has also not shied away from exploiting his position as owner to influence how Avaz presents issues. The

December 29 edition of Avaz carried a front page article that slammed those who opposed the construction of a new administrative building for the Islamic Community and accusing them of seeking to put the Islamic Community under their political control, to diminish its power, or to destroy it. Avaz plainly misrepresented facts related to the project, and made use of extensive purple prose in negatively characterizing opposition to the project. The following day,

Avaz continued its offensive against "the enemies of Islam" with a full-page interview with Enver Imamovic, a professor of history at the Philosophy Faculty in Sarajevo. Imamovic condemned public attacks against the Islamic Community and

Reis Ceric, declaring, "Let us not forget what the Islamic

Community meant to our people in the past war. This was the institution around which Bosniak people gathered."

Comment

-------

Â¶ 9. (C) In an atmosphere of pessimism, created and fueled by a lack of political or economic progress in the country, insisting on the importance of being a proper Bosniak is gaining momentum as a political tool. Lending credence to, and most likely feeding, this discourse is increasingly audacious nationalism among Bosnian Serbs and, to a lesser extent, Bosnian Croats. A growing fear of isolation appears to be providing fodder for political actors, which they can exploit to urge Bosniaks to rally around their leadership and agenda, which some politicians, the Reis and the opportunist

Radoncic, have sought to define in conservative and more religious terms. Depending on how this debate plays out,

Bosniaks politics could take an increasingly conservative political trajectory. The outcome of this intra-Bosniak debate will likely take considerable time to play out, but its outcome will almost certainly shape public perceptions of who is fit to lead and to speak for Bosniaks, an ethnic group whose sense of identity is still in flux. With all three

sides of the ethnic divide retreating to ethnic-based politics, the prospects of compromises necessary for Bosnia's future become much dimmer.

ENGLISH

Viewing cable 09STOCKHOLM418, EUR A/S GORDONâ€™S JULY 3 MEETINGS WITH

THE EU



09STOCKHOLM418

2009-07-09

16:04

2010-12-09

21:09

CONFIDENTIAL

Embassy

Stockholm

VZCZCXRO9840

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RUEHPW RUEHROV RUEHSL RUEHSR RUEHTRO

DE RUEHSM #0418/01 1901615

ZNY CCCCC ZZH

O 091615Z JUL 09

FM AMEMBASSY STOCKHOLM


INFO RUCNAFG/AFGHANISTAN COLLECTIVE IMMEDIATE

RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE

RUCNIRA/IRAN COLLECTIVE IMMEDIATE

Thursday, 09 July 2009, 16:15

C O N F I D E N T I A L SECTION 01 OF 06 STOCKHOLM 000418

SIPDIS

EO 12958 DECL: 07/09/2029

TAGS EUN, PREL, PGOV, IR, RS, SW

SUBJECT: EUR A/S GORDONâ€™S JULY 3 MEETINGS WITH THE EU

POLITICAL DIRECTORS

STOCKHOLM 00000418 001.2 OF 006

Classified By: CDA LAURA J. KIRKCONNELL FOR REASONS 1.4(B) AND (D)

-------

SUMMARY

-------

Â¶ 1. (U) Assistant Secretary for European and Eurasian Affairs Phil Gordon met with the 27 EU Member State Political Directors in Stockholm July 3. He then met with the EU Political Directors â€œtroika,â€ comprising Swedish

PolDir Bjorn Lyrvall, EU Council Secretariat DG Robert Cooper, EU External

Relations Commission PolDir Karel Kovanda, Spanish PolDir Alfonso Lucini, and EU Council Secretariat Policy Coordinator Helga Schmid.

Â¶ 2. (C) On Iran, A/S Gordon emphasized that post-election developments have not altered the Obama Administrationâ€™s fundamental approach to the nuclear question, and UK PolDir Mark Lyall-Grant urged the EU to be in position â€œto move rapidlyâ€ with new sanctions at the beginning of the

Spanish EU Presidency in January 2010. On the Middle East peace process, the United States was focused on creating the conditions necessary for peace before proposing full-scale negotiations. This would require a stop to Israeli settlements and efforts to build up Palestinian security capacity and an end to violence and incitement. French PolDir Gerard Araud raised the possibility of an EU security force in support of a possible agreement. Regarding the U.S.-Russia relationship, Gordon said that the

Russians are testing the Obama Administration to see if it will compromise on its principles; it won,t.

----

IRAN

----

Â¶ 3. (C) Swedish MFA Political Director Bjorn Lyrvall opened A/S Gordonâ€™s discussion with the EU 27 PolDirs by noting growing concern over internal developments in Iran following last monthâ€™s presidential elections.

Terming as â€œoutrageousâ€ regime statements blaming the unrest on foreign actors, Lyrvall discussed the importance of EU unity in response to the detention of local employees of the British embassy in Tehran and noted that the EU Political Directors had discussed â€œpossible responsesâ€ to the detentions during their meetings earlier in the day. Asked to brief on the nuclear file, EU DG for External and Politico-Military Affairs Robert

Cooper replied that he had little to say. The post-election unrest in Iran seemed to entail â€œno new cooperation, perhaps rather less,â€ and the

Iranian regime was now weaker and less legitimate. Cooper continued that

â€œthe prospects look difficultâ€ for a meaningful Iranian response to the

P5 1 offer, and that we had always seen this year as the key year for addressing this issue. Cooper concluded that, in the second half of this year, we must have â€œthe beginning of a breakthrough.â€

Â¶ 4. (C) In his introduction, A/S Gordon expressed the importance the Obama

Administration attaches to working with Europe, stressing that the U.S. realizes that it cannot handle matters alone and that Europe is our most natural foreign policy partner. Concerning Iranian election unrest, he said that the Administrationâ€™s policy had denied the regime the opportunity to blame the U.S. so now it was turning to the UK. Asked about links between the post-election domestic situation and the negotiations on the nuclear file, A/S Gordon suggested that the regime might pursue one of several options. It might decide to engage the P5 1, which A/S Gordon (and other EU

PolDirs) assessed as unlikely. Or it could pretend to engage, while forestalling meaningful action. Lastly, it could refuse any dialogue.

Â¶ 5. (C) While now is not the time for the USG to increase its engagement, it is also not the time to reduce it, Gordon continued. The Presidentâ€™s approach would continue to highlight the path Iran would need to take to address international concerns. But the clock was ticking as long as enrichment continued, Gordon added, so he urged the PolDirs to start

thinking now about actions they might need to take by the end of the year to increase pressure on Tehran. â€œEach day that passes sharpens the binary choice between accepting a nuclear Iran or a military strike, either by

Israel or the U.S.,â€ Gordon continued. The successful development of a nuclear capability by Iran would spell the death of the Non-Proliferation

Treaty, he concluded, because the international community would not be able to maintain credibility with other would-be nuclear powers.

Â¶ 6. (C) UK Political Director Lyall-Grant agreed that the prospects for negotiations with Iran were not good, but

STOCKHOLM 00000418 002.4 OF 006 argued that the P5 1 must persevere â€œbecause the alternatives are grim.â€ If talks do not yield progress soon, then the EU must

â€œdiscreetlyâ€ think about additional sanctions even in the absence of a

UN Security Council resolution, which would be unlikely given the Russian and Chinese positions. The EU should be in position â€œto move rapidlyâ€ at the beginning of the Spanish EU Presidency (in January 2010) with a set of sanctions that are â€œvery substantiveâ€ in the areas of â€œtrade, banking and possibly the hydrocarbons sector.â€ He also expressed gratitude for U.S. and EU solidarity with the UK concerning its local embassy employees in Tehran.

Â¶ 7. (C) Iran was turning into â€œa military dictatorship with an extremist ideology,â€ stated German Political Director Volker Stanzel. Therefore, the international community must not â€œplay the game the Iranian leaders wantâ€ and must not escalate in response to Iranian escalations. Rather, engagement with the Iranian opposition should continue where possible.

Moreover, the international community should press Tehran for a

â€œyes/noâ€ answer to the P5 1 proposal by the time of the UN General

Assembly in September. Efforts to keep Russia and China â€œin the boatâ€ would be important, but even without them the EU and United States should

â€œgo ahead anywayâ€ with additional autonomous sanctions.

Â¶ 8. (C) Spanish PolDir Alfonso Lucini noted â€œconsensus that we need to prepare a Plan B,â€ but asked whether enhanced sanctions would â€œbe enoughâ€ if Russia and China were not on board. Saying he preferred further UNSC action on Iran, A/S Gordon acknowledged that PRC leadersâ€™ concerns regarding Chinaâ€™s internal stability*which requires sufficient oil imports to maintain economic growth*was a key factor in PRC policy on

Iran. And while Russia did not want to see a nuclear Iran, it might also be motivated by a desire to ensure that the United States and the EU do not enjoy a major foreign policy success in the Middle East. Indeed, some in

Moscow might see advantages for Russia if Israel or the United States used force against Iran, which in their view would seriously damage U.S. standing in the region, as well as dramatically increase the price of oil.

Even if Russia and China refused to support a new UNSC, joint U.S.-EU actions would have a powerful impact on trade -- and be a powerful statement with respect to regime legitimacy. And if there were no new effort on sanctions, that failure to act would send a message to the rest of the world about the low risk of pursuing a nuclear program.

-------------------------

MIDDLE EAST PEACE PROCESS

-------------------------

Â¶ 9. (C) Turning to the Middle East peace process, A/S Gordon noted that after extensive consultations in the region, Special Envoy Mitchell had concluded the time was not ripe for full-scale negotiations between the

Israelis and Palestinians. Rather, the conditions for successful negotiations needed to be created first. The United States had â€œvisibly

and publiclyâ€ called for Israel to halt all settlement activity, which helped create an atmosphere in which we could ask that Arabs do hard things as well. S/E Mitchell has been urging Arab governments to support the

Palestinian Authorityâ€™s security services in an effort to enhance security in the West Bank and Gaza. The U.S. saw no logic to engagement with Hamas until it renounces violence and recognizes all past agreements,

A/S Gordon continued. While the U.S. and EU both need to remain engaged with both the Israelis and the Palestinians, there might be benefits in

Washington focusing its efforts on getting a stop to settlement activity while the EU focused on efforts to build security in the PA-administered territories.

Â¶ 10. (C) Lyrvall said the EU very much welcomed the U.S. approach and the

Presidentâ€™s Cairo speech. The gap between the Israelis and Palestinians is very deep. Greek PolDir Tryphon Paraskevopoulos stated that â€œno one in the Middle East thinks Iran will actually use nuclear weapons against

Israel.â€ Rather, they think Israeli concerns over the Iranian nuclear program are motivated by a desire to not lose their strategic dominance. He noted that whenever the international community took actions against Iran,

Iran responded by firing up Hamas and Hizbullah to cause trouble. A regional approach, therefore, was needed, including improved ties with

Syria. The Greek PolDir concluded elliptically that Qatar and Saudi Arabia needed to â€œstop playing with fire.â€ A/S Gordon noted that Syria is the conduit for Iranian arms into the region, and that U.S. diplomacy is focused on weaning Syria away from Iran.

Â¶ 11. (C) French PolDir Araud said that we should not get into any prolonged negotiations with the Israelis on settlements;

STOCKHOLM 00000418 003.2 OF 006 the core issue is negotiations between the Israelis and Palestinians. The

Knesset is unable to act. We already know the parameters of the peace agreement. If there is no strong international commitment to working this, the parties will not negotiate, he said. Nothing will be possible if the

U.S., the EU, and the Arab states are not united in pressing both sides. He also raised the possibility of an EU security force in support of a possible agreement. A/S Gordon agreed with Araud on settlements, but said that we need to improve the context for real negotiations by making progress on smaller issues, and that the U.S. call for stopping settlements resonates with the Arabs, and helps with asking them for funding for the PA and reaching out to Israel.

--------------------

AFGHANISTAN/PAKISTAN

--------------------

Â¶ 12. (SBU) A/S Gordon outlined the significant steps the Obama

Administration was taking in Afghanistan: 21,000 additional troops, the appointments of SR Holbrooke, LTG McChrystal, Amb. Eikenberry, as well as certain changes in strategy such as on narcotics. He asked that European governments do more to explain to their publics that the EU is not helping the Americans with â€œan American war.â€ Afghanistan and Pakistan are global problems with serious security and humanitarian concerns for Europe.

Lyrvall agreed, pointing to ongoing discussions within the EU on doing more on the civilian side, and noting that the upcoming Afghan elections were crucial. European Commission PolDir Kovanda stated that the EU will deploy

250 observers from Member States, PRTs and local missions to monitor the elections along with 8,000 Afghan observers, and expressed gratitude for

NATO,s indispensable in extremis support.

------

RUSSIA

------

Â¶ 13. (C) At Lyrvallâ€™s request, A/S Gordon offered some impressions to the group on U.S. relations with Russia. He said that we are looking to restore relations while also stressing our core principles; e.g., no spheres of influence, democracies have the right to choose alliances, and non-recognition of Abkhazia and South Ossetia. The Russians, for their part, are exploring U.S. willingness to compromise in the name of better relations, which we will not do. A/S Gordon said that with regard to the

Medvedev proposals, the U.S. is not prepared to compromise on European security. Lyrvall asked about expectations for the Moscow Summit. A/S

Gordon said we were not trying to overstate expectations, but we are talking seriously with the Russians on arms control and Afghanistan.

Lithuanian PolDir Eitvydas Bajarunas urged a common U.S.-EU approach on

Belarus and Georgia, and A/S Gordon replied that we can only interpret the

Zeltser release as an expression of Belarusâ€™s interest in better relations, and that he was planning to go to Belarus himself. He said

Georgia was a good example of the U.S. not compromising its principles in the name of better relations with Moscow-- in fact, Russia had been isolated on decisions regarding OSCE and UNOMIG ) and he noted the Vice

Presidentâ€™s upcoming trip to Georgia and Ukraine.

--------------

TROIKA MEETING

--------------

Â¶ 14. (U) After his meeting with EU27 PolDirs, Gordon held a smaller meeting with the EU Political Directors â€œtroika,â€ comprising Swedish

PolDir Bjorn Lyrvall, EU Council Secretariat DG Robert Cooper, EU External

Relations Commission PolDir Karel Kovanda Kovanda, Spanish PolDir Alfonso

Lucini, and EU Council Secretariat Policy Coordinator Helga Schmid. This smaller discussion focused on Russia, the Eastern Partnership region, the

Western Balkans, and non-proliferation.

------

RUSSIA

------

Â¶ 15. (C) A/S Gordon conveyed that the U.S. may be making some progress with Russia on START follow-on negotiations, and may also be making progress with regard to cooperation on Afghanistan. We have little to no progress to report regarding Georgia. The Russians are testing the Obama

Administration to see if it will compromise; it will not. Lyrvall commented that there have been no breakthroughs in EU-Russia Partnership and

Cooperation Agreement (PCA) negotiations, and noted that the Russians see the EUâ€™s

STOCKHOLM 00000418 004.2 OF 006

Eastern Partnership initiative through a zero-sum lens; if it encourages closer EU ties with six former-Soviet states, it must be anti-Russia.

Lucini recommended engaging Russia in the Eastern Partnership through cooperation on concrete projects. Helga Schmid praised the OSCE Ministerial in Corfu for its emphasis on the indivisibility of Euro-Atlantic security.

-------

GEORGIA

-------

Â¶ 16. (C) Schmid commented that the Geneva process is useful because it is the only venue which includes all parties to the Georgia conflict. She encouraged the U.S. to press Georgia to work with the Abkhaz; the Abkhaz have been rebuffed in their overtures to the Georgians, and are left with no option but to seek Russiaâ€™s support. Kovanda similarly urged outreach to the Abkhaz; they are looking for some daylight with the Russians, and we should help. EU negotiations on visa facilitation with Georgia are not going well. Lucini said we need to let Georgians know we support them without giving Saakashvili â€œa blank check.â€

Â¶ 17. (C) A/S Gordon said the Georgians have shown reasonable restraint with protesters lately, marking a departure from previous behavior. Vice

President Bidenâ€™s upcoming trip to Georgia will emphasize the need to strengthen democratic institutions. A/S Gordon inquired about potential

U.S. participation in the EUâ€™s Georgia monitoring mission. An American contribution*either official USG or via NGOs--would showcase our commitment, and could potentially deter future Russian misbehavior. Schmid noted that U.S. participation would also mean opening the mission to Turkey and Ukraine; U.S. political support might be preferable. Cooper agreed that it would be hard for the EU to resist Turkish participation in the EU monitoring mission if the U.S. participated, as Turkey is an EU candidate country. Turkish participation would not necessarily be a bad thing, but it would â€œneed some thinking about.â€

-------

BELARUS

-------

Â¶ 18. (C) Schmid said the Belarusians are under huge pressure from Russia to recognize Abkhazia and South Ossetia; the Belarusian FM told her so personally at Corfu. Belarus is bankrupt, and therefore vulnerable to

Russian exploitation. The EU is looking into possible European Bank for

Reconstruction and Development and IMF support, on the order of two to three billion dollars. Schmid said â€œI donâ€™t like Luka, but(â€œ the

Zeltser release was clearly intended as a signal.

-------------------

EASTERN PARTNERSHIP

-------------------

Â¶ 19. (C) A/S Gordon said the U.S. understands this; we would like to associate ourselves with the EUâ€™s Eastern Partnership initiative. Lyrvall said an EU-Ukraine FTA is looking increasingly unlikely due to Ukrainian squabbling; Moldova is likewise â€œa mess.â€ It is difficult to anchor those countries into the European integration process. On Armenia, A/S

Gordon said that resolving Nagorno-Karabakh is the key to unlocking

Turkish-Armenian relations, and consequently regional energy supplies. The

Russians have been reasonably productive on this account, but it is unclear whether they are just going through the motions or are seriously engaged, particularly as a Nagorno-Karabakh solution would facilitate a Southern

Corridor gas route. Cooper asserted that if the Russians really wanted to resolve Nagorno-Karabakh, they would have done so already. On Ukraine, A/S

Gordon asserted that the U.S. does not want to unconditionally bail Ukraine out of its economic troubles. We should let IFIs (particularly the IMF) help Ukraine. The U.S. and EU need to urge Ukraineâ€™s unwilling government to take difficult steps in this regard.

---------------

WESTERN BALKANS

---------------

Â¶ 20. (C) Pointing to EU High Representative Solana/Vice President

Bidenâ€™s and Swedish FM Bildt/Deputy Secretary Steinbergâ€™s recent joint engagement in the Balkans, A/S Gordon said the more high-level U.S.-EU cooperation we can organize in the Balkans, the better. Lyrvall said that

Sweden wants to keep the EUâ€™s enlargement agenda moving

STOCKHOLM 00000418 005.2 OF 006 during the Swedish Presidency. Montenegroâ€™s application is with the

Commission, and Macedonia may receive a relatively positive EU progress assessment. Fairly or unfairly, Macedonia may have to compromise on the name issue in order to move forward on EU accession. In Serbia, implementation of the interim agreement is â€œdeadlocked,â€ and Dutch FM

Verhagenâ€™s recent trip to Serbia is unlikely to assuage the

Netherlandsâ€™ concerns.

Â¶ 21. (C) On Bosnia and Herzegovina, FM Bildt and Deputy Secretary

Steinberg planned to meet the following week to discuss the Prud process.

It is critical that BiH takes ownership of the 5 2 process, Lyrvall said.

The EU is enthusiastic about a transition in BiH as long as the conditions are met. There has to be recognition that the EUSR mission would be less

â€œintrusiveâ€; rather, the EU would present a â€œpull factorâ€ for reform, he added. EU enlargement policy has been a successful incentive for reform elsewhere in the region. A significant shift in the Althea mission should not take place until transition is secure on the civilian side,

Lyrvall concluded. Cooper said there might come a point where we need to

â€œforce the issueâ€ of state property; if we do not resolve this before the autumn PIC, then weâ€™ll lose two years because of the Bosnian elections. Cooper added that after a â€œmiserableâ€ PIC, we should insist on conditionality. BiH Croats have gotten the message from Zagreb to be productive.

Â¶ 22. (C) A/S Gordon asked whether the Swedes might invite the parties and the U.S. to Stockholm to resolve the state property issue. The U.S. agrees that OHR is not doing well, but we are reluctant to take away the crutch and make a leap of faith. He recounted a side conversation with French

PolDir Gerard Araud, who said that if we wean the Bosnians off of the

â€œdrugâ€ of OHR, then the EU can be the â€œmethadone.â€ Furthermore, to conduct a military transition at the same time as the OHR/EU transition would send the wrong signal and might invite problems. Lucini said EU member states are talking to their militaries about the need to stay in

BiH, but militaries are pushing back. Lyrvall conceded the need for â€œa comfort blanket.â€

Â¶ 23. (C) On Macedonia, A/S Gordon said the U.S. is still letting UNSR

Nimetz lead, and noted that Deputy Secretary Steinberg has talked to the

Greeks. While the Macedonians need to â€œclimb downâ€ on issues such as naming their airport, they have a reasonable case on other topics such as their language, the name of their citizenship, etc. Some â€œclimbing downâ€ is needed on both sides.

Â¶ 24. (C) On Serbia, A/S Gordon said that while we havenâ€™t spoken to ICTY prosecutor Brammertz, the U.S. is trying to provide further FBI and forensic assistance. The U.S. is trying to determine what Serbian steps are required in order to get the Dutch on board with Serbiaâ€™s EU accession process. What is the gap between â€œfull Serbian cooperationâ€ and what the Serbs are currently doing, and how can it be filled? Cooper said we are caught in a vicious circle with Brammertz, who feels he cannot utter the words â€œfull cooperationâ€ but is trying to indicate as much in other terms.

Â¶ 25. (C) On Kosovo, Lyrvall noted the sensitivities raised by the fact that five EU member states do not recognize Kosovoâ€™s independence.

However, even these recalcitrant member states would like to move forward with Kosovoâ€™s Euro-Atlantic integration. Lyrvall noted the issue of visa liberalization in the Balkans, and said the EU has leverage on the Serbs in this regard. Cooper stated that we have had some small successes in Kosovo and some failures. The Battle of Kosovo Polje anniversary passed without incident, with the Serbian royal family making some usefully anodyne speeches. But decentralization in Kosovo will not succeed. Serbian

President Tadic has said that Serbia cannot call on Kosovo Serbs to vote in

Kosovo,s elections. EUSR for Kosovo Pieter Feith thought we should think of

2011 as a deadline for bringing the ICO process to an end: according to

Feith, once a state is up and running, the international community should step back. The â€œsix pointâ€ agenda is largely dead. A/S Gordon relayed that Deputy Secretary Steinberg told Kosovo leaders that their comments on

UNMIK were not helpful.

-----------------

NON-PROLIFERATION

-----------------

Â¶ 26. (C) Lyrvall said that the EU was very encouraged by the Obama

Administrationâ€™s approach on non-proliferation. A/S Gordon said that the

Administration is serious about the goal of a world free of nuclear weapons, but realistic. If the international community hopes to promote a

Fissile Material

STOCKHOLM 00000418 006.2 OF 006

Cut-off Treaty and create an international nuclear fuel bank, we must back the IAEA with resources. The Administration will try to get the

Comprehensive Test Ban Treaty ratified; the prospects for ratification are uncertain, but are better now than before, in part due to improvements in scientific modeling over the past ten years. Regarding START talks with

Russia, the Administration seeks a framework that permits fewer weapons than the Moscow Treaty and that also includes delivery vehicles and warheads. Both sides want an agreement, but ratification is always a question. Raising Iran, Cooper pointed out that a nuclear-armed Iran would

â€œblow the NPT out of the water.â€ If we allow Iran to develop the bomb, how can we credibly say â€œnoâ€ to the Egyptians and the Saudis?

Â¶ 27. (U) Assistant Secretary Gordon has cleared this cable. KIRKCONNELL

Viewing cable 09ZAGREB694, PUSHING CROATIA FORWARD ON ICTY

COOPERATION AND EU



09ZAGREB694

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14:02

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SIPDIS

SENSITIVE

EMBASSY SARAJEVO FOR DAS JONES

EO 12958 DECL: 01/01/2019

TAGS PREL, PGOV, ICTY, EUC, HR

SUBJECT: PUSHING CROATIA FORWARD ON ICTY COOPERATION AND EU

ACCESSION

Classified By: Amb. James Foley, reasons 1.4 (b) & (d).

Â¶ 1. (C) SUMMARY: After making difficult concessions in order to conclude an Arbitration Agreement with Slovenia, Prime Minister Kosor now confronts an ongoing UK and Netherlands blockage of Croatiaâ€™s EU accession path, inspired by ICTY Prosecutor Serge Brammertz. This impasse has the potential to endure as the GOC likely cannot produce documents demanded by the prosecutor, and Brammertz seems unwilling to settle for anything besides the documents. Brammertz also refuses to assist the GOC in its investigation. Importantly, the impasse could undermine the U.S. stake both in the Kosor-led reform process in Croatia and the regionâ€™s integration into Euro-Atlantic institutions. Accordingly, post recommends that we register our differences with Brammertzâ€™s assessment at the December 3

UNSC discussion of ICTY and consider high-level approaches to the UK and

Netherlands urging that the EU make Croatiaâ€™s ICTY cooperation a closing rather than an opening benchmark for Chapter 23 accession negotiations. END

SUMMARY.

CROATIAâ€™S EFFORTS TO SATISFY ICTY

Â¶ 2. (U) Prime Minister Kosor, Justice Minister Simonovic, Interior

Minister Karamarko and Chief State Prosecutor Bajic all met with visiting

Special Envoy for War Crimes Issues Ambassador Stephen Rapp and Ambassador

Foley on November 27, to describe Croatiaâ€™s continuing efforts to cooperate with the ICTY and Prosecutor Serge Brammertz in the search for missing artillery documents in connection with the 1995 Operation Storm and the Gotovina case. The discussions focused on the results of Croatiaâ€™s recent police-led Task Force formed specifically to address objections

Brammertz had raised with earlier efforts by Croatia to locate the documents. The Task Forceâ€™s status report, sent to ICTY on November 9, states that Croatia provided ICTY with three of the 23 documents sought (as

well as a partial draft of a fourth), four others were never created, seven were destroyed, and eight have not been located.

Â¶ 3. (C) All GOC officials insisted that Croatia is engaged in a good faith effort to locate whatever documents, if any, that can be found, and pledged that the investigation would continue. Prime Minister Kosor declared to

Ambassador Rapp that the GOC had an â€œabsolute political willâ€ to find the documents or establish their chain of custody and said she had issued orders for the investigation to continue. She commented that it would be

â€œabsolutely stupidâ€ for Croatia to jeopardize its otherwise imminent EU accession â€œover a few documents,â€ noting that General Gotovinaâ€™s rendition to The Hague was the work of the GOC. Karamarko predicted that if

Brammertz gave a good grade to Serbia despite its failure to render Mladic and Hadzic while giving a negative grade to Croatia over missing documents

â€œthat may or may not exist,â€ it could have â€œdangerousâ€ internal repercussions. Bajic echoed this, stating that an EU decision not to open

Chapter 23 would be a â€œmajor setback to Croatia in terms of the reform process and those who have been involved in it.â€ (NOTE: Bajic was apparently alluding to his own anti-corruption efforts backed by Kosor. END

NOTE)

Â¶ 4. (C) Ambassador Rapp told Kosor and others the Task Forceâ€™s work was a â€œgood faithâ€ and â€œimpressiveâ€ effort. Post shares this assessment of the Task Forceâ€™s work as credible and indicative of a significant effort by the GOC to cooperate with the ICTY. The investigation is far from perfect, relying too heavily on interviews with individuals connected to the documents. In our Nov. 27 meetings, we suggested ways that the continuing investigation could be made more aggressive. However, we have no reason to believe that the GOC lacks the will to find the documents or is seeking to thwart the ICTY. The artillery documents have likely been destroyed or sequestered over the years by Gotovina and his associates.

ICTY CANNOT BE SATISFIED

Â¶ 5. (C) Brammertz for his part remains unwilling to acknowledge the full degree of Croatiaâ€™s cooperation. In his written report to the UNSC he notes only that â€œresults are limitedâ€. While proclaiming himself

â€œsatisfiedâ€ with Serbian efforts that have nonetheless failed to produce the fugitive indictees, Brammertz seems unwilling to accept

Croatian efforts as satisfactory unless they actually produce the missing papers.

RESULT: IMPASSE

ZAGREB 00000694 002 OF 003

Â¶ 6. (U) The immediate problem is that several EU member states (in particular the UK and the Netherlands) have refused to allow Croatia to open accession negotiations on Chapter 23 (Judiciary and Fundamental

Rights) pending a clean bill of health on ICTY cooperation. Brammertz has indicated that he will continue to demand that Croatia produce the missing documents throughout the entirety of the appeals process. Thus Croatia could be facing a prolonged and indefinite blockage of its EU accession.

Â¶ 7. (C) UK Ambassador Blunt (protect) told Ambassador Foley last week that some key officials in London regard Croatia as virtually unchanged since the Tudjman era and are inclined to assume GOC bad faith in its dealings with the ICTY. UK Ministers were unlikely to budge on Chapter 23 in the face of a negative assessment from Brammertz. However, Blunt personally agreed that the missing artillery documents likely could not be found by the GOC, and that Brammertz had no interest in either assisting the GOC investigation or accepting as adequate any Croatian effort that does not produce the documents. Blunt suggested that a visit by Ambassador Rapp to

London to acquaint senior officials with these realities might offer the only hope for a reassessment of the entrenched UK position.

Â¶ 8. (C) French Ambassador Pasquier told Ambassador Foley on November 28 that Paris was deeply concerned about Brammertzâ€™s expected contrasting assessments of Serbian and Croatian cooperation. He stressed that France supports and does not wish to jeopardize Serbiaâ€™s progress, but fears that a simultaneous rejection of Croatiaâ€™s efforts and the continued blockage of Chapter 23 would badly damage public support for EU membership and Kosor herself. He expected that France would be prepared to back

Croatia and implicitly dissent from Brammertzâ€™s assessment in the

Security Council on December 3. But he stressed that hope for unblocking

Chapter 23 depended on Brammertz adjusting his language and finding a way on December 3 to acknowledge progress and cooperation on the part of the

GOC. That might be enough, he thought, to persuade the UK and Netherlands to allow the opening of Chapter 23.

A NEW U.S. APPROACH

Â¶ 9. (C) The stakes for the U.S. of an enduring impasse on this issue are high -- not only a prolonged blockage of Croatiaâ€™s EU accession with implications for internal stability, but a closed EU door to the rest of

Southeastern Europe. We therefore propose a U.S. effort aimed at unblocking

Croatiaâ€™s Chapter 23 negotiations and encouraging intensified Croatian efforts to cooperate with the ICTY. One aspect of this strategy would be to urge the EU to bring more factors into its assessment of cooperation than simply the Prosecutorâ€™s judgment. In this regard, we note that the ICTY

Trial Chamber will hold a hearing on the document issue on December 16, although it is unlikely to issue a ruling until after the new year. Another aspect would be to press Brammertz to show more readiness to accept a credible investigation by the Croatians as adequate cooperation, and to provide assistance to Croatian efforts. Ultimately, we should urge the EU to allow Chapter 23 to open, with a closing benchmark being the implementation of further steps to bolster the credibility of the continuing GOC investigation or the delivery of the requested documentation.

Â¶ 10. (C) To set the stage for this approach, post supports Ambassador

Rappâ€™s efforts vis a vis Mr. Brammertz in advance of the December 3 UNSC session, and recommends the following points be addressed in the U.S. statement at that session if our assessment of Croatian cooperation remains at variance with his:

-- Cooperation with the ICTY remains a fundamental obligation for all states in the region, and a sine qua non of Euro-Atlantic integration; --

We note that Croatia has engaged in extensive efforts to respond to the

Trial Chamberâ€™s order of September 2008 to deliver or engage in a credible investigation into the fate of the requested artillery documentation from Operation Storm; -- In our judgment those efforts have been conducted in good faith, and we believe that the Government of

Croatiaâ€™s latest investigation, which is continuing, is credible and represents a significant step forward in Croatiaâ€™s cooperation with the

ICTY; -- At the same time, we believe the Croatian efforts should be improved and would encourage the Croatian authorities to

ZAGREB 00000694 003 OF 003 explore additional measures such as using outside expertise and engaging in more aggressive investigative techniques; -- For that reason, we are concerned with the Prosecutorâ€™s apparent reluctance to engage directly with the Croatian investigators in providing advice on investigative measures, and we would encourage him to reconsider that approach.

Â¶ 11. (C) Post expects Minister of Justice Simonovic to represent Croatia in the December 3 Security Council session. Simonovic told us that at present Croatia anticipates statements of support in the Security Council from France, Austria, Turkey and potentially additional members. FOLEY

Viewing cable 06PARIS7579, GOF C/T COORDINATOR,S OVERVIEW OF TERRORISM

THREAT




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S E C R E T PARIS 007579

SIPDIS

SIPDIS

S/CT MARC NORMAN

E.O. 12958: DECL: 11/29/2016

TAGS: PTER PGOV PREL FR

SUBJECT: GOF C/T COORDINATOR,S OVERVIEW OF TERRORISM THREAT

REF: A. PARIS POINTS NOV 22

Â¶ B. PARIS 7425

Classified By: Political Minister Counselor Josiah Rosenblatt for Reaso ns 1.4 (b) and (d)

SUBJECT: GOF C/T COORDINATOR,S OVERVIEW OF TERRORISM THREAT

Â¶ 1. (S) Summary: Christophe Chaboud, the Ministry of

Interior's counter-terrorism coordinating chief, told us on

November 20 that GOF authorities remain extremely concerned about the threat of terrorism on French soil and are actively taking measures to combat current and future threats.

Radical Islamists are still the principal threat to French interests at home and abroad. Chaboud reported that the

2003-2004 uptick in fighters from France to Iraq appears to have lost momentum, and that there are no signs that the GSPC is actively targeting France. The C/T chief also reviewed improvements to airport security, as well as ETA and PKK activities. End Summary.

RADICAL ISLAMIC THREAT

Â¶ 2. (S) On November 20, poloff met for an introductory call

with Christophe Chaboud, the head of France's C/T coordination unit, or UCLAT. (Note: UCLAT is the Ministry of

Interior's nexus for all counter-terrorism operations, analysis, and exchanges.) Chaboud set the tone for the discussion by quickly establishing that radical Islamists remained the principal threat to France and French interests around the world, particularly in the Middle East. While intelligence analysis suggested there were no active known networks operating in France, Chaboud said the GOF was taking aggressive preventative measures to ensure that authorities are not caught off guard. GSPC,s announcement of its joining with al-Qaeda and highlighting France as its number one enemy, was extremely worrisome, however, French intelligence officials had not noted any signs of increasing activity.

FRENCH JIHADISTS

----------------

Â¶ 3. (S) There were now "very few" known cases of French nationals going to Iraq, according to Chaboud. In 2003-2005, the GOF intelligence community was deeply concerned about the radicalization of young French Muslims to the point that some joined the jihad in Iraq and Afghanistan, he said. The trend appears to have faded since then. Aside from the recent

October 20 arrests of three French nationals in Damascus (see ref A), Chaboud said, French officials were not aware of any other recent cases. He praised Syrian officials for their efficiency in arresting the young French men, who were apparently taken into custody after only a few days in Syria, and credited intense U.S. pressure as motivation for the

Syrians' haste. Chaboud added that, for the moment, there was no evidence that any of the three men had connections to previously known networks in France; more likely, they had found their path to Iraq through very informal channels.

Asked about the reason for the downturn in numbers going to

Iraq, Chaboud said he believed that harsh punishment from

French authorities, the deaths of their "brothers" in Iraq, and a local lack of support among most French Muslims, must certainly have had an effect. (Note: Two of the three French nationals were reportedly expelled to France on November 22, and despite a lack of notification by Syrian authorities, were arrested after landing in France.)

PREVENTION: IMAM EXPULSIONS

---------------------------

Â¶ 4. (S) Chaboud proudly touted the expulsion of 54 imams from

France since 2001. The imams were expelled from France for allegedly preaching radical Islamic ideas. (Note: In at least one highly publicized case, an expelled imam told local media that the Koran sanctioned the submission of women through force.) Chaboud noted that while the majority of expelled imams were Algerian, a handful came from Turkey,

Morocco, Tunisia and "one or two Gulf countries." He added that France was far ahead of other EU states, in particular the UK, in taking necessary action against foreign nationals who advocated "radical ideologies." Another 12 imams are reportedly awaiting deportation.

PREVENTION: AIRPORT SECURITY

----------------------------

Â¶ 5. (S) When asked about the current, very public, controversy

(see ref B) surrounding the suspension of security clearances of 72 Muslim workers at Paris, Charles de Gaulle airport,

Chaboud confirmed this had occurred chiefly on UCLAT's recommendation. Since the 2005 London bombings, he said, there clearly has been a need to focus on security in sensitive locations. Given CDG's stature in the world, and its past as an origination point for the December 2001 "shoe bomber," Chaboud stressed that dramatic steps had to be taken to avoid future attacks. "I asked myself, what I would do if

I was a terrorist; how I would get past airport security,"

Chaboud said. The answer was simple, he replied -- to clearly identify and exploit airport employees who might be sympathetic to the "cause."

Â¶ 6. (S) After more than a year of investigation, UCLAT had concluded that at least 72 workers were vulnerable to exploitation because of their deep, and at least somewhat radical, religious convictions, Chaboud stated. He added that while they were not themselves terrorists, they appeared to be extreme enough in their comportment outside of work to lead authorities to conclude that they might aid or abet terrorists. Chaboud readily admitted that GOF authorities were creating new territory and that the judiciary had its own role to play, but he onetheless adamantly defended the recommendations that led to the revocation of security clearances. (Note: In the cases of 11 of the 72 employees who have filed legal grievances, the local Prefet voluntarily gave back security clearances to two individuals. A separate judgement has demanded that two others also be reinstated).

ETA STEPS UP ACTIVITY IN FRANCE

-------------------------------

Â¶ 7. (S) ETA, Chaboud said, appears to have become more active in France over the past several months. He repeated the standard French policy line that ETA is a Spanish domestic issue and not a political question for France. That said, he noted that there was intense operational dialogue between

France and Spain about cross-border activity. Chaboud said he was convinced that ETA is using the time for negotiating a political truce to replenish its stockpile of weapons, vehicles, and false travel documents. "I have warned the

Spanish," Chaboud stressed, and said he would continue to advise them about developments in the French Basque country.

(Note: Recent press reports speculate that in addition to the rise in stolen property, ETA wishes to directly involve Paris in the negotiations, something the French refuse outright.)

PKK: "THEY KNOW NOT TO GO TOO FAR"

----------------------------------

Â¶ 8. (S) Chaboud said that PKK members in France knew the GOF was prepared to act if they "go too far." France certainly did not want to provoke the PKK, which has never attacked

France or French interests, but had made clear that certain activities would not be allowed on French soil. He added that the GOF had taken some steps in the past year to break-up money laundering operations by PKK members. It was a message he insisted the PKK understands. "France is not an important country for the PKK; Germany is. We do not have the kind of PKK members they have there; we have the intellectuals; it is our tradition," Chaboud said.

COMMENT

-------

Â¶ 9. (S) Chaboud expressed confidence that France was taking appropriate measures in the fight against terrorism, adding that legislation passed in 2006 had gone a long way to codify current practices and pave the way for increased electronic surveillance. He noted that cooperation with the U.S. and the G-6 was excellent, but indicated there was still a great deal of work to be done with intelligence officials in the

Maghreb.


STAPLETON

Viewing cable 06PARIS7904, S/CT CRUMPTON MEETS RUSSIAN COUNTERPART TO

EXTEND




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EO 12958 DECL: 11/21/2016

TAGS PARM, FR

SUBJECT: S/CT CRUMPTON MEETS RUSSIAN COUNTERPART TO EXTEND

COUNTER-TERRORISM COOPERATION

Classified By: Political Minister-Counselor XXXXXXXXXXXX for reasons 1.4 b and d.

Â¶ 1. (S) Summary: In an amicable December 7 dinner meeting with Ambassadorat-Large Henry Crumpton, Russian Special Presidential Representative

Anatoliy Safonov agreed to move forward with several proposals that expand

U.S./Russian counter-terrorism (CT) cooperation. These include:

--Engaging the American and Russian business communities in CT efforts.

--Expanding cooperation with scientific experts to include terrorist scenario modeling.

--Continuing intelligence sharing, specifically with regard to Iran,s sponsorship of terrorism and the recent murder of Russian diplomats in

Iraq.

--Continuing efforts to formulate a standardized list of criteria for designating terrorist organizations.

--Convening an experts, conference in May to discuss strategies to prevent terrorists from exploiting Islam and to explore the ideological threat of

â€œJihadismâ€.

--Publicizing bilateral cooperation by staging press conferences in each other,s respective country and touring the United States together at a 2007 date to be determined. End Summary.

Â¶ 2. (S) In a December 7 dinner meeting with Ambassador-at-Large Henry

Crumpton, Russian Special Presidential Representative Anatoliy Safonov welcomed several proposals aimed at extending bilateral counterterrorism

(CT) cooperation. Safonov opened the meeting by expressing his appreciation for U.S./Russian cooperative efforts thus far. He cited the recent events in London - specifically the murder of a former Russian spy by exposure to radioactive agents - as evidence of how great the threat remained and how much more there was to do on the cooperative front. (Comment: The implication was that the FOR was not involved, although Safonov did not offer any further explanation.) Safonov noted the daunting number of countries that posed particular terrorism threats, mentioning North Korea,

Pakistan, South Africa, Libya, Iran, India, and Israel (sic?). He described a range of dangers, stressing the more immediate threats posed by nuclear and biological terrorism, but also acknowledging the risks of chemical terrorism. Safonov highlighted coverage of transit corridors as one of the most promising areas of U.S./Russian CT cooperation and commented that the

U.S. and Russia should continue to refine this effort.

Â¶ 3. (S) Safonov was particularly enthusiastic about Crumpton,s proposal that their respective governments cooperatively engage the private sector in their CT efforts. Crumpton made specific reference to the Business

Executives for National Security as one American group they might contact.

Safonov applauded the idea,s potential for offering new CT perspectives and expressed the hope that such cooperation might enrich Russian privatesector business, which he said could learn a lot from its American counterpart. Crumpton also suggested the Russia/United States Business

Council as a possible starting point for engaging the private sector.

Safonov said he would meet with Ambassador Burns in Moscow to discuss next steps, and both men agreed to explore possible private sector contacts in their home countries.

Â¶ 4. (S) Safonov reiterated his belief that new perspectives and out-ofthe-box thinking were critical to defeating terrorism and expressed his appreciation for scientific approaches, which he asserted were â€œbroader and less conditioned by lived experienceâ€. He cited one physicist,s conception of global terrorism as analogous to biological disease, i.e., the fever that serves as a warning for larger problems. Crumpton agreed with Safonov about the importance of scientific perspectives and suggested that they expand their cooperation with Sandia National Laboratories in New

Mexico, specifically that they jointly direct the scientists there to undertake terrorist scenario modeling. Crumpton noted that the Sandia

Laboratories already had established relationships with Russian counterparts and had worked cooperatively with them on nuclear safety and biological weapons threats, which could also be a topics for ongoing cooperation. Safonov agreed, and asked for the names of the affiliated

Russian research groups. In this context, the two also touched on the

importance of continued bioterrorism cooperation including bilateral consultations; Safonov seemed keen to expand all avenues of joint action.

Â¶ 5. (S) Also on the topic of taking advantage of academic perspectives,

Ambassador Crumpton offered to â€œloanâ€ XXXXXXXXXXXX to engage with

Safonov,s team in Russia and to review the situation in Chechnya. Safonov seemed amenable, but the two did not discuss specifics.

Â¶ 6. (S) On Iraq, Crumpton stressed the paramount importance of preventing

Al Qaida from establishing a safe operating haven in Iraq, which could serve as a staging area for the whole region. He also conveyed the USG,s intention to provide Russia with all available information on the terrorists responsible for the recent kidnapping and killing of Russian diplomats, noting that the CIA had already met all but one of the Russian information requests that had been made since June of 2006. On Iran,

Crumpton relayed the USG,s intention to provide the Russian government with a formal intelligence report detailing the Iranian terrorist threat, including specific links to Hamas and other groups, Iran,s ongoing support of Iraqi Shia, and information on Iranian missile transfers to Hizballah.

Â¶ 7. (S) Crumpton asserted there was a pressing need for the G-8 to establish uniform criteria for designating terrorists and terrorist groups.

Safonov agreed and noted that â€œWe need to overcome this deadlock...Right now there are about twelve groups causing disagreement.â€ Crumpton concurred and pressed for the name of the Russian official XXXXXXXXXXXX who was authorized to continue to negotiate on establishing uniform criteria.

In the only slightly evasive exchange during the entire three-hour conversation, Safonov resisted answering outright; after repeated questioning, he provided the name of XXXXXXXXXXXX and the qualification that â€œthere are two layers (to this issue)â€.

Â¶ 8. (S) Crumpton invited Russia to participate in a four-day experts, conference sponsored by the Marshall Center to discuss how terrorists exploit Islam and the ideological threat of â€œJihadismâ€. Safonov accepted the invitation immediately and expressed great interest in exploring how they might reverse the extremists, â€œhijackingâ€ of Islam.

Crumpton told Safonov that the conference -- to include NATO, Russia, and

Turkey -- was planned for May in Istanbul and was tentatively divided into two days spent with subject matter experts and two days spent with policy makers.

Â¶ 9. (S) Safonov enthusiastically agreed to and elaborated on Crumpton,s ideas for publicly highlighting U.S./Russia CT cooperation. Safonov accepted Crumpton,s invitation to visit the United States as his guest and went on to suggest that they could publicize the visit with cross-directed press events wherein each of them would be interviewed by journalists from the other country. Crumpton pressed for a short time line, inviting Safonov to come to New York in January 2007, then going on to Los Angeles together;

Safonov suggested a March-April 2007 visit timeframe. Safonov accepted responsibility for arranging the next steps.

Â¶ 10. (S) In the course of their exchange, Safonov made the following passing statements:

--Safonov claimed that Russian authorities in London had known about and followed individuals moving radioactive substances into the city but were told by the British that they were under control before the poisoning took place.

--On Afghanistan, Safonov said that British and Canadian soldiers were well regarded, but Dutch soldiers were causing problems by posing â€œconstant questions about governanceâ€.

--On Lebanon, Safonov judged that the situation was probably â€œnot yet at the bottomâ€ and so there may not yet be enough incentive to find a solution. The key was to prevent any movement toward civil war. To that end, the Russian government planned to continue to work with Syria, which

â€œis not the central cause of the conflict and in some ways is also a hostage of the situationâ€. In Safonov,s eyes, the conflict had no single cause, but rather was composed of many problems and many actors, though the present crisis likely would not have arisen if former Israeli PM Sharon had been in charge. He believed Sharon would not have made the error of attacking a nation when the enemy was Hizballah.

--In Iraq, coalition forcesâ€™ failure to restore order reminded Safonov of an exchange he had with a freedom fighter just after Russian forces had captured Grozny. The fighter told him, â€œYour real problems are only now beginning.â€

Â¶ 11. (U) This message has been cleared by Ambassador Crumpton. Please visit Parisâ€™ Classified Website at: http://www.state.sgov.gov/p/eur/paris/index.c fm HOFMANN

Viewing cable 07LONDON4045, EUR SENIOR ADVISOR PANDITH AND S/P ADVISOR

COHENâ€™S



07LONDON4045

2007-10-25

16:04

2010-12-13

21:09

CONFIDENTIAL

Embassy

London

Cable Text:

VZCZCLOI278

PP RUEHC RUEHZL

DE RUEHLO #4045/01 2981638

ZNY CCCCC ZZH

P 251638Z OCT 07

FM AMEMBASSY LONDON



Thursday, 25 October 2007, 16:38

C O N F I D E N T I A L SECTION 01 OF 05 LONDON 004045

SIPDIS

EO 12958 DECL: 10/17/2017

TAGS PGOV, PREL, KISL, PTER, SCUL, UK

SUBJECT: EUR SENIOR ADVISOR PANDITH AND S/P ADVISOR COHENâ€™S

VISIT TO THE UK, OCTOBER 9-14, 2007

REF: LONDON 4030

Classified By: DCM Richard LeBaron for reasons 1.4 b, d

Â¶ 1. (C) Summary. EUR Senior Advisor for Muslim Engagement Farah Pandith and S/P Member Jared Cohen met with a wide range of UK government leaders, community activists, think tanks, artists, and Muslim youth during their

October 9-14 visit to the UK. Government officials stressed that the UKâ€™s problem with extremists is a domestic as well as a foreign policy issue, since all recent successful and thwarted terrorist attacks were perpetrated by individuals from Muslim communities in the UK. Muslim youth from deprived areas expressed less concern with UK and U.S. foreign policy than with the chance to have their voices heard in British society, while those with more education focused on disagreements with UK foreign policy and the need to use the arts to address cultural tensions and reconciliation.

Bollywood actors and executives agreed to work with the USG to promote anti-extremist messages through third party actors and were excited about the idea of possibly partnering with Hollywood as well. Community activists discussed how they are working to empower their communities and help shape the debate against extremism in UK Muslim communities. One highlight of the visit was a day trip to Leicester, which Pandith said was arguably home to the most conservative Islamic population she had seen anywhere in Europe.

End summary.

Radicalization Efforts

------------------------------------

Â¶ 2. (C) HMG is currently working on an updated strategy, yet to be blessed by ministers, to update and improve its approach to stopping terrorists and extremists, FCO Engaging the Islamic World Group Head Barry Lowen and Arab

Reform Team Leader Alex Cole told Pandith and Cohen October 12. The new strategy includes the creation of the Research and Intelligence

Communications Unit (RICU), which falls under the joint auspices of the

FCO, the Home Office, and the Department for Communities and Local

Government (DCLG). Although still in the â€œembryonic stage,â€ Lowen said, the RICU would have three primary functions: 1) tracking and coordinating research and information on extremism in the UK Muslim Community; 2) alerting HMG to important events, such as an impending Osama Bin Laden speech, and preparing a unified government response; and 3) supporting nongovernment tools in battling extremists (For more on the RICU and HMGâ€™s counter-radicalization structure, see ref). One project currently underway is preparation of a paper on what language works best in public outreach,

Lowen said; for example, the advantage of using the word â€œmainstreamâ€ to define common values, as opposed to â€œthe West,â€ which can have negative connotations.

Â¶ 3. (C) Work on empowering moderate Muslim voices in the UK and overseas is divided into aid directly from HMG and facilitation of contacts between non-governmental actors, Cole said. Programs which HMG sponsors directly include: sponsoring Arabic language childrenâ€™s television programming in

Jordan to promote peace and tolerance; assisting visiting religious leaders and journalists from UK-based Muslim communities to meet the Archbishop of

Canterbury and other church leaders; and providing English language training to tutors at Al-Azhar University in Cairo through the British

Council. On the non-governmental side, HMG is also currently working to facilitate linkages between third party actors, Cole said. Pandith noted these efforts mirror current USG initiatives. She and Cohen described USG efforts at â€œseedingâ€ small initiatives overseas to see what works and what doesnâ€™t. Both sides agreed they would exchange ideas for promoting counter-radicalization efforts, both those directly and indirectly sponsored by governments.

Â¶ 4. (C) With the FCOâ€™s Policy Planning Middle East analyst Richard Shaw,

Cohen described current USG thinking on the linkage between public diplomacy, counter terrorism, and counter radicalization. Shaw said the

UKâ€™s overall approach is focused on how likely Muslims are to turn to violence. Unlike the U.S. September 11 attack, Shaw noted, all of the UK terrorist attacks and would-be attacks have been perpetrated by â€œhome grownâ€ terrorists. What is considered foreign policy for the USG is both domestic and foreign for the UK, he pointed out. Pandith, Cohen and Shaw discussed the importance of trying to work with youth through web-based technology and communications, since these are some of Al Qaidaâ€™s primary tools. They also discussed the limitations of traditional outreach methods, including government-supported exchange programs, which pay off handsomely for those who participate but reach a mere handful of people, many of whom are already inclined to anti-extremist sentiment. Foreign Secretary David

Miliband is focused on exactly these types of questions, Shaw said.

The Personal Journey of the UKâ€™s, First Muslim MP

--------------------------------------------- --------------

Â¶ 5. (C) On October 12, Pandith and Cohen met with newly-appointed

Department for International Development (DFID) Minister Shahid Malik. A

Labour MP since 2005, when he and fellow Labourite Saddiq Khan were the first Muslim MPs ever elected to the British Parliament, Malik is an active participant in the British Muslim dialogue. He told Pandith and Cohen his own personal story of alienation, saying that even though he grew up in the

UK he was so anti-British as a young man that he rooted for the other side in any sporting match in which an England team played. At the age of 27, however, he was appointed to the Commission for Race and Equality, and began to travel around the UK and listen to the stories of other Muslims.

This was a turning point in his life, he said, because he realized that many Muslims were finding ways to celebrate both their Muslim and their

British heritages simultaneously. In his public appearances, Malik said, he emphasizes that anger over UK or U.S. foreign policy is not a valid reason for extremism. By the same token, he said, it is important to separate out extremists from the vast majority of law-abiding Muslims. He praised Gordon

Brownâ€™s handling of the thwarted July car bombings in London, noting the

Brown had referred to the perpetrators as â€œcriminals,â€ without mentioning their religion.

Â¶ 6. (C) HMG needs to organize itself better on Muslim engagement, Malik admitted, and work to empower young people and make sure their voices are heard. A lot of important work is being done on education, where the

Mosques and Imams Board (MINAB) has been set up to evaluate the credentials of imams to ensure that Muslim youth are being taught by qualified teachers. Pandith suggested that the two governments work more closely together, wondering if Malik would be interested in working with other elected Muslim officials around Europe who were keen to engage youth, act as role models, and learn from each other. Malik was very keen to help make this happen; Pandith will follow up with him.

Â¶ 7. (C) Pandith also raised the critical need for a place in Europe where religiously curious youth could go to learn more about Islam and specificially learn about it as a Muslim in Europe. Finding a â€œcampusâ€ where students could go to learn about theology as well as religion, history, culture, and science was a necessary missing piece in Europe.

Malik agreed and said he would follow up with further thinking about this issue.

Female Muslim Role Models

-------------------------

Â¶ 8. (SBU) Pandith met Lady Sheikh, wife of Conservative Peer Lord Sheikh and herself a party activist, at her offices adjacent to Westminster Abbey on October 11. Sheikh said Muslim communities are economically the most deprived in Britain, and stressed the importance of educating and encouraging British Muslims to participate in democracy. She expressed an interest in receiving American female Muslim visitors whom she could introduce to young Muslim women to serve as role models. Pandith said the

USG engages in outreach of this kind and told Sheikh the Embassy would keep her request in mind when programming such exchanges.

Visit to Leicester

------------------

Â¶ 9. (SBU) On October 11, Pandith and Cohen traveled to Leicester, a large urban center about 70 minutes north of London with a substantial ethic minority population. Leicesterâ€™s Muslim population is 11 percent, well above the overall UK percentage of three percent. The visit was organized by Parvin Ali, founder and Chief of Executive of FATIMA Womenâ€™s Network, which aims to address Muslim womenâ€™s issues both locally and nationally.

Pandith and Cohen toured a number of Leicesterâ€™s commingled but distinct ethnic neighborhoods, including Highfields (lower income, predominantly ethnic Indian Gujarati, influenced religiously by the Wahhabi sect), Medway

(Bangladeshi), Evington (mainly Muslim, middle class), Stonygate

(progressive Jewish neighborhood with recent influx of more affluent

Muslims), and Oadby (more prosperous and outside the city center). With over 200 mosques and madrasses in Leicester, Ali noted, the city has for the first time put up Eid decorations on the streets in Muslim neighborhoods. Diwali decorations have been a tradition for some time, Ali said, and the Diwali celebrations in Leicester are said to be the largest in Europe, and possibly the largest outside of India.

Â¶ 10. (SBU) Leicesterâ€™s progressive Muslims may be politically

â€œquieterâ€ because of the comparatively huge orthodox presence, Ali said. The large numbers of Gujarati immigrants who came to the UK had originally settled in East Africa, and so brought with them a unique cultural memory of immigration strategies that had worked there. These immigrants knew and recognized the importance of immediately building up community institutions, leading to the proliferation of mosques and other community institutions. In addition, Leicesterâ€™s ethnic climate is unique academically - the University of Leicester attracts numerous students from outside the area, even internationally, due to its academic prestige.

DeMontFord University, by contrast, can then absorb more local populations, leading to a high level of ethnic diversity there.

Â¶ 11. (SBU) Members of the Leicestershire Constabularyâ€™s Community Safety

Bureau described to Pandith and Cohen how their main focus is neighborhood policing and anti-terrorism, including racially and religiously-related crime. These programs rely on non-police community actors, who advise, inform, and assist with police operations. The police force will inform key community members prior to a raid, so that once police action is taken, comprehensive information on the situation is made available immediately to the community, thus preventing rumors and a possible escalation of conflict. As a result, there has been a significant level of community engagement with law enforcement. Constabulary officials acknowledged that their success might be a useful information tool for others in the United

States or UK. Pandith expressed interest in passing information on their work to the Department of Homeland Security.

Â¶ 12. (SBU) Despite the many positive programs in Leicester, the isolation of some parts of the Muslim community was striking. During a discussion with religious and community leaders at an Ahmadiyya mosque, Yaqub Khan,

General Secretary of a local organization called the Pakistan Association, insisted that he had to teach young people in Urdu. When Pandith challenged him as to why he would use Urdu with children who were growing up with

English as their first language, Khan insisted that there were no good books on the Koran in English. At a local book store, texts in English seemed designed to segregate Muslims from their wider community, urging women to cover themselves and remain in their homes, playing up the differences between Islam and other religions, seeking to isolate Muslims from community, and feeding hate of Jews to the young. Some Leicester

Muslims seemed to have haphazardly thrown together different elements of

Islam, pairing an Arabian Gulf-style hijab with a Pakistani shalwar kameez, for example. Girls as young as four years old were completely covered.

Pandith commented afterward that this was the most conservative Islamic community she had seen anywhere in Europe.

Muslim Youth

------------

Â¶ 13. (SBU) Pandith and Cohen attended three events specifically aimed at hearing the concerns of Muslim youth in London. On October 9 they traveled to the East London neighborhood of Waltham Forest, a largely Muslim area that is plagued by urban problems including drugs, youth gangs, violence

(three young people were shot close to the meeting site that same evening),

and a significant radical Muslim presence. There they met with young

Muslims, journalists, and community leaders, including the Mayor of Waltham

Forest and two Borough Councillors, under the auspices of the Active Change

Foundation (ACF), a recently-launched leadership training program targeted at Muslim youth in deprived areas of East London. The ACF had just finished recruiting its first class of young men and women to participate in the

ACFâ€™s inaugural leadership training course. During the meeting, the young people present repeated several times to Pandith and Cohen that they want the skills and the opportunities to be able to represent their views to the media and to decision makers. Although the journalists kept interjecting foreign policy issues such as Iraq and Israel/Palestine, the young people stressed that while those issues might be of some concern, the real issues in their lives are jobs, education, and empowerment. After a lively exchange, the ACF students presented a grant application for Embassy consideration, and both sides pledged that the link forged that evening would be maintained.

Â¶ 14. (SBU) In contrast, Cohen met October 9 with a small group of more privileged Muslim youth in Kensington, a wealthy London district. This meeting was held under the auspices of Kensington Borough Councillor

Mushtaq Lasharie, himself a British Muslim of Pakistani origin who is the first Muslim councillor for this predominantly non-Muslim area. The young people at this meeting, all with higher education, said they wanted to see reconciliation themes conveyed through the arts, especially music. Cohen urged them to turn their ideas into action.

Â¶ 15. (U) An Iftar sponsored by the Next Century Foundation and held in

Pandith and Cohenâ€™s honor October 10 drew such a large number of participants that the group was split in two. Participants included representatives of the Muslim Public Affairs Committee UK (MPAC), and the

Leeds and Bradford Diasporas, the UK Turkish community, and Muslim community leaders. Discussion centered on foreign policy issues including

Kashmir, Israel/Palestine, Afghanistan, Armenia/Turkey, and the spread of fundamentalist Islam. The wide variety of opinions expressed provided U.S. participants with a broad cross-section of the positions of the different

Muslim communities in Britain. Cohen noted a distinct difference between the focus of these young people -- all in their mid-20s with graduate degrees -- as opposed to the group of more impoverished youth in East

London, where discussions focused on integration and opportunity issues inside of Britain. This group focused entirely on foreign policy, and more specifically on U.S. foreign policy. Many of them had radical views, including that â€œAmerica had 9/11 coming to it.â€

Bollywood

---------

Â¶ 16. (SBU) On October 10, Pandith and Cohen met with a cross section of the South Asian community working in film to discuss the potential of working with the Indian film industry - â€œBollywoodâ€ - on delivering an anti-terrorism message. Participants included Director of Arts Versa Mohsin

Abbas, Channel 4 TV Head of Multicultural Programming Farouk Dhondi,

Producer Director Mahmood Jamal, Locations Manager Amjad Khan, and singer/actress Humeira Akhter, who has strong links with top Bollywood actors/actresses. A lively discussion produced a number of possible ideas, including developing ways to promote existing anti-terrorist films, and to

develop funds for similar productions. Once such an anti-extremist genre is established, participants believed that major Bollywood figures would be willing to speak out on the issue. Humaira Akhtar has already gotten back to Pandith on possible stars in Bollywood interested in such a project.

Community Groups

----------------

Â¶ 17. (U) The National Muslim Communities Development Network (MCDM) arose from a series of meetings held by various UK Muslim communities, following the July 5, 2007 bombings in London. MCDM is now an independent structure intended to bring attention to the continuing work of existing organizations focused on countering extremism. It works to help develop and broaden emerging leadership within Muslim communities, bringing communities together through positive action and raising the standard of debate on

Islam in Britain today. In a meeting October 10, MCDM members including

Director Nadeem Kazmi, Muslim Media Networkâ€™s Munir Zamir, Waltham Forest

Community Cohesion Office Munir Zamir, Citibankâ€™s Nazish Zaid, Khayall

Theaterâ€™s Luqman Ali, Jangâ€™s Ali Murtaza Shah, and Art Versa Mohsin

Abbas, exchanged views with Pandith and Cohen about the challenge of promoting a more sophisticated and nuanced approach to the debate on Islam in British society. All parties committed to continue to explore ways to support MCDM programs, while the MCDM leaders agreed to facilitate U.S. mission efforts to reach out to the British Muslim community. These leaders agreed to stay in touch with Cohen and Pandith about their progress in creating a network of activists.

Media

-----

Â¶ 18. (SBU) Taking advantage of the wide range of Diaspora media available in London, Pandith spoke to a cross section of the UK-based Muslim media during her visit, including Jang Daily News, the oldest Pakistani-community newspaper in the UK with a European circulation of about 23,000 readers;

Emel Magazine, a high-end weekly glossy with a print run of 20,000: the

Muslim Weekly, whose website receives 34,000 hits a day; and Al Hayat, an influential Pan Arab daily with a world-wide circulation of 160,000.

Pandith stressed that the USG is interested in building a dialogue with

European Muslims from which both sides benefit: this gives the United

States a chance to dispel myths that its policies are anti-Islam, and

Muslims gain a better understanding of how U.S. foreign policy is shaped.

It also empowers Muslims to discuss their own religion directly, rather than allowing the media to interpret for them through soundbites and other filters. As this dialogue has improved, so has understanding, leading to cooperative efforts to develop and support grass roots movements that combat the destructive impulses of extremists. Drawing on her own experience as a Muslim American, Pandith sought to dispel some myths about

Muslims in America, noting that they are free to honor their religion as well as their ethnic and cultural backgrounds. The tension between allegiance to oneâ€™s country and to oneâ€™s faith is mostly absent for

American Muslims, she said, because America is a country of immigrants, many of whom emigrated seeking religious freedom. She was careful to point out that the history of immigration and integration in the United States has at times been painful, but stressed that as a country the United States has benefited greatly from the experiences of the Civil Rights Movement.

Â¶ 19. (U) EUR Senior Advisor Pandith and S/P Member Cohen have cleared this message.

Visit Londonâ€™s Classified http://www.state.sgov.gov/p/eur/london/index. cfm Tuttle

Website:

Viewing cable 09ASHGABAT1633, BERDIMUHAMEDOV AND TURKMENISTANâ€™S

RULING FAMILY



09ASHGABAT1633

2009-12-18

13:01

2010-12-13

21:09

CONFIDENTIAL

Embassy

Ashgabat

Appears in these articles: http://www.spiegel.de/

VZCZCXRO0347

PP RUEHAG RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW RUEHROV RUEHSL

RUEHSR

DE RUEHAH #1633/01 3521357

ZNY CCCCC ZZH

P 181357Z DEC 09

FM AMEMBASSY ASHGABAT


INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE

RUCNCIS/CIS COLLECTIVE

RUCNMEM/EU MEMBER STATES COLLECTIVE

RUEHAK/AMEMBASSY ANKARA 6025

RUEHBJ/AMEMBASSY BEIJING 3719

RUEHKO/AMEMBASSY TOKYO 3578


RHEHNSC/NSC WASHDC

RHMCSUU/CDR USCENTCOM MACDILL AFB FL

RUEAIIA/CIA WASHDC

RHEFDIA/DIA WASHDC


RUEKJCS/SECDEF WASHINGTON DC

RUEHVEN/USMISSION USOSCE 4206


RUCPDOC/DEPT OF COMMERCE WASHDC

RHEBAAA/DEPT OF ENERGY WASHDC

RUEATRS/DEPT OF TREASURY WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 001633

SIPDIS

STATE FOR SCA/CEN

EO 12958 DECL: 12/17/2019

TAGS PGOV, PINR, TX

SUBJECT: BERDIMUHAMEDOV AND TURKMENISTANâ€™S RULING FAMILY

REF: ASHGABAT 1503

Classified By: Charge dâ€™Affaires Sylvia Reed Curran. Reasons 1.4 (B) a nd

(D).

Â¶ 1. (C) SUMMARY: Turkmen President Berdimuhammedov is vain, fastidious, vindictive, a micro-manager, and a bit of an Ahal Teke â€œnationalist.â€

He also is the only son in a family of eight children. His father is a retired prison guard with the rank of colonel. The father, many in

Turkmenistan think, is more intelligent than the son. Berdimuhamedov reportedly has a Turkmen wife and a Russian mistress. He has two daughters and a son with his Turkmen spouse and a daughter with his Russian wife. One of his sons-in-law runs the London office of the Turkmen State Agency for

Management and Use of Hydrocarbon Resources. His other daughter lives with her husband, a diplomat, in Paris. XXXXXXXXXXXX

Â¶ 2. (C) President Gurbanguly Berdimuhamedov is the â€œdeciderâ€ for the state of Turkmenistan. Since his word is often law, it is beneficial to understand what makes him tick and to know something about those closest to him, his family. According to XXXXXXXXXXXX, Berdimuhamedov is vain, suspicious, guarded, strict, very conservative, a practiced liar, â€œa good actor,â€ and vindictive (reftel). XXXXXXXXXXXX said that while he usually forgets something after a few months or a year, Berdimuhamedov never forgets. Our source described Berdimuhamedov as a micromanager. He said that the president signs off on work schedules for experienced doctors.

Â¶ 3. (C) Our source said Berdimuhamedov is very clean and neat and requires all around him to be the same. XXXXXXXXXXXX When Berdimuhamedov became the head of a dental clinic, he insisted that the other men who worked there

had creases in their pants. About 30 years ago, when Berdimuhamedov owned an old Russian car, he would leave it at home if it rained and take a taxi instead.

Â¶ 4. (C) Berdimuhamedov apparently does not think all Turkmen are the same.

He once told our source that the true and first Turkmen come from the area between Kaka and Baharly in Ahal Province. Other people are not real

Turkmen.

Â¶ 5. (C) Berdimuhamedov does not like people who are smarter than he is.

Since heâ€™s not a very bright guy, our source offered, he is suspicious of a lot of people. Our source claimed Berdimuhamedov did not like America,

Iran, or turkey, but likes China. (COMMENT: Berdimuhamedov probably views other countries in terms of what they can do for him and his country, rather than in terms of like or dislike. END COMMENT.) He also asserted that the president is not fond of either Uzbek President Karimov or

Kazakhstan President Nazarbayev.

BORN OF GOODLY PARENTS

Â¶ 6. (SBU) Gurbanguly Berdimuhammedovâ€™s father, Myalikguly

Berdimuhamedov, worked as a senior Interior Ministry officer in a prison guard detachment. He retired as a Colonel of

ASHGABAT 00001633 002 OF 002

Internal Troops. In local public opinion, the father is rumored to be far more intelligent than his son. The presidentâ€™s mother was a housewife.

The presidentâ€™s parents now live with their son in the official residence in Firuza Valley, which is 19 km from Ashgabat. His grandfather

Berdimuhamed Annayev was the principal of a school in his native village of

Izgant.

WIFE, MISTRESS AND CHILDREN

Â¶ 7. (C) Berdimuhammedov is married and has two daughters and one son,

Serdar. The oldest daughter is married to Yhlasgeldi Amanov, who is a representative of the Turkmen Agency for Use and Management of Hydrocarbon

Resources for Europe, posted in London. His other daughter lives with her husband, who works at the Turkmenistan Embassy in Paris. A local Turkmen entrepreneur claims this daughter has a villa on the Cote dâ€™Azure in southern France. There is a rumor among Ashgabat residents that

Berdimuhamedov has a mistress, in addition to his Turkmen wife, who is reportedly very conservative. The mistress is supposedly an ethnic Russian by the name of Marina. She was reportedly a nurse at a dental clinic where

Berdimuhamedov worked earlier in his career, and has a 14-year old daughter with the president. Berdimuhamedovâ€™s wife has reportedly been living in

London since 2007.

SISTERS-HOUSEWIVES, SISTERS-TEACHERS AND SISTERS-BUSINESSWOMEN

Â¶ 8. (SBU) Berdimuhamedov is the only son in his family of eight children.

One of the younger sisters teaches at the Turkmen National Economy

University; another, the youngest one, is a housewife married to a Central

Bank employee. His second oldest sister, Aynabat Berdimuhamedova, actively exploits the influence of her brother.10. (SBU) COMMENT: Berdimuhamedov has gone to great lengths to conceal information about his family and personal life from the public. For a public figure who tries to project an image as a renaissance man, whether it be author, surgeon, pilot, sportsman or statesman, the failure to cultivate a â€œfamily manâ€ image leaves a void that the public is ready to fill. END COMMENT. CURRAN

Viewing cable 09LONDON27, UK MUSLIM DEMOGRAPHICS (C-RE8-02527)



09LONDON27

2009-01-06

11:11

2010-12-14

21:09

SECRET

Embassy

London

O 061155Z JAN 09

FM AMEMBASSY LONDON

TO SECSTATE WASHDC IMMEDIATE 0834

S E C R E T LONDON 000027

DEPARTMENT FOR INR/I AND EUR/WE

E.O. 12958: DECL: 12/30/2018

TAGS: PINR KISL KPLS UK

SUBJECT: UK MUSLIM DEMOGRAPHICS (C-RE8-02527)

REF: A. 08 STATE 128186

Â¶ B. LONDON DAILY REPORT 7-28-08

Classified By: Political Counselor Rick Mills, Jr. for reasons 1.4 (b) and (d)

Â¶ 1. (S/NF) Summary. Per reftel, this cable provides information on the demographics of the Muslim community in the UK. The last official UK census was in 2001 and much of

what is provided below is a combination of census figures and subsequent estimates and surveys. Post notes that the information is incomplete and in many cases several years old. This is, however, the most current and accurate information available. Among the findings are that the UK

Muslim population has jumped in seven years from 1.6 million to 2 million. At that rate of increase, HMG estimates that the Muslim population of the UK at the next census in 2011 will be over 2.2 million. End Summary.

Overall Muslim Population Growing But Rate Slowing

--------------------------------------------- -----

Â¶ 2. (C) The 2001 UK census showed a population of 1.6 million

Muslims. In April 2008, the Home Secretary Jacqui Smith announced that HMG estimated the Muslim population at 2 million or 3.3% of the UK population. This represented an increase of 400,000 in seven years. The 1951 census showed a population of Muslims of less than 22,000. Therefore between

1951 and 2001 (50 years) there had been an annualized increase of 31,500 Muslims in the UK, but in the seven year period between 2001 and 2008 there was an actual annualized increase of 57,000. The rate of increase as measured by decades has slowed, however. In 1961, the population of

Muslims in the UK was 2.5 times what it had been in 1951.

Between 1961 and 1971 the Muslim population multiplied an astonishing 5 times its previous population. Thereafter the

Muslim population's rate of growth began to slow. In 1981 it was only 2.4 times the 1971 population (this was attributed to the ending of unlimited Commonwealth immigration in the early 1970's). In 1991 it was only 1.7 times what it had been in 1981; and between 1991 and 2001 it only grew by 1.6 times the previous population. Based on a projected 2011 population of 2.2 million, the rate of increase between 2001 and 2011 is estimated to be 1.4 times the 2001 figure. In overall numbers, the UK Muslim population is rapidly increasing, but its rate of growth is slowly decreasing.

Changes to UK visa rules announced in 2008 may slow this rate even more.

Immigration Or Birthrate?

-------------------------

Â¶ 3. (C) HMG does not categorize either births or immigration by religion. A rough estimate, however, based on immigration statistics by country of origin indicates 50-55,000 "self declared" Muslims were granted settlement (permanent residence) in the UK in 2007. Based on the aforementioned

57,000 annualized growth in the Muslim population, it is clear that a significant portion of the population growth among Muslims in the UK is based on immigration. 34% of

Muslims in 2001 were below the age of 16, however, and 63% of

Muslim households had at least one child and 25% contained 3 or more children. Based on these statistics a report by the

NGO Migration Watch UK (MWUK), which favors restrictions on immigration, estimated in 2008 that the real number of

Muslims in the UK was closer to 3 million which would be 5% of the UK population.

Raw Data: Office of National Statistics

---------------------------------------

Â¶ 4. (SBU) The following are excerpts from the UK's Office of

National Statistics (ONS), all data is from the 2001 UK census unless otherwise noted.

-- The 2001 Census showed that out of the total UK population of 58.8 million, 1.6 million identify as Muslims. At 3 percent, this is the largest non-Christian religious population. They are a young, tightly clustered, but often disadvantaged community, according to UK social and economic statistics.

-- People with Muslim backgrounds are most concentrated in

London (38% of the total UK Muslim population) and other large urban areas, including the West Midlands (14% of the

Muslim population), the North West (13%), and Yorkshire and the Humber (12%). Within these areas, Muslims are highly concentrated spatially. Muslims make up 8% of the population of London overall, but 36% of the Tower Hamlets area and 24% of the Newham area population.

-- 70% of Muslims gave their national identity as British,

English, Scottish, or Welsh; 91% of UK-born Muslims gave a

British national identity.

-- More than half of Muslim adults living in England and

Wales in 2001 said their religion was important to their self-identity.

-- Muslims are the second least-likely of all religious groups to have been born in the UK, with the majority being born outside the UK; 46% were born in the UK, 39% were born in Asia (Pakistan - 18%; Bangladesh - 9%; India - 3%), 9% were born in Africa (Somalia - 2%; Kenya - 1%), and 4% were born in Europe outside the UK (Turkey - 3%, former

Yugoslavian countries - 1%).

-- Muslims were more likely than all other groups of UK 16 to

24-year-olds to be living with a partner, either as a married or cohabiting couple (19% each).

-- Among 45 to 54-year-olds, 17% described their marital status as divorced, separated or re-married.

-- Muslims households were the least likely to be homeowners

(52%) and are the most likely among all religious groups to be living in accommodation rented from the council or housing association (28%); 4% live rent-free.

-- 32% of Muslim households live in overcrowded

accommodation. Average family size for a Muslim family is

3.8, which can contribute to overcrowding. 34% of Muslim households contained more than five people. 63% contained at least one dependent child, and 25% contained three or more dependent children.

-- Unemployment rates were higher for Muslims than any other religion, for both men and women. Muslim male unemployment rate was 13% in 2004, and for women it was 18%.

-- Muslims between the ages of 16 and 24 had the highest unemployment rates at 28%; 11% of Muslims over the age of 25 were unemployed.

-- Muslims were most likely to be unavailable or not actively seeking work due to reasons such as disability, being a student, or looking after the family and home. 31% of working-age men were economically inactive, as were 69% of working-age women.

-- With 34% of Muslims under the age of 16 in 2001, Muslims have the youngest age profile of all the religious groups in

Great Britain. Less than one in ten were aged 65 or older.

-- Muslim men outnumber women 52% to 48%.

-- 74% of Muslims are from an Asian ethnic background

(Pakistani - 43%, Bangladeshi - 16%, Indian - 8%, Other Asian

- 6%), Almost 1.2 million Asian Muslims were living in Great

Britain in 2001. Another 11% were from a White ethnic background, including 4% of White British origin and 7% from another White background (including Turkish, Cypriot, Arab and Eastern European). 6% of Muslims were of Black African origin, mainly from North and West Africa.

-- Muslims, both male and female, had the highest rates of reported ill health in 2000. Age-standardized rates of "not

good" health were 13% for Muslim males and 16% for Muslim females.

-- Muslims had the highest rates of disability, with 24% of females and 21% of males claiming a disability.

-- Lone parent households are less common within Muslim communities, with around 50% of Muslim households headed by an individual who is part of a married couple.

-- Muslim households were also more likely to contain more than one family, with 19% of all multiple family households

Muslim.

-- 33% of working-age Muslims in Great Britain had no qualifications in 2004, which is the highest rate of any religious group. At 12%, they were also the least likely to have degrees or equivalent qualifications.

-- Muslims who were born in the UK are more likely than

Muslims born elsewhere to have a degree or equivalent qualification at any age. UK-born Muslims under the age of

30 were almost twice as likely to have degrees as those born elsewhere in 2004.

-- 371,000 school-aged (5 to 16 years old) Muslim children were in England in 2001, and by 2008 there were seven state-maintained Islamic schools catering to around 2,100

Muslim children.

-- One-fifth of Muslims were self-employed n 2004.

-- 37% of Muslim men and over a quarter of Muslim women were working in the distribution, hotel and restaurant industry.

-- One in seven Muslim men work in the transport and communication industry.

-- Less than a third of Muslim men work in managerial or professional occupations, and almost one in ten worked as a taxi driver, cab driver or chauffeur in 2004.

-- Between 16 and 20% of Muslim women work in sales and customer service jobs.

Raw Data: Post's 2008 Religious Freedom Report and NGOs

--------------------------------------------- ----------

Â¶ 5. (SBU) The following are excerpted from Post's

International Religious Freedom Report (IRFR) and reports or studies from various Muslim and migration/immigration NGO's.

Citations are from the IRFR unless otherwise noted.

-- The Government estimates the number of mosques in the UK to be around 1,000.

-- A May 8, 2008, Religious Trends report states that more than 50% of Muslims regularly worship at mosques. (Embassy

Comment: Religious Trends is a UK think tank that monitors a wide array of religious issues. Among other things, the 2008 report noted that while 43 million UK residents claimed to be

Christians, less than 3 million (7%) regularly worship in churches. End Comment).

-- The Crown Prosecution Service (CPS) reported a decrease in prosecutions over the previous reporting period for religiously-motivated incidents, with only 29 cases classified as religiously-aggravated offenses. Of the 23 cases in which the victim's religious affiliation is known,

17 were Muslim.

-- In 2006, controversy arose after 100 Islamic private schools turned out to be "little more than places where the

Koran is recited," the schools promised to upgrade their

instruction and they are due for review in 2010.

-- According to a poll of 600 Muslim and 800 non-Muslim students at thirty universities throughout the UK conducted by the Centre for Social Cohesion (CSC), as reported ref B,

32 percent of Muslims on UK campuses believe killing in the name of religion is justified, 54 percent wanted a Muslim

Party to represent their world view in Parliament, and 40 percent want Muslims in the UK to be under Sharia law. Only

2 percent of non-Muslims felt killing in the name of religion could be justified and none believed it was acceptable for

Muslims in the UK to have a religious-based party, or to be under Sharia law. 73 percent of Muslim students are at least occasional participants in Friday services while only 2 percent of non-Muslim students attend any religious service.

The poll results also found that 73 percent of Muslim students believe it is possible to be both Muslim and British and a similar number believe their parents are "much more or somewhat more" strict Muslims than they are. In addition only six percent believed that people who leave Islam for another religion should be "punished according to Sharia law"

(killed).

-- According to MWUK, arranged marriages in the Muslim community are creating unusually large population growth in areas where Muslims predominate, since first-generation families tend to have larger numbers of children (based on published research and a comparison of the 1991 and 2001 census). For example, in the eighties the Bradford (city)

Council estimated that the Muslim population would reach

130,000 by 2030 and then level off. Now the projection is for 130,000 by 2020 and rising. Bradford is a West Yorkshire industrial city whose 2001 population of 294,000 included an estimated 75,000 Muslims (25%), predominantly of Pakistani origin. Bradford has the largest Muslim population in the UK outside of London, and no single London borough

(neighborhood) has as large a Muslim population.

-- Also according to MWUK, the number of marriageble-age

Muslims in the South Asian community had jumped from 155,000 in 1991 to 236,000 in 2001. MWUK claims the majority of members of these communities seek spouses from overseas in arranged marriages. MWUK claims these figures point to a much larger Muslim population than HMG is reporting and is projecting. HMG says arranged marriages with South Asian partners, "are a normal facet of settlement figures."

Visit London's Classified Website: http://www.intelink.sgov.gov/wiki/Portal:Unit ed_Kingdom

TUTTLE

Viewing cable 09BERN432, SCENESETTER: YOUR OCTOBER 10 VISIT TO ZURICH



09BERN432 2009-10-08 10:10 2010-12-14 21:09 SECRET Embassy Bern

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INFO RUEHAK/AMEMBASSY ANKARA 0282

RUEHMO/AMEMBASSY MOSCOW 0620

RUEHFR/AMEMBASSY PARIS 0758

RUEHTRO/AMEMBASSY TRIPOLI 0009

RUEHYE/AMEMBASSY YEREVAN 0059

RUEHBS/USEU BRUSSELS

S E C R E T BERN 000432

SIPDIS

FOR THE SECRETARY FROM AMBASSADOR BEYER

EO 12958 DECL: 10/08/2019

TAGS PREL, OVIP, SZ

SUBJECT: SCENESETTER: YOUR OCTOBER 10 VISIT TO ZURICH

Classified By: Ambassador Donald S. Beyer; reasons 1.4(b) and (d).

Â¶ 1. (S) I and the rest of the Embassy Bern team are looking forward to your visit with great anticipation in what promises to be a landmark event in Armenian-Turkish relations with lasting benefits for Euro-Atlantic security. Foreign Minister Calmy-Rey is riding high on a series of foreign policy successes, from the Swiss governmentâ€™s agreement with DOJ in the

UBS matter, to Switzerlandâ€™s hosting of the October 1 P5 1 talks with

Iran in Geneva, to the upcoming October 10 signing ceremony in Zurich to chart a path for normalization of relations between Turkey and Armenia.

Â¶ 2. (S) While Calmy-Rey has reasons to celebrate, her foreign policy activism is not universally appreciated across the domestic political spectrum in Switzerland. Swiss views are colored by Switzerlandâ€™s centuries-old tradition of neutrality. Issues that draw on the Swiss capacity for facilitation and mediation, such as Turkish-Armenian rapprochement, generally enjoy strong public support. On the other hand, foreign policy activism with a more partisan or â€œhardâ€ security flavor, such as Calmy-Reyâ€™s vociferous support for Kosovo independence, or her recent all out -- but ultimately unsuccessful -- effort to obtain a parliamentary mandate for Swiss military participation in the EU antipiracy operation Atalanta, do not enjoy the same broad public support. The recent arrest at the Zurich airport of film director Roman Polanski was viewed by Calmy-Rey as putting a dent in Switzerlandâ€™s international image. Nevertheless, she has limited her criticism to remarking that the arrest lacked â€œfinesse,â€ and surely is aware that Swiss public opinion favors Polanskiâ€™s extradition to the United States.

Â¶ 3. (S) Probably the biggest challenge on Switzerlandâ€™s foreign policy front is its continuing crisis with Libya, following the July 2008 arrest of Muammar Gaddafiâ€™s son Hannibal Gaddafi in Geneva for allegedly brutally abusing his domestic staff. Swiss President Merzâ€™s ill-fated visit to Tripoli in late August, during which he publicly apologized for what by all accounts was a justified police action, thus far has failed to win the freedom of two Swiss businessmen that the Libyan government has refused to allow to leave Libya for over a year. The two Swiss citizens are being refused departure purportedly because of visa irregularities, but it is clear to all that Tripoli views them as a bargaining chip in extracting

maximum concessions from the Swiss. Moreover, after living under house arrest for the past year, the two businessmen recently were taken by Libyan officials to an undisclosed location, further raising concern in Bern about their fate. Calmy-Rey has asked for USG assistance in pressing the Libyans to allow the two Swiss to return to Switzerland. I strongly believe it is in our interest to do what we can, given Switzerlandâ€™s many efforts to assist U.S. citizens in Iran, including, most recently, the cases of the three hikers and the release earlier this year of Roxana Saberi.

Â¶ 4. (S) Finally, Calmy-Rey has been very active is urging the Swiss government to accept for resettlement in Switzerland several Guantanamo detainees who are slated for release. This idea is not at all popular with the Swiss public, but Calmy-Rey views it as a consequent gesture against the backdrop of the Swiss governmentâ€™s past criticisms of Guantanamo. A

Swiss team visited Guantanamo in August to interview four detainees, and is looking seriously at accepting an Uzbek and two Uighurs. The Swiss government, however, is concerned that agreeing to accept Uighurs would buy too much trouble with China at a time when Switzerland is seeking to conclude a trade agreement with Beijing. Personal encouragement from you to

Calmy-Rey underlining how much the USG would appreciate Switzerland accepting Uighurs would be particularly timely while you are in Zurich.

Â¶ 5. (U) Minimize considered. BEYER

Viewing cable 06BAKU1661, BP AZERBAIJAN PRESIDENT SAYS AZERBAIJAN

MOVING



06BAKU1661

2006-11-15

11:11

2010-12-15

21:09

CONFIDENTIAL

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INFO RUCNCIS/CIS COLLECTIVE

RUCNMEM/EU MEMBER STATES

RUCNIRA/IRAN COLLECTIVE


Embassy

Baku

RUEHBS/AMEMBASSY BRUSSELS 0139


RUCPDOC/DEPT OF COMMERCE WASHDC

RUEKDIA/DIA WASHDC


Wednesday, 15 November 2006, 11:38

C O N F I D E N T I A L SECTION 01 OF 03 BAKU 001661

SIPDIS

SIPDIS

EO 12958 DECL: 11/15/2016

TAGS AJ, PGOV, PREL, EPET, ENRG, RU

SUBJECT: BP AZERBAIJAN PRESIDENT SAYS AZERBAIJAN MOVING

SLOWLY TO ADDRESS GAS PROBLEM

REF: ANKARA 006396

Classified By: Ambassador Anne. E. Derse, Reasons 1.4 (B,D)

Â¶ 1. (C) SUMMARY: At a November 10 Azerbaijan International Oil Company briefing, outgoing BP Azerbaijan President David Woodward told the

Ambassador that according to SOCAR President Rovnaq Abdullayev, Turkey had not agreed to forego its contracted for 2007 Shah Deniz gas deliveries as a way of helping Azerbaijan and Georgia with their winter gas problems, although they were willing to defer delivery of some amounts if the contracted for price of USD 120 per thousand cubic meters remained the same. Woodward said that Turkey was declaring itself ready to receive Shah

Deniz gas, although he himself had doubts. He said that a joint BP-SOCAR working group would start work soon to discuss ways of redressing possible

GOAJ domestic gas shortages in winter 2007. END SUMMARY.

Â¶ 2. (C) On November 10 the Ambassador attended an Azerbaijan International

Oil Company briefing headed by outgoing BP Azerbaijan President David

Woodward. Other attendees were incoming BP Azerbaijan President Bill

Schrader, BP Group Azerbaijan Director for Communications and External

Affairs Clare Bebbington, UK Ambassador Laurie Bristow, UK EconOff, and

Econoff as notetaker.

READ-OUT OF TU-GOAJ MEETING

--------------------------------------------- --

Â¶ 3. (C) Woodward gave a read-out of his November 2 meeting with SOCAR

President Rovnaq Abdullayev. This meeting, prompted by the visit to

Azerbaijan of BP Executive Vice-President and Deputy Chief Executive of

Exploration and Production Andy Inglis, occurred right after Abdullayev had returned from Turkey with Deputy Prime Minister Abid Sharifov, where they had notified Turkey of intended delays in GOAJ 2007 Shah Deniz gas deliveries. Abdullayev, fresh off the plane, provided Woodward and Inglis a read-out of his Turkey meeting with Energy Minister Gular and Botas. Rovnaq told them that Botas would not sign the document he had brought, in which

Turkey was asked to agree to GOAJ providing no Shah Deniz gas in 2007 and in which the GOAJ sought to re-open Shah Deniz price negotiations. Turkey insisted on receiving its contracted for 2007 three billion cubic meters

(bcm) of Shah Deniz gas at the agreed upon price of USD 120 per thousand cubic meter (tcm), but said it did not have to receive it all in 2007. It

proposed that it could take half (1.5 bcm) in winter 2007, with the rest to be received in 2008 or 2009, at the contracted price of USD 120/tcm.

Abdullayev told Inglis that he had gotten Turkey to agree that it would be a transit country for Shah Deniz gas (vice a buyer-seller).

Â¶ 4. (C) During this November 2 meeting with Abdullayev and Sharifov,

Energy Minister Gular also said that Turkey was ready to receive Shah Deniz gas. In this regard, Woodward said that he thinks that Botas will ask for commissioning gas during the week of November 13-17. As to how ready Turkey actually is to receive Shah Deniz gas, Woodward said that the BP opinion is that Botas still has a lot of work to do to complete the pipeline to include work on the valve stations, and that if the work were done in accordance with international standards then the pipeline might not be ready until spring 2007. However, he added that â€œit was not inconceivableâ€ that Botas could â€œrush finishâ€ the job so that it would be ready to receive gas shortly, although the pipeline would not meet international standards.

ACG PROBLEM RESOLUTION

-----------------------------------------

Â¶ 5. (C) Woodward said that during the recent visit of BP Executive Inglis,

BP had given both President Aliyev and SOCAR President Abdullayev a copy of a BP â€˜white paperâ€™ on the way forward for Azerbaijan in the energy sector, (a copy of which he gave to the Ambassador), with the focus on four main themes:

- ACG Maximum Development: Resolving current issues associated with ACG to maximize recovery - Short/medium/long term gas issues: Short-term - how to address this winterâ€™s gas needs; Medium/Long-term: how best

BAKU 00001661 002 OF 003 to identify and exploit GOAJ gas reserves - SOCAR: how to help make SOCAR an energy company that meets international standards - BP Social Programs: putting a â€˜harder edgeâ€™ on them, to help build capacity in Azerbaijan

Â¶ 6. (C) Woodward said that there were a series of outstanding ACG-related issues the resolution of which involved billions of dollars and which the

AIOC partners were trying to resolve with SOCAR in a package, vice individually. In the November 2 meeting between SOCAR President Rovnaq

Abdullayev and BP executive Inglis, Abdullayev said that he would head the

SOCAR ACG steering group dealing with these problems, and that SOCAR VP

Elshad Nassirov would be the SOCAR working level representative. Abdullayev also said he would head the SOCAR team on the BP-SOCAR gas working group, with Nassirov again the working-level representative. Woodward said that

Abdullayev had an unrealistic expectation of how quickly these outstanding

ACG issues could be resolved: whereas BP thinks that a framework within which to discuss the issues could be agreed upon by January, with actual negotiations over these issues lasting up to six months, Woodward said that

Abdullayev told Inglis that the issues could be solved â€˜within a few days.â€™

Â¶ 7. (C) Woodward said that Abdullayev did not show much willingness to engage with BP re Azerbaijanâ€™s short-term (Winter 07) gas problems, contending that AIOC giving SOCAR more associated ACG gas could solve the problem. (Note: AIOC is scheduled to give 1.4 bcm of associated ACG gas to

SOCAR in 2007; SOCAR is arguing that AIOC does not need to re-inject any

ACG associated gas back into the well, and wants 3 bcm). Woodward said that all sides seemed to be waiting for the results of the President Aliyev-

President Putin meeting in Moscow, although he himself doubted whether the two would reach any definitive agreement, as everyone is waiting to see the

results of the various CIS bilateral Gazprom negotiations, to see if the

USD 230/tcm level will hold.

BP GEORGIA GAS READOUT

----------------------------------------

Â¶ 8. (C) Woodward said he and his replacement Bill Schrader had just returned from Georgia, where they had met separately with the Georgian

Energy Minister, Environment Minister and Prime Minister, among others. At these meetings the Georgian proposal of a November three-way gas-focused

Turkish-Azerbaijani-Georgian ministerial-level meeting in Tblisi or Ankara was discussed, although nothing definite had been agreed to by all parties.

In their meetings, the GOG interlocutors had referred to Turkeyâ€™s Summer

2007 â€˜agreement in principleâ€™ to supply Georgia from its own Shah Deniz gas, although Woodward said in his opinion all Turkey had agreed to at that time was a â€˜bring us a proposal and weâ€™ll have a look at itâ€™ type agreement. Woodward said that the GOG Energy Minister had told him that GA would not buy gas from Gazprom at USD 230/tcm, and that Turkey would supply

GOG with 1.5 bcm in 2007. Woodward said the GOG PM was more realistic, saying that perhaps Georgia could get 0.8 to 1.2 bcm from Turkey in 2007.

Woodward said the GOG PM seemed more relaxed about the upcoming winter gas situation than did the Energy Minister, and more concerned about Shah Deniz

Stage Two-related issues, stating that, inter alia, Georgia and Azerbaijan should look at gas storage issues together, vice separately. Woodward said he got the impression that GOG was more concerned about the economics of gas purchases from Gazprom than the supply itself, and he noted that despite the intense rhetoric flowing between Russia and Georgia, the energy continues to flow.

SD PRODUCTION

------------------------

Â¶ 9. (C) Woodward agreed that Shah Deniz was experiencing production delays, but said that other issues would play a more determinative role in deciding where Shah Deniz gas went, such as the GOG technical capacity to uptake Shah Deniz gas at its border with Azerbaijan. He said that the Gas

Pressure Reduction and Metering Station at Pump Station One in Georgia has a maximum daily design throughput of 4.0 million cubic meters, equivalent to 1.46 bcm/a at one hundred percent load (note: this compares to currently contracted

BAKU 00001661 003 OF 003 quantities which build up to around 08. bcm/a by 2011). As such, he said that part of the work of the SOCAR-BP gas working group that would be meeting imminently would be to model how much gas Georgia could uptake from

Azerbaijan from a technical viewpoint. He noted that in addition to the SCP

(i.e. Shah Deniz) pipeline, there was also the possibility of transferring gas from Azerbaijan to Georgia through the Azerbaijani gas system. As for

Shah Deniz gas itself, Woodward said that as soon as the first two of the four wells start flowing (mid-November and late December respectively), will it be clear how quickly and how much production will be available for winter 2007.

Â¶ 10. (C) COMMENT: Before determining what steps to take to redress any possible winter 07 gas shortages in Azerbaijan and Georgia, Azerbaijan first needs to assess its current gas balance and possible alternative supply options. In this regard it is encouraging to hear that the joint BP-

SOCAR gas working group is scheduled to meet the week of November 12.

Woodward however was disparaging of the selection of SOCAR President Rovnaq

Abdullayev and Deputy Prime Minister Sharifov as the GOAJ officials sent to

Ankara to deal with the Turkish government (indeed, a Statoil

representative told the Ambassador that Abdullayev had taken the wrong version of the Shah Deniz contract to the discussions), and despaired of any solution to the short-term regional problem occurring if management of the issue stayed at the SOCAR level. As such, he requested USG help in convincing Turkey to meet with Azerbaijan and Georgia. Now that Turkey is doing so (see reftel), Embassy will seek to ensure that the GOAJ participates at the appropriate level. END COMMENT. DERSE

Viewing cable 06BAKU1771, AZERBAIJAN: PRESIDENT ALIYEV ON UPCOMING GAS



06BAKU1771

2006-12-05

15:03

2010-12-15

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RUCNMEM/EU MEMBER STATES PRIORITY


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Tuesday, 05 December 2006, 15:44


SIPDIS

SIPDIS

DEPT FOR DAS BRYZA

Embassy

Baku

EO 12958 DECL: 12/04/2016

TAGS ENRG, GA, PGOV, PREL, TU, AJ

SUBJECT: AZERBAIJAN: PRESIDENT ALIYEV ON UPCOMING GAS

TRILATERAL

REF: BAKU 1720

Classified By: Ambassador Anne E. Derse, Reasons 1.4 (b,d)

Â¶ 1. (U) ACTION REQUEST: Please see Paragraph 10.

Â¶ 2. (C) SUMMARY: President Aliyev told the Ambassador on December 5 that he expected the December 8 Trilateral meeting of Energy Ministers in

Tbilisi to â€œclarifyâ€ whether Turkey was willing to help Georgia with its winter gas problems. He said Azerbaijan would host a subsequent

December 14 meeting in Baku among Azerbaijan, Georgia and Turkey, plus BP and Statoil. Aliyev again blamed BP for linking commercial issues to the current gas problems, and reported that â€œnothing had changedâ€ in

Azerbaijan,s gas negotiations with Russia during Russia PM Fradkov,s visit to Baku. END SUMMARY.

Â¶ 3. (C) On December 5 the Ambassador met with President Aliyev and discussed both energy and press freedom issues (septel). Energyoff was notetaker.

Russian PM Fradkov Visit Readout

--------------------------------------------

Â¶ 4. (C) Concerning the just concluded visit to Baku of Russian Prime

Minister Mikhail Fradkov, Aliyev said that â€œnothing had changedâ€ concerning the Gazprom offer of gas to Azerbaijan at 1.5 billion cubic meters (bcm) at USD 230 per thousand cubic meters (mcm). Aliyev said that

Russia knows Azerbaijan will not buy at this price, which would be more expensive than Azerbaijanâ€™s burning mazut in its power plants. Aliyev said that he did not even seek to raise the issue with Fradkov, but that

Fradkov had broached it. Aliyev said that Fradkov contended that the

Gazprom offer was not â€œanti-Azerbaijan,â€ and was purely a commercial decision, but Aliyev added that Gazpromâ€™s sales of gas to Ukraine at USD

130 per mcm belies this claim. Aliyev said that Russia justifies its lower gas sales price to Armenia by its being Armeniaâ€™s close ally and by purchase of the Iran-Armenia gas pipeline, by which, he said, Russia seeks to control strategic future gas export routes to Europe. Russia was trying to â€œcircle the European gas market,â€ which also was influencing its negotiations with Belarus, but here too there has not been an agreement on sales price.

Â¶ 5. (C) Aliyev said that Fradkov also proposed that Russia could help

Azerbaijan in transporting its gas to third countries, although Aliyev told the Ambassador his response was that he did not see how such â€˜helpâ€™ would be possible. Fradkov told Aliyev that Russia was going to need more gas for domestic use, which would reduce volumes it could sell to Europe.

Aliyev said that Russia was working with Algeria to form a gas monopoly.

Gas Trilat

------------

Â¶ 6. (C) The Ambassador said she knew that Aliyev had had a good discussion with DAS Bryza on energy issues in Minsk and with Georgian PM Noghaideli when he visited Baku on November 30, and that based on the latter meeting there was going to be a trilateral meeting of the Turkish, Georgian and

Azerbaijani Energy Ministers in Tbilisi on December 8. Aliyev said Georgian

and Azerbaijan shared a common strategic vision on energy issues, would be coordinating closely in this regard, and as such, during Noghaideliâ€™s

December 4-14 visit to the United States he would be delivering an

Azerbaijani message as well as a Georgian one (Comment: The Georgian

Ambassador told the Ambassador on December 5 that in his US visit Georgian

PM Noghaideli would ask Secretary Rice and Vice-President Cheney to

â€œencourageâ€ BP to help this winter). Aliyev said that he had expected the Turkish and Georgian governments to have had positive discussions prior to Noghaideliâ€™s November 30 visit to Baku but that this did not happen, and that the answer Georgia received from Turkey at that time concerning redistribution of Shah Deniz gas was negative, and contrary to the common understanding arrived at in July 2006 among the leaders of the three countries.

BAKU 00001771 002 OF 003

Aliyev said he felt that â€œthe Turkish approach was not sincere,â€ and as such Azerbaijan and Georgia needed to coordinate tactics and strategy. At a recent high-level meeting of his government Aliyev said he stressed his commitment to the longer-term strategic project of delivering Caspian gas to Europe and that â€œAzerbaijan should not sacrifice its long-term energy strategy for day-to-day needs.â€ Azerbaijanâ€™s strategic goal, which

Aliyev said was currently more important for Europe than it was for

Azerbaijan, was to enter European markets. Putin is saying that Azerbaijan and Kazakhstan cannot supply gas to Europe - â€œif we donâ€™t do it, we lose the battle.â€ As such, Azerbaijan has put forward the best possible solution for the short-term gas crunch: some gas for Georgia, some for

Turkey, some for Azerbaijan, and some for Greece.

Â¶ 7. (C) The Ambassador said that the Georgians have been led to believe that the Turkish government is going to be more positive in the December 8

Tbilisi meeting, although she could not confirm this assessment (Comment: the Georgian Ambassador told the Ambassador on December 5 that Georgiaâ€™s

Embassy in Ankara has reported that the Turkish Foreign Ministry is saying that Turkey is now ready to discuss redistributing its 2007 Shah Deniz gas volumes) . She said that DAS Bryza has suggested that after the December 8 trilateral, it might be useful to have another trilateral meeting on

December 14 in Baku with the inclusion of BP and Statoil, and she asked the

President for his opinion. Aliyev said that â€œwe donâ€™t have time to wait,â€ noting that the winter holidays were fast approaching. He said he approved the proposed December 14 meeting -- trilateral plus BP and Statoil

-- and would be willing for Baku to host it. He added that he had wanted

Baku to host the December 8 meeting, but deferred to the Georgian desire to have it in Tbilisi. He said USG involvement in the December 14 meeting would be useful. He said that the December 8 Tbilisi meeting would be very important as it would â€˜clarifyâ€™ the Turkish position, i.e. whether they were willing to help, and that the December 14 meeting would be similarly important as it would clarify whether BP was willing to help.

BPâ€™s Dangerous Game

----------------------------

Â¶ 8. (C) Aliyev said that BP could deliver more associated gas from the ACG field to Azerbaijan for domestic use, but that it was linking its cooperation in this regard with its desire to extend its Production Sharing

Agreement (PSA) with Azerbaijan to develop ACG deep gas. Aliyev said it was inappropriate for BP to link all of its issues such as PSA extension, ACG deep gas, transportation tariff agreements and others into one bundle; it also was inappropriate for BP to link the solution of those issues to

Azerbaijanâ€™s â€œtemporary troubles.â€ He said that BP was using â€œmild blackmailâ€ and argued that BP must instead act in good faith. Aliyev said that he had instructed his officials to tell BP that if it were not

â€œsupportiveâ€ with ACG associated gas, it would not get its way with PSA extension and ACG deep gas. â€œIf BP wonâ€™t give us more ACG associated gas, I have instructed our officials to tell them no PSA extensions or ACG deep gas,â€ Aliyev underscored. He said that he did not want this to happen, since from an economic viewpoint both the AIOC Consortium and

Azerbaijan would benefit from extending the PSA and for the Consortium being the ones to develop ACG deep gas. But it was not just Azerbaijan, but also Europe and Georgia who had a stake in this issue. Aliyev concluded by saying that if Turkey agreed to redistribute its 2007 Shah Deniz gas that

â€œwould almost be the way out,â€ but that then Azerbaijan would still need BP support in both redistributing this Shah Deniz gas and also in giving Azerbaijan more ACG associated gas.

Â¶ 9. (C) The President also mused that â€œwe could cut the gas supply to

Turkeyâ€ if need be. The Ambassador pointed out that this would be an extreme measure with serious repercussions. She asked Aliyev if he knew the reasons for Turkish truculence concerning gas redistribution. He said he did not, but suspected it could be monetary, i.e. buying gas at USD 120 per mcm and selling it at USD 230. He also

BAKU 00001771 003 OF 003 conjectured that Turkey could be under serious pressure from Russia.

Â¶ 10. ACTION REQUEST: Ambassador will meet with BP Azerbaijan President

Bill Schrader December 8. Departmentâ€™s guidance, particularly information on the message being delivered to BP officials in Washington, is requested.

DERSE

Viewing cable 07BAKU522, AZERBAIJAN ENERGY MINISTER LIKES BP BUT WANTS

MORE



07BAKU522 2007-04-27 13:01 2010-12-15 21:09 CONFIDENTIAL Embassy Baku

VZCZCXRO9501

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DE RUEHKB #0522/01 1171351

ZNY CCCCC ZZH

P 271351Z APR 07

FM AMEMBASSY BAKU




RHMFISS/CDR USEUCOM VAIHINGEN GE



RUEKDIA/DIA WASHDC

RHEHNSC/NSC WASHDC

Friday, 27 April 2007, 13:51


SIPDIS

SIPDIS

EO 12958 DECL: 07/25/2027

TAGS ENRG, PREL, PGOV, AJ

SUBJECT: AZERBAIJAN ENERGY MINISTER LIKES BP BUT WANTS MORE

LEVERAGE

REF: BAKU 463


Â¶ 1. (C) SUMMARY. In an April 18 conversation with the Ambassador, Energy and Industry Minister Natiq Aliyev said that GOAJ would continue its close cooperation with BP, and that in principle the GOAJ supported BP plans for

ACG PSA extension and ACG deep gas. The GOAJ also wants BP as Shah Deniz operator to accelerate Phase Two production and to work with SOCAR to develop other fields. He said that the GOAJ cannot commit gas that

â€œbelongs to BP,â€ and any specific public commitments or comments about future levels of Azerbaijani gas production should be made and supported by both BP and the GOAJ. The GOAJ needs some type of â€œleverâ€ over BP to ensure that it lives up to its production commitments. He suspected BP was purposefully dragging its feet on Shah Deniz Phase Two development due to ambiguity about transit costs and the ultimate market for this gas. END

SUMMARY

Â¶ 2. (C) On April 18 the Ambassador met with Energy and Industry Minister

Natiq Aliyev to discuss future Azerbaijani gas production. EnergyOff was notetaker.

Â¶ 3. (C) The Ambassador told Aliyev that she had talked with President

Aliyev recently on energy matters (reftel). She said that in her April 16 discussion with President Aliyev, he said the GOAJ â€œcannot commit gas that it does not own,â€ and that GOAJ gas production o/a 2012 depends largely on BP as the Shah Deniz consortium operator. She told Energy

Minister Aliyev that DAS Bryza was meeting with Hungarian Prime Minister

Gyurcsany on April 20 to discuss, inter alia, the Nabucco pipeline, amidst

Hungarian concerns that Azerbaijan would not be able to supply sufficient gas to get it started. Prior to this meeting in Budapest, the Ambassador wanted to ensure that the USG knew and accurately reflected the message the

GOAJ wanted to put out concerning its willingness and ability to supply gas for Nabucco, and President Aliyev had suggested she confer with the Energy and Industry Minister.

Â¶ 4. (C) Energy and Industry Minister Aliyev said that he had just met with visiting BP Production and Exploration Head Andy Inglis, whom he told that the GOAJ was ready to accelerate gas production efforts within the EU

Commission framework. Aliyev said the GOAJ wanted to show its desire to participate in commercially viable gas projects, such as TGI, Nabucco, and transiting gas from Kazakhstan and/or Turkmenistan. However, for much if not most of the GOAJâ€™s gas production, â€œwe depend on BP.â€ When the

Ambassador pointed out that there was the possibility that the GOAJ would

â€œlose outâ€ on securing gas contracts with European consumers unless they could reassure them that Azerbaijan was willing and able to supply gas, the Energy Minister stressed that the GOAJ is ready and willing to coordinate and cooperate with European customers, but the GOAJ has no ability to fulfill BPâ€™s obligations. â€œWe canâ€™t answer Europe (re availability of gas) without BP,â€ Aliyev stressed. For this reason, the

GOAJ was unwilling to publicly commit to supply â€œ20 bcm o/a 2012â€ without support from BP. â€œIt would be naive for Azerbaijan to commit 5 to

10 bcm to Nabucco without â€œsome type of leverâ€ over BP, Aliyev said.

Â¶ 5. (C) Aliyev also said that the GOAJ had no power to compel BP to produce gas on schedule, and that BP has no strong obligation to implement the GOAJâ€™s annual production program, which was designed based on BP gas production estimates. He complained that â€œBP has no responsibility for fulfilling production quotas; under the PSA there is no recourse for nonperformance.â€ There had been a delay of â€œthree to four yearsâ€ with

BTC, and with Shah Deniz, Azerbaijan was committed to deliver gas to Turkey in 2006, but hadnâ€™t been able to because of production delays. â€œWe must have strong cooperation with BP,â€ but Aliyev said he didnâ€™t know â€œhow to ensure that BP fulfills its obligations - we canâ€™t punish them or make claims against them.â€ BP provides gas production estimates to the GOAJ, but â€œthese arenâ€™t obligations, and BP can change them anytime.â€

Â¶ 6. (C) Aliyev said that this year BP had projected that Shah Deniz would produce 5.6 bcm, but now they say â€œno more thanâ€ three bcm, â€œwhich means probably around two bcm.â€ â€œIf we had gotten the promised 5.6 bcm, the GOAJ could have provided gas to Georgia this last winter without any problem... and now

BAKU 00000522 002 OF 003 they are saying that there will be a second Shah Deniz well producing in

May, but I donâ€™t believe them.â€ Aliyev did grudgingly admit that offshore deep-sea gas production was â€œdifficult,â€ and that BP was being

â€œcareful - we canâ€™t push them too much.â€

Â¶ 7. (C) The Ambassador agreed with Aliyev that it was a difficult situation, given the GOAJâ€™s strong desire to accelerate production and export gas to Europe. In response to the Ambassador saying that it was important for the GOAJ to state publicly its policy goal regarding

Azerbaijanâ€™s willingness and ability to export this gas to Europe, Aliyev said that he thought that SOCAR and BP should make a joint declaration,

â€œbecause without BP, Azerbaijanâ€™s commitment means nothing.â€ SOCAR and BP should be working together on Shah Deniz and ACG Deep Gas, with BP making production estimates and the GOAJ approving them.

BP AND GOAJ COOPERATION

-----------------------

Â¶ 8. (C) Energy Minister Aliyev said that BP has large proposals for oil and gas projects in Azerbaijan. It has upgraded its estimates of oil reserves at the ACG field from an original estimate of 2.4 billion barrels to 9 billion barrels. As such, BP claims that at the end of the current PSA

(2024), only 60-70 percent of the fieldâ€™s recoverable production could have been extracted, with two billion barrels left in the ground. Aliyev said the GOAJ agrees in principle to extending the PSA, but â€œnow is not

1994,â€ and the terms will change. The GOAJ will calculate to ensure that it preserves its equities.

Â¶ 9. (C) Minister Aliyev said that in general, the GOAJ was willing to cooperate with BP on ACG PSA extension, on ACG Deep Gas, and on accelerating production for Shah Deniz Phase Two (SD2). He also said that the GOAJ was ready to continue cooperating with BP on other SOCAR

exploration blocks. (COMMENT: This statement has not been reflected by public pronouncements from SOCAR, which instead has expressed a desire to increase its control in exploring remaining offshore fields.)

BP RELUCTANT ON SD2?

--------------------

Â¶ 10. (C) Aliyev said that given the high price of gas if nothing else, the

GOAJ should accelerate gas production as much as it could. With SD2 production beginning o/a 2012, overall Shah Deniz production would be 16 to

20 bcm. He said that he thought it unlikely that SD2 production could be accelerated earlier than 2011-2012, although to an extent this depended on capital expenditure levels. He said SD2 development is going to take a lot of capital expenditure, and he thought that BP doesnâ€™t think that there is an existing transportation option for SD2 gas. The existing system delivers only to Erzerum, and the Turkish market is very limited. Before committing to SD2 development, BP needs to see the details of transit/transport and a market for SD2 gas beyond Turkey, i.e. Greece,

Italy, the Balkans. The existing Turkey-Greece pipeline capacity is only three to five bcm, which in BPâ€™s eyes is insufficient. BP doesnâ€™t see a delivery system for SD2 gas and doesnâ€™t see terms and conditions of transit. Nabucco is a project on paper only at this point, and overall there are â€œtoo many unknownsâ€ relating to export of SD2 gas to make a commercial decision. As such, Aliyev said he thought BP is seeking to delay decisions on SD2 development until more factors, such as commercial transit fees, were known.

SD2 MARKETING

-------------

Â¶ 11. (C) In response to the Ambassadorâ€™s question about SD2 marketing,

Aliyev said that he thinks this issue would be solved between Statoil and

SOCAR, because â€œit is not easy to be a seller, and Statoil has experience

- if SOCAR wants to sell, first they have to learn how.â€ He thought that

SOCAR was currently not ready to market SD2 gas, but that â€œthere was timeâ€ for them to learn. Aliyev went on to say that it was â€œtoo earlyâ€ to worry about SD2 marketing. He mused that perhaps there could be a â€œrotation systemâ€ for SD2 gas sales, with the marketer changing among

SD Consortium partners every two years.

BAKU 00000522 003 OF 003

Â¶ 12. (C) When the Ambassador tried clarifying with the Energy Minister what the USG and GOAJ can say publicly about future Azerbaijani gas exports, Aliyev said that one could say (as did the President recently) that exploration has shown that SD has 1.2 trillion cubic meters of recoverable reserves, and that Azerbaijan is committed to providing as much gas as possible as soon as possible to Europe (Baku-based energy insiders were puzzled by President Aliyevâ€™s recent statement on SD capacity, as it exceeded current SD recoverable reserve estimates). The GOAJ does not want to prematurely commit itself, but SD2 production will allow exports through

Turkey. What is possible now are statements of political intent, which the

GOAJ has made and is making, Aliyev said; BP should also publicly â€œsign onâ€ to these expressions of intent.

Â¶ 13. (C) In response to the Ambassadorâ€™s comment that the GOAJ needs to send a clear and strong signal to Europe that Azerbaijanâ€™s will and intention are strong, Aliyev said that Shah Deniz production combined with other GOAJ gas production, to include new discoveries, is enough to supply gas to Europe, without gas from Kazakhstan or Turkmenistan. But BP as operator must commit to this goal too. For its part, the GOAJ is willing to move forward with BP on ACG Deep Gas, on accelerating SD2 production, and

on exploring other GOAJ options. But BP programs and commitments must be approved and controlled â€œon a high levelâ€ by BP and the GOAJ together.

Aliyev said that it was in the strategic interest of the GOAJ to deliver gas to Europe, and that in this regard there had to be strong cooperation among SOCAR, BP and the GOAJ. BP Production and Exploration Head Andy

Inglis would be returning to Azerbaijan in June to continue discussions with SOCAR on a range of issues, to include PSA extension, accelerated SD production, and ACG Deep Gas. The Energy Ministry was not involved with BP-

SOCAR negotiations.

NEED FOR TRANSIT REGIME

----------------------

Â¶ 14. (C) Aliyev said that before making any decisions about gas sales, all parties involved must know the relevant information about delivery through

Turkey, to include Turkish transit information, so that all involved costs are known. The Ambassador pointed out that time was a factor, as European customers had to make decisions soon for long-term gas contracts. Aliyev said that the President has not yet authorized transit talks with Turkey

(COMMENT: We are following up with the GOAJ on their desired timeline for transit talks with Turkey). He asked that the USG to â€œpush the Turksâ€ towards beginning transit talks with Azerbaijan. As a first step, the

Minister said that BP has to forward a letter to the President about terms and conditions that need to be negotiated, saying that an Intergovernmental

Agreement with Turkey is needed.

Â¶ 15. (C) COMMENT: The Energy Minister strongly underscored the GOAJ position that Azerbaijan is ready to provide as much gas possible as soon as possible to Europe, and repeated the GOAJ talking point heard from SOCAR and President Aliyev that statements about specific volumes of future gas production must be made in conjunction with BP. Embassy will follow up with

BP to ascertain concerning the status and nature of its discussions with

SOCAR and the GOAJ. END COMMENT. DERSE

Viewing cable 07BAKU855, AZERBAIJANâ€™S RITICAL ENERGY INFRASTRUCTURE


Reference

ID


07BAKU855

2007-07-09

12:12

2010-12-15

21:09

VZCZCXRO6754

PP RUEHDBU

DE RUEHKB #0855/01 1901241

ZNY SSSSS ZZH

P 091241Z JUL 07

FM AMEMBASSY BAKU


SECRET//NOFORN

Embassy

Baku



RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY


RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY




RUEHDIR/IRAN RPO DUBAI PRIORITY



RUEHNO/USMISSION USNATO PRIORITY 0633

RUEHVEN/USMISSION USOSCE PRIORITY 0610

Monday, 09 July 2007, 12:41

S E C R E T SECTION 01 OF 04 BAKU 000855

SIPDIS

SIPDS

NOFORN

DEPT FOR EUR/CARC, PM AND S/CT

EO 12958 DECL: 07/05/2017

TAGS ENRG, EPET, PTER MARR, MASS, PBTS, IR, AJ

SUBJECT: AZERBAIJANâ€™S RITICAL ENERGY INFRASTRUCTURE

VULNERABLE TO TERRRISM

BAKU 00000855 001.2 OF 004

Classified By: Charge dâ€™Affaires Donald Lu per 1.4 (b,d).

Â¶ 1. (C) Summary: Senior BP officils believe that the Sangachal energy terminal and offshore platforms are vulnerable to terrorism. As BP

Azerbaijan President Bill Schrader routinely tells U.S. officials, â€œall it would take is one guy with a mortar or six guys in a boatâ€ to wreak havoc in Azerbaijanâ€™s critical energy infrastructure. Although Azerbaijan has a system and plans in place to deal with security threats at its on- and offshore installations, the GOAJâ€™s plans are hampered by a lack of resources, a lack of coordination among GOAJ agencies, and a fundamental lack of recognition of the vulnerabilities. The GOAJ is eager for U.S. views on this topic and plans to present its own assessment of critical energy infrastructure security needs at the July 9-10 bilateral security consultations. We strongly recommend that the Department explore options to help Azerbaijan better assess these vulnerabilities, in line with the NATO

Riga Summit declaration on energy security. End summary.

BPâ€™S Views on the Vulnerabilities

---------------------------------

Â¶ 2. (C) BP, the operator for the Azerbaijan International Operating

Company and associated Baku-Tbilisi-Ceyhan Oil Export Pipeline, believes that the Sangachal terminal and Azerbaijanâ€™s off-shore platforms are vulnerable to terrorism. As BP Azerbaijan President Bill Schrader has told

U.S. officials in private conversations, â€œall it would take is one guy with a mortar or six guys in a boatâ€ to wreak havoc in Azerbaijanâ€™s critical energy infrastructure. The Sangachal terminal, a sprawling 800hectare site roughly 45 km south of Baku, is one of the worldâ€™s largest integrated oil and gas terminals, and according to Schrader, the most vulnerable energy installation in Azerbaijan. The terminal -- easily accessible from Azerbaijanâ€™s main north-south highway -- is still expanding and lacks a hard perimeter in the areas under construction. This, coupled with a large volume of trucks and personnel related to the construction and operations make access control and segregation inside the facility a challenge. Schrader said that an attack on the terminal, rather than the pipelines themselves, is his primary security concern, due to the catastrophic nature of the consequences.

Â¶ 3. (C) BP also believes that the off-shore platforms are vulnerable to attack. As Schrader has repeatedly told U.S. officials, â€œall it takes is six guys hijacking a ship and ramming it into a platform to bring production to a halt for months if not years.â€ Although commercial and military radars exist to give advance notice of an attack against an offshore production platform, there is no GOAJ or BP means of deterring such an attack. Discussions within the Azerbaijani Navy seem to be focused on pipeline vice platform security. The Navy leadership is focused on solutions to protect the sub-sea pipeline from terrorist attacks and underwater mining. GOAJ response capacity is hampered by a lack of resources and a lack of coordination between the Navy and the Coast Guard, the two GOAJ entities with primary responsibility for protecting the offshore installations.

THE GOAJ SECURITY PLAN

----------------------

Â¶ 4. (SBU) Coordination of security and contingency planning responsibility rests with the State Committee to Protect Pipelines, headed by the Prime

Minister. The commission includes Representatives from various government entities including the Special State Protection Service (SSPS), Ministry of

Defense (MOD) and Ministry of Emergency Situations (MES). The commission has had an emergency action/contingency plan in place since 2002, when it was created with the help of experts from the USG and from private industry. (Note: In December 2002 a pipeline and structures security seminar was held in Baku and included representatives from S/CT, DS ATA,

EUCOM, and private

BAKU 00000855 002.2 OF 004 industry.) The commission holds tabletop exercises/trainings to drill and evaluate their plan on average every six months. The most recent exercises were held in November 2006 and February 2007.

Â¶ 5. (SBU) Responsibility for security at critical energy infrastructure sites is divided by location. Onshore pipelines and associated structures such as the Sangachal Terminal and BTC pumping stations are the responsibility of the SSPS, which is also responsible for the security of the president of Azerbaijan and high-ranking government officials. Offshore structures and pipelines are the responsibility of the Azerbaijani Navy and

Coast Guard.

Onshore Facilities

------------------

Â¶ 6. (SBU) Along with the pipeline operators, SSPS is responsible for ensuring the security of the various pipelines in Azerbaijan, to include the Baku-Tbilisi-Ceyhan (BTC), Western, and Novorossiysk (northern) oil pipelines, as well as the South Caucasus (SCP) gas pipeline and associated structures such as the Sangachal terminal.

Â¶ 7. (SBU) The Sangachal Terminal is located approximately three kilometers from the Caspian coast on a broad valley floor encompassing an estimated

800 hectares of land. The terminal continues to expand as new production platforms come on-line, and will eventually occupy most of the allotted land. Sangachal currently is the primary collection and redistribution point for most of the oil and gas produced off-shore, which accounts for most of Azerbaijani production. All of the major oil and gas pipelines originate in the Sangachal Terminal or the immediate area, making it the single most important structure for the movement and production of oil and gas exports. (The GOAJ and Azersun Holdings have plans to develop a second oil terminal with an initial capacity of 10 million tons at Garadagh, close to Baku. The GOAJ may also develop new commercial port facilities in the same area.)

Â¶ 8. (SBU) The BTC pipeline begins at the Sangachal Terminal and extends through central Azerbaijan, across Georgia and Turkey, to the port of

Ceyhan. The Azerbaijani portion of the BTC is approximately 450 kilometers long and includes the Sangachal Terminal and associated pump stations.

Â¶ 9. (SBU) The Western or Supsa pipeline is a Soviet era line that is approximately 460 kilometers long in Azerbaijan and continues on in Georgia to the port of Supsa. The line is parallel to the BTC line for most of its route in Azerbaijan. The SCP gas pipeline generally parallels the BTC to its terminus in Erzurum, forming an energy corridor from Sangachal to the

Georgian border.

Â¶ 10. (SBU) The Novorossiysk or northern pipeline runs parallel to the

Caspian coastline up to the Russian border and is approximately 240 kilometers long. This pipeline is estimated to move approximately two million tons of oil a year versus the 30-35 million being transported with the BTC.

Â¶ 11. (SBU) Azerbaijan moves a small percentage of its oil, currently as much as 140,000 tons a month at peak use, by rail. This amount is expected to increase significantly as the flow of Caspian oil from Kazakhstan and to a lesser extent Turkmenistan increases as expected. The rail lines originate in the Sangachal area at rail on-load terminals and are transported over existing mixed use rail lines to Georgia. Responsibility for the security of rail transport is believed to lie mainly with the railroad authority.

SSPS

----

Â¶ 12. (SBU) SSPS is the prime protector of onshore energy infrastructure and has invested considerable resources to

BAKU 00000855 003.2 OF 004 ensure the protection of critical structures. SSPS has a annual budget of approximately USD 10 million and over 800 personnel dedicated to pipeline security. Investment by SSPS in training and equipment is expanding each year. Recent investments include the fielding of a Motorola TETRA communications system on the BTC and Novorossiysk corridors as well as the purchase of two helicopters and an additional 20 patrol vehicles. SSPS has nine regional branches to cover the two main pipeline routes

(BTC/Western/Erzurum) and Novorossiysk. SSPS is also opening a new 200

hectare training facility near Baku which should give it greater capacity to conduct the training of pipeline protection personnel which average three months of training prior to deployment depending on ability and prior experience. The BTC and SCP pipelines themselves are equipped with stateof-the-art electronic monitoring devices which can detect minute changes in flow pressure associated with hot or cold taps or with losses of pipeline integrity.

Â¶ 13. (SBU) SSPS works closely with the BTC operators (primarily BP) to ensure pipeline security. The routine patrol coverage of the BTC segments located in Azerbaijan has been favorably commented on by BP and by SSPS, who feel that the overlapping of SSPS, BP maintenance patrols and local line minders was working well. SSPS is expanding its vehicle fleet for pipeline protection operations to 100 vehicles and will increase its horsemounted patrol, used for the most rugged and remote parts of the pipeline, from 30 to 100 in the coming year. SSPS is proud of its record of low or no theft of product in the Azerbaijani segments, as compared to the line tapping problems in Georgia and Turkey, and lack of criminal and/or terrorist activity along the Azerbaijani sections of the pipelines.

Â¶ 14. (C) As noted above, the Sangachal Terminal presents some serious concerns. BP and SSPS work cooperatively to manage access to the facility, with SSPS manning a primary checkpoint on the spur off the main highway at the entry to the terminal area and BP controlling movement within the structure. The terminal is guarded by an SSPS detachment which patrols the perimeter on a 24 hour basis and has a 25 man armed react team on standby.

The area is fenced and has CCTV coverage monitored by SSPS and BP. SSPS also has an elevated observation point located on an adjacent mesa, capable of monitoring the entire valley in which the Sangachal facility is located.

According to SSPS, the Ministry of Defense has anti-aircraft capability and is responsible for the air defense of the area. Both BP and SSPS report that a number of physical security improvements are planned or underway for the facility to improve the control of vehicles and personnel both on entry to the terminal and within.

Â¶ 15. (SBU) SSPS recently conducted joint contingency training exercises in each of its regional areas with pipeline security elements from the regional offices for the Ministry of National Security (MNS) and the

Ministry of Interior (MIA), as well as BP and the local regional administrations through which the pipeline passes.

Offshore Facilities

-------------------

Â¶ 16. (C) Protection of offshore energy infrastructure facilities is the responsibility of the Azerbaijani Navy and Coast Guard, although there is no clear delineation of responsibilities between the two. Many security and industry sources state that the Navy and Coast Guard take seriously their responsibilities to protect the production platforms and undersea pipelines, but lack resources. The navy maintains a patrol ship on alert on

Jiloy Island, but appears to lack the capability to place a vessel continuously on station near the primary production platforms and as such would be unable to prevent or respond quickly to an event on a platform.

The Navy currently has radar coverage in the platform areas that is planned to be enhanced by a feed from

BAKU 00000855 004.2 OF 004 the BP collision avoidance radars. The USG is currently assisting in the refurbishment of five Azerbaijani Coast Guard vessels and upgrades of radars and navigation/communications equipment on five Azerbaijani Navy vessels, which should be completed by next summer and which could increase

the GOAJâ€™s response capacity, although communication/coordination issues will remain. delimitation and

Â¶ 17. (SBU) The USG has trained and equipped an Azerbaijani naval commando unit and continues to hone its skills with follow-on exchanges twice a year. This commando unit has the capability to respond to the platforms with rigid hulled inflatable boats (RHIBS) provided by the USG, but the lack of a mobile platform from which to launch them at or near the platforms severely limits their abilities to respond quickly to an emerging incident. BP maintains a 500 meter restricted zone around the offshore platforms, but if a violator moves into this area the only planned response is to shut down the platform. Currently the only regular patrol near the platforms is the standby boat operated by BP.

Â¶ 18. (SBU) The head of the SSPS, General Akhundov, outlined what he saw as the problem by contrasting the situation in the Caspian with what he saw on a trip last year to Norway. In Norway he saw a Norwegian navy vessel on active patrol around a group of platforms 150 kilometers from shore, and wondered why Azerbaijan could not do the same with the Chirag, Central

Azeri, and East and West Azeri platforms. He also expressed concern about the pipelines as they neared the shore at Sangachal. The waters are extremely shallow for the first several kilometers, perhaps as little as five meters. The shallow water coupled with a number of fishing vessels make effective patrol and protection by the coast guard and navy difficult as the lines are readily accessible.

COMMENT

-------

Â¶ 19. (S/NF) The vulnerabilities of Azerbaijanâ€™s critical energy infrastructure -- particularly at the Sangachal energy terminal and the offshore platforms -- are made more acute by Azerbaijanâ€™s location next to Iran and the small, but growing number of indigenous extremist groups with ties to transnational terrorists. Although the January arrest of the

â€œMahdi Armyâ€ which had been working under Iranian instructions to provide information on Azerbaijanâ€™s critical energy infrastructure highlighted some of these issues, we, like BP, believe that the Government of Azerbaijan does not fully recognize the vulnerabilities in its current energy infrastructure security arrangements. We also are concerned by the lack of clear delineation of responsibility for protection of offshore facilities. Deputy Foreign Minister Araz Azimov plans to present a briefing on Azerbaijanâ€™s energy infrastructure security needs at the July 9-10 bilateral security consultations. We view this briefing as an opportunity to begin a dialogue with the GOAJ on this vitally important subject, and strongly urge the Department to explore options to help Azerbaijan better assess these vulnerabilities, in line with the NATO Riga Summit declaration on energy security. LU

Viewing cable 07BAKU1227, PRESIDENT ALIYEV ON ENERGY ISSUES IN ADVANCE

OF



07BAKU1227 2007-10-09 2010-12-15 CONFIDENTIAL Embassy

14:02 21:09 Baku

VZCZCXRO4526

OO RUEHAG RUEHDBU RUEHROV

DE RUEHKB #1227/01 2821414

ZNY CCCCC ZZH

O 091414Z OCT 07

FM AMEMBASSY BAKU

TO RUEHVL/AMEMBASSY VILNIUS IMMEDIATE 0022

RUEHC/SECSTATE WASHDC IMMEDIATE 4019








Tuesday, 09 October 2007, 14:14


SIPDIS

SIPDIS

VILNIUS PLEASE PASS TO MATT BRYZA

EO 12958 DECL: 10/09/2017

TAGS ENRG, PREL, PGOV, RS, TU, UP, KZ, PL, GG, LH, TX, AJ

SUBJECT: PRESIDENT ALIYEV ON ENERGY ISSUES IN ADVANCE OF

THE VILNIUS ENERGY SUMMIT

REF: A. (A) BAKU 1224 B. (B) TBILISI 2498

Classified By: Ambassador Anne E. Derse. Reason: 1.4 (B)(D)

Â¶ 1. (C) SUMMARY: In a one-hour one-on-one meeting with the Ambassador on

October 8, President Aliyev outlined with frustration current problems on energy in advance of the Vilnius Summit. British Petroleum (BP) is

â€œstealing our oil,â€ he asserted sharply, seeking to put pressure on

Azerbaijan to delay to 2010 the advent of an 80/20 profit split due next year under the Azeri Chirag Guneshli (ACG) Production Sharing Agreement

(PSA) by threatening to cut back on gas it provides to the GOAJ from the

ACG field from 3 bcm to 1.4 bcm. â€œOnly Georgia will sufferâ€ if BP continues down this path, he warned, noting Azerbaijanâ€™s commitment, otherwise, to help Georgia on gas this winter. He said the Georgian PM had promised him to enlist Washingtonâ€™s help with BP. He said BP had asked for time, until October 19, to resume talks. If a good response is not found, Azerbaijan â€œwill make public that BP is stealing our oil,â€

Aliyev stated. Similarly, he said, Turkeyâ€™s 15 percent netback pricing

scheme for gas transit is â€œunacceptableâ€ as it would require Azerbaijan to disclose to Turkey sales agreements with customers in Europe and allow

Turkey to sell 15 percent of Azerbaijanâ€™s gas to European markets. A transit agreement is â€œnot so urgent for us that we will accept unjustified conditions from Turkey.â€

Â¶ 2. (C) Summary Continued: Azerbaijan has an MOU with Greece, will soon launch talks with Italy, and will not allow Turkey to â€œblock the

Azerbaijan-Europe partnership.â€ He said Turkmenistan seems to want the trans-Caspian option to be implemented but â€œto hide it from Russia.â€

Azerbaijan has shown â€œmaximum constructivenessâ€ -- offering its infrastructure to Turkmenistan and pledging to serve as purely a transit country -- but Azerbaijan will not initiate next steps with Turkmenistan --

â€œWe cannot want it more than they do.â€ Azerbaijan does support the

Odessa-Brody-Plotsk oil pipeline for political reasons (â€œUkraine, Poland,

Georgia are friends to us.â€) and will present a concrete plan on next steps at a meeting in Vilnius with Ukraine, Poland, Lithuania, and Georgia with the aim of making the project commercially feasible. Aliyev asked that the U.S. try to deliver the message on the unacceptability of the 15 percent netback pricing proposal to Turkey. He continues to support

Nazarbayevâ€™s idea of a 3-way summit between Kazakhstan, Azerbaijan and

Turkmenistan as a good signal and a way to strengthen 3-way relations, but will not initiate the meeting. End Summary.

Georgian Winter Gas

-------------------

Â¶ 3. (C) President Aliyev opened the discussion on energy by saying that

Azerbaijan will help Georgia this winter as it has in the past. He said he confirmed this to the visiting Georgian PM during his September 27 visit to

Baku. The GOAJ, however, is having some difficulties with BP, he said.

Because the GOAJ halted negotiations on PSA extension and Shah Deniz development, BP is now â€œtrying to put political pressure on us by cutting back on gas it is giving to Azerbaijan, from 3 bcm to 1.4 bcm.â€ But

â€œonly Georgia will sufferâ€ from this step because the Shah Deniz gas they will receive from Azerbaijan will not be enough. â€œIf BP reduces the gas it is giving Azerbaijan, Georgia will get less.â€ The Georgian PM,

Aliyev said, had told him he is aware of this danger, and had said he would talk to Washington to â€œget them to help us.â€ (See Ref. A for background on Azerbaijan-BP negotiations.)

Â¶ 4. (C) Aliyev continued that â€œthese things are inter-connected. If BP is supportive and helpful, there will be no problem supplying Georgia.â€

But the situation with BP is â€œunpleasant -- they are cheating us on the

PSA profit split according to our calculations.â€ The GOAJ believes that the profit split should have changed in the second quarter of this year.

â€œThey are stealing our oil -- they are unilaterally changing the formula on the ROR (rate of return) so the profit split will take place in 2010.

SOCAR spoke to (BP Azerbaijan head) Bill Schrader. BP asked for time, until

October 19, to come back to discussions.â€

BAKU 00001227 002 OF 003

(Comment: BP Azerbaijan on October 9 had no news of an impending visit by

BP CEO, per Ref. B. End comment.) If there is not a good response,

â€œweâ€™ll make public that BP is stealing our oil . . . oil that belongs to Azerbaijan, because BP wants the 80/20 profit split that should occur next year to be pushed to 2010.â€ The Georgian situation, Aliyev repeated,

â€œis connected to that.â€

Turkey Transit Agreement

------------------------

Â¶ 5. (C) Aliyev said that Azerbaijan rejects the Turksâ€™ 15 percent netback proposal. The Turkish formula would require Azerbaijan to disclose to the GOT its commercial agreements with Greece, Italy, and other European countries -- â€œanywhere our gas goes.â€ The netback pricing proposal is

â€œnot acceptable -- it does not exist in any other transit agreement. We would lose money and Turkey could sell 15 percent of our oil to our markets. This is not fair. Weâ€™ll pay an agreed transit tariff. We want to do it on the basis of best international practice. Our position with Turkey is pretty strong. If they block an agreement, they are responsible. The

Minister always says Turkey will do the necessary, but then does nothing.

We will not accept pressure.â€

Â¶ 6. (C) Aliyev noted that it is Turkey and European consumers who need the transit agreement. â€œIt is not so urgent for us that we will agree to unjustified conditions with Turkey.â€ Azerbaijan has existing and adequate markets for its gas in Georgia and Turkey, he noted. Aliyev asked that the

U.S. â€œdeliver (to Turkey) if it can, this message. Turkey wants to get everything.â€ Turkey does not understand that Azerbaijan has signed an MOU with Greece and will soon start negotiations with Italy. â€œTurkey cannot block the Azerbaijan-Europe partnership.â€ Aliyev said Finance Minister

Samir Sharifovâ€™s proposal for USTDA technical assistance to review best international practice in transit agreements was a good one. Azerbaijan wants the transit agreement with Turkey to be based on best international practice, not to â€œinvent something new.â€ He encouraged the U.S. to consider the technical assistance.

Turkmenistan and Trans-Caspian Gas

----------------------------------

Â¶ 7. (C) Aliyev pointed to Turkmen President Berdimuhamedovâ€™s statement that he would â€œsell gas to Europe at Turkmenistanâ€™s border,â€ adding, however, that he had failed to specify which border he was referring to -- that with Russia, Iran, or the Caspian Sea? Aliyev said it was his sense that Turkmenistan wants the trans-Caspian option to be implemented but

â€œwants to hide it from Russia.â€ Azerbaijan, he said, has shown

â€œmaximum constructiveness -- we offered all our infrastructure; we said weâ€™d be a purely transit country, not do like Turkey is trying to do. But we will not be more interested than they. I will not initiate a meeting with Berdimuhamedov -- it is not right to do.â€ Azerbaijan, he repeated,

â€œwill not initiate discussions with Turkmenistan because we do not need its gas -- we cannot be seen to want it (the trans-Caspian option) more than they do.â€

Odessa-Brody-Plotsk

-------------------

Â¶ 8. (C) Azerbaijan has finalized its energy plan, Aliyev said. Azerbaijan supported the Krakow Summit and the proposed Odessa-Brody-Plotsk oil pipeline â€œeven though the project is seen as anti-Russianâ€ because

Ukraine, Poland and Georgia are friendly to Azerbaijan. Aliyev said that the key is for Odessa-Brody-Plotsk to be â€œcommercially feasible.â€ For this reason, he had asked Energy Minister Natiq Aliyev to prepare a concrete proposal for discussion in Vilnius. This will include

Azerbaijanâ€™s joining as a shareholder in the Sarmitia pipeline, and the launch of a feasibility study. In addition, a joint trading company for

Black Sea oil will be created. With Supsa and Novorossisk, there is a great deal of Black Sea oil available, Aliyev said. The key, he repeated, is to make the Odessa-Brody-Plotsk project commercially feasible. Azerbaijan supports it â€œmore to show political support than any urgent needâ€ economically.

BAKU 00001227 003 OF 003

Three-way Summit

----------------

Â¶ 9. (C) Aliyev said that Lithuanian PM Adamkus had told him in Vilnius last month that Kazakhstan would not attend the Vilnius Summit. He said, again with some frustration, that the idea of a 3-way Azerbaijan-

Turkmenistan-Kazakhstan summit was Nazarbayevâ€™s idea, but there has been no further progress on taking it forward to his knowledge. With the clear implication that Kazakhstan should take its idea forward, Aliyev said he still believes such a trilateral meeting â€œwould send a good signal, strengthening our relations and could be a positive thing.â€

Â¶ 10. (C) Comment: Aliyev was clearly frustrated and uncharacteristically sharp in discussing Turkey, Turkmenistan and especially BP, and disappointed with what he sees as Kazakhstanâ€™s equivocation. He repeated throughout the conversation that Azerbaijanâ€™s interest in delivering gas to Europe is strategic, driven by Azerbaijanâ€™s desire for a deeper partnership with Europe. He also underscored, in a clear reference to

Russia, that Azerbaijan â€œcannot be seenâ€ to be more in the lead than others in the region on gas issues. It will be important to reassure Aliyev in Vilnius of the USGâ€™s commitment to the southern corridor and to working closely with Azerbaijan to realize it, and to encourage him to find a productive way forward, in practical terms, with Turkey, Turkmenistan and

BP. Septel will provide further insights from both BP and SOCAR on both the state of GOAJ-AIOC negotiations and Azerbaijanâ€™s ability to provide gas to Georgia this winter. End comment.

DERSE

Viewing cable 08BAKU671, AZERBAIJAN SCENESETTER FOR JULY 14 VISIT OF




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Friday, 11 July 2008, 09:30


ANKARA OR ISTANBUL - PLS PASS TO SE GRAY

EO 12958 DECL: 07/13/2018

TAGS PGOV, PREL, AJ, ENRG, TU

SUBJECT: AZERBAIJAN SCENESETTER FOR JULY 14 VISIT OF

SPECIAL ENVOY C. BOYDEN GRAY

REF: A. A) BAKU 494 B. B) ASHBABAT 817 C. C) ANKARA 1172

Classified By: Ambassador Anne E. Derse, reasons 1.4 (b,d)

Â¶ 1. (C) Your second visit to Baku comes on the heels of your early June participation in the Fifteenth Annual Caspian Oil and Gas Exhibition and

Conference (ref A), and your subsequent early July letter to President

Aliyev providing input for next steps we can take together to pursue joint

USG-GOAJ energy goals of a viable gas transit regime through Turkey, enhanced GOAJ-GOTX energy cooperation, and effective EU outreach to

Azerbaijan. The GOAJ is pleased with the increased USG engagement on energy. We have heard that President Aliyev was very pleased with the congratulatory letter from President Bush that you read during the opening

COGS ceremony. SOCAR Vice-President Elshad Nassirov, a key energy advisor to President Aliyev with whom you will meet in the absence of SOCAR

President Rovnag Abullayev, relayed Azerbaijanâ€™s enthusiasm about the

â€œnext stepsâ€ letter you sent to President Aliyev, and is working with the President to discuss it with you.

TURKEY

---------

Â¶ 2. (C) President Aliyev will be very interested in your just completed visit to Turkey. As you are aware, Azerbaijanâ€™s desire to conclude sales and purchase agreements for Shah Deniz Phase Two (SD2) gas with European customers has been held up for over a year by an inability to secure gas transit through Turkey. Solving transit for SD2 gas through Turkey is also linked both to selling volumes of SD2 gas to Turkey, and to renegotiations for the price of Shah Deniz Phase One gas currently being sold to Turkey.

Turkey has said it seeks â€œallâ€ of SD2â€™s approximately 13 billion cubic meters annually (bcm/a) for its domestic needs, but will settle for 8 bcm/a. However, Azerbaijan wishes to sell it no more than 4 bcm/a so that 6 bcm/a of SD2 gas remains to sell to Europe, enough to sanction one pipeline project (SOCAR assumes that 3 bcm/a of SD2 will go for domestic use and/or

Georgia).

Â¶ 3. (C) The Shah Deniz Consortiumâ€™s commercial negotiations with the three pipeline projects competing for SD2 gas (TAP, Nabucco TGI) are at a standstill until transit through Turkey is solved, and the GOAJ continues a policy of seeking to persuade intermediaries such as the EU, USG and various commercial companies vying for SD2 gas to put pressure on Turkey to provide commercially viable transit. In this regard, Azerbaijan seeks to

persuade Turkey that â€œAzerbaijan has optionsâ€ for SD2 gas that donâ€™t require transit through Turkey, to include Russia, Iran, and a â€œNabucco without Turkeyâ€ option that re-routes Nabucco from Georgia across the

Black Sea to Bulgaria.

TURKMENISTAN

----------------------

Â¶ 4. (C) Although bilateral relations between the two countries have improved significantly due to Azerbaijanâ€™s diplomatic outreach to

President Berdimuhamedov since the latterâ€™s accession, currently joint cooperation over offshore energy development seems dependent upon resolving the status of the offshore Serder-Kyapaz field. The GOTX seeks GOAJ acknowledgement of full Turkmen ownership of this field in exchange for the

GOTX dropping its claims on the ACG field. Given such acknowledgement, the

GOTX would be willing to ship S-K production through Azerbaijan. However,

Azerbaijan seeks at least minority S-K ownership, while repeating its assertion that any discussion of ACG status is â€œoff the table.â€

Â¶ 5. (C) There is ongoing cooperation between the two countries in preparation for an early September joint Energy Exhibition and Conference focusing on joint reserves to be held in Baku. This is a seminal event in growing Azerbaijan-Turkmen relations, and we will want to be as supportive as possible. In this regard, SOCAR has asked whom from the US Government should be invited to this joint exhibition and conference, asking if it would be possible for Secretary Rice to come. SOCAR has also asked for USG input as to what US-based organizations should be invited to this joint

GOAJ-GOTX September conference (mentioning OPIC as one possibility).

EU

---

Â¶ 6. (C) SOCAR has expressed concerns about European Commission

(EC)proposals it has indirectly heard about, to include EC attempts to link gas transit through Turkey with energy sector development in Turkmenistan

(ref C - â€œCaspian Development Corporation.â€ SD Consortium member

StatoilHydro also expressed grave misgivings about such reftel plans during a July 10 meeting with Ambassador Derse-septel.) On another matter, SOCAR

(along with SD Consortium member StatoilHydro) have expressed a â€œlevel of comfortâ€ with EU verbal assurances to allow joint marketing of SD2 gas into Europe, so while they would also welcome a written guarantee, they donâ€™t deem it essential.

TRANSIT OF KAZAKH OIL

----------------------

Â¶ 7. (C) Much as a transparent and commercially viable gas transit regime through Turkey is essential to attract both Azerbaijan and eastern Caspian gas westwards, so too is a transparent and commercially viable oil transit arrangement through Azerbaijan essential to attract TengizChevroil (TCO) and expected Kashagan volumes. Azerbaijan needs to be reminded that North

Caspian shippers seek secure, safe, predictable and transparent long-term arrangements for transit of oil through Azerbaijan before they can commit to shipping volumes westwards, and that they too have â€œother options.â€

BP-GOAJ RELATIONS

-----------------

Â¶ 8. (C) Finally, you should be aware of the current status of negotiations between the AIOC Consortium headed by BP (responsible for the ACG field, which provides the bulk of GOAJ income) and the GOAJ. The Consortium is seeking extension of the current Production Sharing Agreement (PSA) so that

it can make the necessary investments to increase oil recovery from this mega-field. It also seeks the rights to develop â€œACG Deep Gas,â€ which is a major source of undeveloped gas lying under the area currently being developed by the AIOC Consortium. However, there has been no progress on these issues for a while, as the GOAJ is unwilling to discuss them until it resolves the following issues with AIOC:

- Zero Balance Date (ZBD): Under the current BTC PSA, after the BTC

Consortium loses ownership of the pipeline in 2026, the Consortium members still reserve the rights to ship their oil at a discount through the pipeline. Additionally, SOCAR is sorely grieved by a PSA clause which decreases GOAJ ownership of the BTC pipeline after ZBD as Northern Caspian

(Kazakh) crude volumes through BTC increase. SOCAR wants full ownership of

BTC after ZBD, with the right to charge whatever tariffs it wishes.

- Total Transportation Costs (TTC): In the current PSA there is a link between the cost of transportation and the split of profit oil, which can swing the profit split at most five percent. TTC calculations stretched out until 2016 make a significant potential difference in revenue split, and

SOCAR wants to revisit this issue. SOCAR President Rovnaq Abdullayev has been emboldened by his success in handling of the â€œrate of returnâ€ dispute, which dealt with the timing of when the various shifts in splitting profit oil were to occur. XXXXXXXXXXXX

- Baku-Supsa: The Baku-Supsa pipeline, with a capacity of 100 to 150 thousand barrels a day, is currently under AIOC Consortium ownership and control, but SOCAR and the GOAJ want it for themselves so that they can set tariffs and ship volumes as they see fit. DERSE

Viewing cable 08BAKU790, AZERBAIJANI PRESIDENT: I DIDNâ€™T STAND BEHIND




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Friday, 22 August 2008, 04:03


SIPDIS

EO 12958 DECL: 08/21/2009

TAGS ENRG, ETRD, PREL, AJ, RU, TR

SUBJECT: AZERBAIJANI PRESIDENT: I DIDNâ€™T STAND BEHIND

SAAKASHVILI BECAUSE IT WOULD HAVE MADE NO DIFFERENCE

REF: ANKARA 1474

Classified By: Charge Donald Lu, for reasons 1.4 (b,d).

Â¶ 1. (C) SUMMARY: On August 19, President Aliyev told visiting British

Petroleum CEO Inglis that Azerbaijan is taking quiet steps to support

Georgia, although Aliyev himself did not publicly support the Georgian

President. For example, Azerbaijanis are repairing a critical rail bridge destroyed by the Russians. Aliyev reconfirmed his western orientation for oil and gas exports, although he acknowledged that he would sell some gas to Russia and oil to Iran. Aliyev stressed that gas sales to Russia would be limited, maybe 2 bcm, and that the purpose would be to pressure Turkey to conclude gas transit talks; oil sales to Iran are a result of current pipeline constraints. Aliyev said that during the crisis he phoned Moscow to warn them against attacking Azeri interests in Georgia, including pipelines, the ethnic Azeri community and the Azeri-owned oil terminal at

Kulevi. END SUMMARY.

Â¶ 2. (C) On August 20, British Petroleumâ€™s Chief Executive Officer for

Exploration and Production Andrew Inglis briefed the Charge on his one-hour one-on-one meeting with President Ilham Aliyev on the evening of August 19.

Inglis was to meet Aliyev on August 20, but the President asked to see

Inglis early before the Presidentâ€™s meeting with visiting Turkish PM

Erdogan. Inglis said that the President appeared â€œrelaxed, convivial and warm.â€

PRESIDENTâ€™S REACTION TO GEORGIA CRISIS

--------------------------------------

Â¶ 3. (C) The President told Inglis, â€œI didnâ€™t rush to stand behind

Saakashvili because it would have made no difference.â€ The President quickly added that Azerbaijan is quietly finding ways to support Georgia.

He claimed that Azerbaijan is providing more aid than anyone by using its people within the country (Comment: a possible reference to ethnic Azeri

Georgians) to do â€œreal things.â€ For example, he reported that

Azerbaijanis are repairing the destroyed rail bridge link.

Â¶ 4. (C) Aliyev emphasized that the events of the past few days

â€œreinforce the journey (towards a western orientation) and not the need for a U-turn.â€ He said that he is not in favor of changing his foreign policy in response to this conflict. His foreign policy has been to develop

Azerbaijanâ€™s independence from Russia using its oil and gas resources.

This engagement continues.

Â¶ 5. (C) The President did probe Inglis about the timing of the Georgia invasion in relation to the PKK attack on the Baku-Tbilisi-Ceyhan (BTC) pipeline. He did not explicitly endorse the following conspiracy theory,

but was interested in Inglisâ€™ reaction. Aliyev linked the following events:

-- The PKK, formerly sponsored by the KGB, attacks the BTC.

-- Three days later Russia invades Georgia.

-- In a seemingly random act, the Russians blows up a key railway bridge halting rail export of oil.

-- A stray bomb falls 10 meters from the Baku-Supsa oil pipeline.

-- Transneft reports a technical fault along the Novorossiysk Line threatening one of the last remaining oil export route.

PRESIDENT ALIYEV PHONES MOSCOW

------------------------------

Â¶ 6. (C) President Aliyev noted that when he learned that a stray Russian bomb struck near the Baku-Supsa line, he rang Moscow (he inferred that he called Putin but did not specify). He said that he wanted to make clear that it would be considered a â€œmajor actâ€ if Russia took actions against Azerbaijanâ€™s interests. He specifically complained about the bombing of a military airfield in the ethnic Azeri community of Marneuli, the stray bomb near the Baku-Supsa pipeline and reports of Russian troops entering the Azeri-owned oil terminal at Kulevi. Aliyev said that in response, the troops withdrew from Kulevi and there were no further bombings in these sensitive areas.

BAKU 00000790 002 OF 003

GAS SALES TO RUSSIA A â€œSUBTERFUGEâ€

----------------------------------

Â¶ 7. (C) Inglis explained that limited future gas sales to Russia are for the purposes of enhancing Azerbaijanâ€™s position in the gas transit talks with Turkey. He emphasized that Aliyev told him that Azerbaijan still wants to sell Shah Deniz Phase Two gas west and not north. â€œIt would be madness to do otherwise. The events have not changed the (political) rationale for exporting gas westward,â€ the President added.

Â¶ 8. (C) Inglis believes that Aliyev is in a much stronger position with

Turkey than a month ago. Inglis added that Turkey must agree to transit rights and that Aliyev is not going to negotiate from a point of weakness.

Aliyev said that he would be selling some gas to Russia and that â€œthese sales to Russia must be credible.â€ Inglis noted that, for Russia, some is not enough. There is not enough gas to go around and Russia wants it all.

Thereâ€™s no compromise solution. The 2 bcm to Russia is not significant.

It is â€œsubterfugeâ€ for the price negotiations, Inglis added.

Â¶ 9. (C) The President also told Inglis that as a result of the pipeline closures, Azerbaijan will be forced to sell crude to Iran.

ADDITIONAL DETAILS ABOUT THE PKK ATTACK ON BTC

--------------------------------------------- -

Â¶ 10. (C) Inglis confirmed reftel report that BP has evidence showing that the fire at the block valve along BTC in Turkey was the result of sabotage.

â€œWe are absolutely confident it was terrorism,â€ he said. The evidence are photos showing a dent in the 8 inch bypass pressure line showing force from the outside as well as shrapnel holes. He passed copies of these photos to President Aliyev to show Turkish PM Erdogan in the event Erdogan denied that this was caused by terrorists.

Â¶ 11. (C) Inglis added that the block valves are the most vulnerable points, while the 42 inch main line is buried and was not damaged. To attack the main line would require a two meter trench, and something to penetrate its thick alloy. There are ten most vulnerable block valves in

Turkey. BP has asked that the Turkish security forces â€œcamp outâ€ at these valve stations, in addition to requesting that the Turkish State Oil

Company Botas eventually harden the facilities around the valves. BP has raised this with the Ministry of Energy in Turkey, but believes it needs to be raised with the Turkish Army as well.

Â¶ 12. (C) In Turkey, block valves are housed in â€œlittle green corrugated shacks,â€ whereas in Azerbaijan and Georgia the block valves and actuators are in concrete buildings with intrusion detectors. In Borjomi, Georgia, BP has installed carbon fiber matting to defend the main line against an RPG attack and fiber optic lines above the main line to detect digging.

AZERI CHARM OFFENSIVE WITH BP

-----------------------------

Â¶ 13. (C) Last year, the Azerbaijani State Oil Company (SOCAR) was threatening to have BP Azerbaijanâ€™s President arrested and tried for theft of state resources. In contrast, Inglis described the mood about BP in Azerbaijan as having come full circle. Aliyev made positive comments to the press about BP and SOCAR being friends in difficult times.

Â¶ 14. (C) The President told Inglis that Azerbaijan still needs BP. He asked rhetorically, â€œIf SOCAR owned BTC would it still be there?â€ The

President said he knows that he needs to keep BP motivated and interested in Azerbaijan. There was good discussion about a Production Sharing

Agreement (PSA) extension and the extraction of Azeri-Chirag-Guneshli (ACG) deep gas. Inglis believed the details will still move at a certain pace, for tactical reasons, but that these issues are headed in the right direction.

Â¶ 15. (C) The President summoned the SOCAR President after the evening meeting with Inglis and made SOCAR available to Inglis the next day.

â€œ(SOCAR President) Rovnag (Abdullayev) was the nicest Rovnaq weâ€™ve ever met.â€ Inglis said that he

BAKU 00000790 003 OF 003 had â€œreal conversationâ€ with Abdullayev about the Shah Deniz Phase One gas price. Inglis advised SOCAR to settle on a price now and not wait for a conclusion of transit talks as the price of gas is rising every day.

COMMENT

-------

Â¶ 16. (C) Inglis believes that Aliyev is looking for a statement from the

West (and particularly the U.S.) that parallels Aliyevâ€™s statement to

Moscow: If you mess with the pipelines, youâ€™re messing with us. He noted that Aliyev was dismissive of high-level people turning up in Baku for a photo-op with him and lacking a substantive message.

Â¶ 17. (C) On the sale of Azeri gas to Russia, Inglis clearly seemed to be spinning this to try to head off expected U.S. objection to such a sale.

His analysis may yet be true about this sale being used to pressure Turkey over transit talks, but it is also doubtless motivated by BPâ€™s commercial interest in developing a market and routes to justify Shah Deniz Phase Two and ACG deep gas production. Likewise, Azerbaijan oil sales to Iran could be problematic, if continued over the longer-term.

LU

Viewing cable 08BAKU815, BP BRIEFS SENATOR LUGAR ON CASPIAN ENERGY




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Thursday, 28 August 2008, 08:57


SIPDIS

EUR FOR MATT BRYZA; E/EEB FOR SE BOYDAN GRAY, STEVE MANN;

DOE FOR KATHY FREDRIKSEN

EO 12958 DECL: 08/27/2018

TAGS ENRG, EPET, EINT, PREL, AJ, TX, TU, GG

SUBJECT: BP BRIEFS SENATOR LUGAR ON CASPIAN ENERGY

DEVELOPMENTS

REF: A. BAKU 810 B. BAKU 787 C. BAKU 765 D. BAKU 761


Â¶ 1. (C) Summary: The Russia-Georgia conflict, according to BP, may be forcing Azerbaijan to re-examine needs for regional stability and security, perhaps with leaders concluding that a large foreign presence in Azerbaijan and the region is necessary to create an environment of greater security, predictability and dependability. Azerbaijanâ€™s overland pipelines are relatively well protected; offshore assets are much more vulnerable. The

GOAJ is not well coordinated internally or with regional partners to address emergencies. BP reports that, in their view, the Russians did not target the BTC or Baku-Supsa pipelines in Georgia. However, terrorists were responsible for the BTC explosion earlier this month in Turkey. Future oil and gas projects in the region depend on security of existing infrastructure, particularly BTC. Turkey must now act constructively and come to terms with Azerbaijan on Shah Deniz Phase I pricing and Shah Deniz

Phase II volumes for purchase. The Nabucco project may be more realistically pursued on a piecemeal basis, with existing infrastructure patched together in Europe, fed by a â€œtwo-country inter-connectorâ€ across the Caspian Sea. In BPâ€™s analysis, there is a great deal of natural gas in the South Caspian, but â€œNabucco may be ten years too early.â€ End Summary

Â¶ 2. (C) BP Azerbaijan President Bill Schrader briefed Senator Richard

Lugar and staff on developments in Caspian energy August 25, highlighting the current status of offshore operations and regional transport in light of the ongoing Russia-Georgia conflict and previous disruption of the Baku-

Tbilisi-Ceyhan (BTC) pipeline. BP External Affairs Vice President Seymour

Khalilov and BP Vice President for Pipelines and Terminals Rashid Javanshir were also present. Ambassador Derse accompanied Senator Lugar; DCM and Pol-

Econ Chief also attended.

Georgia Crisis Changes Azerbaijanâ€™s Tune

---------------------------------

Â¶ 3. (C) Schrader noted that BP Managing Director Andy Inglis visited Baku from London the previous week, meeting with President Aliyev, the State Oil

Company of Azerbaijan (SOCAR) and others. The purpose of that visit was supposed to be discussions on BP reinvestment in Azerbaijanâ€™s economy; instead, given the ongoing crisis in the Caucasus, regional security concerns dominated the talks. Schrader said that previously Azerbaijanâ€™s leadership had been sounding increasingly self-confident -- even arrogant, at times -- and had downplayed the need for foreign investment in the next generation of projects. With events in Georgia, and heightened Russian activity in the Caucasus, Azerbaijan â€œmay now be changing its tune.â€

Schrader suggested that the Russia-Georgia conflict is forcing Azerbaijan to re-examine needs for regional stability and security, with leaders apparently coming to an early conclusion that a large foreign presence in

Azerbaijan and the region creates an environment of greater security, predictability and dependability.

Security Concerns Resonate

-----------------------

Â¶ 4. (C) Javanshir said that overland pipeline routes within Azerbaijan are reasonably well protected, with BP leading efforts to monitor. The offshore sector is more vulnerable, as it is much more difficult to protect.

XXXXXXXXXXXX Azerbaijan

Â¶ 5. (C) Javanshir said that the BTC explosion and Georgia crisis served as a â€œwake-up callâ€ for Azerbaijan, which finds itself with few transport options and mounting losses in export revenues. In the opinion of BP, the time has come for

BAKU 00000815 002 OF 003

â€œless gamesmanship and chess playingâ€ and more serious cooperation among Azerbaijan, Georgia and Turkey. XXXXXXXXXXXX

XXXXXXXXXXXX

------------------------------

Â¶ 6. (C) XXXXXXXXXXXX XXXXXXXXXXXX

Criticism of Turkey, Acts of Terror

----------------------------

Â¶ 7. (C) BP was also highly critical of Turkeyâ€™s BOTAS, which built the

BTC on Turkish territory as a turn-key project. Construction was delayed and over-budget and BP has always suspected quality-control issues.

Moreover, the Turks are responsible for pipeline security, including protection against illegal tapping and terrorism. XXXXXXXXXXXX

Turkey Must Cooperate on Shah Deniz I, II

----------------------------------------

Â¶ 8. (C) Javanshir said that future gas projects, like the trans-Caspian and Nabucco pipelines, â€œare now dependent on BTC security. If BTC cannot be protected, governments and private investors will not come forward to promote additional Southern Corridor projects.â€ Schrader emphasized that there is â€œlots of gas in the South Caspian region,â€ between Azerbaijan and Turkmenistan. Time, however, is needed to bring this gas to markets.

The Nabucco project â€œmay be ten years too early,â€ Schrader and

Javanshir said. In the nearer term, the Turks must realize that they

â€œcannot be greedy.â€ Azerbaijan is willing to sell Turkey approximately

4 billion bcm of Shah Deniz Phase II gas, but a minimum 6-8 bcm, as demanded by Ankara, is not possible.

Â¶ 9. (C) Schrader reported that Shah Deniz Phase IIâ€™s â€œtechnical pathâ€ is still on target for 2014. All depends, however, on a commercial deal with Turkey on transit and sales. SOCAR, rather than StatoilHydro, will have the lead on that front. Complicating the matter, however, is ongoing negotiations on sales price under the current (Shah Deniz Phase I) contract. BP underscored the need for Turkey to reach agreement with suppliers on pricing as soon as possible, as contractual terms expired in

April. â€œSOCAR is now selling gas to Turkey at $130 per thousand cubic meter (tcm), while the Russians are shipping gas through Blue Stream at

$450/tcm.â€ In all likelihood, Turkey is amassing large debts to SOCAR. BP stressed that negotiations on this issue must be completed by the first quarter of 2009.

ACG Deep Gas Could Be Developed

-----------------------

Â¶ 10. (C) Following the visit of Andy Inglis, BP now sounds relatively optimistic about an extension of the ACG

BAKU 00000815 003 OF 003 production sharing agreement, which would allow the AIOC consortium to extend production of oil at offshore fields (and book the reserves to increase company values). BP also retains hopes of clinching a separate agreement to develop non-associated or â€œdeep gasâ€ at the ACG fields.

Azerbaijan had been holding a firm line in negotiations on PSA extension and â€œdeep gas,â€ criticizing BP for Shah Deniz production delays

XXXXXXXXXXXX Recent events in Georgia, however, may be causing Azerbaijan to reconsider its line, according to BPâ€™s representatives.

More on Nabucco

--------------

Â¶ 11. (C) Schrader noted that Nabucco, as a grand vision, is still rather hard to imagine. A single pipeline -- â€œa 48-inch pipeâ€ -- running from

Turkmenistan to Vienna, may never be realized. Rather, it is more constructive to look at the Nabucco project as a piecemeal project, with

â€œcapillariesâ€ connecting existing infrastructure. This could begin in the Caspian, with a â€œtwo-country inter-connectorâ€ sufficing as a

â€œTrans-Caspian Pipeline.â€ Much of this work has already begun in

Central Europe. BP, which has interest in investing in Turkmenistan, now worries that Ashgabat may â€œget scared offâ€ from such a project because of Russiaâ€™s actions in Georgia. Returning to the â€œ10 years too earlyâ€ comment, Schrader and Javanshir expressed confidence that â€œsubstantial volumes of gasâ€ would be moving from Turkmenistanâ€™s and Azerbaijanâ€™s offshore to the West by 2030.

Comment

---------

Â¶ 12. (C) The crisis in Georgia, and the myriad of oil and gas transport problems that resulted from it, has caused Azerbaijanâ€™s leadership to reconsider security and energy issues. Aliyevâ€™s expressed intention to re-open discussion with BP on PSA and ACG deep gas, after a long period of inaction, is significant, and likely a result of a new appreciation for the security benefits of a significant western presence in the energy sector in the wake of regional developments. Still, we expect Azerbaijan to maintain a tough negotiating line on ACG PSA extension and access to ACG deep gas, as well as natural gas pricing, supply and transit with Turkey. Embassy agrees with BPâ€™s assessment that the future of energy projects in the region depends critically on improving the security of existing infrastructure, and on visibly heightened cooperation in this respect among

Caspian/Caucasus states. DERSE

Viewing cable 08BAKU947, AZERBAIJAN SEEKS TO DEVELOP ACG DEEP GAS, CAN




VZCZCXRO1050

PP RUEHAG RUEHROV

DE RUEHKB #0947/01 2821027

ZNY CCCCC ZZH

P 081027Z OCT 08

FM AMEMBASSY BAKU



RUCNMEM/EU MEMBER STATES




RUEKDIA/DIA WASHDC


RHEHNSC/NSC WASHDC


Wednesday, 08 October 2008, 10:27


SIPDIS

EO 12958 DECL: 09/06/2018

TAGS PGOV, PREL, AJ, ENRG, TU

SUBJECT: AZERBAIJAN SEEKS TO DEVELOP ACG DEEP GAS, CAN

SUPPLY GEORGIA WITH WINTER GAS

REF: A. A) BAKU 919 B. B) BAKU 897 C. C) BAKU 883


Â¶ 1. (C) SUMMARY: BP Azerbaijan President Bill Schrader told USG interlocutors that there will be â€œplenty of gasâ€ for Azerbaijan to sell to Georgia this winter. This is a result of oil production problems at the offshore ACG oil mega-field, which continues to cost the GOAJ tens of millions of dollars in lost revenues, and the resulting technological prohibition on re-injecting the gas. Post-Georgia conflict, the GOAJ has shown renewed interest in the AIOC Consortium developing the second largest known gas field in Azerbaijan after Shah Deniz, referred to as ACG â€œDeep

Gas.â€ BP has revised upwards its production estimate for Shah Deniz Phase

Two from 13 to 16 bcm/a - a development which, in conjunction with the extra one bcm/a that will be gained from debottlenecking Shah Deniz Phase

One, could help alleviate differences on supply volumes between Azerbaijan and Turkey. AIOC partners have not yet been able to resolve Shah Deniz

Phase I pricing discrepancies with Turkey; the case could be headed to international arbitration. BP Azerbaijan continues to maintain that Nabucco is â€œa good project, but ten years too early.â€ END SUMMARY

Â¶ 2. (C) On September 29 BP Azerbaijan President Bill Schrader met with

Ambassador Derse and UK Ambassador Browne, to brief them on ongoing production problems in ACG offshore oil mega-field. On October 1, BP

President Bill Schrader met with Deputy Secretary Negroponte, DAS Bryza and

Ambassador Derse at Sangachal Terminal, to brief them on BPâ€™s Azerbaijan operations. On October 2, Ambassador Derse hosted a lunch in honor of the

Deputy Secretary, at which BP Azerbaijan President Schrader and other highlevel BP Azerbaijan executives briefed Secretary Negroponte, DAS Bryza and

Ambassador Derse on regional gas development issues.

â€˜PLENTY OF GASâ€™ FOR GEORGIA

Â¶ 3. (C) Schrader said that given BPâ€™s ongoing oil production problems at the Central Azeri platform (refs A-C), BP would not technically be able to re-inject gas into this field â€œwell into the winter.â€ As such the GOAJ

would have â€œplenty of gasâ€ to sell to Georgia this winter should it wish (NOTE: according to the AIOC PSA, all ACG gas not used for operational reasons such as re-injection is to be given free to SOCAR). BP will provide to SOCAR as much of this ACG associated gas as technically possible, since the alternative would be either to flare it or to decrease oil production even further.

SD2 = 16 BCM/A

Â¶ 4. (C) Schrader said that currently Shah Deniz (SD) production was doing quite well, with four wells operating and a fifth due to start in January

2009. In a significant change, BP Azerbaijan has revised upwards its own internal production estimates for Shah Deniz Phase Two (SD2) gas from 13 to

16 bcm/a, although it has not yet communicated this revised estimate to

SOCAR nor made this fact public, as the revised estimate had not yet been approved by BP (NOTE: BP Azerbaijan President Schrader asked that USG interlocutors keep this revised estimate to themselves and not share it with either SOCAR or the GOT). SD2 Production would likely start in 2015.

GOAJ INTERESTED IN ACG DEEP GAS

Â¶ 5. (C) Schrader said that post-Georgia crisis, SOCAR has clearly seen the benefits of its association with IOCs and as such has sought to â€œfasttrackâ€ discussions with the AIOC Consortium over developing the nonassociated gas that lies underneath the ACG oil field (NOTE: referred to as

â€œACG Deep Gas,â€ this gas is not covered by the current PSA between the

AIOC Consortium and the GOAJ. However, the Consortium has the right of first refusal and the right to match any offer for ACG Deep Gas development, and as a practical matter could prevent development of this field by any other IOC). This field could produce one to three bcm/a by

2013/2014, with a production plateau of six to ten bcm/a by 2015, which could continue for 30 years. SOCAR was seeking an MOU on

BAKU 00000947 002 OF 003 developing this field with the AIOC Consortium by the end of 2008.

(COMMENT: Take together, this additional production projections for Shah

Deniz and ACG Deep Gas could have significant positive impact in satisfying

Turkeyâ€™s demand and in advancing the Southern Corridor in 2015-16).

ACG AS SUBSTITUTE FOR SD2?

Â¶ 6. Schrader characterized Turkish intransigence on SD2 gas transit as the major barrier to expeditious SD2 development. He said that should the GOT continue to refuse to provide transit for SD2 gas on terms that Azerbaijan finds commercially viable, then the GOAJ might well decide to keep SD2 undeveloped and â€œlet Turkey freeze for a few winters.â€ In the interim, the GOAJ would proceed with developing ACG Deep Gas, whose product volumes would be low enough to satisfy the regional market of Russia, Georgia and

Iran. (Note: in a separate conversation, Foreign Minister Mammadyarov reported to the Deputy Secretary that natural gas talks with Russaâ€™s

Gazprom had â€œfailed,â€ because of differencesin opinion on formulas for

â€œmarket pricing.â€ End Comment)

SD1 ARBITRATION

Â¶ 7. (C) Schrader said that negotiations with Botas for the post-April 1,

2008 price of SD1 gas are still at a dead-end, with Botas offering a price of USD 150 per 1,000 tcm at a time when a â€œrealisticâ€ price for this gas would be closer to USD 350/tcm. (Gazpromâ€™s price for gas to Europe is close to USD 500/tcm.) As such, the Shah Deniz Consortium partners will in all likelihood vote on October 15 to take the matter to arbitration.

ACG OIL PRODUCTION PROBLEMS

Â¶ 8. (C) Schrader said that the September 17th shutdown of the Central

Azeri (CA) platform, in which the â€œred buttonâ€ was pressed after detection of a gas leak on the Central Azeri Platform that led to the evacuation of 211 platform workers off the platform, was the largest such emergency evacuation in BPâ€™s history. Given the explosive potential, BP was quite fortunate to have been able to evacuate everyone safely and to prevent any gas ignition. Gas bubbles on the waterâ€™s surface were no longer observed from the air by September 19th. Due to the blowout of a gas-injection well there was â€œa lot of mudâ€ on the platform, which BP would analyze to help find the cause of the blowout and gas leak. Gas samples would have to be taken to London to determine whether the gas was shallow (biogenic) or deep (foundation). Central, Eastern and Western Azeri

Azeri platforms remain shut down. 9. (C) Schrader said that Western Azeri

Platform was shut down due to its only functioning generator being powered by a cable from the Central Azeri Platform, and BP hoped to be able to restart this platform in November. â€œBlack-startingâ€ a platform (i.e. restarting a platform when all of its operations had been fully shut down) was a very difficult, time-consuming process, and would have to be taken slowly, on a step-by-step basis. BP Azerbaijan would slowly start to get its people back out on the CA Platform later this week to begin re-starting selective systems that would help ascertain the problemâ€™s source.

Â¶ 10. (C) It is possible that BP Azerbaijan â€œwould never knowâ€ the cause of the gas leak, but BP is continuing to methodically investigate possible theories, Schrader said. Although the production decrease had not been a significant story heretofore, he thought it likely that more attention in the industry would be paid to it after October 2, when SOCAR nominated volumes to be sold at Ceyhan for the coming month. Schrader said although the story hadnâ€™t caught the pressâ€™s attention, it had the full focus of the GOAJ, which was losing â€œ40 to 50 million dollarsâ€ each day that the ACG production remained at 300,000 bpd vice its earlier daily production of approximately 900,000 bpd.

SD2 GAS PIPELINE OPTIONS

Â¶ 11. (C) BP Azerbaijan Gas Marketing Manager Richard Ruddiman said that both the TGI and TAP pipeline projects each needed approximately seven bcm/a of SD2 gas to get sanctioned. Nabucco, a â€˜greenfieldâ€™ project with no current infrastructure and with its 30 bcm/a carrying capacity, would

BAKU 00000947 003 OF 003 need firm commitments of at least eight bcm/a and relatively firm commitments for a total of 18 bcm/a before construction could begin. Given supply constraints, both Schrader and Ruddiman said that Nabucco was â€œa good project, but ten years too early,â€ and that it was unlikely that it could get sanctioned within the next ten years. They said that a more

â€œgradual and capillaryâ€ approach to delivering Caspian gas to Europe, similar to how the US gas infrastructure was developed, was a more realistic scenario for getting Caspian gas to Europe than mega-projects such as Nabucco. Ruddiman said that there was no hard â€œlatest date,â€ by which these projects had to be developed; their sanctioning could continue to be postponed until/unless the main barrier of Turkish transit was solved. The key requirement for sanctioning any of these pipelines was long-term gas supply contracts that could be used to achieve construction financing.

WESTERN ROUTE

Â¶ 12. (C) Schrader said the Western Route oil pipeline through Georgia to the Black Sea (Baku-Supsa) was ready to resume operations and would be doing so within a week or so. (NOTE: It had restarted operations a few days

before Russiaâ€™s August incursions into Georgia, after which BP shut it down for operational security reasons).

TURKMEN PETROCHEMICALS

Â¶ 13. (C) Schrader and Ruddiman said that developing gas-intensive petrochemical industries in Azerbaijan and Turkmenistan probably doesnâ€™t make sense, even given its large amounts of gas available for feedstock, as the distance to significant markets would put Turkmenistan at a competitive disadvantage. Ruddiman pointed to the example of Sumgayit in Azerbaijan as an example of a petrochemical center disadvantaged by its relative distance from key regional markets.

Â¶ 14. (C) COMMENT: The silver lining to ACGâ€™s ongoing oil production problems is that it seems to have solved Georgiaâ€™s winter gas woes, given the massive amounts of ACG gas that will not be needed in the foreseeable future for reinjection. Less adulterated good news is that SD2 volumes will be closer to 16 bcm/a, and another one bcm/a may be available from

SD1. When SD2 production was expected to be 13 bcm/a, SOCAR saw approximately three bcm/a going to Georgia and Azerbaijan and seven needed to sanction a pipeline to Europe, leaving four bcm/a for Turkey. Given

SOCARâ€™s previous offer to Turkey of surplus (i.e. above 13 bcm/a) SD2 production, these new numbers mean that SOCAR could potentially offer

Turkey seven bcm/a This is an amount very close to the eight bcm/a, on which Turkey is insisting as the price of transit. Equally good news is the GOAJâ€™s newfound desire to expedite ACG Deep Gas development, although

Embassy has heard from SOCAR that this fieldâ€™s development also depends on the GOT allowing transit of Caspian gas to European markets. END

COMMENT.

Â¶ 15. (U) DepSec staff, DAS Bryza, have cleared this cable. DERSE

Viewing cable 09BAKU30, AZERBAIJAN: BP DOWNBEAT ON 2009 SHAH DENIZ

PHASE




VZCZCXRO7579

PP RUEHAG RUEHROV RUEHSR

DE RUEHKB #0030/01 0151101

ZNY CCCCC ZZH

P 151101Z JAN 09

FM AMEMBASSY BAKU













SIPDIS

ANKARA PLEASE PASS TO DAS BRYZA

EO 12958 DECL: 01/13/2019

TAGS PGOV, PREL, AJ, TU, ENRG

SUBJECT: AZERBAIJAN: BP DOWNBEAT ON 2009 SHAH DENIZ PHASE

TWO PROGRESS

REF: A) BAKU 1126 B) BAKU 1186 C) ANKARA 56

Classified By: CA Don Lu, Reasons 1.2 (b,d)

Â¶ 1. (C) SUMMARY: Acording to BP Azerbaijan, inability to reach agrement between Azerbaijan and Turkey on the price of Shah Deniz Phase One gas currently being sold toTurkey and on transit of Shah Deniz Phase Two ga has delayed and will continue to delay the deveopment of the Shah Deniz Phase

Two project in 2009. As such, SOCAR might be more willing to first develop

ACG non-associated (aka â€œdeepâ€) gas, as it can be developed relatively inexpensively and in increments, with the resulting gas sold to purely regional markets, including Russia and Iran (i.e., no need to transit through Turkey). The Central Azeri Oil platform in the ACG offshore oil mega-field has resumed production as of December, and the AIOC Consortium expects production to reach pre-September 2008 levels within a few months.

END SUMMARY.

Â¶ 2. (C) On January 13 Charge met with BP Azerbaijan President Bill

Schrader and UK CDA Simon Tonge, to discuss recent energy issues. Also present were BP Azerbaijan Gas Marketing Manager Richard Ruddiman, BP

Azerbaijan Government Relations VP Seymour Khalilov, and the U.S. and UK

Embassy Energy Officers.

SHAH DENIZ DEVELOPMENT DELAYED

Â¶ 3. (C) In general, BP Azerbaijan was not optimistic on timely Shah Deniz

Phase Two (SD2) development. As such, according to BP Azerbaijan, the Shah

Deniz (SD) Consortium will continue to slow-track SD2 development in 2009, due to disputes over Shah Deniz Phase One (SD1) price and SD2 transit with the Government of Turkey. In BPâ€™s opinion, an optimistic scenario is some type of agreement in 2009, but currently the SD Consortium has budgeted no more than a negligible, â€˜placeholderâ€™ amount on SD2 in 2009 due to lack of progress on SD1/SD2 in its talks with Turkey. BP Azerbaijan also noted that SOCAR will probably also be marginally less likely to spend the large amounts needed for its share of SD2 investment given its vastly decreased oil-related income and that fact that the start of payback for any such

SOCAR investments is no earlier than 2015.

Â¶ 4. (C) As for SD1, BP senses a reluctance from SOCAR to go to arbitration with its Turkish brother, but the two sides are still orders of magnitude apart on price for SD1, with no real â€˜negotiatingâ€™ occurring. BP senses that the SD Consortium would be willing to give GOT a price lower than the

Gazprom/Iran price (as we have confirmed separately with SOCAR), but

Botasâ€™s current offer is so low that â€œthere is no real discussion going on.â€ ACG DEEP GAS MAY MOVE FORWARD SOONER

Â¶ 5. (C) In a related vein, BP said it was seeing a continued increase of interest in Azeri Chirag Guneshli (ACG) non-associated (aka â€˜deepâ€™) gas from the GOAJ, and thinks it possible the GOAJ will seek to develop deep gas before SD2, since development can be done far more cheaply and incrementally, with the resulting gas being sold to Russia, Iran, and

Georgia (i.e., no need for Turkey transit). TURKMENISTAN

Â¶ 6. (C) When asked about the possibility of GOTX gas being supplied to

GOT, BP repeated its opinion that due to the long timelines involved with gas development, there would be no GOTX gas coming west earlier than 2020.

UKRAINE-RUSSIA

Â¶ 7. (C) BP said that it thought that one result of the Gazprom-Ukraine gas conflict, which has affected Turkish gas supply, would be that the GOT would be even more focused on security of supply/supply diversification/getting as much gas as it can from SD2. GEORGIA 8. (C)

According to BP the Georgian government is unusually quiet for this time of winter, i.e. not complaining about the lack of gas it is receiving from

Azerbaijan. BP says that SOCAR is pushing as much gas to Georgia as is obligated, and that Georgia is also getting its full amount from SD1. These two sources, plus the gas it is getting as transit gas, seem to be meeting the GA demand, and BP thinks it might be the case that GA will not need any gas from Gazprom this winter. BP agreed that GA could benefit from gas storage, pointing out that many countries try to have storage equal to 20 percent of its annual need.

CENTRAL AZERI GAS LEAK IDENTIFIED

BAKU 00000030 002 OF 002

Â¶ 8. (C) BP has restarted oil production from CA and is about to start reinjecting gas again in the Central Azeri field. It has closed off a â€œfew suspect wellsâ€ from which they think a bad cement job caused the leaking gas (which is actually good news, since had it been a reservoir leak the damage would have been potentially non-repairable, whereas now all BP has to do is fix the cement job around a few wells, a hard and expensive job to be sure, but preferable to losing the platform). Production is now around

700,000 bpd, and with gas injection they hope to get it back up to

September levels, i.e. 950,000 bpd.

Â¶ 9. (C) COMMENT: Since this meeting, there is indication (reftel c) that

Botas has increased the price it is willing to pay for Shah Deniz Phase One gas. Additionally, SOCAR VP for Marketing Elshad Nassirov canceled a

January 15 meeting scheduled with the Embassy to fly on short-notice to

Turkey to meet with the Turks on SD-related issues. Embassy will be reporting on these developments septel. LU

Viewing cable 09BAGHDAD791, CDA, CG AND PM DISCUSS EVOLVING SECURITY

CONCERNS,



09BAGHDAD791

2009-03-23

09:09

2010-12-15

21:09

SECRET

VZCZCXRO6918

PP RUEHBC RUEHDE RUEHIHL RUEHKUK

DE RUEHGB #0791/01 0820927

ZNY SSSSS ZZH

P 230927Z MAR 09 ZDK

FM AMEMBASSY BAGHDAD


INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY


Monday, 23 March 2009, 09:27

S E C R E T SECTION 01 OF 03 BAGHDAD 000791

SIPDIS

EO 12958 DECL: 03/20/2029

TAGS PGOV, PREL, MOPS, MARR, PTER, IZ, EPET, EFIN

SUBJECT: CDA, CG AND PM DISCUSS EVOLVING SECURITY CONCERNS,

THE BUDGET, OIL CONTRACTS; CDA DELIVERS DEMARCHE ON CAMP ASHRAF

Embassy

Baghdad

REF: A. SECSTATE 26167 B. BAGHDAD 00442

Classified By: Charge dâ€™ Affairs Patricia Butenis for reasons 1.4 (b) a nd (d)

Â¶ 1. (S) Summary: In a meeting with Iraqi Prime Minister Nuri al-Maliki on

March 19, Charge dâ€™ Affaires (CDA) Butenis and Commanding General MNC-I

Lieutenant General (LTG) Austin discussed evolving security concerns, politics surrounding the budget, efforts to capture former Sons of Iraq

(SOI) leader Adel Mashadani, and asked about the way ahead for reforms to improve management of hydrocarbons; additionally, the CDA delivered a demarche on Camp Ashraf (REF A) to which the PM acknowledged the sensitivity of the issue but emphasized the domestic Iraqi pressure as well as specific threats from Iran that he faces on the Mujahedin e-Khalq (MEK) residents of Camp Ashraf. He said, however, that they would not be harmed, that he would abide by the humanitarian assurances provided to the USG, and that he would not forcibly remove anyone to Iran - even those suspected of crimes - but that they could not remain in Iraq. LTG Austin noted vast improvements in the security environment over the last year, commenting that the GOIâ€™s operation in Basra last March was a pivotal moment in

Iraqâ€™s history. The PM remarked that â€œmaintaining victory is much more difficult than achieving victory,â€ noting that Iraqi security forces must adapt to new threats posed by smaller clandestine terrorists cells and emphasized that intelligence would be key to this end. In response to the

CDAâ€™s query about payments due to General Electric for power generation contracts, the PM said that the contracts would be paid even if it had to come out of their own salaries. LTG Austin expressed his gratitude to the

PM for resolving budget problems related to payment of the SOI, to which the PM responded that the COR is playing political games with the budget.

With regard to hydrocarbons, the PM asked for the U.S. position on direct contracts with U.S. firms and on U.S. firms developing cross border fields on the Iran border. End Summary.

Â¶ 2. (S) LTG Austin informed the PM that General Odierno was in Jordan and asked about the PMâ€™s recent trip to Australia. The PM said that the trip was productive, but noted that it was very long. The position of the

Australian government is a very good one, he reiterated.

----------------------------

An Evolving Security Threat

----------------------------

Â¶ 3. (S) LTG Austin reminded the PM that this time last year they were in

Basra, adding that â€œso much has changed since then.â€ Basra was a defining point in Iraqâ€™s history, he told the PM. The PM agreed, commenting that â€œmaintaining victory is much more difficult than achieving victory.â€ The PM said that â€œthey (insurgents/terrorists) are still out there,â€ but they have lost control of the cities and have become â€œgangsâ€ that move from one area to the next. â€œWe need to build our intelligence capability to track these clandestine gangs.â€ The time of armed confrontations (battles) is over, he said. â€œWe have to adjust our forces to counter this new threat and intelligence will play a key role in this,â€ al-Maliki warned. He questioned whether or not existing plans or strategies, e.g., focusing on checkpoints, are still applicable. â€œWe have to evolve our forces to compensate for the changing security environment and emerging threats,â€ he said.

Â¶ 4. (S) LTG Austin said that the PM and General Odierno are of Q4. (S) LTG

Austin said that the PM and General Odierno are of a like mind on this matter. He remarked that the Iraqi Police (IP) would need to assume a greater responsibility for internal security, while the Iraq Army (IA)

would focus on external threats. The PM quickly responded that the IA plays a critical role in ongoing security operations and would continue to do so, particularly in light of the drawdown of U.S. forces. â€œThere is no substitute for the IA in a security role,â€ he said. â€œI donâ€™t want to risk withdrawing the IA, particularly in light of the drawdown of U.S. forces,â€ he reiterated. Perhaps, he said, this will happen after we ensure that the insurgents and al-Qaida Iraq (AQI) will not come back.

Â¶ 5. (S) The PM said that â€œwe must continue to develop the police.â€

They need weapons and equipment and additional training in combating terrorism. There have also been some problems within the IP, noting the recent arrest of a â€œgangâ€ within the passport office that was taking bribes for counterfeiting passports (photo-substitution) of suspected former Baâ€™ath Party members. He said that the police taking bribes is a serious problem that undermines security in Iraq.

BAGHDAD 00000791 002 OF 003

â€œTerrorists can use our passports to move around freely with absolute anonymity.â€ LTG Austin responded that the IP is twice as large as the IA and that it would take some more time to develop, acknowledging that the IA is far more capable at present. PM al-Maliki responded that the IP would eventually assume responsibility for internal security, allowing the IA to focus on external threats.

--------------------------------

Politics and the Budget Process

--------------------------------

Â¶ 6. (S) LTG Austin thanked the PM for his help with the SOI. â€œI thought that there would be more problems with them getting paid, but it now seems to have been resolved,â€ LTG Austin remarked. The PM said that the COR may have been playing political games with the budget and that he had taken money from the MOIâ€™s budget to pay the salaries of the SOI. The COR is trying to sabotage our efforts, he said. The CDA took this opportunity to ask about the GOIâ€™s plan to fund this yearâ€™s payments to GE on the contract signed last year for electrical generators. The PM assured the CDA that the payments would be made, even if the money had to come from their own salaries. The PM said that â€œwe can not sacrifice electricity

(referring to the GE contract), or security, of which the SOI are an important part, even if we have to cut the budget in other areas.â€

---------------------------------

Former SOI Leader Adel Mashadani

---------------------------------

Â¶ 7. (S) Updating the PM on the status of former SOI leader Adel Mashadani

(REF B), XXXXXXXXXXXX. The PM responded that he is running out of patience on this matter and that it had already taken too long. He said that

Mashadaniâ€™s presence is a direct challenge to the GOI. He said that â€œwe must develop a plan that minimizes collateral damage but has some acceptable risk,â€ comparing the situation to Basra. This is a big problem, the PM said. â€œI will have our special forces and intelligence units work out a strategy and present it to you, we donâ€™t want to wait too long,â€ al-Maliki advised. LTG Austin said that they are already working with Iraqi Special Forces units in the area, noting they had recently collaborated to arrest two suspected AQI operatives in Fadhel.

â€œWe will work with your forces to develop a plan, but we want to be cautious,â€ LTG Austin said.

Â¶ 8. (S) The PM was insistent that we not wait too long, fearing that

Mashadani might escape or that the GOI would be perceived as being complicit in Mashadaniâ€™s criminal activity, or worse, that the GOI is incapable of acting against him. The PM said that we have gone after tougher and stronger targets than him, adding that we should not fear him.

LTG Austin reiterated that he only wants to minimize casualties but that he understands the PMâ€™s concerns.

Â¶ 9. (S) Turning to the CDA, the PM asked about the arrival of Ambassador

Hill. The CDA said that Ambassador Hill will have confirmation hearings in the Senate on March 25 and that, hopefully, he would arrive in Iraq sometime in April. The Qhopefully, he would arrive in Iraq sometime in

April. The PM asked the CDA if she foresaw any problems. She responded that some Senators had expressed concern with Ambassador Hillâ€™s lack of experience in the Middle East and over his negotiations with North Korea.

She said that Ambassador Hill had already met with Senators McCain and

Graham to address such concerns. She expressed optimism that he would be confirmed by the Senate, noting that he was one of the Departmentâ€™s most accomplished diplomats. The PM said that he had discussed Ambassador Hill with President Obama when they last spoke and that President Obama said that Ambassador Hill â€œhad his complete confidenceâ€ and that he is

â€œthe right man for the job.â€ The PM told the CDA that â€œwe welcome him to Iraq.â€

-------------------------------------------

Oil Reform Proposals and Direct Contracts

-------------------------------------------

Â¶ 10. (S) The CDA asked the PM about the status of the reform proposals from the oil symposium hosted by Deputy Prime Minister Barham Saleh in early March. She said that it was a

BAGHDAD 00000791 003 OF 003 good sign that the government had formalized the symposiumâ€™s conclusions into recommendations for government decision, and asked if the package would need only COM agreement or would also have to go to the COR for approval. The PM said no, he does not intend for the reform proposals to go to the COR and that he would do everything to avoid this, commenting that the COR would â€œtake us into a political maze,â€ which was completely unnecessary.

Â¶ 11. (S) Sadiq Rikabi, political advisor to the PM, asked the PM to inquire about the USGâ€™s position on direct contracts with international oil companies. The PM noted that he is in favor of direct contracts, in order to avoid the delays inherent in a bidding process. The PM said he is currently in negotiations with Chevron to develop various oil fields, to include a cross-border oil field with Iran (NFI). The PM claimed that

Chevron had told him that it had already raised the issue of a cross-border development with Tehran as well. (Note: We have no independent confirmation of this; end note.) The PM asked the CDA about the political feasibility of such a deal involving a U.S. firm working both sides of a cross-border field, given current USG policies toward Iran. The CDA noted that U.S. law on sanctions would apply, but added that the Administration was reviewing its policies on Iran. PM al-Maliki said that he prefers to go with Chevron on the deal; however, he remarked that if U.S. rules prevent Chevron from doing this project, he would approach a non-American firm.

--------------------------------------

PMâ€™s Response to Demarche on the MEK

--------------------------------------

Â¶ 12. (S) The CDA informed the PM that she had been directed by Washington to deliver a demarche on Camp Ashraf (REF A). The CDA delivered the points in the demarche, without interruption by the PM. The PM then expressed some frustration and questioned why the GOI had to act so responsibly towards a organization determined to be a terrorist group by both Iraq and the U.S..

He noted that this created daily problems within the GOI. He asked the CDA to try to understand the very difficult situation that the GOI was in.

â€œIt is not because of Iran,â€ he said. â€œWe have great internal pressures to resolve this matter.â€ The PM noted that he had been around for the last 20 years and knows very well who the MEK are and what they have done. The PM complained â€œthey (MEK) are at the al-Rasheed hotel, meeting with COR members and conspiring against the GOI.â€ He said that

Iran had asked how the GOI could support cross border military actions by

Turkey against the PKK, but not allow Iran to take similar action against the MEK at Camp Ashraf. He added that he is very concerned about a message delivered by Iran that it would attack the MEK at Camp Ashraf if no action was taken soon. Additionally, al-Maliki asked, given the drawdown of U.S. bases, whether the U.S. could help the GOI to use one of the transferred facilities - far from the Iranian border - as a new location for the MEK.

LTG Austin told the PM that he will look into this possibility.

Â¶ 13. (S) The PM reassured the CDA that he would not take any action against the MEK. He said that he would abide by the humanitarian assurances provide by the GOI to the USG. He told the CDA that the GOI would not remove any of the Camp Ashraf residents to any country, including Iran, where they would be harmed. â€œWe will not forcibly return any of them to

Qwould be harmed. â€œWe will not forcibly return any of them to Iran, even those suspected of crimes,â€ al-Maliki stated. But, â€œthey must understand that Iraq is not their home.â€ The CDA noted that the European

Union had delisted the MEK as a foreign terrorist organization and that we were working with other countries to encourage them to relocate the MEK. PM al-Maliki said that he met with ICRC President Jacob Kellenberger on March

18 who had also raised this issue with him and that they had discussed this issue at length. BUTENIS

Viewing cable 05THEHAGUE2309, AMBASSADORâ€™S PARTING THOUGHTS ON

TAKING THE DUTCH



05THEHAGUE2309

2005-08-22

17:05

2010-12-15

16:04

SECRET

Embassy The

Hague


Monday, 22 August 2005, 17:01

S E C R E T SECTION 01 OF 07 THE HAGUE 002309

SIPDIS

EO 12958 DECL: 08/18/2025

TAGS PREL, PGOV, PTER, ECON, EAID, NL, EUN, USUN

SUBJECT: AMBASSADORâ€™S PARTING THOUGHTS ON TAKING THE DUTCH

TO THE NEXT LEVEL

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.4 (B) AND (D).

Â¶ 1. (S) SUMMARY: With the EU divided and its direction uncertain, the

Dutch serve as a vital transatlantic anchor in Europe. As one of the original six EU members, the Dutch ally with the British to counter Franco-

German efforts to steer Europe off a transatlantic course. The

Netherlandsâ€™ solid European and international credentials create a powerful â€œmultiplierâ€ effect. In Iraq, Dutch forces provided the physical and political cover for Japan to deploy and the Dutch are using their NATO Training Mission commitment to push others to do more. In

Afghanistan, the Dutch drove much of the Phase III planning for ISAF and deployed Dutch troops in combat operations for the first time in more than

30 years. The Dutch have led Europe in launching pilot projects to strengthen international counterterrorism cooperation, and initiated the

U.S.-EU dialogue on terrorist financing which laid the groundwork for a proposed major international Terrorism Financing Conference in 2006.

Â¶ 2. (S) (SUMMARY CONTINUED) The Dutch are expanding their leadership beyond Europe. Dutch strategic interests in the Caribbean make them logical partners to counter Venezuelan meddling in the region. They are expanding their military involvement in Africa, in part to provide a secure environment for their robust development assistance program, and in part to add â€œeyes and earsâ€ on the ground. In the Middle East, the Dutch enjoy good relations with Israel and the Palestinians and would welcome a more active role; they quickly promised funds for an expanded Multinational

Observer Force (MFO) and might, under the right circumstances, commit troops. Even in areas where we disagree, such as drugs and trafficking in persons, Dutch views may be shifting. As the headquarters for major international legal institutions, the Netherlands offers a unique opportunity for advancing foreign policy goals far beyond Dutch borders.

Â¶ 3. (S) (SUMMARY CONTINUED) The coalition government, headed by PM

Balkenende, is naturally inclined to work closely with the U.S. The balance could shift toward Brussels, however, if a center-left government comes to power in 2007 (or earlier), as predicted by most polls. The nearly one million Muslim immigrants are largely non-integrated, which is forcing the

Dutch to question long-standing assumptions about Dutch â€œtoleranceâ€ and

â€œidentity.â€ The murder of Theo van Gogh focused attention on Islamic extremism, and the Dutch feel they are ahead of much of Europe in addressing this growing problem. Strengthening U.S.-Dutch ties across the political spectrum is necessary to ensure that the Dutch continue to enlist others to pursue interests in line with the U.S., especially in the political-military sphere. Early and active consultations are the key to harnessing Dutch energies in enhanced pursuit of U.S. interests. END

SUMMARY.

LEADERS IN EUROPE

-----------------

Â¶ 4. (S) Along with the British, the Dutch form a strong, reliable transatlantic anchor in Europe. As a founding member of NATO, one of the original six members of the EU, and Britainâ€™s strongest ally on continent, the Dutch are an influential voice in Europe despite having a population of just under 16 million. Prime Minister Balkenende states often that the Dutch â€œtake their responsibilities seriouslyâ€ and therefore

expect to be heard. While the Dutch â€œnoâ€ to the EUâ€™s constitutional treaty embarrassed Balkenende, the vote revealed that the search for EU integration and consensus has its limits, capping a trend that started in the 90â€™s with then Liberal Party leader (and later EU Commissioner) Fritz

Bolkesteinâ€™s proposals to redefine the scope of European integration to protect Dutch national interests.

Â¶ 5. (S) With the French-German engine of European integration stalled,

German elections pending, and the EU unable to agree on finances, leadership opportunities for the Dutch are growing. This trend is enhanced by the gravitation of EU decision making to smaller groups, as Dutch participation can make or break internal groupings. The Dutch and Italian refusal to attend a â€œgroup of sixâ€ meeting recently proposed by

Schroeder, for example, effectively squelched his initiative. The British

Ambassador here recently confided that Blair sees the Dutch as essential to pursuing his European objectives and ensuring that transatlantic relations remain high on the European agenda. The leaders of the Netherlands, UK,

Norway, Denmark, and Sweden already meet quietly several times a year to coordinate positions prior to EU Council and other high-level EU meetings.

Â¶ 6. (S) Dutch leadership within the EU does not weaken their commitment to

NATO, where they are â€œgo-to guysâ€ for resolving potential EU-NATO conflicts. Their active, if often behind the scenes, support for NATO SYG

(and former Dutch Foreign Minister) Jaap de Hoop Scheffer, as well as their commitment to the NRF (and SRF, ISAF, and NTM-I), have helped push back efforts, such as Tervuren, which might otherwise create tensions between the NRF and EU battlegroups or other emerging ESDP capabilities. Foreign

Minister Bot recently proposed restructuring NATOâ€™s decision-making and funding mechanisms to make them more effective. The appointment of Herman

Schaper, the former deputy director general of political affairs at the

Dutch MFA and a good friend of the U.S., as the new Dutch permrep to NATO should create more opportunities for productive cooperation.

POLITICAL-MILITARY COOPERATION BEYOND THE EU

--------------------------------------------

Â¶ 7. (S) The Dutch are increasingly aware that strategic interests outside

Europe warrant their attention and leadership, especially in the politicalmilitary sphere. For example:

- Venezuela: The Dutch have strategic interests in the Caribbean (i.e., the

Netherlands Antilles and Aruba) and are deeply concerned about Chavezâ€™ meddling in the region. As a Caribbean power, the Dutch have good reasons to lead an effort to balance traditional Spanish dominance on Latin

American issues in the EU, but the U.S. and others will need to push them to take this role. The Dutch are active partners in regional drug enforcement efforts, and recently demonstrated their ability to deploy military forces (F-16â€™s) on short notice. Persuading the Dutch to counter

Chavezâ€™s destabilization efforts more actively would give us a reliable

European partner in the region.

- Afghanistan: According to CENTCOM, the Dutch took a strong lead in organizing and soliciting forces to staff ISAF Phase III, and are now preparing to deploy up to 1,400 personnel in conjunction with British,

Canadian, and possibly Australian forces. Separately, the Dutch deployment of Special Forces in a combat role represents a major shift in Dutch priorities away from peace-keeping to combat missions for the first time since the 1960â€™s. The Dutch remain a strong supporter in the war on terrorism in Afghanistan. We should encourage them both to continue to make significant contributions, and to push others to do more.

- Africa: Senior Dutch military officials say they are considering expanding their military presence in Africa to include Burundi, Rwanda,

Eastern Congo, Botswana, Zambia, and Ivory Coast, adding new â€œeyes and earsâ€ on the ground. The Dutch have requested embedding a cell at EUCOM

(similar to that already operating in CENTCOM) to coordinate their actions with the U.S. and other allies. One objective of the Dutch military deployments is to provide a secure environment for what is already one of the most ambitious assistance programs in the world. The Dutch are the fourth largest provider of assistance to Africa world-wide. In 2005 they established a 110 million Euro Stability Fund for security sector reform in the African Great Lakes Region and Sudan (as well as Afghanistan and Iraq.)

Dutch deployments in Africa have solid support in Parliament, while the focus on security as an aspect of development provides an attractive justification for potential European partners. We should not only encourage the Dutch to increase their direct involvement in Africa, but also explore whether the Dutch could act as a â€œclearinghouseâ€ for other interested parties. - Iraq: The Dutch were instrumental in providing early logistic support to U.S. forces in Iraq (including permitting transshipments through

Rotterdam when other ports in Europe would not.) The Dutch deployed 1,200 troops directly to the southern province of al-Muthanna for 20 months, including two controversial extensions. Although the Dutch have since withdrawn from al-Muthanna, their presence provided the political and military cover necessary for Japan to commit forces. The Dutch provided 25 trainers for the NATO Training Mission in Iraq, and have offered to provide up to 100 if other countries would make comparable contributions. We should urge the Dutch to continue to push their EU and NATO partners to do more in

Iraq.

- Middle East: The Dutch enjoy a reputation for â€œbalanceâ€ almost unique in Europe, as they are strong supporters of Israel, yet trusted by Arabs.

Given Foreign Minister Botâ€™s expressed willingness to take a more active regional role. We should look for opportunities to harness Dutch interest through participation in the Forum for the Future and other initiatives.

The Dutch have already promised to make a financial contribution to an expanded Multinational Observer Force (MFO) if asked, and, under the right circumstances, might be prepared to send peace-keepers to the region as well.

Â¶ 8. (S) These commitments demonstrate how the Dutch â€œtake their responsibilities seriouslyâ€ in practice by committing real resources -- money, troops, hardware, and political capital -- to tackle real problems, as well as their â€œmultiplierâ€ effect in the political-military realm.

The fact that the Dutch are providing the head (Peter Feith) and observers to the EUâ€™s new monitoring mission in Aceh is the latest example of their assuming leadership of an important international mission in a region where they feel special ties (as witnessed by FM Botâ€™s historic decision this year to attend the commemoration of Indonesian independence, the first such visit by a senior Dutch official since Indonesian independence).

Â¶ 9. (S) The Dutch have one of the largest, most geographically diverse deployments of military forces in the world, with more troops deployed as a percentage of their total forces than any other ally. Defense Minister Kamp and CHOD Berlijn recently restructured the Dutch military to eliminate layers of bureaucracy, including independent service chiefs, thereby creating a leaner, more deployable force. Kamp and Berlijn believe firmly in the â€œuse or loseâ€ principle, and have accordingly sought increasingly challenging operations -- such as the Special Forces deployment to Afghanistan and potential operations in sub-Saharan Africa.

Their desire to maximize the militaryâ€™s capabilities and their preference for U.S. equipment, even when alternative European suppliers exist, make the Dutch strong supporters of the Joint Strike Fighter (JSF) program. The

Dutch are one of only two countries (Italy is the other) whose financial contributions merit Tier II status in JSF development. Berlijn is pushing to lock in an early commitment for 50 planes (out of a total of 85) to

prevent JSF from becoming an issue in the 2007 elections. The Dutch are also seeking Tactical Tomahawks for Dutch frigates, additional lift capacity (CH-47, C-130, KDC-10), and are continuing to update their remaining hardware (AH-64D, F-16â€™s, Patriot Missile System, etc.) all of which are focused on meeting their Prague Capability Commitment objectives as well as their ability to sustain extended expeditionary operations outside the European theater.

COUNTERTERRORISM COOPERATION

----------------------------

Â¶ 10. (S) Faced with growing threats in their own country, as witnessed by the murder of Theo van Gogh in November 2004, the Dutch believe they are in the forefront of Europe with regard to counterterrorism, arguing that legislation and other steps earlier adopted by the Dutch are only now being considered in countries like the UK and Italy. Led by Justice Minister

Donner and Finance Minister Zalm, the Dutch were the first in Europe to implement the Container Security Initiative (CSI), Radiological Gates,

DOEâ€™s Megaports program, U.S. Customsâ€™ Green Lane Program, and, soon,

Trusted Flyers. China has engaged the Dutch on next generation protocols and standards for transport security, includng RFID technology. It will be important to monitor and work with the Dutch as they work with China. The

Dutch have also expressed an interest to participate in DHSâ€™s â€œCenters of Excellence.â€ While the EU was arguing with us and itself over releasing personal records to airlines, the Dutch allowed U.S. immigration teams (IAP) to operate at Schipol airport. The Dutch were instrumental in pushing the EU in 2003 to designate Hamas in its entirety as a terrorist entity; an EU-wide designation of the Dutch branch of the Al-Aqsa followed.

During their EU Presidency the Dutch hosted an EU-wide seminar to raise awareness of terrorist financing issues and have offered to host a major international conference on the same subject in 2006. The Dutch continue to push for EU designation of Hizballah in its entirety and to strengthen the

EUâ€™s â€œClearinghouseâ€ designation process. Given their record, we should continue to look to the Dutch to launch joint pilot programs in

Europe, and, more generally, to push counterterrorism issues to the top of the European agenda more generally.

DEVELOPMENT ASSISTANCE

----------------------

Â¶ 11. (S) The Netherlands is among the worldâ€™s leading aid donors, having budgeted USD 4.2 billion (0.74 percent of GDP, with a target of raising it to 0.8 percent) in assistance in 2004. It is a top donor of unearmarked assistance to UN humanitarian programs. In 2003, the Netherlands introduced a more focused aid strategy, which phased out smaller aid programs in wealthier countries. Dutch bilateral aid is now directed to 36 partner countries, including 18 in Africa. In 2003, President Bush and Prime

Minister Balkenende signed an MOU to coordinate HIV/AIDS programs in Ghana,

Zambia, Rwanda and Ethiopia that emphasizes public-private partnerships.

Balkenende recently expressed interest in using the Millennium Challenge

Corporation as a model for promoting public-private partnerships worldwide. USAIDâ€™s involvement with a Heineken AIDS treatment and education program in Rwanda has been particularly successful, and the World Bank has adopted it as a model. Dutch creativity and credibility in development makes them good potential partners for future joint initiatives with the

U.S. We should also take advantage of their experience and insights to help shift global aid efforts in the direction of sustainable long-term development.

CENTER OF INTERNATIONAL LAW AND HUMAN RIGHTS

--------------------------------------------

Â¶ 12. (S) With the International Court of Justice (ICJ), International

Criminal Tribunal for the former Yugoslavia (ICTY), the Permanent Court of

Arbitration (PCA), the Iran-U.S. Claims Tribunal, the International

Criminal Court (ICC) and other international legal institutions all located in The Hague, our ability to have an impact in the Netherlands on international issues ranging from Iraq to the Balkans is unique. With a historical interest in international law dating back to Grotius, the Dutch view themselves as natural defenders of international legal norms and practices. This tradition made them the perfect hosts for a conference of

Iraqi judges in The Hague in 2004, and has pushed them to the forefront of international efforts to train a new generation of Iraqi jurists. While their legalistic approach can be frustrating, they are flexible. Their concerns about U.S. interpretations of the Geneva Protocols have not prevented their Special Forces from deploying in Afghanistan. The Dutch also helped sway the EU to vote against the Cuban-sponsored resolution on

Guantanamo at the Human Rights Commission last year despite concerns about the treatment of detainees. But, as Foreign Minister Bot told Deputy

Secretary Zoellick recently, over the long run Dutch human rights concerns must be addressed to ensure that public and parliamentary support does not erode; we and the Dutch need to work together to resolve this concern.

Finally, the Dutch combination of seeking pragmatic solutions while remaining true to their legal principles could make the Dutch an important asset in resolving our differences with the EU over the ICC and article 98 agreements under the right circumstances.

ECONOMICS AND TRADE

-------------------

Â¶ 13. (S) Balkenende shares our interest in promoting an open international trading system and has been an ally in U.S.-EU trade disputes such as

Boeing-Airbus and the Foreign Sales Corporation Tax. The Dutch share with the British a vision of a market-friendly Europe driven by free trade. They are the third largest investor in the U.S. and the fourth largest recipient of U.S. investment world-wide. Their efforts to shift the Lisbon agenda in a more cooperative direction and to promote innovation and competition are creating additional opportunities for U.S. investors in Europe. Because the

Netherlands has one of the highest broadband penetrations in Europe, emerging research efforts in the areas of nanotechnology, life sciences, and other IT-related areas, and a new tax treaty, the country offers U.S. companies an important gateway into Europe. If consulted early and regularly, the Netherlands can also be an important ally in navigating the

EUâ€™s regulatory environment and removing obstacles.

DRUGS AND TRAFFICKING IN PERSONS

--------------------------------

Â¶ 14. (S) Narcotics and trafficking in persons remain areas of difficulty.

Despite fundamental differences regarding â€œsoft drugsâ€ and legalized prostitution, the Balkenende government has worked to prevent these differences from defining our relationship. There are also signs that Dutch attitudes may be shifting. The Dutch remain a major producer of synthetic drugs. On the other hand, Dutch Health Minister Hoogevorst recently signed a precedent-setting MOU with the U.S. to share information on the health risks of new strains of marijuana with higher concentrations of THC, which may convince the Dutch to rethink their approach to â€œsoft drugsâ€ in general. The Dutch are addressing drug tourism -- a recent proposal to restrict the sale of marijuana to Dutch passport holders in Maastricht, for example, could cut down on cross-border smuggling and other drug-related crime. We should support such initiatives actively.

BALKENENDE SOLID INTERNATIONALLY...

-----------------------------------

Â¶ 15. (S) We are fortunate to have in the Balkenende government an outwardlooking partner for whom working with the U.S. and the U.K. comes naturally. Balkenende and FM Bot take pride in building bridges between the

U.S. and Europe. Nowhere was this more evident than during the Dutch presidency of the EU. On two issues of great importance to the U.S. -- the

China Arms Embargo and accession talks for Turkey -- the Dutch moved, with our active urging, from following an EU â€œconsensusâ€ set by others to redefining the issue on their, and our, terms. In both cases, Bot and

Balkenende overcame initial skepticism and concluded that Dutch and U.S. interests coincided -- a pattern we have seen repeated on other less important issues. FM Bot began the EU presidency telling us that lifting the Arms Embargo was a â€œdone deal.â€ Later, however, he actively intervened to prevent a lift on â€œhisâ€ watch, saying that he did not want the blame for causing a rift between the U.S. and EU. Despite

Balkenendeâ€™s personal skepticism about bringing Turkey into the EU, he and Bot (a former Ambassador to Turkey) worked hard to ensure that Turkey got its date to start accession talks with the EU during the Dutch presidency, and want to see the agreement they helped negotiate successfully implemented. We will want the Dutch to continue to draw on the relationships they developed during the presidency to coax both sides to move in the right direction as October 3 approaches.

Â¶ 16. (S) Specific U.S. policies provoke squalls of anger and frustration here, but President Bushâ€™s visit to the Netherlands in 2005 to commemorate V-E day at the WWII Dutch American Cemetery at Margraten was met with universal acclaim and provoked remarkably little protest. Even

Dutch opposed to U.S. policies warmly welcomed the visit as a reminder of enduring, shared values forged in the crucibles of World War II and the

Cold War. This mission has pursued an ambitious program of outreach to future Dutch leaders to ensure that these emotions are passed to the next generation. In this effort, the Presidentâ€™s youth roundtable in

Maastricht and former Secretary of State Powellâ€™s town hall meeting with young leaders in The Hague were notable successes, which can serve as models for future efforts. Given the disproportionate influence wielded by the Dutch in international fora, we should expand our active exchange programs (including the Fulbright and International Visitor Leadership

Programs) to help shape the successor generation.

...BUT FACES DOMESTIC CHALLENGES

--------------------------------

Â¶ 17. (S) Unfortunately, the outward-looking, transatlantic orientation of the Balkenende cabinet is offset domestically by strong strains of Eurocentralism and Dutch-provincialism. This division will become more pronounced as the parties prepare for local elections in March 2006, and national elections in May 2007. Current polls show that Balkenendeâ€™s center-right coalition (his second government) is falling in the polls, while the main, center-left opposition Labor party (PvdA) and fringes on the right and left are gaining. Balkenende is gambling that his economic reform agenda will pay dividends in time for the 2007 elections, but that is uncertain. There is a strong chance that a center-left government dominated by the PvdA will come to power in 2007 -- or earlier if the 2006 local election results prompt national elections.

Â¶ 18. (S) Although U.S.-Dutch relations should remain fundamentally sound despite a shift to the center-left, a PvdA-led government would present new challenges. PvdA leader Wouter Bos has made clear his tendency to look to

Brussels first in setting Dutch international priorities. He sees the

Netherlands less as a transatlantic â€œbridge builderâ€ than as a follower of EU consensus. As with Schroeder in Germany, Bos might also find it

tempting to adopt a critical attitude toward the U.S. during elections to lock in his left flank. The PvdA is already raising allegations of U.S. abuses to challenge the rationale for Dutch deployments in Afghanistan, and does not support the JSF program. It is in our interest both to support the current governmentâ€™s transatlantic orientation and to engage actively with the opposition to shift them in a favorable direction.

THE ISLAMIC FACTOR

------------------

Â¶ 19. (S) A new, but potentially serious factor in Dutch domestic politics is its large, poorly integrated Muslim population, currently numbering just under 1 million, or 5.8 percent of the population. USG-sponsored polls show that 83 percent of Dutch Muslims identify much more strongly with their religion than with their host country, while 51 percent have little or no faith in the Dutch government as an institution. While the problems of

Dutch integration captured international headlines following the van Gogh murder, the Dutch believe they have an early start on the rest of Europe in seeking creative ways to address these concerns. Their strong interest in sharing and soliciting ideas has opened up opportunities for Embassy and

USG outreach and consultations throughout Dutch society, providing insights into a growing problem throughout Europe. We expect our experiences here will provide good indications of broader European trends as well as opportunities to influence their direction.

CONCLUSIONS

-----------

Â¶ 20. (S) The Netherlands is a complicated, multi-layered society.

Prevailing myths about the Dutch -- e.g., they are homogenous, universally tolerant, pacifist, etc.-- do not accurately gauge differences within society or reflect Dutch potential to influence international events. While the Dutch prefer to see themselves as â€œbalancingâ€ between Europe and the U.S., this balance can shift due to domestic and international factors.

Â¶ 21. (S) The key to maximizing Dutch effectiveness is to involve them early through high-level consultations and exchanges. Dutch pragmatism and our similar world-views make the Netherlands fertile ground for initiatives others in Europe might be reluctant, at least initially, to embrace.

Â¶ 22. (S) As multipliers, the Dutch should be encouraged to play an increasingly prominent role on the global stage. Coaxing the Dutch into the spotlight can take effort, but pays off royally. Dutch credentials, credibility, and capabilities make them effective leaders across a wide range of geographic regions and substantive issues.

Â¶ 23. (S) The Dutch are actively and favorably involved in Afghanistan,

Africa, Iraq, the Middle East, the Balkans, the Caribbean, Indonesia, and elsewhere. They are our best partner in developing pilot projects in the counterterrorism area, and are world leaders in development, free trade, international law and human rights. In pursuit of U.S. interests in all these areas of interest and leadership, we should build upon our successes to date to take the Dutch to the â€œnext level.â€ SOBEL

Viewing cable 09STRASBOURG21, COUNCIL OF EUROPE: OPPORTUNITY TO

INFLUENCE NEW SECGEN;



09STRASBOURG21

2009-09-24

09:09

2010-12-17

21:09

CONFIDENTIAL

Consulate

Strasbourg

VZCZCXRO3180

PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL

DE RUEHSR #0021/01 2670906

ZNY CCCCC ZZH

P 240906Z SEP 09

FM AMCONSUL STRASBOURG



RUEHSR/AMCONSUL STRASBOURG 0195

Thursday, 24 September 2009, 09:06

C O N F I D E N T I A L SECTION 01 OF 02 STRASBOURG 000021

SIPDIS

DEPT ALSO FOR DRL, L, EUR/ERA AND EUR/WE

EO 12958 DECL: 9/24/2019

TAGS PREL, PHUM, COE, FR, GG, KV, RS

SUBJECT: COUNCIL OF EUROPE: OPPORTUNITY TO INFLUENCE NEW SECGEN;

GEORGIA, RUSSIA, GUANTANAMO

REF: (A) STRASBOURG 13 (B) STRASBOURG 12

STRASBOURG 00000021 001.2 OF 002

CLASSIFIED BY: Vincent Carver, CG, Strasbourg, State. REASON: 1.4 (b), (d)

Department action request - please see para two.

SUMMARY

- - - - - - - -

Â¶ 1. (C) The Council of Europeâ€™s (COE) Parliamentary Assembly (PACE) is expected to elect the next Secretary General of the COE (REF A) September

29 or 30; a ranking Department official should consider reviewing our human rights agenda with the new SecGen soon - please see para two. The Georgians are pushing for a political confrontation with Russia at the PACE session

September 28-October 2, with over 70 PACE members supporting debate over the Russian delegationâ€™s credentials. Several western European ambassadors have told us they want to prevent a plenary debate which would provoke a walkout by the Russians. Separately, a few ambassadors questioned

Human Rights Commissioner Hammarbergâ€™s authority to write to all member states urging them to consider accepting detainees from Guantanamo. We do not expect this to hamper the Commissionerâ€™s continuing to support us on this issue. End summary.

EARLY CONSULTATIONS WITH NEW SECGEN WOULD BENEFIT U.S.

- - - - - - - - - - - - - - - - - - - -

Â¶ 2. (C) Mateo Sorinas, PACE Secretary General, briefed us September 21 on the September 28-October 2 PACE session. Despite lingering institutional rivalry between the PACE and member states, the PACE is expected finally to elect former Norwegian PM Jagland September 29 or 30. According to COE

Chief of Protocol Benitez, Jagland would take his oath within a day of being elected and likely would assume his full-time duties in Strasbourg by mid-October. Comment: Jagland can be expected to criticize the U.S. for the death penalty; he may, however, be less enthusiastic than the previous

SecGen, Terry Davis (UK), in publicly criticizing renditions, particularly if we review such issues with him soon. In this regard, we highly recommend a visit by a ranking Department official, such as the Assistant Secretary for DRL, to review our human rights agenda with the new Secretary General in the next several weeks.

COMMISSIONER CRITICIZED FOR LETTER ON GUANTANAMO DETAINEES

- - - - - - - - - - - - - - - - - - -

Â¶ 3. (C) Human Rights Commissioner Thomas Hammarberg, in his quarterly report to the Council of Ministersâ€™ deputies (resident ambassadors)

September 23, briefly mentioned his â€œinformalâ€ visit a few months ago to Washington, during which he told Administration officials that the U.S. could not expect European countries to accept detainees from Guantanamo if the U.S. were not willing to accept some on U.S. soil. Hammarberg was then criticized by a few ambassadors for having written in June to all COE member states calling on them to consider accepting detainees from

Guantanamo. The Maltese Ambassador (one of those criticizing Hammarberg) told us privately that Hammarberg thinks he is â€œGodâ€™s gift to the world.â€ The ambassador added that, if Washington wanted assistance with the detainees, it had plenty of direct channels to European countries and did not need Hammarberg to carry its messages. Comment: A few ambassadors, including the Maltese, have a history of bad relations with Hammarberg.

Most member states respect and even relish Hammarbergâ€™s independence. We do not expect this recent criticism to stifle Hammarberg from raising the detainee issue with European officials.

GEORGIA: TIME TO QUESTION RUSSIAâ€™S CREDENTIALS IN THE PACE

- - - - - - - - - - - - - - - - - - - - - - - -

Â¶ 4. (C) The Georgian Ambassador told us September 23 that he is confident the upcoming PACE session will result in some sort of sanctions against the

Russian PACE delegation. He said it is high time for the COE to penalize

Russia for its non-compliance with its COE commitments, including but not limited to its actions on Abkhazia and South Ossetia. Over 70 PACE members, mainly from conservative parties from central and eastern Europe, have signed a petition to debate the Russian delegationâ€™s credentials. No

Georgian PACE member has signed in an effort to demonstrate that this is a

â€œCOE issue, not simply a Georgian one.â€ The Russians have made it well known that their PACE delegation will walk out if the issue is debated in plenary (note: it will first be debated in the Monitoring Committee). While the Romanian Ambassador told us that the COE will demonstrate it means business on this issue, the Danish Ambassador told us that most member states, â€œtaking a cue from the EU, NATO, and various European and non-

European countries,â€ want better relations with Russia and therefore seek to head off a confrontation. He also noted that the leaders of the political groups and committees in PACE do not support questioning

Russiaâ€™s credentials. The Russian Ambassador, speaking at the deputiesâ€™ session September 23, stressed that any move to question the Russian delegationâ€™s credentials would â€œimpose real damage to the image of the

PACE and the COE. Comment: While the Georgians will view the Monitoring

Committeeâ€™s debate on the credentials as a victory, it likely

STRASBOURG 00000021 002.2 OF 002 will be a hollow one - we doubt that the PACE plenary will, in the face of a Russian walkout, vote to support any serious sanctions against the

Russians.nor

OTHER ISSUES

- - - - - - - - - - -

Â¶ 5. (SBU) Hammarberg and the Serbian Ambassador had a testy exchange

September 23 on Kosovo. The Serb made the usual points about its

â€œsouthern province,â€ claiming there has been no progress on IDPs and that there is a lack of freedom of movement for non-ethnic Albanians. She also criticized references to the Ahtisaari Plan and the Kosovo

Constitution in Hammarbergâ€™s report. Hammarberg retorted that his report covered the Serb minorityâ€™s concerns. He then underscored that he is

â€œobliged to cover the concerns of Europeans - to help individuals - even if this might be viewed as supporting one side or another politically.â€

He called on the Serbian Ambassador not to undermine his work â€œwhen we are trying to assist people.â€

Â¶ 6. (SBU) Several delegations and officials from the European Court of

Human Rights have told us that recent rhetoric from Moscow, including from the Duma, on support for court reforms is just that - rhetoric. Few hold out any hope that Russia will ratify Protocol 14 (REF B).

Â¶ 7. (SBU) In a rather sad exchange at the deputiesâ€™ meeting September

23, the Greek Ambassador criticized photos apparently chosen for

Commissioner Hammarbergâ€™s website regarding Hammarbergâ€™s recent official visit to Turkey. The Greek (echoed by the Italian and Maltese ambassadors) contrasted the â€œvacation-like, very positiveâ€ images with those associated with the Commissionerâ€™s visit to Greece. Hammarberg challenged the Greek by noting that his report on Turkey had not yet been published, and therefore the photos for the website had not yet been selected. CARVER

Viewing cable 09BRASILIA1411, BRAZIL: SCENESETTER FOR THE DECEMBER 13-14

VISIT OF WHA



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C O N F I D E N T I A L BRASILIA 001411

SIPDIS

FOR ASSISTANT SECRETARY ARTURO VALENZUELA

FROM CHARGE D'AFFAIRES LISA KUBISKE

E.O. 12958: DECL: 2019/12/10

TAGS: PREL OVIP BR

SUBJECT: BRAZIL: SCENESETTER FOR THE DECEMBER 13-14 VISIT OF WHA

ASSISTANT SECRETARY ARTURO VALENZUELA

REF: BRASILIA 1412 (EPD SCENESETTER)

CLASSIFIED BY: Lisa Kubiske, Charge d'Affaires, a.i.; REASON: 1.4(D)

Introduction: New Impetus to a Growing Relationship

Â¶ 1. (C) Mission Brazil warmly welcomes your visit to Brasilia. It is more than a courtesy to say that your trip comes at a significant time for U.S.-Brazil relations. A promising start with the new U.S. Administration is beginning to ebb as high-level initiatives have been delayed and Brazil has staked out positions

at odds with USG views on such issues as Honduras,

Colombia/Venezuela, Iran, non-proliferation, and the Middle East peace process. At the same time, as Brazil continues its rapid transformation from a regional to a global power, USG engagement with Brazil has continued to expand on a growing range of issues of importance to the United States, including global trade and finance, climate change, alternative fuels, regional energy integration, food security, UN Security Council matters, and trilateral cooperation in Haiti, Africa and elsewhere. The GOB remains eager to deepen bilateral engagement, and the possibilities to expand our productive economic engagement into other areas remain ample. As the Lula Government heads into its final year, your visit provides the opportunity to provide new impetus to the still-considerable positive momentum in our relationship, and to lay the groundwork for a more strategic partnership with a new

Brazilian government.

A Rapidly Emerging Global Power...

Â¶ 2. (SBU) Brazil's status as one of the world's top-ten economies has received a boost over the past year from the continuation of solid economic management and better-than-expected performance through the global financial crisis and economic downturn.

Brazil's growing economic clout and potential for an estimated 5% annual GDP growth during the next several years, combined with an aggressive effort by the Lula government to increase the country's international reach and the new prominence on the multilateral agenda of issues such as climate change on which Brazil is a necessary player, is encouraging this former global wallflower to make its presence felt on the world stage in ways that would have seemed unlikely only a decade ago.

Â¶ 3. (SBU) Brazil's ascendancy is being driven by a strong and still strengthening democracy, a more open and stable economy, a competitive inward- and outward-looking private sector, a deepening

S&T capability, and an ample natural resource base. Brazil is now the world's third largest agricultural exporter after the United

States and the European Union and the second-largest issuer of ADRs on the New York Stock Exchange. Already a global leader in alternative fuels and self-sufficient in oil, recent discoveries of offshore (so-called "pre-salt") oil, while difficult to exploit, give Brazil the potential to become a major global oil producer and exporter over the next decade. Over the past two years, Brazil has played a critical role in shaping the international economic system through its participation in the Doha Round and its leadership in the G20. Brazil is making a transition from a recipient to a provider of assistance, mostly through technical cooperation.

Brazil officially became an IMF "creditor" country this year and has pledged to increase its contribution to the IMF. (For additional background on Brazil's economy and economic positions, see the scenesetter for the bilateral Economic Policy Dialogue, reftel.)

Â¶ 4. (C) Under Lula, the GOB has dramatically increased its contacts with and presence in Africa, Asia (including North Korea), and the

Middle East (especially Iran), opening some 48 posts abroad over the last seven years and increasing its diplomatic corps by 50%.

While maintaining its focus on South American integration through

MERCOSUL and UNASUL-institutions largely of its making--and preserving its longstanding multilateral encounters with the United

States through the Summit of the Americas, with the EU through both regional and bilateral dialogues, and with Spain and Portugal through the Ibero-American Summit, Brazil has been the driving force behind a series of new multilateral gatherings, including the

BRIC (Brazil, Russia, India, China), IBSA (India, Brazil, South

Africa), ASSA (Southern Africa-South America), ASPA (South

America-Arab Countries), and CALC (Summit of Latin America and the

Caribbean). Brazil's top foreign policy priority remains obtaining a seat on the UN Security Council and, as it takes its place in

January as a non-permanent UNSC member for the tenth time, it is aware that its actions will be closely watched.

Â¶ 5. (C) Brazil has begun to take more visible and assertive

positions on a broader range of issues of interest to the United

States-sometimes helpfully, often not. Brazil's participation in the Doha Round, G20 talks, and, more recently, the preparations for the UNFCCC COP-15, has been serious and generally constructive.

Unlike the other two giant emerging economies, China and India,

Brazil is bringing to Copenhagen a goal to reduce its greenhouse gas emissions: a reduction of between 36-39% by 2020 compared with

"business as usual," which translates to about a 25% decline compared with 2005. (The USG is proposing a 17% decline for 2020 compared with 2005.) Brazil's own military and civilian nuclear programs have made it more difficult to work with on non-proliferation, and have led to the GOB's refusal to sign an

Additional Protocol and lop-sided advocacy of Iran's rights to civilian nuclear technology. Even further from Brazil's historical interests, high-level exchanges of visits with Iran and increasingly intense engagement in the Middle East peace process are among recent high-profile forays into new areas of global import. Statements on North Korean missile tests, China's crackdown in Tibet, and elections in Zimbabwe are other instances where Brazil has stepped into new territory.

...With the Emphasis on "Emerging"

Â¶ 6. (C) If Brazil's rapid emergence on the global stage is unquestionable, it is also true that it is very much still emerging. Brazil's clear sense of purpose in South America, where the overriding importance of maintaining stability on its poorly protected borders has led to an emphasis on dialogue and integration with its ten neighbors, is not in evidence on most extra-regional issues. Brazil's objective in achieving a seat at the table on many global issues seems to stop at the seat itself.

In part, this stems from a general Brazilian disposition to prefer dialogue with other countries to confrontation or isolation. It is also driven by Lula's determination to develop and maintain friendly relations with all global players as Brazil seeks a permanent seat on the UN Security Council. The end result is that

Brazil often remains reticent to take firm positions on key global

issues and generally seeks ways to avoid them. More often than not, the GOB eschews positions of leadership that might require overtly choosing sides. Its discomfort with the spotlight has been on full display in the aftermath of the Honduras coup: thrust into the center of the crisis when President Zelaya appeared on its embassy doorstep, Brazil did very little to extricate itself or to actively pursue a resolution, instead handing responsibility to the

United States.

Â¶ 7. (C) Less obviously, Brazil remains uncomfortable in its leadership on MINUSTAH. To the constant refrain of "we cannot continue this indefinitely," Brazil has been increasingly insistent that international efforts to promote security must go hand in hand with commitments to economic and social development-a theme it will take to the UNSC in January. Brazil maintains a frustrating double-standard on democracy and human rights. Although a founding member of the Community of Democracies and Partnership for

Democratic Governance, Brazil rarely stands firm on these issues; even its stubbornly rigid support of Zelaya (more so than democracy) in Honduras stands in stark contrast to Lula's unquestioning acceptance of Iranian President Ahmadinejad's re-election. And in the wake of what it considered a near-disastrous brush with election observation in Zimbabwe last year, the GOB has opted to focus on technical cooperation related to running elections, in lieu of observing them. In the UN, Brazil generally chooses to abstain even on resolutions regarding the most egregious human rights abuses-such as those in Iran, North Korea, and Sudan-unless it considers evidence of non-cooperation with international human rights bodies to be clear-cut (as in Burma, for example).

Â¶ 8. (C) Where Brazil's policy is not hesitant, it is often ill-informed or straight-jacketed by the policies of the past. As it steps out on Middle East issues, the GOB does so with a lack of expertise on the region. Inclined to take assertions from the

Syrians, Iranians, and Hizbullah at face value, it insists that

peace can be achieved only if all players are at the table, and seeks to position itself as a neutral party, "the country who can talk to everyone," over against what it perceives as the biased

U.S. and European efforts. This penchant for dialogue stands together with respect for sovereignty and non-intervention in internal affairs as the hallmarks of Brazilian foreign policy. But as Brazil plays in a growing number of international arenas, it is finding it more difficult to remain true to these principles, and more difficult to hide its inconsistencies.

Â¶ 9. (C) Brazil's uneven foreign policy is mirrored by continued growing pains at home. Impressive strides over the last twenty years in establishing stable democratic institutions are tarnished by a dysfunctional judicial system, lack of enforcement capability, and persistent and widespread corruption. Even as Brazil's middle class continues to grow, the income gap remains significant and the country is still home to the largest number of poor in the hemisphere, with some 50 million concentrated in the northeast.

Brazil's successful multinationals and vibrant entrepreneurial class are constrained by an inhospitable business climate, a costly and intrusive but inefficient government bureaucracy, R&D spending that focuses on producing articles for publications rather than innovation, and inadequate national transportation, communications, and energy infrastructure networks. Although it is heading to

Copenhagen with an ambitious proposal to reduce greenhouse gas emissions and the lowest rates of deforestation on record, the GOB has made very little headway in straightening out the land ownership issues in the Amazon (where only about four percent of the land is clearly titled) or in providing sustainable economic activities for the more than 25 million people living in the region. Without resolving those issues, the pressure to clear the

Amazon to support one's family will remain as great as ever.

Though proud of its status as a "melting pot" in which different cultures and races exist side-by-side, racism remains a real and largely unacknowledged problem, and Brazil's indigenous population of some 700,000 individuals, scattered across the country in 225 different societies, continues to suffer from prejudice, violence,

and marginalization.

Â¶ 10. (C) Nonetheless, Brazil continues to make progress across the board. Although the average Brazilian remains inward-looking and often ignorant of world developments, a burgeoning public interest in the United States has made Brazil one of the four largest visa-issuing and -adjudicating U.S. missions worldwide. Brazil continues to struggle with unresolved military dictatorship-era human rights violations, but is nonetheless moving successfully to reintegrate the military into the mainstream of national policy.

Organized crime, urban murder rates often ten times those in the most violent U.S. cities, and the second largest consumption of cocaine in the world are in need of urgent attention, but Brazil's professional, well-trained Federal Police works as an effective partner with USG law enforcement agencies. Public education remains sub-standard, the Landless Movement (MST) continues to attract the rural disenfranchised, and the government is largely absent from the favelas of Sao Paulo, Rio de Janeiro, and other major cities, whose millions of residents are often caught between criminal gangs and corrupt civil and military (uniformed) police.

But Brazil has developed innovative social programs, and its Bolsa

Familia conditional-transfer program is considered an international example.

Relations with the United States: Can Brazil Overcome Its

Inferiority Complex?

Â¶ 11. (SBU) This Mission has been saying in its scenesetters that bilateral relations are as good as they have ever been-certainly in decades. This is true, and the evidence is ample: a burgeoning set of government-to-government dialogues covering economic, commercial, scientific, defense, and foreign policy has led to rapidly expanding cooperation: an MOU on biofuels cooperation, increased numbers of joint exercises between our militaries, trilateral cooperation in Africa and Haiti on such issues as health, food security, and institutional strengthening, and an

innovative agreement to fight racial and ethnic discrimination.

Â¶ 12. (C) At the same time, we face significant historical baggage in the way Brazil's foreign policy establishment views the United

States, which slows our ability to build a fully cooperative relationship with Brazil. Much of Brazil's foreign policy establishment remains cautious and mistrustful toward the United

States. Bilaterally, a growing and pragmatic interest in cooperating with the United States on a range of technical and practical issues is often caught up in fears that Brazil will lose sovereign control or will find itself a junior partner on its own soil to better funded, staffed, and organized USG partners. This has led to persistent problems with visas for U.S. law enforcement agencies (particularly, but not exclusively, on counterterrorism issues), refusal to accept USG assistance, and seemingly unreasonable demands and strictures on various types of cooperation. More concerted Mission efforts to reach out to non-traditional executive branch agencies and non-executive branch partners-state and municipal governments, the judiciary, prosecutors, legislators, the private sector, and civil society-have sometimes been greeted with concern, suspicion, and occasional opposition by a Foreign Ministry jealous of its historical lead on all international issues and self-designated role as both definer and protector of Brazil's national interests vis-C -vis the world.

Â¶ 13. (C) Within South America, Brazil sees the United States as a competitor and remains deeply suspicious of our motives and intentions. Although the notion that the United States harbors plans to invade or internationalize the Amazon or to seize Brazil's offshore oil may seem preposterous to Americans, concerns about such plans surface regularly among senior Brazilian officials, academics, and journalists, and are only the most outlandish manifestation of generalized mistrust and insecurity with regard to the United States presence in the region. Brazil's reaction to the

U.S. base agreement with Colombia reflected, in large measure, just such concerns, as have its veiled efforts to scuttle the 3+1

Security Dialogue with Paraguay and Argentina. The United States is not the only one subject to the Brazilian mistrust; The GOB now requires all NGOs operating in the Amazon region to be registered and has tightened controls related to land ownership by foreigners in the area.

Â¶ 14. (C) Outside South America, Brazil's discomfort with the United

States is less in evidence, but it is careful to avoid any suggestion that it is toeing a U.S. line, is intent on avoiding situations in which it might be perceived as a junior partner, and tends to see an "independent" position-i.e., independent of the

United States in the first instance, and wealthy countries more generally-as the preferred default. Nor does Brazil want to be lumped in with the mass of developing countries. In multilateral settings, Brazil prefers to position itself as a "bridge" between the wealthy and developing nations. In cooperating with us in

Africa, it has been careful to limit cooperation to those areas where it can act plausibly as an equal partner. Across the board, engagement with the United States has been pragmatic, rather than strategic. As it looks for strategic partners, Brazil is showing a clear preference for other "independent" emerging powers-South

Africa, Turkey, Ukraine, Iran, China, India-and for one

"independent" world power: France. This (long-standing) affinity for the French, which has been amply reciprocated by President

Sarkozy and his government, has been most evident in the FX-2 fighter competition, in which both Lula and Defense Minister Nelson

Jobim have expressed a clear preference for the French aircraft despite Brazilian Air Force evaluations that show the clear superiority and cheaper price of the U.S. fighter.

An Eager Brazil Gives Us the Opportunity to Invest for the

Long-Term

Â¶ 15. (SBU) In spite of their reticence, Brazilians continue to show a genuine interest in deepening relations with the United States.

Economic issues are proving to be the easiest pathway to more

productive engagement with the GOB, both because, as a large emerging economy, Brazil is beginning to have a natural seat at the table and because the GOB sees most easily how global economic issues directly impact its own well-being and national security.

The GOB has shown itself a willing partner in efforts on bilateral investment and trade issues that will increase business opportunities, job growth, and economic development. At the same time, we are cooperating with Brazil to address the regulatory, legal and infrastructure challenges that constrain Brazil's growth and social inclusion goals and hurt U.S. exporters and investors.

Â¶ 16. (C) We are also building these partnerships with the goal of promote regional and global economic and social inclusion goals--among them, addressing the global financial crisis, opening trade, and stimulating cooperation on economic development.

Brazil's interest in taking on a mantle of global economic leadership offers numerous opportunities for engagement, as we encourage Brazil to take on increasingly responsible roles globally. As always, it is important to frame approaches to the GOB as a partner, and not a junior partner. However, constructive engagement in the G20 has given Brazil increased confidence that it can and should engage in issues outside its own borders, and the

GOB takes deserved pride in having overcome many experiences

(previous financial crises, addressing GINI inequalities, infrastructure impact on growth, etc) common to developing country, and sees itself as uniquely placed to use its "lessons learned" to help other developing countries tackle their own challenges. The

GOB has been receptive to partnering with us on development cooperation, including a newly developing initiative in Mozambique and Haiti on agriculture, health and infrastructure development.

We continue to work with Brazil to build consensus for WTO trade liberalization; to promote enhanced cooperation in fora such as

OECD, WHO, and ICAO; and to create the conditions for global development and prosperity.

Â¶ 17. (C) Our economic engagement provides a bridge to building our relationship with the GOB on other issues. Although they generally

require more careful groundwork and legwork to ensure success, the possibilities to do so remain ample. In a country that seeks nothing so much as recognition of its "rightful" place on the international stage, there is widespread understanding that no other country can legitimize Brazil's aspirations in so meaningful a way as the United States. More immediately, the prospect for advancing beyond a pragmatic partnership received a significant boost with the election of President Obama. Although Brazilians generally admire the United States and maintain a strong interest in our culture and politics, from President Lula to the man on the street they see in the President a kindred spirit whom they are eager to engage. The Administration's early statements and actions with regard to Latin America-the President's meeting with UNASUL and efforts to reach out at the Summit of the Americas, the spirit of negotiation at the OAS General Assembly, efforts to reinitiate dialogue with Cuba, Venezuela, and Bolivia-were all well received in Brazil, and heightened expectations of an even closer relationship. Brazilian officials were impressed by what they heard from General Jones, Under Secretary Tauscher, and other senior officials during their visit in August.

Â¶ 18. (C) In the intervening months, both official and non-official

Brazilians have become increasingly disappointed with what they perceive as a lack of attention from the United States. While acknowledging that the United States has pressing domestic and international priorities, Brazilians feel more than ever that their successes-their performance through the financial crisis, constructive engagement in the WTO and Copenhagen, creative social programs, and even their successful bids for the 2014 World Cup and the 2016 Summer Olympics-have earned them a more prominent place on the U.S. agenda. With regard to the GOB in particular, the

Colombia bases problem seemed to be evidence of a lack on the part of the USG both of transparency in our dealings in the region and of consideration regarding matters that have a direct impact on

Brazil's security. Although initially pleased with the USG response to the coup in Honduras, and despite having publicly insisted the problem was ours to resolve, the GOB saw our position

in support of Honduran democratic process (rather than a firm insistence on Zelaya's restoration) as a step away from consensus-building in the region.

Â¶ 19. (C) Despite this frustration, the GOB remains eager to engage, and holds out continued hope that Brazil will receive a visit from

President Obama in the coming months. The Foreign Ministry is in the process of creating and increasing staffing for a higher level department (equivalent to a Department of State bureau) to handle

United States, Canada, and Inter-American Affairs.

Uncharacteristically, the Foreign Ministry has extended a series of new offers and taken up others it has long delayed: it is eager to launch the proposed high-level dialogue, has sought to replicate the success of the Joint Action Plan to Fight Racial Discrimination by proposing an MOU on gender issues, is moving forward on a

Defense Cooperation Agreement, Pol-Mil talks, trilateral cooperation in Haiti and Africa, and a Tropical Forest Conservation

Act agreement, has offered an MOU on climate change, and has expressed repeated interest in establishing joint counternarcotics cooperation with Bolivia. While getting to yes on these initiatives will undoubtedly require the same patience and care to avoid Brazilian sensitivities that mark almost all of our daily interactions with the GOB, the evident interest at senior levels of the presidency and foreign ministry in building up the relationship should help smooth the way over the next months.

Â¶ 20. (C) As keen as they are to cultivate the Obama Administration,

GOB officials are also driven by the knowledge that their timeframe for making meaningful progress is short. There is little more than a year left of the Lula government; only ten months until elections for president, all 27 governors, two-thirds of the senate, and all federal and state deputies; just over six months before official campaigning begins; and less than four months until ministers who intend to run for office-perhaps as many as half of Lula's cabinet-must resign. This election-year calendar will be further complicated by the traditional slowdown during Brazil's extended

summer/Christmas/Carnival break. Nonetheless, the continuity provided by Brazil's influential diplomatic corps and the likelihood of broad continuity on both foreign and domestic policy under either of the two strongest contenders to succeed Lula on

January 1, 2011 means that initiatives put into place now will lay the groundwork for the new Brazilian government.

Â¶ 21. (C) The GOB will be looking for signs in your visit that USG interest in engaging Brazil as a global partner has not waned.

While GOB officials are unlikely to give on the issues that have proved contentious over the last months, they will value the opportunity to explain their views, will want to hear the

Administration's perspective and aspirations with regard to Brazil, and will seriously entertain suggestions for additional engagement.

Your visit provides the opportunity to forge a durable working relationship over the next year and to lay the foundation for a strategic bilateral relationship with the next Brazilian government that will also be essential to influencing the direction of

Brazil's development as a maturing global actor.

KUBISKE

Viewing cable 07TELAVIV2652, U/S BURNS' AUGUST 17 MEETING WITH ISRAELI

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SUBJECT: U/S BURNS' AUGUST 17 MEETING WITH ISRAELI MOSSAD

CHIEF MEIR DAGAN

Classified By: Ambassador Richard H. Jones. Reasons: 1.4 (b)(d).

-------

SUMMARY

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Â¶ 1. (S) In an August 17 meeting, Israeli Mossad Chief Meir

Dagan thanked Under Secretary Burns for America's support of

Israel as evidenced by the previous day's signing of an MOU that provides Israel with USD 30 billion in security assistance from 2008-2018. Dagan provided his assessment of the Middle East region, Pakistan and Turkey, stressing

Israel's (a) concern for President Musharraf's well-being,

(b) view that Iran can be forced to change its behavior, and

(c) sense that Turkey, Egypt, Jordan, Syria and Lebanon are unstable with unclear futures ahead of them. Dagan probed for more detail about XXXXXXXXXXXX U.S. military assistance

to the Gulf states, and -- while signaling agreement with the

U.S. approach to the Gulf states vis-a-vis Iran -- cautioned that they may not be able to absorb significant military assistance.

Dagan reviewed Israel's five-pillar strategy concerning

Iran's nuclear program, stressed that Iran is economicall

vulnerable, and pressed for more activity with Iran's minority groups aimed at regime change. Dagan urged caution in providing assistance to the Siniora government in

Lebanon, noting Syrian and Iranian efforts to topple the GOL.

Â¶ 2. (S) Under Secretary Burns cited the MOU as tangible evidence of the USG's commitment to Israel, and stressed that the U.S. would support all of its friends -- Arabs included

-- in the Middle East, and will remain engaged in the region for the long term. He described U.S. efforts to support the

Musharraf and Karzai governments as they face opposition from

Al-Qaeda and the Taliban, and explained that the Gulf

Security Dialogue is meant to bolster Gulf states facing threats from Iran. The Under Secretary reviewed U.S. efforts to isolate Iran and increase pressure on it, stressing that the U.S. is currently focused on the diplomatic track. He shared USG thinking about the Siniora government in Lebanon, and urged that the U.S. and Israel continue to consult on

Lebanon. END SUMMARY.

--------------------------------------------

THE SECURITY ASSISTANCE MOU AND ISRAEL'S QME

--------------------------------------------

Â¶ 3. (S) Dagan observed that the signing of the MOU on security assistance could not have come at a better time, and stressed that Israel appreciated America's support. The

Under Secretary agreed about the timing, noting that the

U.S., Israel and like-minded countries were facing multiple threats around the world, and that the Middle East is a very dangerous region. He said that the MOU serves as a concrete reminder that the U.S. stands by its long-term security

commitments to its friends, and is ready to help them with their needs. The Under Secretary noted that the Middle East is now at the heart of American interests. Because Egypt also plays a vital role in the region, the U.S. would also renew its security assistance commitment to that country.

U.S. relations with the Gulf states were longstanding, and

America would stay true to those friendships, as well. The

Under Secretary stressed that the USG is committed to

Israel's QME. He noted that the majority of systems and equipment that the U.S. would sell to Egypt and other Arab partners would replace items that had been sold to those countries in the past.

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DAGAN REVIEWS MIDDLE EAST, PAKISTAN, TURKEY

-------------------------------------------

Â¶ 4. (S) Assessing the region, Dagan said Israel sees itself in the middle of a rapidly changing environment, in which the fate of one Middle Eastern country is connected to another.

Dagan then said he was concerned about how long Pakistani

President Musharraf would survive: "He is facing a serious problem with the militants. Pakistan's nuclear capability could end up in the hands of an Islamic regime." Turning to

Iran, Dagan observed that it is in a transition period.

There is debate among the leadership between Rafsanjani and

Ahmadinejad and their respective supporters. Instability in

Iran is driven by inflation and tension among ethnic minorities. This, Dagan said, presents unique opportunities, and Israelis and Americans might see a change in Iran in

TEL AVIV 00002652 002 OF 005 their lifetimes. As for Iraq, it may end up a weak, federal state comprised of three cantons or entities, one each belonging to the Kurds, Sunnis and Shias.

Â¶ 5. (S) Dagan said that the Gulf states and Saudi Arabia are concerned about the growing importance of Iran and its influence on them. They are taking precautions, trying to increase their own military defensive capabilities.

Referring to the Gulf Security Dialogue (GSD), Dagan warned that these countries would not be able to cope with the amount of weapons systems they intend to acquire: "They do not use the weapons effectively."

Â¶ 6. (S) Dagan said that Jordan has successfully faced down threats from the Muslim Brotherhood and Hamas, and that Egypt is struggling with the question of who will replace President

Mubarak. He said he sees no hope for the Palestinians, and that Israel looks at Syria and Lebanon, and sees only instability. Further afield, it looks at Turkey and sees

Islamists gaining momentum there. The question, he asked, is how long Turkey's military -- viewing itself as the defender of Turkey's secular identity -- will remain quiet.

Â¶ 7. (S) If Israel's neighborhood were not unstable enough,

Dagan observed, it did not help that Russia is playing a

"very negative role" in the region. He observed that all of these challenges have to be addressed globally -- they could not be dealt with individually. Returning to Jordan as an example, he noted that the more than one million Iraqi refugees in Jordan were changing Jordanian society, and forcing it into a new relationship with Saudi Arabia. This is evidenced by Saudi King Abdullah's recent visit to Jordan, which implies greater understanding between the Jordanians and the Saudis.

----------------------------------------

DISCUSSION OF THE GULF SECURITY DIALOGUE

----------------------------------------

Â¶ 8. (S) Turning to the Gulf Security Dialogue (GSD), Dagan

said that enhancing the capabilities of the Gulf states "is the right direction to go," especially as they are afraid of

Iran. Such a U.S. commitment will be a stabilizing factor in the region. Dagan clarified that he would not oppose U.S. security assistance to America's Arab partners. He expressed concern, nevertheless, about the current policies of those partners -- especially with regards to Syria and Iran. Dagan added that if those countries must choose between buying defensive systems from the U.S. or France, then he would prefer they buy systems from the U.S., as this would bring them closer to the U.S.

Â¶ 9. (S) Dagan observed that the challenge facing the U.S. now is how to unite the Gulf states under a shared policy, and pointed to Qatar as the weakest link in the chain, trying to play all sides. Under Secretary Burns replied that the U.S. is trying to get Qatar and its neighbors to look at issues from a regional perspective, and to focus on threats in a unified way. Acting PM Assistant Secretary Mull expressed understanding for Israel's frustration with how the region looked, but stressed nevertheless that if America did not engage the Gulf states through the GSD, the situation would become much worse. It is critical to get the Gulf states focused on the Iran threat, and to adopt a regional approach to countering it. Encouraging and supporting their counterproliferation efforts would be crucial. Dagan said he agreed with this approach, stressing that the threat of radical Islam is real.

--------------------------------------------- ----

IRAN: DAGAN REVIEWS ISRAEL'S FIVE PILLAR STRATEGY

--------------------------------------------- ----

Â¶ 10. (S) Dagan led discussion on Iran by pointing out that the

U.S. and Israel have different timetables concerning when

Iran is likely to acquire a nuclear capability. He clarified that the Israel Atomic Energy Commission's (IAEC) timetable

is purely technical in nature, while the Mossad's considers other factors, including the regime's determination to succeed. While Dagan acknowledged that there is still time to "resolve" the Iran nuclear crisis, he stressed that Iran is making a great effort to achieve a nuclear capability:

"The threat is obvious, even if we have a different timetable. If we want to postpone their acquisition of a

TEL AVIV 00002652 003 OF 005 nuclear capability, then we have to invest time and effort ourselves."

Â¶ 11. (S) Dagan described how the Israeli strategy consists of five pillars:

A) Political Approach: Dagan praised efforts to bring Iran before the UNSC, and signaled his agreement with the pursuit of a third sanctions resolution. He acknowledged that pressure on Iran is building up, but said this approach alone will not resolve the crisis. He stressed that the timetable for political action is different than the nuclear project's timetable.

B) Covert Measures: Dagan and the Under Secretary agreed not to discuss this approach in the larger group setting.

C) Counterproliferation: Dagan underscored the need to prevent know-how and technology from making their way to

Iran, and said that more can be done in this area.

D) Sanctions: Dagan said that the biggest successes had so far been in this area. Three Iranian banks are on the verge of collapse. The financial sanctions are having a nationwide impact. Iran's regime can no longer just deal with the bankers themselves.

E) Force Regime Change: Dagan said that more should be done to foment regime change in Iran, possibly with the support of student democracy movements, and ethnic groups (e.g., Azeris,

Kurds, Baluchs) opposed to the ruling regime.

Â¶ 12. (S) Dagan clarified that the U.S., Israel and like-minded countries must push on all five pillars at the same time.

Some are bearing fruit now; others would bear fruit in due time, especially if more attention were placed on them.

Dagan urged more attention on regime change, asserting that more could be done to develop the identities of ethnic minorities in Iran. He said he was sure that Israel and the

U.S. could "change the ruling regime in Iran, and its attitude towards backing terror regimes." He added, "We could also get them to delay their nuclear project. Iran could become a normal state."

Â¶ 13. (S) Dagan stressed that Iran has weak spots that can be exploited. According to his information, unemployment exceeds 30 percent nationwide, with some towns and villages experiencing 50 percent unemployment, especially among 17-30 year olds. Inflation averages more than 40 percent, and people are criticizing the government for investing in and sponsoring Hamas, saying that they government should invest in Iran itself. "The economy is hurting," he said, "and this is provoking a real crisis among Iran's leaders." He added that Iran's minorities are "raising their heads, and are tempted to resort to violence."

Â¶ 14. (S) Dagan suggested that more could be done to get the

Europeans to take a tougher stand against Iran. Under

Secretary Burns agreed, and suggested that Israel could help

SIPDIS by reaching out to the Europeans. Dagan said that Israel is already doing this, and would continue to do so. Dagan

reiterated the need to strike at Iran's heart by engaging with its people directly. Voice of America (VOA) broadcasts are important, but more radio transmissions in Farsi are needed. Coordination with the Gulf states is helpful, but the U.S. should also coordinate with Azerbaijan and countries to the north of Iran, to put pressure on Iran. Russia, he said, would be annoyed, but it would be fitting, as Russia appears bent on showing the U.S. that it cannot act globally without considering Russia.

Â¶ 15. (S) Under Secretary Burns stressed that the USG is focused on Iran not only because of its nuclear program, but also because it supports terrorism and Shiite militias in

Iraq. The U.S. approach is currently focused on the diplomatic track and increasing pressure on Iran through sanctions. Work in the UNSC helps to define the Iranian nuclear threat as one that affects international security, and not just that of Israel. While UNSC members Russia,

China and Qatar will water down efforts to increase pressure on Iran, it is still worthwhile to push for a third sanctions resolution. In the meantime, the U.S. will encourage the

Europeans, Japan and South Korea to implement unilateral sanctions against Iran outside the UNSC framework. The U.S.

TEL AVIV 00002652 004 OF 005 will continue to encourage banks and financial institutions to slow down their operations in Iran and financially isolate it. Regarding military pressure, the Under Secretary noted that the U.S. has deployed 1-2 carrier battle groups in the

Gulf over the last six months, and that President Bush has stated that he will interrupt Iran's activity in Iraq. As for outreach to the Iranian people, the VOA is now broadcasting programs in Farsi, and the USG is trying to get more Iranian students to visit the U.S. to promote people-to-people relations.

-----------------------------------------

PAKISTAN: ISRAEL WORRIED ABOUT MUSHARRAF

-----------------------------------------

Â¶ 16. (S) On Pakistan, Dagan said that President Musharraf is losing control, and that some of his coalition partners could threaten him in the future. The key question, Dagan said, is whether Musharraf retains his commander-in-chief role in addition to his role as president. If not, he will have problems. Dagan observed that there has been an increase in the number of attempts on Musharraf's life, and wondered whether he will survive the next few years. Under Secretary

Burns replied that South Asia has assumed vital importance in

American foreign policy since September 11. The U.S. is committed to denying Afghanistan as a safe-haven for Taliban and Al-Qaeda activity. The USG will continue to support

Pakistani President Musharraf, and is seeking to boost his military defensive capabilities. At the same time, the U.S. is encouraging Pakistan and Afghanistan to work with each other militarily. Turning to India, Under Secretary Burns noted that U.S.-Indian economic cooperation is growing, and that the USG is working effectively to reduce tensions between India and Pakistan.

-----------------------------

LEBANON: DAGAN URGES CAUTION

-----------------------------

Â¶ 17. (S) Dagan urged caution with respect to Lebanon, noting that the results of efforts there to bolster the Siniora government would impact Syria and Iraq. The U.S. and Israel, he said, are on the edge of achieving something in Lebanon, and so cannot afford to drop their guard. What is necessary is finding the right way to support PM Siniora. "He is a courageous man," Dagan said. Syria, Iran and Hizballah are working hard against him. Dagan noted that much of what is

animating the leadership of Lebanon to take on Syria is personal: "Hariri, Jumblat and others had their parents executed by the Syrians." This anti-Syrian sentiment has forged an alliance based on personal and national interests.

Siniora has worked well with the situation, but Dagan suggested that the odds are against him. Under Secretary

Burns replied that the U.S. is trying to give PM Siniora as much support as possible, and that we would continue to consult closely with Israel on Lebanon. He noted that he would return to Israel in October.

--------------------

MEETING PARTICIPANTS

--------------------

18, (SBU) Accompanying Under Secretary Burns in the meeting were:

-- Ambassador Richard H. Jones

-- Acting PM Assistant Secretary Stephen Mull

-- Acting Assistant Secretary of Defense for International

Security Affairs Mary Beth Long

-- NEA/IPA Deputy Director Nicole Shampaine

-- Embassy Tel Aviv Counselor for Political Research

-- Embassy Tel Aviv Political-Military Officer (notetaker)

Â¶ 19. (SBU) Accompanying Mossad Chief Meir Dagan in the meeting were:

-- Israeli Ambassador to the U.S. Salai Meridor

-- Advisor to Foreign Minister Livni Omer Caspi

-- Two unidentified Mossad officials

Â¶ 20. (U) Under Secretary R. Nicholas Burns cleared on this cable.

********************************************* ********************

Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv

TEL AVIV 00002652 005 OF 005

You can also access this site through the State Department's

Classified SIPRNET website.

********************************************* ********************

JONES

Viewing cable 09TELAVIV1688, PM A/S SHAPIRO'S JULY 22-23 VISIT TO ISRAEL



Embassy Tel

Aviv

09TELAVIV1688

2009-07-30

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RUEHRH/AMEMBASSY RIYADH PRIORITY 2806



S E C R E T TEL AVIV 001688

SECRET

SIPDIS

E.O. 12958: DECL: 07/30/2019

TAGS: PREL PGOV MOPS PTER EG CH IR SA LE IS

SUBJECT: PM A/S SHAPIRO'S JULY 22-23 VISIT TO ISRAEL

REF: GRUBB-MILLER 07/22/09 E-MAIL

Classified By: DCM Luis G. Moreno, reasons 1.4 (b),(d)

Â¶ 1. (S) Summary: Assistant Secretary for Political-Military

Affairs Andrew Shapiro met with a number of GOI officials on

July 22-23 to stress the importance of the U.S.-Israeli political-military relationship, and to discuss among other issues Israel's Qualitative Military Edge (QME). GOI interlocutors continued to press for the opportunity to review the QME report prior to its submission to Congress, and presented an official response to a U.S. non-paper on potential arms transfers to Arab countries. In that respect, the MOD proposed technical discussions in Washington on

August 3 to further discuss GOI concerns over the potential

F-15SA transfer to Saudi Arabia. GOI officials continued to express reservations regarding U.S. arms transfers to

Lebanon, and requested the opportunity to further discuss

U.S. strategy and intentions with respect to the Lebanese

Armed Forces. GOI interlocutors raised continued concerns over the Iranian nuclear weapons program, noting that any policy of engagement be done in conjunction with tougher sanctions and for a finite period of time before turning to other "options on the table." Other issues raised by GOI officials included the Peace Process, Israel's export control system, and potential Israeli exports to China. Both sides agreed in principle to the next session of the Joint

Political Military Group (JPMG) in October or early November in Israel. End summary.

Â¶ 2. (SBU) On July 22, A/S Shapiro met with MOD Director

General Pinchas Buchris, MOD Political-Military Director Amos

Gilad, Defense Export Control Directorate Chief Eli Pincu, and participated in a roundtable discussion led by J5

Strategic Division Chief Brigadier General Yossi Heymann. At the MFA on July 23, A/S Shapiro met with Director General

Yossi Gal and participated in a roundtable discussion led by

Deputy Director General for Strategic Affairs Alon Bar and

Export Control Director Roey Gilad. A/S Shapiro also participated in a strategic tour of Israel, and visited

Israeli defense company Plasan-Sasa.

U.S.-Israeli Relationship

-------------------------

Â¶ 3. (SBU) A/S Shapiro stressed the importance of the

U.S-Israeli political-military relationship, noting the significance of visiting Israel on his first overseas trip in his capacity as Assistant Secretary for the

Political-Military Affairs Bureau. GOI interlocutors appreciated the opportunity to resume dialogue on this important aspect of the U.S.-Israeli relationship. MOD DG

Buchris noted the two still relatively new administrations in the United States and Israel, and the importance of limiting the number of misunderstandings in the future.

Qualitative Military Edge

-------------------------

Â¶ 4. (S) GOI officials reiterated the importance of maintaining

Israel's Qualitative Military Edge (QME). They said that

Israel understands U.S. policy intentions to arm moderate

Arab states in the region to counter the Iranian threat, and prefers such sales originate from the United States instead of other countries like Russia or China. However, Israel continues to stress the importance of identifying potential risks that may become future threats or adversaries, and for this reason maintains several objections as indicated in the

official GOI response to the QME non-paper on potential U.S. arms sales to the region (ref e-mail to PM/RSAT separately).

Â¶ 5. (S) GOI officials also expressed continued interest in reviewing the QME report prior to its submission to Congress.

A/S Shapiro reiterated that the report was based on an assessment from the intelligence community, and therefore not releasable to the GOI. He referenced previous points made to the Israeli embassy in Washington regarding the report, and welcomed any comments the GOI might have -- although such comments should be delivered as soon as possible as the report is already overdue. Israeli interlocutors appreciated the classified nature of the report, but also made clear it was difficult to comment on the report's results without reviewing its content or intelligence assessment. In that respect, Buchris and other GOI officials requested that the

QME process be reviewed in light of future QME reports.

Â¶ 6. (S) GOI interlocutors attempted to make the argument that moderate Arab countries could in the future become adversaries -- and that this should be taken into account in the QME process. During a roundtable discussion led by the

MFA's Deputy Director General for Strategic Affairs Alon Bar, the MFA's Center for Policy Research gave intelligence briefs on Saudi Arabia, Egypt, and Lebanon to further support the argument that these countries could become future foes.

Policy Research Center interlocutors reviewed succession concerns in both Saudi Arabia and Egypt. Bar argued that a perceived closure in the capability gap between Israel and

Arab states, coupled with a nuclear-armed Iran, could compel moderate Arab states to reassess the notion that Israel was a fixture in the region.

Â¶ 7. (S) Typically frank, MOD Political-Military Chief Amos

Gilad was not certain how much longer Egyptian President

Mubarak would live, and questioned whether his son Gamal was ready to assume command. Gilad said the Egyptian military

led by Defense Minister Tantawi continues to train and exercise as if "Israel was its only enemy." He added that there were disturbing signs on the Egyptian streets, as women are dressed more conservatively, and that peace with Israel

"is too thin, too superficial." On Saudi Arabia, Gilad said that King Abdullah does not hate Israel, but his chief priority is the survival of the regime.

Â¶ 8. (S) The GOI official response to the arms transfer non-paper includes several objections, such as the potential transfer of systems for the F-15SA to Saudi Arabia, including the Enhanced Paveway II, Joint Helmet Mounted Cueing System, and AESA radar. Buchris said the GOI is ready to establish a working group to discuss the F-15SA transfer, and proposed an

Israeli technical team accompany BG Heymann to Washington (in town for a missile defense meeting) on August 3 to discuss the issue further. Buchris said the sale of the F-15SA was not the problem, but rather the weapons systems included on the planes and the location of the planes in Saudi Arabia.

Lebanon

-------

Â¶ 9. (S) The GOI remains concerned about U.S. arms transfers to the Lebanese Armed Forces (LAF), and has requested the opportunity to discuss further U.S. intentions regarding the

LAF. A/S Shapiro said the results of the Lebanese elections represented a turning point, and rejection of Hizballah and its Iranian sponsors. The need to build up Lebanese institutions, including the army, was now more important than ever, he argued. A/S Shapiro said the LAF has thus far demonstrated a solid record of accounting for U.S. systems transferred to Lebanon.

Â¶ 10. (S) Buchris acknowledged that the elections in Lebanon were positive, but countered that Hizballah's influence remains strong. He argued that items such as the Cessna

Caravan and the Raven unmanned aerial vehicle (UAV) lack sufficient mitigation measures, which creates the potential for an incident along the Israel-Lebanese border. Amos Gilad said the GOI does not believe the LAF will attack Israel.

However, given the ties between Hizballah and the LAF, he was certain the IDF would eventually face the LAF in any conflict with Hizballah.

Â¶ 11. (S) Analysts from the MFA's Center for Policy Research argued there has been no dramatic change in the political arena despite the March 14 coalition's significant victory in the elections. They said the fragile political situation in

Lebanon is currently stable, but Hizballah still possesses an unofficial veto over policy. Long term prospects will be tested by the Hariri Tribunal and Hizballah's desire for a reprisal to the 2008 Mughniyeh assassination. MFA Policy

Research analysts further argued that the LAF faces tremendous pressure following the recent explosion of a

Hizballah arms cache near the Lebanese-Israeli border. MFA

DG Yossi Gal noted that UNIFIL had been prevented from investigating the explosion, and raised the recent crossing by Lebanese citizens into Israeli territory to plant Lebanese and Hizballah flags. He said French and Italian delegations had praised the GOI's restraint in these cases.

Â¶ 12. (S) A/S Shapiro asked if the election results might be the result in part of a backlash in the Christian community against Hizballah; the Policy Research analysts countered that the results were indicative of several factors, including the influx of Saudi money and an unstable opposition camp. They agreed that Hizballah leader Nasrallah might be a bit chastened following the elections, as suggested by A/S Shapiro, but that Hizballah continues to try and undermine the March 14 coalition.

Â¶ 13. (S) During the MOD roundtable discussion, BG Heymann also acknowledged the positive results of the elections. However,

he feared the outcome did not represent the real power of the

Shi'ites in Lebanon. He agreed that moderates and the LAF must be strengthened, but expressed deep concerns about ongoing cooperation between Hizballah and the LAF. He also said that such aid to Lebanon be paired with efforts to halt smuggling and directly weaken Hizballah.

Â¶ 14. (S) BG Heymann also cited concerns regarding mitigation measures for the Caravan and Raven in order to prevent an

"accidental engagement" by the IAF. Overall, he was skeptical that these systems would benefit the LAF, and said the GOI would appreciate a more in-depth conversation regarding U.S. intentions and overarching strategy with respect to the LAF. Heymann suggested further talks to coincide with the August 3rd F-15 technical discussion in

Washington; MFA DDG Bar echoed this request. A/S Shapiro offered to take that back to Washington for review. If it proved too difficult on short notice to bring together interagency experts to discuss US intentions with the LAF,

A/S Shapiro suggested it be included in the Joint Political

Military Group talks later in the fall.

Iran

----

Â¶ 15. (S) Iran's pursuit of nuclear weapons remains the GOI's primary focus. Buchris stated bluntly that it was not clear to him where U.S. policy was heading with regard to Iran. In separate meetings, Buchris and Amos Gilad said that Israel's preeminent priority is to prevent Iran's nuclear weapons program, which if realized would cause a nuclear arms race across the Middle East as Saudi Arabia, Turkey and Egypt pursue similar programs in response. Gilad was skeptical that engagement would work, noting Iranian desires to

"establish a new empire" and pointing to Iranian support for

Hizballah and "Hamastan." Buchris added that the United

States' desire to engage with Iran should be accompanied by tough sanctions, and only pursued for a finite period of time; MFA DG Gal concurred. Alluding to a potential military strike, Buchris said "all options must remain on the table," and acknowledged that part of his job was insuring Israel was ready to employ such an option, no matter how undesirable it may be.

Â¶ 16. (S) A/S Shapiro made clear that a nuclear armed Iran was unacceptable to the United States. He referenced Secretary

Clinton's July 15 foreign policy address at the Council on

Foreign Relations, noting the offer of engagement with Iran

-- but reinforcing that such an offer is not indefinite. A/S

Shapiro argued that an Iranian rejection of our offer to engage will only help bolster international support for increased sanctions. He also pointed to the uncertain situation following the Iranian elections -- it was unclear at this point how the regime in Tehran will react to our offer of engagement. That said, he repeated that the engagement offer was not unlimited, noting that the United

States will reassess its engagement strategy with Iran later this fall.

Â¶ 17. (S) A/S Shapiro cited a commonality of interests with the

Gulf States, which also view Iran as the preeminent threat -- we should take advantage of this commonality, he said.

During the J5 roundtable discussion, IDF interlocutors expressed skepticism that proposed military assistance to the

Gulf would help against Iran, as some of the systems slated for delivery are not designed to counter the threats, nuclear and asymmetrical, posed by Iran. A/S Shapiro agreed that assistance to Gulf states should not diminish Israel's QME, but argued that it sends a signal to those countries (as well as Iran) that they have strong allies in the West. It also helps convince these regimes that their best interests lie with the moderate camp rather than with Iran.

Â¶ 18. (S) Buchris said the lack of an appointed U.S. special envoy focusing on Iran suggested the United States did not believe Iran was a priority. A/S Shapiro reassured Buchris that Iran was a top priority as President Obama and Secretary

Clinton are intensely focused on Iran. The fact that Tehran has not responded to our offer of engagement makes a special envoy responsible for negotiations not as important, A/S

Shapiro said -- in any case, much of the discussion will be behind the scenes.

Â¶ 19. (S) Buchris referenced a press report from Secretary

Clinton's trip to Jakarta in which she said the United States would consider providing a defense umbrella for moderate Arab countries in the Middle East should Iran acquire a nuclear weapon. Buchris argued that such a statement already conceded the idea of a nuclear-armed Iran. MFA Deputy

Director General for Strategic Affairs Alon Bar also raised the Secretary's Jakarta statement; A/S Shapiro stated that the Secretary's comments did not indicate a new policy approach, but were meant as a deterrent factor toward Iran's nuclear weapons ambitions -- not as a concession -- and that journalists covering the trip attempted to make more out of the statement than was intended.

Â¶ 20. (S) Amos Gilad referenced Russia's potential sale of the

S-300 missile system to Iran, noting that Russian interlocutors initially denied the S-300 contract with Iran, and then later admitted it had been signed but added that the system would not be delivered for political reasons.

However, Gilad said the Russians would reassess this political calculation should the United States continue to pursue missile defense plans in Poland and the Czech

Republic. He speculated that the Iranians would continue to put pressure on Russia to sell the system rather than pursue alternative Chinese systems. He said the Russians appear committed to preventing Iran from acquiring nuclear weapons, but he personally had doubts about their intelligence

capabilities following their lack of knowledge regarding the

Syrian nuclear project.

Peace Process

-------------

Â¶ 21. (S) Buchris acknowledged that the Palestinian Authority was doing a "good job" in the West Bank, noting respect for

Palestinian Security Forces (PASF) as they take more control of security -- giving them the chance to succeed was important, Buchris said. He also commended the work of

United States Security Coordinator Gen. Dayton in training the PASF. That said, Buchris argued the way ahead would be difficult, given the divide between Hamas and Fatah.

Reconciliation talks between the two have stalled -- Amos

Gilad said both sides are "more interested in swallowing one another" than negotiating. Behind the scenes discussions with Hamas by European countries and even U.S. visitors have not helped the situation, Buchris said. A/S Shapiro deferred to Special Envoy Sen. George Mitchell's efforts, but noted

Secretary Clinton's point that a stronger PA will offer an alternative to Hamas. He also stressed Secretary Clinton's remarks during her July 15 speech that the United States will not engage with Hamas unless it has accepted the Quartet principles.

Export Control

--------------

Â¶ 22. (C) MOD Defense Export Control Directorate (DECD) Chief

Eli Pincu reviewed the export control system, emphasizing an improved process, but also acknowledging the potential for improvement. He gave a brief presentation regarding Israeli export controls, including enhanced legislation, cross-ministry coordination, enhanced enforcement, and increased industry outreach and training. He noted 780 registered exporters in Israel; for 2009, 31,373 marketing

licenses had thus far been issued, with 1,198 denials and 219 returned without action. MFA Export Control Director Roey

Gilad stressed the partnership between the MOD and MFA on export licenses, and explained the system's dispute resolution mechanism in the event the MFA and MOD disagree on a particular case.

Â¶ 23. (C) Both Pincu and Roey Gilad noted that the GOI continues to seek assistance in closing export control loopholes, including brokering. Pincu noted that brokering had been included in the Defense Export Control Act, but that accompanying implementation legislation had not yet entered in to force. Pincu said the GOI had consulted with Germany, the United Kingdom, France, and Japan on its brokering laws, and planned to raise it during the annual defense export control working group to be held in Washington in October.

Roey Gilad and other DECD officials also hope to travel to

Washington in the near future to further discuss brokering issues.

China

-----

Â¶ 24. (C) MFA Export Control Director Roey Gilad reiterated that the GOI in no way desires to compromise U.S. national interests with respect to exports to China. He noted, however, that the U.S. Department of Commerce created in 2007 a list of exemptions for certain items if sent to validated end users in China. Gilad questioned whether the same exemptions might be possible for Israel. As it currently stands, the GOI must pursue any export to China through the bilateral statement of understanding with the United States.

While the statement calls for expeditious resolution of any requests to export to China, it often takes up to 80 days to obtain approval. By that time, Gilad said, China has often found the item through another supplier. Moreover, the

Israeli export control system requires a 20-working day

turn-around on all export license requests -- which is not possible, given the length of time required to obtain an answer from the United States. A/S Shapiro offered to raise the issue in Washington.

JPMG

----

Â¶ 25. (SBU) A/S Shapiro suggested the next session of the Joint

Political Military Group (JPMG) convene shortly after the

Jewish holidays, most likely in October or early November.

GOI officials agreed in principle, and will look at the calendar and propose dates.

Â¶ 26. (U) A/S Shapiro has cleared this cable.

********************************************* ********************

Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv

********************************************* ********************

CUNNINGHAM

Viewing cable 09TELAVIV2473, SCENESETTER FOR THE VISIT OF DEPUTY

SECRETARY



2010-12-19

21:09

SECRET

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09TELAVIV2473

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SIPDIS

DEPARTMENT FOR DEPUTY SECRETARY STEINBERG

E.O. 12958: DECL: 11/12/2019

TAGS: PREL PGOV PTER MOPS KWBG IS IR

SUBJECT: SCENESETTER FOR THE VISIT OF DEPUTY SECRETARY

JAMES STEINBERG

Classified By: Deputy Chief of Mission Luis G. Moreno, Reason 1.4 (b) ( d)

Â¶ 1. (S) Summary. Israel is deceptively calm and prosperous.

The security situation inside Israel is the best since the outbreak of the Second Intifada, the economy has weathered the storms of the international economic crisis, and

Netanyahu's governing coalition is stable, for the time being at least. Yet outside the storm is gathering and Israelis of many different political outlooks agree on the need to seize the initiative, even while they disagree about what exactly should be done. Israelis see Iran as the primary regional threat, both due to its nuclear program and its projection of power directly into Gaza and southern Lebanon. The Israeli navy's seizure of a ship loaded with a huge shipment of

Iranian arms November 3 has provided tangible proof of

Iran's involvement in arming Hamas and Hizballah. Syrian intentions are also a source of concern, as Israeli analysts see Asad moving closer to Iran and Hizballah even as Syria improves its relations with the West. The sharp decline in

Israel's long- standing strategic relationship with Turkey is adding a new

element of instability into the picture. Prime Minister

Erdogan's rhetorical support for Ahmedinejad and his dismissal of the threat posed by Iran's nuclear program is feeding the sense here of impending crisis, although the robust U.S.-Israeli security relationship is profoundly reassuring to Israeli security officials and the general public alike. Finally, the failure to re-launch

Israeli-Palestinian negotiations and the political crisis in the Palestinian Authority is deeply disturbing to Israelis who still believe in a two-state solution. Even GOI skeptics are worried that the lack of a political dialogue and talk of a collapse of the PA are undermining the bottom-up approach they advocate as the alternative to a final-status agreement.

Netanyahu insists that he is ready to start negotiations immediately without preconditions, but he will not negotiate on the basis of former PM Olmert's offer of a year ago. The opposition Kadima Party's number two, former IDF Chief of

Staff and former Minister of Defense Shaul Mofaz, has generated considerable attention with a new peace plan that is based on offering the Palestinians a state with temporary borders in the next year or two, to be followed by intensive final status negotiations. Few here believe the Palestinians will accept this idea, but it may serve to push Netanyahu toward offering a peace initiative of his own. End Summary.

Calm Before the Storm?

----------------------

Â¶ 2. (S) Israel in the fall of 2009 is deceptively calm on the surface. Israelis are enjoying the best security situation since the outbreak of the Second Intifada, the result of

Israeli intelligence successes in destroying the suicide bombing network in the West Bank as well as good security cooperation with the Palestinian Authority's security forces.

The Israeli economy has successfully weathered the world economic crisis, with only a slight uptick in unemployment and no major impact on the financial system. PM Netanyahu's

center-right coalition is stable, and faces no significant challenge from the opposition Kadima Party. Netanyahu personally enjoys approval ratings over sixty percent, and appears to have benefited politically from the media obsession with reports of frictions with the U.S.

Administration. Netanyahu so far has managed the more right wing elements of Likud and other rightist elements in the coalition, although tensions with the far right are likely to reemerge over peace process issues, including a temporary settlement freeze or a decision to make good on Barak's pledges to evacuate illegal outposts. There are signs of a growing split within the Labor Party, and Foreign Minister

Lieberman continues to face the strong possibility of several criminal indictments for money laundering and obstruction of justice, but none of this threatens the stability of the coalition, at least not yet. The latest polls indicate that

Likud would gain three seats if elections were held now.

And Looming Threats

-------------------

Â¶ 3. (S) Despite this good news for the government, Israelis are even more anxious than normal these days. Sixty-one years after the establishment of the State of Israel,

Israelis sense a growing tide in the world challenging not just the occupation of territory seized in 1967, but even against the existence of the Jewish state within any borders.

The GOI's alarm and outrage over the Goldstone Report was based on their view that the report represented an attempt to deny Israel the right to react military to terrorist threats.

TEL AVIV 00002473 002 OF 004

Security is indeed good and Israel's borders are generally the quietest they have been in years, but it is common knowledge that Hamas in Gaza and Hizballah in Lebanon both

now possess rockets capable of hitting the greater Tel Aviv area, Israel's main population and economic center. When discussing Iran's nuclear program, sophisticated Israeli interlocutors note that the issue is not just whether a nuclear-armed Iran would launch nuclear-tipped missiles at

Israel - although that possibility cannot be dismissed - but rather the regional nuclear arms race that would ensue and the impact of the resulting uncertainty on Israeli elites and foreign investors alike. Israel's remarkable high-tech economy is a great achievement, but it also makes Israel exceptionally vulnerable to a host of private decisions to live and invest elsewhere. Growing alienation among Israel's twenty-percent Arab minority and the increasing domination of

Israeli Arab politics by an elite that identifies with

Palestinian nationalism further complicates Israel's internal scene.

Â¶ 4. (S) Painstakingly constructed relations with Israel's neighbors are also fraying. Even optimists about relations with Egypt and Jordan admit that Israel enjoys peace with both regimes, but not with their people. The transformation of Michel Aoun into Hizballah's primary Lebanese ally may be the final nail in the coffin of Israel's decades-old relations with Lebanon's Maronite Christians. Finally,

Israelis are deeply alarmed by the direction of Turkish foreign policy, and see Erdogan and Davutoglu as punishing

Israel for the EU's rejection of Turkey while driving

Israel's erstwhile strategic ally into an alternative strategic partnership with Syria and Iran.

Gaza Dilemmas

-------------

Â¶ 5. (S) Gaza poses its own set of dilemmas. The IDF general responsible for Gaza and southern Israel, Major General Yoav

Galant, recently commented to us that Israel's political leadership has not yet made the necessary policy choices

among competing priorities: a short-term priority of wanting

Hamas to be strong enough to enforce the de facto ceasefire and prevent the firing of rockets and mortars into Israel; a medium-priority of preventing Hamas from consolidating its hold on Gaza; and a longer-term priority of avoiding a return of Israeli control of Gaza and full responsibility for the well-being of Gaza's civilian population. Israel appears determined to maintain its current policy of allowing only humanitarian supplies and limited commercial goods into Gaza, while sealing the borders into Israel. There are indications of progress in the indirect negotiations with Hamas over the release of Gilad Shalit in return for the release of hundreds of Palestinian prisoners, many of them hardened terrorists,but it is difficult to predict the timing of such a deal. Shalit's release would likely result in a more lenient Israeli policy toward the Gaza crossings, but a large prisoner exchange would be played by Hamas as a major political achievement and thus further damage the standing of

Abu Mazen among Palestinians.

Security Cooperation with the U.S. Reassuring

---------------------------------------------

Â¶ 6. (S) Especially given the sense of growing threats from all directions, Israelis from the Prime Minister on down to the average citizen are deeply appreciative of the strong security and mil-mil cooperation with the U.S. The

U.S.-Israeli security relationship remains strong, as indicated by the joint U.S.-Israeli missile defense exercise

Juniper Cobra 10 in which over 1,400 American personnel tested Israel's defense - and U.S. support thereof - against ballistic missile threats in the region . The United States remains committed to Israel's Qualitative Military Edge

(QME), and has taken a number of steps to alleviate Israeli concerns over some potential U.S arms sales to the region, including the creation of four new QME working groups to further discuss these arms transfers. These working groups

will soon begin deliberations, focusing on previous arms transfer agreements, mitigation measures for the planned U.S.

F-15 sale to Saudi Arabia, technical mitigation issues, and intelligence policy.

Â¶ 7. (S) While the United States and Israel may not agree on some U.S. arms transfers to the region, these QME working groups will ensure a transparent process so that Israel is not surprised by any U.S. potential transfer. As it does in assessing all threats, Israel approaches potential U.S. arms sales from a "worst case scenario" perspective in which current moderate Arab nations (Egypt, Saudi Arabia, and

TEL AVIV 00002473 003 OF 004

Jordan) in the region could potentially fall victim to regime change and resume hostilities against Israel. It is primarily for this reason that Israel continues to raise concerns regarding the F-15 sale to Saudi Arabia, especially if the aircraft are based at Tabuk airfield near the Israeli border. We have deflected Israeli requests for additional information regarding the F-15 sale until we receive an official Letter of Request (LOR) from Saudi Arabia.

Â¶ 8. (S) Finally, an argument can be made that Israel has continued to raise concerns over the F-15 sale as leverage in its attempts to modify its purchase of the F-35 Joint Strike

Fighter (JSF). Israel remains highly committed to the JSF as a successor to its aging F-16 fleet, although budgetary considerations have raised some doubts how Israel will be able to afford it. Nevertheless, Israel continues to press for the inclusion of an Israeli-made electronic warfare (EW) suite, indigenous maintenance capacity, and a lower cost per aircraft into its JSF purchase plans, and has repeatedly raised these issues with SecDef.

Impasse with the Palestinians

-----------------------------

Â¶ 9. (C) Polls show that close to seventy percent of Israeli

Jews support a two-state solution, but a similar percentage do not believe that a final status agreement can be reached with the Palestinian leadership. Expressed another way,

Israelis of varying political views tell us that after Abu

Mazen spurned Ehud Olmert's peace offer one year ago, it became clearer than ever that there is too wide a gap between the maximum offer any Israeli prime minister could make and the minimum terms any Palestinian leader could accept and survive. Sixteen years after Oslo and the Declaration of

Principles, there is a widespread conviction here that neither final status negotiations nor unilateral disengagements have worked. While some on the left conclude that the only hope is a U.S.-imposed settlement, a more widely held narrative holds that the Oslo arrangements collapsed in the violence of the Second Intifada after Arafat rejected Barak's offer at Camp David, while Sharon's unilateral disengagement from Gaza resulted in the Hamas takeover and a rain of rockets on southern Israel. Netanyahu effectively captured the public mood with his Bar Ilan

University speech last June, in which he expressed support for a two-state solution, but only if the Plestinian leadership would accept Israel as the ation-state of the

Jewish people and the Palestiian state would be demilitarized (and subject toa number of other security-related restrictions o its sovereignty that he did not spell out in deail in the speech but which are well known in Wahington). Palestinian PM Fayyad has recently temed Netanyahu's goal a "Mickey Mouse state" due to all the limitations on Palestinian sovereignty that it would appear to entail.

Â¶ 10. (S) Abu Mazen's stated intent not to seek another term is widely seen here as an effort to put pressure on Washington

to put pressure on Israel to meet Palestinian terms for starting negotiations. Abu Mazen's statements have likely reinforced his image among Israelis as a decent man, and certainly a different breed from Arafat, but a weak and unreliable leader. Yet even some of the Israeli officials, including Avigdor Lieberman and Sylvan Shalom, who have been most skeptical about the prospects for a final status agreement in the near term, are now expressing concern at the lack of engagement with the PA and the prospects of the PA collapsing. Advocates of a bottom-up approach are finally realizing that without a political process, the security cooperation and economic development approach will become unsustainable. Netanyahu has told us that he considers Abu

Mazen to be his negotiating partner, and in his latest public statements has stressed that he is not interested in negotiations for their own sake, but rather seeks a far-reaching agreement with the Palestinians, but it remains unclear to us how far Netanyahu is prepared to go. Netanyahu is interested in taking steps to strengthen Abu Mazen, but he will not agree to the total freeze on Israeli construction in the West Bank and East Jerusalem that Abu Mazen insists is a requirement for engaging with Netanyahu.

Israeli Choices

---------------

Â¶ 11. (C) Former Defense Minister and former IDF Chief of Staff

Shaul Mofaz generated a lot of media attention this week when he announced a peace plan that calls for establishing a

Palestinian state with temporary borders on sixty percent of the West Bank, then entering final status negotiations.

TEL AVIV 00002473 004 OF 004

Mofaz' approach is similar to ideas that have been floated quietly over the past few months by Defense Minister Barak

and President Peres, and Mofaz claims that both Barak and

Peres support his plan. Mofaz' plan is in part an effort to undermine the political position of his rival for Kadima party leadership, former Foreign Minister Tzipi Livni.

Livni, presumably drawing on her experience negotiating with the Palestinians during the Olmert government, says she opposes the idea of an interim solution, but instead supports intensive final status negotiations, perhaps this time with direct U.S. involvement. Livni and Mofaz both stress that they are motivated by a sense of urgency and that time is not on Israel's side.

Â¶ 12. (C) Netanyahu still holds the political cards here, however, and we see no scenarios in which Livni or Mofaz become prime minister in the near future. As Mofaz told the

Ambassador earlier this week, Netanyahu may wait until the

Palestinian elections, if they are in fact held in January, but the initiative is in his hands. If the Palestinians continue to refuse to engage on terms that Netanyahu can accept, it is possible that Netanyahu could turn his attention to Syria. Media reports that Netanyahu asked

President Sarkozy to deliver a message to Asad may turn out to be accurate, but as with the Palestinians, Netanyahu will not resume talks with Syria where they left off under Olmert, but will insist on negotiations without preconditions.

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SUBJECT: ASSISTANT SECRETARY OF DEFENSE VERSHBOW MEETS WITH

SENIOR ISRAELI DEFENSE OFFICIALS

Classified By: DCM Luis G. Moreno, reasons 1.4 (b),(d)

This is a re-transmission of USDAO TEL AVIV 3188.

Â¶ 1. (C) SUMMARY: On November 1 and 2, Assistant Secretary of

Defense (ASD) for International Security Affairs, Ambassador

Alexander Vershbow, met with a number of senior Israeli defense officials in Israel including: Ministry of Defense

(MOD) Director General (DG) Pinchas Buchris; Head of MOD

Political Military Bureau Amos Gilad; Assistant Chief of

Defense Major General (MG) Benny Gantz; and Head of MOD

Intelligence Analysis Production Brigadier General Yossi

Baidatz. The Israelis expressed positive views on continued

U.S.-Israel cooperation particularly on Israel's Qualitative

Military Edge (QME) and the ongoing Juniper Cobra missile defense exercise. Israeli officials explained that they were going through an unprecedented period of calm due to the deterrent effect of Operation CAST LEAD, but that below the surface were a number of significant dangers. They continued to emphasize that Iran represents the greatest strategic threat to the region, both its nuclear program and its "axis" with Syria, Hezbollah, and HAMAS. They also expressed skepticism about Palestinian President Abbas's future, given his weakened position as a result of his handling of the

Goldstone Report and his inability to get the full settlement freeze he had pushed for; they questioned his ability to restart peace negotiations. Israeli officials were concerned about the deteriorating Turkey-Israel relationship and discussed threats emanating from both Syria and Lebanon. END

SUMMARY

-------------------

Bilateral Relations

-------------------

Â¶ 2. (S) ASD Vershbow's trip to Israel came as a number of high-level Israeli and American officials were meeting on key issues. On October 31, Secretary of State Clinton arrived in

Jerusalem for talks on the peace process with Prime Minister

Netanyahu, Defense Minister Barak, and Foreign Minster

Lieberman. In addition, EUCOM Commander Admiral Stavridis arrived in Israel on November 1 to observe the Juniper

Cobra-10 ballistic missile defense exercise. The ASD's visit also came in the wake of recent high-level discussions on

Israel's QME in Washington, and the October 21 meeting of the

Joint Politico-Military Group in Tel Aviv.

Â¶ 3. (S) On QME, ASD Vershbow asked for Israel's assessment of recent discussions, and across the board, Israeli officials

expressed gratitude for U.S. efforts on this front and voiced optimism on the steps moving forward. Amos Gilad acknowledged the sometimes difficult position the U.S. finds itself in given its global interests, and conceded that

Israel's security focus is so narrow that its QME concerns often clash with broader American security interests in the region. Israeli officials acknowledged the impressive nature of the QME dialogue mechanisms recently established, but stated that the results of the process are what truly matter.

MG Benny Gantz defined successful QME relations as "the effective process plus the right mitigations." While not explicitly saying it, Gantz seemed to acknowledge that Israel does not expect that all QME decisions will break in its favor, but that Israel only expects a fair and equitable process that incorporates "intimate dialogue." DG Buchris thanked Versbhow for the recent success of the JPMG and said he looks forward to convening the first meeting of the agreed upon working groups by the end of November. Vershbow stated that the technical working group discussions would be launched soon, and that he was looking forward to future

Israeli participation on this issue.

------------------------

Iran Remains Top of Mind

------------------------

Â¶ 4. (S) Israeli officials continue to uniformly emphasize that

Iran's nuclear program and regional hegemonic ambitions are the greatest strategic threats to Israel. They view Iran as the center of a radical axis that includes Syria, Hezbollah and HAMAS.

Â¶ 5. (S//NF) Israel continues to offer a worst-case assessment of the Iranian nuclear program, emphasizing that the window for stopping the program (by military means if necessary) is rapidly closing. General Baidatz argued that it would take

Iran one year to obtain a nuclear weapon and two and a half years to build an arsenal of three weapons. By 2012 Iran would be able to build one weapon within weeks and an arsenal within six months. (COMMENT: It is unclear if the Israelis firmly believe this or are using worst-case estimates to raise greater urgency from the United States). Amos Gilad explained his view of the repercussions of an Iranian nuclear capability stating that it would give Iran a free hand in supporting "HAMAStan" in Gaza and "Hezbollahstan" in Lebanon.

Gilad also argued that Saudi Arabia would definitely react to a nuclear Iran by obtaining a weapon (with Pakistani assistance) and Egypt would almost certainly follow. He was less sure about whether Turkey would respond by pursuing a nuclear weapon. Regardless, the security situation in the region surrounding Israel would be dramatically altered should Iran acquire a nuclear weapons capability.

Â¶ 6. (S//NF) ASD Vershbow queried various Israeli officials about their view of the Tehran Research Reactor (TRR) proposal and Iran's recent equivocation on the agreement.

Israeli officials uniformly expressed support for the agreement but made clear that by itself it was not sufficient. They stated that it was only one stop on the way to containing the Iranian nuclear program and that it must be followed by a freeze-for-freeze agreement and eventually the full suspension of uranium enrichment, as well as the end of work on the newly disclosed site at Qom. They warned that the TRR agreement by itself could serve as a major victory for Iran if it legitimized in the world's eyes Iran's right to enrich uranium on its own soil. None of the Israeli officials expressed surprise about Iran's apparent reversal on the TRR agreement, as they viewed this as typical Iranian negotiating style and part of an Iranian strategy of delay.

Amos Gilad stated that Iran would never agree to anything that contradicted its overall strategic goal of achieving a nuclear weapons capability.

Â¶ 7. (S) When queried about how the U.S. views the Iranian response, ASD Vershbow explained that the United States was still seeking greater clarity on what was the real Iranian bottom line. We may need time to ascertain whether Iran's response was in fact a serious walk-back or whether it would be willing to abide by the initial TRR agreement that had been agreed to in principle in Geneva on October 1. However, he also emphasized that American patience is not unlimited and that if the TRR agreement did collapse, the U.S. would likely begin pursuing the pressure track.

Â¶ 8. (S//NF) Israel was also highly concerned about Iran's support for proxies, with General Baidatz emphasizing that there are multiple bases in Iran where IRGC, Quds Force,

Hezbollah, HAMAS, and Palestinian Islamic Jihad operatives all train together and share knowledge. MG Gantz also emphasized Iran's role as a weapons supplier to Syria and that Syria actively facilitated arms transfers to Hezbollah.

He expressed concern about Iranian shipments of weapons via

Sudan to Egypt and into Gaza. On the Russian delay in delivery of the S-300 (SA-20) to Iran, Gilad voiced satisfaction with the train of events, acknowledging Prime

Minister Netanyahu's "secret" visit to Moscow and President

Obama's engagement with Medvedev had both played a role.

Gilad was worried about Russian readiness to support tough sanctions on Iran. ASD Vershbow said the Russians' signals on sanctions were mixed, but they seemed genuinely concerned about recent Iranian missile tests and the revelation of the

Qom facility.

-------------------

West Bank and Gaza

-------------------

Â¶ 9. (S) Of particular interest throughout the meetings was the subject of the Palestinian political situation. It was widely agreed that President Abbas is currently in a weakened

political state, and Israeli officials generally cast a dour assessment of Abbas's future. In one exchange, Amos Gilad stated his opinion that Abbas will not survive politically past the year 2011. Gilad further stated that Abbas is facing unprecedented criticism within the Palestinian

Authority over his handling of the Goldstone report, and that this, coupled with a stubborn HAMAS, has weakened Abbas considerably. The Israelis said the perception in the Arab world was that the U.S. had encouraged Abbas to take difficult positions on Goldstone and settlements only to walk away from him. ASD Vershbow queried Gilad over measures that could be taken to bolster Abbas. Gilad responded by stating that Israeli-Palestinian peace discussions need to be resumed immediately, but without preconditions, and that both parties need to seek further cooperation on a range of issues -- specifically on the security sector front. Gilad expressed optimism over the current atmosphere in the West Bank, citing improvements in the security and economic spheres, and further stated that the reduced Israeli Defense Force (IDF) footprint in the West Bank has made conditions ripe for advancing the relationship. Gilad closed, however, on a sourer note by stating that the Government of Israel has little faith in the Palestinian negotiating team.

Â¶ 10. (S) ASD Vershbow transitioned off the political discussion to focus on the Palestinian Authority Security

Force (PASF). Specifically, Vershbow highlighted the concern that Palestinian forces were seen as lacking real authority, and therefore asked for steps that could be taken to give the

PASF more visible control of security. Israeli officials responded by citing the decreased number of direct- action incursions, checkpoints and patrols, and seemingly drew a correlation between reduced IDF activity and increased PASF authority (COMMENT: Despite Israeli assurances, U.S. and

Palestinian officials continue to highlight the corrosive effect of regular Israeli incursions). MG Gantz cited

Palestinian security sector reform as a major accomplishment, stating that on-the-ground coordination between the PASF and

IDF units has improved dramatically. Despite these positive developments though, Israeli officials repeatedly underscored the importance of retaining the right to disrupt terrorist operations in the West Bank and Gaza. Additionally, they stated that if Israel allowed a weak and untrained security force to take over in the West Bank in the short term, the result will be deterioration of the Israel-Jordan relationship over the long term. The prospect of poor

Israeli-Jordanian relations, according to Amos Gilad, is unacceptable, and would result in the loss of "strategic depth" for Israel.

Â¶ 11. (S) ASD Vershbow urged his Israeli counterparts not to soley focus on the short-term "here and now," but rathr to envision the possible benefits that a strongand viable West

Bank could have for Israel's secrity situation in the future. Vershbow used thi point to springboard to the issue of HAMAS and aza, asking whether success in the West Bank coud serve as a "magnet" and help solve the Gaza problem.

He asked if Israel had made any headway in tems of an information operations campaign to better communicate with the people of Gaza. Israeli officials offered very little in the way of a communications strategy or long-term vision for the territories, but reinforced Israel's core belief that

HAMAS has only sinister motives, and that any attempt Fatah might make to improve its standing in Gaza would only be met with HAMAS opposition. General Baidatz articulated Israel's concern by highlighting recent intelligence that HAMAS is trying to acquire from Iran (and potentially test-fired the previous weekend) the 60 km-range Fajr-5 rocket that could reach Tel Aviv. These actions, according to Baidatz and other officials, make any discussion of Palestinian reconciliation both premature and unrealistic. Ambassador

Vershbow sought further clarification on this point, querying

Israeli officials over the level of public support for HAMAS.

Specifically, the ASD asked if there was any way to undermine support for HAMAS vis-a-vis the peace process.

Amos Gilad responded simply by saying that one of Israel's biggest concerns is the atmosphere created by disjointed peace talks. Specifically, Gilad stated that political promises of peace, unification, and reconciliation -- concepts that are never realized -- are only resulting in a climate of uncertainty that is unhealthy. On this matter,

Gilad mentioned that Egypt's role in pushing reconciliation is not helpful and often counterproductive, but that he expects Egypt to continue floating the idea at future junctures.

Â¶ 12. (C) In bringing up the Goldstone Report, DG Buchris emphasized that the Government of Israel took extraordinary steps to mitigate civilian casualties, despite HAMAS's deliberate use of civilians as human shields. He stated that the IDF made over 300,000 phone calls to alert civilians before bombing legitimate military targets. He also compared

Israeli operations in Gaza to U.S. operations in Iraq and

Afghanistan and stated that Israel would do whatever was necessary to protect its population. In response, ASD

Vershbow recalled U.S. support for Israel in handling of the

Goldstone report, and offered to share U.S. experience in investigating incidents in Iraq and Afghanistan as the GOI considered whether to conduct an additional investigation.

--------------------

Anxiety Over Turkey

--------------------

Â¶ 13. (S) Israeli officials also expressed growing anxiety over the Turkey-Israel relationship after the Turkish cancellation of Israel's participation in the ANATOLIAN EAGLE joint exercise. They expressed their belief that the strategic relationship with Turkey is critical, but that PM Erdogan's

views have increasingly penetrated into the military and have been part of the reason for the deterioration in relations as

Turkey looks East rather than West. Gilad believes this is understandable as Turkey's EU accession prospects look increasingly doubtful, and they must balance their relations with both regions to succeed.

Â¶ 14. (S) Baidatz stated that the Turks have an agenda to contain any Kurdish influence in Iraq and that to achieve it they need to improve their relations with Iran and Syria. In his view, the worst possible outcome would be a new

Turkey-Iran-Syria-Iraq axis in the Middle East. Gilad also noted that Turkey wanted to improve its relationships with

Iran and asserted that it had made some very aggressive plans recently to support HAMAS. However, he had a less pessimistic view than Baidatz, stating that Turkey had played a positive role in Iraq and that generally the Turks' agenda was for a stable Iraq that would be commercially beneficial to Turkey. Gilad stated that he was skeptical of any political rapprochement between Israel and Turkey in the near term, but that Israel would continue to foster the military-to-military relationship because of its strategic importance.

Â¶ 15. (C) Gilad also queried ASD Vershbow about what Israel might do to improve its relationship with Turkey. Vershbow explained that Turkey wants to be influential in the region and that if it jeopardizes its relationship with Israel, it will undermine its status and its leverage as an evenhanded mediator. He also commented that Erdogan's ideological views may lead him to focus on Turkey's Islamic neighbors, but he is also a realist who will not want to jeopardize Turkey's ties to the U.S. or NATO. The U.S. and Israel should be patient with Turkey and stay engaged, encouraging the Turks to play a constructive role in the region. He stated that at the upcoming bilateral defense talks between the U.S. and

Turkey in December, he and Under Secretary Flournoy would

emphasize the need to improve Israel-Turkey relations.

----------------------------

Quiet on the Northern Border

----------------------------

Â¶ 16. (S) Israeli officials remain pleased with the "quiet" nature of its northern border -- something they attribute to the deterrent effect Israel has built up following OPERATION

CAST LEAD and the 2006 war in Lebano. However, according to

Israeli officials, it i a foregone conclusion that strong cooperation eists between the Lebanese Armed Forces (LAF) and ezbollah. The level of cooperation far exceeds wht many assume is simply the day-to-day problem of corruption within the ranks. On the contrary, Israel believes that

LAF/Hezbollah cooperation is a matter of national policy.

Amos Gilad attributed this dynamic to elements of nationalism, stating that Lebanese government and military officials choose not to confront Hezbollah out of patriotic zeal. Moreover, according to Gilad, any information shared with the United Nations Interim Force-Lebanon (UNIFIL) goes directly to Hezbollah by way of the LAF.

Â¶ 17. (S) Israeli officials have major concerns over developments within Hezbollah -- specifically, its relationship with Syria and Iran. General Baidatz spoke of this relationship and drew attention to the existing supply of Fateh-110 long-range missile that Iran sent to Syria.

Israeli officials believe these missiles are destined for

Hezbollah. According to Baidatz and others, if the delivery were to occur, this would significantly alter Israel's calculus. Under such a scenario, the looming question for

Israeli policymakers then becomes: "to strike or not to strike."

-----------------

Optimism on Syria

-----------------

Â¶ 18. (S) General Baidatz offered an Israeli intelligence assessment that if Syria were able to achieve peace with security and obtain greater U.S. involvement, it may pull away from Iran's orbit. He explained that President Assad used his "negative assets," namely Hezbollah and HAMAS, to make himself relevant and that ultimately Assad wants it all:

the Golan Heights; peace with Israel; better relations with the U.S.; a strong relationship with Iran; and a continued relationship with Hezbollah. Ultimately, Gen Baidatz asserted that if Assad had to choose one thing, it would likely be peace with Israel. ASD Vershbow asked if Hezbollah could be sustained without Syrian support. Baidatz acknowledged the difficulty in answering this question, but stated his belief that it would be a gradual process before

Hezbollah could completely wean itself from the Syrian support apparatus and that, ultimately, both Hezbollah's and

Iran's flexibility would be significantly reduced.

-------------------------------

Mil-to-Mil Relations with Egypt

-------------------------------

Â¶ 19. (C) Amos Gilad commented that he would like to see a complete peace with Egypt, but noted there was very little in the way of Egyptian-Israeli military relations and that Egypt continued to train its military for war with Israel. Gilad stated that Egypt was not likely to attack Israel and did not represent a short-term threat, but that at the very least it was necessary to have modest contact between Egyptian and

Israeli officers. He expressed frustration by describing

Egypt and Israel's "frozen peace" and that neither side knows anything about the other. He noted that the last high-level military visit for Egypt was in 1991.

Â¶ 20. (S//NF) Israeli officials agreed that Egypt's counter-smuggling efforts have improved, particularly since

Operation CAST LEAD in January. However, they stated that gaps still exist and that Egypt needs to focus its efforts on stopping Bedouin smuggling in the Sinai. Gilad said he was disillusioned with the technical monitoring solution; tunnels continue and smuggling is increasing even with U.S. assistance along borders with Egypt.

--------------------------------------------- ---------------

Iron Dome and Juniper Cobra - Strengthening the Relationship

--------------------------------------------- ---------------

Â¶ 21. (S) On Iron Dome, DG Buchris (Assisted by retired General

Nagel) briefed ASD Vershbow on the latest developments, stating that Iron Dome is planned to have an initial operating capability by the spring of 2010, and that technological advancements have made the system much more viable defending against short range rocket attacks from Gaza or Southern Lebanon. Buchris also emphasized the need for additional USG support to help fund additional production of

Iron Dome to protect the civilian population in both the

North and the South. Buchris also noted progress on the upper- and medium-tier ballistic missile defense systems

(Arrow-3 and David's Sling, respectively). In an earlier meeting, MG Gantz quantified the importance of fielding adequate missile defense systems by citing critical Israeli infrastructure such as Ben Gurion Airport and the Ashkelon electricity plant. Suffering the loss or damage of places such as these, according to Gantz, would be a major blow to

Israel and, therefore, every effort to stand up a capable missile and rocket defense shield should be taken.

Â¶ 22. (S) After Gantz highlighted three areas of focus for the

IDF (deterring conventional threats, responding nimbly to asymmetric threats, and developing an integrated missile

defense system), ASD Vershbow asked for Gantz's initial impression of the Juniper Cobra-10 exercise. Gantz stressed the importance of this exercise, and stated that so far it had been a success. ASD Vershbow stated that the timing of

Juniper Cobra was somewhat fortuitous, given the recent developments with Iran. On the larger issue of missile defense, ASD Vershbow stressed U.S. efforts to try and persuade Russia to become more involved in missile defense cooperation, but stated that Russia's realization that the new U.S. missile defense approach in Europe is more effective than the previous one is causing the Russian leadership to ask many questions about the system.

-------

Summary

-------

Â¶ 23. (S) All of ASD Vershbow's interlocutors carried a consistent message emphasizing that: Iran remains Israel's greatest threat; recent events have weakened President Abbas; the PASF have performed well in the West Bank; and the relative calm on all Israel's borders does not obscure the fact that Israeli intelligence is seeing significant activity and planning by Iranian surrogates, namely HAMAS and

Hezbollah, with facilitation from Syria. These threats suggest that Israel must remain vigilant and prepared for the calm to end one day.

Â¶ 24. (U) ASD Vershbow has cleared this message.

CUNNINGHAM

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SUBJECT: 40TH JOINT POLITICAL-MILITARY GROUP: EXECUTIVE

SESSION (PART 1 OF 4)

Classified By: A/DCM Marc Sievers, reasons 1.4 (b,d)

Â¶ 1. (S) Summary: During the Executive Session of the 40th

Joint Political Military Group (JPMG), U.S. and Israeli counterparts continued discussion on the creation of four new

Qualitative Military Edge (QME) working groups. GOI interlocutors continued to raise concerns regarding the F-15 sale to Saudi Arabia. Both sides agreed that continued pressure be applied to Iran, especially following the disclosure of the nuclear facility in Qom. GOI participants expressed concern regarding Chinese and Russian cooperation with respect to enhanced Iranian sanctions. The GOI also

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raised dual citizenship concerns with respect to access to sensitive technology, and noted from its perspective Turkey's disturbing change of course toward Syria and Iran -- and away from Israel. This is the first in four cables (septels) reporting on the JPMG. End summary.

Â¶ 2. (SBU) Israeli Participants:

-- Brigadier General (res) Pinchas Buchris, MOD Director

General

-- Major General (ret) Amos Gilad, MOD Political-Military

Chief

-- Brigadier General Ronen Dan, acting Israeli Defense

Attache to the United States

-- Gad Dovev, Director, MOD Mission, New York

-- Alon Bar, MFA Deputy Director General for Strategic Affairs

-- COL Shimon Arad, IDF J5

-- Rami Yungman, MOD Political-Military Bureau

-- Schmuel Royter, Assistant to the MOD Director General

U.S. Participants:

-- Andrew Shapiro, Assistant Secretary of State, Bureau of

Political-Military Affairs

-- Luis Moreno, Deputy Chief of Mission, U.S. Embassy Tel Aviv

-- Dr. Colin Kahl, International Security Affairs, Deputy

Assistant Secretary of Defense

-- Brigadier General Jefforey Smith, Joint Staff

-- Prem Kumar, Director for Israeli, Palestinian, Egyptian and Jordanian Affairs, NSC

-- Tom Goldberger, Director for Israel and Palestinian

Affairs, Bureau of Near Eastern Affairs

-- COL Richard Burgess, Defense Attache, U.S. Embassy Tel Aviv

Qualitative Military Edge

-------------------------

Â¶ 3. (S) The Executive Session continued discussion from the

September 30 Qualitative Military Edge (QME) meeting in

Washington. Both sides presented their primary points of contact for the four newly proposed working groups focusing on previous agreements, mitigation measures for the F-15 sale to Saudi Arabia, technical mitigation issues, and intelligence/policy. Agreement was reached to begin working on the details of each working group's meeting schedule and timeline.

Â¶ 4. (S) The GOI continued to express concern over the F-15 sale to Saudi Arabia. U.S. participants noted that the USG is unable to provide more detailed information about the sale until Saudi Arabia officially sends a Letter of Request

(LOR). The GOI expressed additional concerns about stationing these new aircraft at Tabuk airfield in the northwest corner of Saudi Arabia -- close to the Israeli border. U.S. participants stated the USG understanding that this should not be an issue, as the Saudis are considering stationing new Typhoon aircraft at Tabuk. The GOI also raised AMRAAM sales to Jordan; U.S. participants explained that the new C-7 AMRAAM is an export version with capabilities similar to the C-5 version -- and therefore provides little to no increase in capabilities.

Iran, China and Russia

----------------------

Â¶ 5. (S) Both sides expressed concern over the recent revelation regarding Iran's nuclear facility at Qom, and agreed that increased pressure should be applied directly and internationally against Iran in order to better determine

Tehran's motives and next steps. Both sides agreed that the facility at Qom should be inspected immediately. One member of the Israeli delegation expressed the opinion that some consideration be given to "shutting Qom operations down completely" to prevent further progress on obtaining a

nuclear weapon. That said, the GOI argued that the international community not become bogged down on the Tehran

Research Reactor (TRR) and Qom, thereby diverting focus from

TEL AVIV 00002500 002 OF 002 the bigger issue of Iran's nuclear program.

Â¶ 6. (S) Several questions were raised about China's position on Iran's efforts to acquire a nuclear weapon. Both sides agreed that continued engagement with China and Russia is needed -- as well as building a consensus in Europe. The USG speculated, and the GOI concurred, that China will follow

Moscow's lead. USG participants argued that China would seek to avoid an international confrontation over Iran. The GOI described 2010 as a critical year -- if the Iranians continue to protect and harden their nuclear sites, it will be more difficult to target and damage them. Both sides then discussed the upcoming delivery of GBU-28 bunker busting bombs to Israel, noting that the transfer should be handled quietly to avoid any allegations that the USG is helping

Israel prepare for a strike against Iran.

Â¶ 7. (S) The GOI made the case for "crippling sanctions"; cooperation between the United States, Europe, Russia and

China will be necessary in order for these sanctions to be effective. U.S. participants stressed the USG position that any discussions with Iran on this subject be finite; the USG will continue to monitor whether negotiations are making progress. The GOI stated that it is not convinced the

Iranians will negotiate in good faith unless there are visible and clear threats. U.S. delegation members described eight lanes of sanctions, and outlined a plan to "pivot to apply appropriate pressure" on those points and tracks that have the most impact. U.S. participants concurred that 2010 is a critical year -- but the continued application of

pressure is vital.

Â¶ 8. (S) Regarding Russia, the GOI was not confident that

Moscow will be helpful in any Iranian sanctions effort -- GOI participants opined that Russia is considered a "mystery" with respect to their views on Iran. The GOI raised the

Russian S-300 sale to Iran, noting that the transfer is still pending. GOI participants argued that Moscow seeks a return to superpower status, but there are contradictory trends regarding Russia's internal condition.

Dual Citizenship Issues

-----------------------

Â¶ 9. (S) The GOI raised the issue of dual citizenship within the context of access to sensitive technology. U.S. participants acknowledged Israeli concerns, noting that the issue is being worked at the highest levels of the USG to reach consensus on how to proceed. The GOI recommended obtaining a waiver similar to the relationship from which

Canada or Australia benefit.

Turkey

------

Â¶ 10. (S) The GOI raised the current direction the Government of Turkey has taken toward Syria and Iran -- and away from

Israel. Israeli participants argued that Turkey has been supportive of Hamas in Gaza while pursuing a more "Islamic" direction with the goal of becoming a regional superpower.

The GOI argued that the Turkish military is losing its ability to influence government decisions and strategic direction. After this past year, GOI participants said they have a "bad feeling" about Turkey. The GOI noted that the

Israel Air Force (IAF) Commander in the past wanted to speak to the Turkish Air Force Commander, but his Turkish counterpart declined.

Â¶ 11. (U) A/S Shapiro has cleared on this cable.

CUNNINGHAM

Viewing cable 09TELAVIV2734, STAFFDEL KUIKEN-CAMMACK'S MEETING WITH PM

ADVISOR



09TELAVIV2734

2009-12-18

08:08

2010-12-19

21:09

SECRET

Embassy Tel

Aviv

VZCZCXRO9963

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SIPDIS

E.O. 12958: DECL: 12/18/2019

TAGS: PREL PGOV KWBG IS

SUBJECT: STAFFDEL KUIKEN-CAMMACK'S MEETING WITH PM ADVISOR

RON DERMER

Classified By: Acting Deputy Chief of Mission Marc Sievers, reasons 1.4

(b),(d)

Â¶ 1. (S) Summary: During a December 14 meeting with Senate

staff members (Michael Kuiken, Senate Armed Services

Committee, and Perry Cammack, Senate Committee on Foreign

Relations), the Prime Minister's Director for Policy Planning

Ron Dermer confirmed a solid U.S.-Israeli relationship that weathered a "rocky start" following the transition to new administrations in both countries. He argued that the international environment has changed in favor of pursuing a pressure track with Iran; tougher sanctions combined with continued domestic pressure within Iran might bring about change in Tehran. He expressed frustration with the peace process, noting that the GOI has taken steps in the effort to convince Abu Mazen to return to the negotiating table to no avail. Dermer said PM Netanyahu's patience has "run out," and that the GOI will make no more concessions in that regard

-- it is time for Abu Mazen to "be a leader." End summary.

U.S.-Israeli Relations

----------------------

Â¶ 2. (S) Dermer described U.S.-Israeli relations as good and improving, but acknowledged that the relationship between the new Obama and Netanyahu administrations got off to a "rough, rocky start." He noted that changes in administrations in both countries at nearly the same time were "relatively rare"

-- both entered office and started formulating policy based on electoral mandates representing change from the previous administrations. Dermer said that the United States and

Israel agree on so many things; when an issue of disagreement arises, the media tends to disproportionally accentuate the disagreement -- as was the case earlier in the year on settlements.

Â¶ 3. (S) Since this disagreement, Dermer said relations between the two administrations have improved daily, and were "only getting stronger." He noted greater U.S.-Israeli cooperation and coordination, especially with regard to confronting Iran and its attempts to acquire nuclear weapons. Dermer said

that President Obama does not get enough credit in Israel for weighing in helpfully on several issues affecting Israel's security, such as the Goldstone Report, problems in the

Turkey-Israel relations, and the recent EU Council statement on East Jerusalem. He also cited the successful Juniper

Cobra joint missile defense exercise hosted by Israel in

November 2009.

Iran

----

Â¶ 4. (S) Dermer said there was "great understanding" between

President Obama and PM Netanyahu on Iran during their first meeting in May 2009. Since then, several events related to

Iran have helped changed the international community's view on Iran: the Iranian elections and the regime's subsequent crackdown, the discovery of the Qom enrichment facility, and

Iran's refusal of the Tehran Research Reactor (TRR) proposal.

Dermer noted that PM Netanyahu has been quite vocal on Iran over the last 15 years; as the PM's communications advisor,

Dermer said he is often asked why Netanyahu has not spoken out against Tehran recently. Dermer described the PM's uncharacteristic public reticence as a strategic decision to give the United States a chance to succeed and not undermine the engagement process.

Â¶ 5. (S) Dermer suggested that the "stars are aligning" in favor of putting more pressure on Iran. He described the upcoming French UNSC presidency as positive, while the GOI was pleased to see the Swedish EU presidency come to an end.

Dermer said the trick was to convince Tehran that the continued pursuit of its weapons program would cause the regime's downfall, and that Russia remains the key on sanctions.

Â¶ 6. (S) Dermer acknowledged disparate voices within the GOI on strategy regarding Iran, but added that PM Netanyahu favored

tough economic sanctions combined with support for internal democratic dissent. Dermer compared Iran to the former

Soviet Union, in which experts were shocked by its internal fragility and subsequent sudden collapse. The assumption is that Iran is powerful, he said, but internal dissent coupled with constant external pressure could lead to the fall of the regime. He noted the importance of finding Iran's "Achilles heel" to apply pressure on the regime -- perhaps through

Iran's lack of oil refinery infrastructure. Dermer also said that PM Netanyahu was impressed with the recent efforts by

Senators Brownback and Specter to secure funding to provide all-source, uncensored internet access to peoples living

TEL AVIV 00002734 002 OF 002 under repressive regimes.

Peace Process

-------------

Â¶ 7. (S) Dermer noted that the GOI has taken a number of steps in the effort to jump-start the peace process with the

Palestinians, but to no avail -- as a result, Netanyahu's patience has "run out," he said. Dermer noted progress on

West Bank checkpoints and outpost evacuations, Netanyahu's acceptance of the two-state solution during his June 2009 Bar

Ilan speech, allowing "violent" individuals into the West

Bank to attend the Fatah party congress, and the recent settlement moratorium. He claimed that 70 percent of the

Israeli public opposes the moratorium (note: we think this is an exaggeration) -- this was a difficult decision for

Netanyahu, but one he decided to make to restart negotiations.

Â¶ 8. (S) Dermer lamented the lack of a partner on the

Palestinian side to pursue negotiations. He pointed to an

interview Abu Mazen gave to The Washington Post's Jackson

Diehl six months ago in which Abu Mazen implied he would "sit back and wait" for the United States to deliver Israel to the negotiating table. Dermer accused Abu Mazen of trying to internationalize the conflict, which he described as a "big mistake." The GOI understands Abu Mazen's political constraints and lack of support from Arab regional partners

-- but at the end of the day, Abu Mazen must "be a leader,"

Dermer said.

Â¶ 9. (S) Dermer noted that there will come a point readily apparent to the GOI in which the settlement freeze offers diminishing returns. He said the steps or "concessions" the

GOI has taken thus far have been devalued because they were made outside the context of negotiations -- "give us context," he said. In that regard, Dermer stated categorically that the GOI will not make any more concessions to Abu Mazen in order to return to negotiations -- "that is over." He asked what steps the PA has taken to return to the negotiating table, and dismissed Palestinian progress in the security sector as simply efforts to preserve Fatah's power.

Â¶ 10. (S) Dermer said that while Netanyahu is ready to engage at any time, the Israeli public is skeptical regarding the benefits of returning to negotiations with the Palestinians.

He noted that it would be "extremely difficult" for Netanyahu to approach the Cabinet at this point regarding negotiations when all the GOI has received in return for its efforts was a

"slap-down from the international community" following the

Goldstone Report.

Â¶ 11. (S) Dermer said Netanyahu does not believe Abu Mazen is as weak as he claims, and that Abu Mazen has the potential to

"rise to the occasion" in negotiating peace. However, he said Abu Mazen must make some sort of gesture to return to the table and "prepare his people" for the difficult decisions necessary for peace. Seemingly simple steps such

as employing new language or condemning violence and terrorism -- something the GOI believes Abu Mazen has not done since 2003 -- would be very appreciated, Dermer said.

Â¶ 12. (U) The staffdel cleared this cable.

CUNNINGHAM

Viewing cable 05VATICAN467, POPE BENEDICT XVI SUCCEEDS JOHN PAUL II



05VATICAN467

2005-04-19

19:07

2010-12-22

21:09

CONFIDENTIAL

Embassy

Vatican


C O N F I D E N T I A L VATICAN 000467

SIPDIS

DEPT. FOR EUR/WE (LEVIN), EUR/PPD, INR

E.O. 12958: DECL: 4/19/2015

TAGS: PREL PGOV PINR VT

SUBJECT: POPE BENEDICT XVI SUCCEEDS JOHN PAUL II

REF: A. A) VATICAN 000463,

Â¶ B. B) VATICAN 00465,

Â¶ C. C) VATICAN 00466

CLASSIFIED BY: D. Brent Hardt, Charge D'Affaires, EXEC, STATE.

REASON: 1.4 (d)

-----------------------------------

Ratzinger Elected Pope Benedict XVI

-----------------------------------

Â¶ 1. (SBU) The Roman Catholic College of Cardinals elected German

Cardinal Joseph Ratzinger Supreme Pontiff April 19. Ratzinger,

78, has taken the name Pope Benedict XVI. Despite media speculation that Ratzinger had the support of many cardinals, his election was a surprise to many, given indications that other more moderate voices might prevent a two-thirds majority.

Just yesterday, Poloff spoke to a top aide to Ratzinger,

American Monsignor Charles Brown, who asked half jokingly for prayers for Ratzinger's candidacy. When we saw Brown just after

Benedict's appearance as the new pope, the American was shellshocked: "I'm speechless," he said.

-----------------

Powerful Cardinal

-----------------

Â¶ 2. (SBU) Ratzinger was Dean of the College of Cardinals and had long been considered one of the two or three most powerful men in the Vatican. As head of the Holy See's Congregation for the

Doctrine of the Faith, the Vatican's watchdog for theological orthodoxy, Ratzinger developed a reputation for unapologetic conservatism and a firm hand with wayward theologians. The media often portrayed him as an aloof, autocratic despot.

However, in meetings with Ratzinger, Post has found him to be surprisingly humble, spiritual, and approachable.

--------------------

Will Stay the Course

--------------------

Â¶ 3. (C) Post will provide a more detailed analysis of the likely course of Benedict XVI's papacy septel, but the broad strokes

seem clear. Benedict XVI will stay the course of John Paul II theologically; there will be no liberalization of Catholic policy on abortion, contraception, priestly celibacy, female priests, and other hotly debated issues. A sermon he delivered

Monday before the opening of the conclave indicated as much, as

Ratzinger made it clear a new pope should not back down in the face of secularism and other challenges to orthodoxy.

--------------

Europe a Focus

--------------

Â¶ 4. (C) Pope Benedict will likely place great emphasis on the

Church in Europe. Ratzinger believes Europe is the spiritual and historic home of the Church, and he is not ready to cede his home continent to the forces of secularism or Islam. In fact,

Ratzinger made headlines in August 2004 when he expressed reservations about Turkey's prospective EU membership (04

Vatican 3196). He also led the ultimately unsuccessful drive for a mention of Europe's Christian roots in the new EU constitution, which became a primary focus of John Paul II's last year as pontiff. Many in the Holy See questioned the logic of this focus, given that the constitution already provided the legal protections the church needed, but it reflects the new

Pope's certain attention to the spiritual future of Europe.

--------------------

Transitional Figure?

--------------------

Â¶ 5. (SBU) In choosing the name Benedict XVI, Ratzinger may have been acknowledging that at 78, and following an historic papacy, he will be a transitional figure. Benedict XV's short-lived papacy lasted only from 1914-1922. The original St. Benedict, the founder of European monastic tradition, is the patron saint of Europe -- yet another hint of Benedict XVI's intentions.

------------------------

Biographical Information

------------------------

Â¶ 6. (U) Joseph Ratzinger was born on 16 April 1927 in Marktl am

Inn, Germany. He was ordained a priest on 29 June 1951. His father, a police officer, came from a traditional family of farmers from Lower Bavaria. He spent his adolescent years in

Traunstein, and was called into the auxiliary anti-aircraft service in the last months of World War II. From 1946 to 1951, the year in which he was ordained a priest and began to teach, he studied philosophy and theology at the University of Munich and at the higher school in Freising. In 1953 he obtained a doctorate in theology. Four years later, he qualified as a university teacher. He then taught dogma and fundamental theology at the higher school of philosophy and theology of

Freising, then in Bonn from 1959 to 1969, Muenster from 1963 to

1966, Tuebingen from 1966 to 1969. From 1969, he was a professor of dogmatic theology and of the history of dogma at the

University of Regensburg and Vice President of the same university.

Â¶ 7. (U) Already in 1962 he was well known when, at the age of

35, he became a consultor at Vatican Council II, of the

Archbishop of Cologne, Cardinal Joseph Frings. In March 1977,

Paul VI elected him Archbishop of Munich and Freising and on 28

May 1977 he was consecrated, the first diocesan priest after 80 years to take over the pastoral ministry of this large Bavarian diocese. Ratzinger was created and proclaimed Cardinal by Paul

VI in the consistory of 27 June 1977. On 25 November 1981 he was nominated by John Paul II Prefect of the Congregation for the Doctrine of the Faith; President of the Biblical Commission and of the Pontifical International Theological Commission.

-------

Comment

-------

Â¶ 8. (C) The election of John Paul II's theologian to succeed him suggests that the College of Cardinals wanted the closest possible theological continuity they could find in a new Pope.

At the same time, it is unlikely that the 78-year-old "humble worker in the Lord's vineyard," as he described himself will cut as prominent figure on the world stage as the young and robust

John Paul II did when he was first elected. While he will certainly carry on the Holy See's global mission left by his predecessor, his focus is likely to be more on strengthening the church from within than promoting the Church's role externally.

Despite his euro-centric focus, he will also need to address the concerns of those Catholics in the developing world whose priority remains a socially and politically active church working against poverty, disease and oppression. In this regard, and more broadly on international issues, he will face a steep learning curve. We should reach out to him early on to help shape his approach as he begins to grapple with the world beyond the Vatican's walls.

HARDT

NNNN

2005VATICA00467 - Classification: CONFIDENTIAL

Viewing cable 06VATICAN199, HOLY SEE: POPE'S REGENSBURG SPEECH IGNITES

FIRESTORM, LEADS



06VATICAN199

2006-09-18

13:01

2010-12-22

21:09

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SUBJECT: HOLY SEE: POPE'S REGENSBURG SPEECH IGNITES FIRESTORM, LEADS

TO PAPAL APOLOGY

VATICAN 00000199 001.2 OF 003

CLASSIFIED BY: Christopher Sandrolini, Charge d'affaires a.i.,

EXEC, State.

REASON: 1.4 (d)

Â¶ 1. (C) Summary. Pope Benedict XVI's September 12 speech in

Regensburg caused an unwanted firestorm in the Islamic world because of the pope's quoting, in passing, an insulting reference made by a 14th-century Byzantine emperor. The Holy

See, and the pope himself, responded with statements of clarification and regret in the ensuing days. While the pope surely did not intend such an outcome, his own approach toward

Islam and toward interreligious dialogue is cooler than that of

his predecessor. Post expects further papal comments on the matter on September 20, unless the controversy has died down by then, and will report further in the coming days. End summary.

Â¶ 2. (C) During his recent visit to Germany, Pope Benedict XVI gave a lecture to a gathering of academics on September 12 at the University of Regensburg. The lecture, entitled "Faith,

Reason and the University: Memories and Reflections", fairly long at roughly 3800 words, was of a learned sort, and focused on the relationship of reason and faith in the Western world.

At the outset of his remarks, the pope cited a comment made by a

14th century Byzantine emperor, Manuel II Paleologus, in order to make the point that proselytizing by violence is unacceptable to Christians, if not necessarily to Muslims. The actual quotation included a stinging reference to the prophet Mohammed.

This reference, a very small part of the lecture, subsequently produced an inflamed reaction in the Muslim world, several contrite statements from Rome, and considerable commentary. In order to shed some light on this unexpected controversy, this cable takes a look at what the pope said, the reactions it produced, and our interpretation of the situation.

What the Pope Said

------------------------------

Â¶ 3. (U) Following a bit of personal reminiscence about his own university days, the pope embarked on the lecture with the following passage:

"I was reminded of all this recently, when I read the edition by

Professor Theodore Khoury (Munster) of part of the dialogue carried on -- perhaps in 1391 in the winter barracks near Ankara

-- by the erudite Byuzantiine emperor Manuel II Paleologus and an educated Persian on the subject of Christianity and Islam,

and the truth of both. It was probably the emperor himself who set down this dialogue, during the siege of Constantinople between 1394 and 1402; and this would explain why his arguments are given in greater detail than the responses of the learned

Persian. The dialogue ranges widely over the structures of faith contained in the Bible and in the Qur'an, and deals especially with the image of God and of man, while necessarily returning repeatedly to the relationship of the three Laws: the

Old Testament, the New Testament, and the Qur'an. In this lecture I would like to discuss only one point -- itself rather marginal to the dialogue itself -- which, in the context of faith and reason, I found interesting and which can serve as the starting-point for my reflections on the issue.

"In the seventh conversation edited by Professor Khoury, the emperor touches on the theme of the jihad (holy war). the emperor must have known that surah 2, 256 reads: There is no compulsion in religion. It is one of the suras of the early period, when Mohammed was still powerless and under threat. But naturally the emperor also know the instructions, devloped later and recorded in the Qur'an, concerning holy war. Without descending to details, such as the difference in treatment accorded to those who have the "Book" and the "infidels", he turns to his interlocutor somewhat brusquely with the central question on the relationship between religion and violence in general, in these words: "Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." The emperor goes on to explain in detail the reasons why spreading the faith through violence is something unreasonable. Violence is incompatible with the nature of God and the nature of the soul. God is not pleased by blood, and not acting reasonably is contrary to God's nature. Faith is born of the soul, not the body. Whoever would lead someone to faith needs the ability to speak well and to reason properly, without violence and threats.... To convince a reasonable soul,

one does not need a strong arm, or weapons of any kind, or any other means of threatening a person with death...."

Â¶ 4. (U) The remainder of the lecture says very little about Islam

VATICAN 00000199 002.2 OF 003

(except for a passage suggesting that Muslims differ from

Christians in their willingness to accept God as absolutely transcending reason) and focuses instead on ancient Greek philosophy, Medieval Christian scholarship, and modern European thinking about the relationship of faith and reason. It concludes with an echo of the Manuel quotation to affirm that reason and faith can and must go together.

Reactions

--------------

Â¶ 5. (SBU) The lecture received substantial media coverage. By

September 14 criticism had been heard from various Muslim authorities; this criticism intensified in the following days.

According to press reports, the president of Turkey's Religious

Affairs Directorate, Ali Bardakoglu, said he read the pope's speech with amazement and horror, and he considered it to be provocative, hostile, prejudicial, and a barrage of other uncomplimentary terms. Aiman Mazyek, Secretary-General of the

Central Council of Muslims in Germany, and Dalil Boubakeur, head of the French Council for the Muslim Religion, were also quick to express concern. Senior Islamic officials in Kuwait, Egypt, and Pakistan called for an apology. Other prominent Muslims, such as Indonesian President Susilo and former Iranian President

Khatami, called for caution and hoped for clarification. Most recently, al-Qaeda militants in Iraq have reportedly vowed war on "worshippers of the cross" in reaction to the papal remarks.

In Somalia, gunmen shot an Italian nun, but it is not clear that the attack was related to the papal statement.

Â¶ 6. (U) The Turkish government has so far resisted calls to postpone or cancel the Pope's planned November visit to

Istanbul. The Moroccan government recalled its ambassador to the Holy See for consultations.

Â¶ 7. (U) The Vatican responded later on September 14 with a statement from Father Federico Lombardi, the Holy See's spokesman. Lombardi said it was certainly not the pope's intention to offend the sensibilities of Muslim believers, and went on to emphasize that the pope wants to cultivate an attitude of respect and dialogue toward other religions and cultures, "obviously also toward Islam".

Â¶ 8. (SBU) On September 16, the newly-installed Secretary of

State, Cardinal Tarcisio Bertone, issued an additional statement. Bertone noted the reaction in Muslim quarters to the pope's remarks, as well as the clarifications and explanations already presented by the director of the Holy See press office

(Lombardi). Bertone said the pope:

(a) has a view of Islam which is unequivocally that expressed in

"Nostra Aetate" -- a seminal Vatican II document on interfaith relations -- i.e., that the Church regards Muslims with esteem

(for their reverence for Jesus and Mary, their monotheism, their obedience to God, etc.).

(b) strongly favors interreligious and intercultural dialogue

(c) did not mean to imply that he shares the views of Manuel II which he quoted in his remarks

(d) "sincerely regrets that certain passages of his address

could have sounded offensive to the sensitivities of the Muslim faithful, and (could have been) interpreted in a manner that in no way corresponds to his intentions."

(e) hopes Muslims "will be helped" to understand the correct meaning of his words in the interests of faith, peace, and justice.

Â¶ 9. (SBU) Bertone gave an interview on September 17 in which he said that papal nuncios had been asked to explain the pope's remarks in their host countries. Bertone criticized the media for its role in the crisis, and said the pope's words had been

"seriously manipulated". Cardinal Renato Martino, head of the

Holy See's influential Justice and Peace dicastery, wrote a front-page article in L'Osservatore Romano on September 17, in which he blamed the controversy on mass media distortions and

"orchestrated political and ideological exploitation". Martino said, rather awkwardly, that if some believers from another religion feel offended, they should know that the pope's desire is to inspire sentiments of respect and Christian friendship for all true adherents of other religions. Other prominent

Catholics around the world, such as British Cardinal

Murphy-O'Connor, also came to the pope's defense.

VATICAN 00000199 003.2 OF 003

The Pope's Regrets

----------------------------

Â¶ 10. (U) At his weekly Angelus address on Sunday, September 17,

Pope Benedict XVI himself spoke to the issue, albeit briefly.

Speaking in Castelgandolfo, and making his first public remarks since returning from Germany, he said "I am deeply sorry for the

reactions in some countries to a few passages of my address at the University of Regensburg, which were considered offensive to the sensibility of Muslims. These in fact were a quotation from a medieval text, which do not in any way express my personal thought. Yesterday the Cardinal Secretary of State published a statement in this regard in which he explained the true meaning of my words. I hope that this serves to appease hearts and to clarify the true meaning of my address, which in its totality was and is an invitation to frank and sincere dialogue, with great mutual respect."

Comment

--------------

Â¶ 11. (C) Charge d'affaires has appointments pending with Holy See officials and others, and will report the results of those conversations as soon as possible. We will also be sending in a summary of relevant media coverage.

Â¶ 12. (C) For the moment, it is clear that Pope Benedict XVI has created an unwanted controversy with potentially significant, and harmful, implications. A common view is that the pope, a studious and retiring academic by nature, simply didn't imagine that his historical reference could cause such heartburn. While defenders have blamed the media, or trouble-seeking Muslims, others have noted that the firestorm could easily have been foreseen, and forestalled, had the pope circulated his text in advance to his deputies. (A powerful intellect long accustomed to writing his own material, Benedict is not in the habit of having his material vetted.)

Â¶ 13. (C) On the other hand, it taxes the imagination in today's world to suppose that a reference -- by the pope! -- to the

Prophet Mohammed's innovations as "evil and inhuman" would pass

unnoticed. Nor is it likely that the particular quotation is accidental. Benedict is known for his meticulous ways, and also for his distinctly cooler (compared to John Paul II) approach toward Islam and interreligious dialogue. The pope is preparing for an important visit to Istanbul in November. His invocation of Manuel, an emperor whose life was defined in combat with the

Ottomans who destroyed his empire a few decades later, must have been deliberate. So, too, the decision to quote the precise words of Manuel -- rather than a milder paraphrase -- is significant in a pope known for his belief that one must neither compromise with the truth, nor back down from defending the faith. (As Cardinal Ratzinger, he was also known for his belief that Turkey should not enter the European Union.) One of the pope's hardline Italian supporters, journalist Sandro Magister, argued in a September 18 column that Benedict has deliberately chosen a path of "less diplomacy and more Gospel", with marked willingness to say politically incorrect things.

Â¶ 14. (C) Our view is that Benedict very likely chose his words carefully and was not averse to having them interpreted as a sign of his skepticism about Islam; his earlier actions, such as the transfer of Archbishop Michael Fitzgerald last spring, made this attitude clear enough. However, he surely did not intend for them to lead to violence or a worsening of tensions between

Christians and Muslims. The quick succession of mollifying remarks by senior Vatican officials, including the pope, is unusual and suggests a chastened feeling at the top. However, the actual "apology" is itself phrased rather carefully and may fall short of putting out the fire. Upon return from a trip, popes customarily reflect upon the trip at the next public opportunity; in this case, that means the Wednesday audience on

September 20. We will watch developments closely.

Â¶ 15. (C) From our perspective, any USG comments on the matter should carefully note the Holy See's own statements,

particularly the Pope's own comments confirming that his remarks have been misunderstood and dissociating himself from Manuel's words about the prophet. Cardinal Bertone's clarification of the Holy See's continuing dedication to the principles of Nostra

Aetate (see para 8) and deep respect for Islam should also be noted.

SANDROLINI

Viewing cable 06VATICAN249, VATICAN: ENCOURAGEMENT, BUT NO CHANGE ON

TURKEY/EU POLICY



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2006-12-01

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SIPDIS

SIPDIS

DEPT FOR EUR/WE LARREA

Embassy

Vatican

E.O. 12958: DECL: 12/1/2016

TAGS: KIRF PHUM SOCI TU VT

SUBJECT: VATICAN: ENCOURAGEMENT, BUT NO CHANGE ON TURKEY/EU POLICY

REF: A) ANKARA 6529; B) 04 VATICAN 1164; C) 04 VATICAN 3196

VATICAN 00000249 001.2 OF 002

CLASSIFIED BY: Peter Martin, Pol/Econ Chief, Vatican, State.

REASON: 1.4 (b), (d)

-------

Summary

-------

Â¶ 1. (C) Despite media reports to the contrary, the Vatican remains officially neutral on the subject of Turkey's EU bid.

It maintains its position that it sees "no obstacle" to Turkey's entry if the GoT fulfills the Copenhagen criteria on religious freedom. Holy See officials were quick to speak out and clarify the Holy See's stance following media reports on Turkish PM

Erdogan's claim of new support from Pope Benedict. Referring to the Copenhagen criteria, Cardinal Secretary of State Bertone did make a statement of "hope" that Turkey would be able to fulfill the conditions put before it regarding its EU bid. While this should not be interpreted as an endorsement of Turkey's entering the Union, it was certainly encouragement for the GoT to enact needed reforms and continue to work towards integration. Top officials including Deputy Foreign Minister equivalent Pietro

Parolin have spoken frankly in private, confirming that the pope's statements in Turkey did not represent a shift in the

Holy See's stance. Vatican officials here are waiting for the return of the delegation Friday to hear the back story from

Turkey. End Summary.

------------------

Position Unchanged

------------------

Â¶ 2. (C) Media have run with Turkish PM Erdogan's claim that

Pope Benedict told him he now supported Turkey's bid to join the

EU. In fact, according to various high-level Vatican officials, the Holy See's position has not changed; the Vatican remains officially neutral on the subject, and maintains that it sees

"no obstacle" to Turkey's entry if the GoT fulfills the criteria established by the December 2002 Copenhagen Summit (ref b).

-------------------

Officials Speak Out

-------------------

Â¶ 3. (SBU) Holy See officials were quick to speak out following reports on Erdogan's statement. Press office director Federico

Lombardi issued a statement emphasizing that the Holy See had neither the power nor the competency to intervene on the precise point of Turkey's entry in the European Union. Lombardi did note that the pope had expressed his appreciation for the

Alliance of Civilizations initiative promoted by PM Erdogan, and noted the Vatican's encouragement of dialogue on this and related issues. New Holy See FM equivalent Archbishop Dominique

Mamberti chimed in that the Holy See had not expressed an official position on the issue of Turkey's entry. He also referred to the need for Turkey to live up to the Copenhagen criteria, a sentiment echoed by his boss, Holy See Secretary of

State Cardinal Tarcisio Bertone, who said he hoped Turkey "could fulfill the conditions put before it to join the European

Union." [Note: Bertone's statement should not be interpreted as an endorsement of Turkey's entering the Union, but was certainly encouragement for Turkey to enact needed reforms. It was significant as a rare public voicing of the Vatican's long-held position on the issue.]

Â¶ 4. (C) Privately, top Vatican officials including Deputy FM

Pietro Parolin have confirmed that the pope's statements in

Turkey did not represent a shift in the Holy See stance on

Turkey's EU bid. "We all hope that Turkey will take the steps on religious freedom and human rights that are necessary to enter," a foreign ministry official told us. The media will

"always say what they want," but the Vatican position has not changed, he said. Confidentially, he was skeptical about

Turkey's commitment to religious freedom, expressing doubts, for example, about the GoT's new Law on Foundations (ref a). He did not elaborate.

-------

Comment

-------

VATICAN 00000249 002.2 OF 002

Â¶ 5. (C) In the wake of his Regensburg speech and in an effort to clarify or soften his widely-reported 2004 remarks expressing doubts about Turkey's place in the EU (please see ref c),

Benedict likely said something relatively positive about

European integration that Erdogan (for whatever reason) interpreted more broadly. The pope was certainly trying to put a positive face on his Turkey trip whenever possible, and his

shift in tone from 2004 is noteworthy. The Vatican will maintain its neutrality on the EU question, but its encouragement of dialogue and further reforms are useful in the context of USG goals on the issue.

SANDROLINI

Viewing cable 06VATICAN256, TURKEY: VATICAN BACKS INTEGRATION



06VATICAN256

2006-12-07

17:05

2010-12-22

21:09

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SIPDIS

SIPDIS

DEPT FOR EUR/WE LARREA

EO 12958 DECL: 12/7/2016

TAGS SOCI, PHUM, TU, VT

SUBJECT: TURKEY: VATICAN BACKS INTEGRATION

REF: A. A: VATICAN 249

Embassy

Vatican

Â¶ B. B: ANKARA 6593, ET AL.

VATICAN 00000256 001.2 OF 002

CLASSIFIED BY: Peter Martin, Pol/Econ Chief, Vatican, State. REASON: 1.4

(b), (d)

------------

Summary

------------

Â¶ 1. (C) While not officially endorsing Turkeyâ€™s entry into the EU (ref a), the Holy See continues to support the dialogue and reform process connected to the issue. Top officials, including the pope, have spoken positively in public and private about European integration. Although they are critical of the religious freedom situation in Turkey, officials recognize that the EU entry process offers an opportunity to bring Turkey along on these matters. In his December 6 audience, the pope expressed emphasized his hope that Turkey would be a â€œbridge of friendship and of fraternal cooperation between the East and West.â€ Post continues to engage on the issue, focusing on the opportunity presented by integration and EU entry to ameliorate the situation for Catholics and other Christians in Turkey. A high-level visit from the Department could be very helpful in highlighting the matter for the Holy See and eliciting further useful public and private comments. Please see paragraphs 5-6 for action request.

----------------------

â€œPositiveâ€ Process

----------------------

Â¶ 2. (C) Holy See Undersecretary for Relations with States (Deputy FM equivalent) Pietro Parolin told the Charge December 6 that the Holy See continues to support the â€œpositiveâ€ process of dialogue and reform connected to Turkeyâ€™s EU bid . (Recent public statements from other Holy

See officials have borne a similar positive message on European integration.) The Vaticanâ€™s position on Turkeyâ€™s EU accession has not changed (ref a), despite inaccurate media reports following Pope

Benedictâ€™s meeting with PM Erdogan . In fact, neither the pope nor the

Vatican have endorsed Turkeyâ€™s EU membership per se; rather, the Holy See has been consistently open to accession, emphasizing only that Turkey needs to fulfill the EUâ€™s Copenhagen criteria to take its place in Europe. If that occurs, Parolin reiterated, â€œwe would see no obstacleâ€ to

Turkeyâ€™s joining the EU -- a development which, he agreed, has the potential to promote greater rights for religious minorities in Turkey.

---------

Caveats

---------

Â¶ 3. (C) Parolin does have some concerns about the situation. One great fear is that Turkey could enter the EU without having made the necessary advances in religious freedom. He insisted that EU members - and the U.S. - continue to press the GoT on these issues. We noted that the continuing dialogue and process for EU entry provide just such a forum for this pressure, and cautioned that deadlines and ultimatums would be counterproductive -- robbing Turkey of a powerful incentive to enact needed reforms, and depriving the West of valuable leverage on the issue. Parolin took the point, but said that short of â€œopen persecutionâ€, it couldnâ€™t get much worse for the Christian community in Turkey, where limited property rights and other factors have left Christians enjoying

â€œfreedom of belief, but hardly a full freedom of religionâ€. Other

Vatican officials expressed disappointment to us over President Sezerâ€™s veto of nine articles of the recently passed Foundations Law affecting religious minorities (ref b). Parolin noted that a list of particular problems -- outlined in a document put out by the Turkish Catholic bishops two years ago -- remains valid today as an explanation of the troubles

Catholics face in Turkey.

-----------------------

Pope Speaks Again

VATICAN 00000256 002.2 OF 002

-----------------------

Â¶ 4. (C) Parolin confirmed that the popeâ€™s trip to Turkey had been very positive for inter-religious relations. The â€œtense atmosphereâ€ in

Turkey preceding the visit may have eased somewhat. With regard to

Erdoganâ€™s incorrect assertion that the pope had expressed his specific support for Turkeyâ€™s EU membership, Parolin expressed certainty that the

PM hadnâ€™t misunderstood the pontiff; but probably just wanted to get some good media coverage from the meeting. The pope expressed the â€œsame position we have always hadâ€, though perhaps in a â€œnicer wayâ€. The general message from the Holy See on the issue, in any case, has been positive. At his weekly audience December 6, the pope expressed his hope for â€œjoint Christian and Muslim action on behalf of human rightsâ€ and emphasized his hope that Turkey would be a â€œbridge of friendship and of fraternal cooperation between the East and West.â€

------------------------------------

Comment and Action Request

------------------------------------

Â¶ 5. (C) The Holy See will not officially endorse Turkeyâ€™s EU entry, but positive comments from the pope and other officials in support of the dialogue and reforms that are part of integration and the entry process receive a lot of play in the European media. The popeâ€™s Regensburg speech

, which made clear that he is not naove about the challenges presented by

Islam, gives added heft to his favorable words on Turkey. Private comments from Vatican officials to European diplomats here also carry some weight - particularly in the traditionally Catholic countries. Our emphasis on using

integration and EU entry as an opportunity to make life better for

Christians in Turkey, will resonate with the Vatican, and could lead to more Holy See action, both public and private. Despite Parolinâ€™s insistence that those in favor of Turkeyâ€™s EU entry must do more to push for reforms, he is on the same page with us on the overarching issue: in essence, both Turkey and Europe need to see diversity as a strength, not a threat.

Â¶ 6. (C) At this critical juncture we have an opportunity to catalyze a more active Holy See voice on Turkey. We hope a senior Department official such as A/S Fried or DAS Bryza can visit in the near future to highlight the matter for the Holy See and encourage them to do more to push a positive message on Turkey and integration. SANDROLINI

V iewing cable 09VATICAN78, HOLY SEE: SCENESETTER FOR THE PRESIDENTâ€™S

JULY 10 VISIT



09VATICAN78

2009-06-26

16:04

2010-12-22

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RUEHYD/AMEMBASSY YAOUNDE PRIORITY 0001

Embassy

Vatican



SIPDIS

FOR THE PRESIDENT FROM THE CHARGE Dâ€™AFFAIRES

EO 12958 DECL: 6/26/2019

TAGS PREL, PGOV, VT

SUBJECT: HOLY SEE: SCENESETTER FOR THE PRESIDENTâ€™S JULY 10 VISIT

REF: A. A) VATICAN 72 B. B) VATICAN 63 C. C) VATICAN 59 D. D) VATICAN 52

E. E) VATICAN 38

VATICAN 00000078 001.2 OF 005

CLASSIFIED BY: Julieta Valls Noyes, CDA, EXEC, State. REASON: 1.4 (b), (d)

Mr. President, itâ€™s an honor to welcome you and your family to the

Vatican, the worldâ€™s smallest sovereign state, and one with global clout.

Summary

-------

Â¶ 1. (C/NF) Holy See officials also are pleased you are visiting. Your meeting with Pope Benedict XVI will be an opportunity to discuss our shared commitments to overarching goals such as peace, justice, development, human dignity, and inter-faith understanding. From the Vaticanâ€™s perspective, it will also provide a forum to discuss sensitive bioethical issues in a mutually respectful way. In your meeting with him, or possibly with other

Vatican officials on the margins, you may cover other topics of special interest, such as the Middle East, Iraq, immigration, and the environment.

Your discussions at the Holy See will help deepen our mutual collaboration on issues around the world. End Summary.

Context for Your Visit

----------------------

Â¶ 2. (C/NF) The Vatican is second only to the United States in the number of countries with which it enjoys diplomatic relations (188 and 177 respectively), and there are Catholic priests, nuns and lay people in every country on the planet. As a result, the Holy See is interested and well informed about developments all over the globe. This year marks the 25th anniversary of formal relations between the U.S. and Holy See. The Holy See is the global government of the Catholic Church, which it operates from

Vatican City State, a sovereign territory of a quarter of a square mile.

Â¶ 3. (C/NF) The Holy See in many ways welcomed your election, as demonstrated by the Popeâ€™s immediate letter of congratulation. Vatican officials have been impressed by many of your initiatives, especially on foreign policy. The Vatican newspaper, the â€œOsservatore Romano,â€ has welcomed your positions on the Israeli-Palestinian situation, outreach to

Muslims, disarmament, Cuba and the environment. The Holy See has appreciated your multilateralism and focus on human rights, including your decisions to run for the Human Rights Council and close the Guantanamo detainee facility. Nevertheless, although it does not generally express them publicly, the Vatican also has profound concerns about your

Administrationâ€™s positions on abortion and embryonic stem cell research.

The Vatican has allowed the American Catholic Church to take the lead in enunciating these concerns. This is a tactical decision, and should not be interpreted as a divergence of views between Rome and the U.S. Conference of Catholic Bishops (USCCB). The Vatican trusts the USCCB, is proud of the work that Catholic organizations do in the U.S., and relies on the generosity of American Catholics to support the Vatican and Catholic causes worldwide. On balance, the Vatican regards your Presidency favorably and will seek to focus more on the areas of policy convergence between us than on the issues that divide us.

Pope Benedict XVI

-----------------

Â¶ 4. (C/NF) The Pope has had a rocky year, having confronted controversies about Catholic-Jewish relations and his views on AIDS prevention, and breakdowns in internal Vatican communications related to the controversies.

At the same time, he also took crucial, successful trips to the Middle East and Africa. He is looking forward to meeting you. The Pope genuinely likes

Americans and the United States, and enjoyed his visit there last year. He admires the U.S. model of secularism, where the church and state are separate but which he says â€œallows for professing belief in God and respects the public role of religion and churches.â€ The Pope has made promotion of international religious freedom a central objective of his papacy, and appreciates U.S. support for this goal. As the spiritual leader of 1.3 billion Catholics worldwide and enjoying

VATICAN 00000078 002.2 OF 005 respect as well from non-Catholics, the Pope wields an unparalleled moral megaphone. He uses it carefully, speaking publicly in generic, neutral terms about the need for peace and social justice rather than criticizing individual states. Behind closed doors, he sometimes takes on specific issues more directly. In that context, a Vatican official had told us that the Pope probably will raise abortion, embryonic stem cell research, and social justice issues -- especially immigration -- with you.

Bioethical Issues

-----------------

Â¶ 5. (C/NF) The Catholic Church teaches that abortion is wrong. Vatican officials grudgingly accept that abortion is legal in the U.S., but oppose making it more widely available. Internationally, the Vatican would

forcefully oppose USG advocacy of legalizing abortion elsewhere, financing foreign abortions, or making abortion an international â€œreproductive right.â€ The Vatican would welcome an honest, respectful dialogue with the

United States on abortion. Vatican officials followed your Notre Dame speech closely. While clearly not agreeing with everything you said, they were very pleased by your calls to reduce the number of women seeking abortions, make adoption more available, and provide support for pregnant women. They appreciated your commitment to â€œhonor the conscience of those who disagree with abortion,â€ and especially welcomed the call for a sensible conscience clause for health care workers.

Â¶ 6. (C/NF) The Vatican opposes embryonic stem cell research on the grounds that it leads to the destruction of human embryos. It has no objection to non-embryonic stem cell research. As new techniques now allow research with adult stem cells, the Vatican says the use of embryonic stem cells is not justified scientifically either.

Financial Crisis, the Poor, and Immigration

-------------------------------------------

Â¶ 7. (C/NF) The Vatican has been very vocal about protecting the worldâ€™s most vulnerable people from harm caused by the global financial crisis. In a letter to UK PM Gordon Brown, for example, the Pope wrote, â€œDevelopment aid, including the commercial and financial conditions favorable to less developed countries and the cancellation of the external debt of the poorest and most indebted countries, has not been the cause of the crisis and out of fundamental justice must not be its victim.â€ The Vatican criticizes â€œconsumeristâ€ societies, strongly supports the UN Millennium

Development Goals, and hopes all countries will redouble efforts to meet their MDG pledges. The Vatican has long supported freer migration between nations to permit the poor to begin new lives. The USCCB has made immigration reform a priority in the U.S., and the Pope will likely mention this in his discussions with you. The Pope is expected to issue the second

â€œencyclicalâ€ (letter addressed to the whole world about pressing moral issues) of his papacy sometime during the week before your meeting. It will cover social justice concerns, and the Pope will likely mention it to you.

(Embassy will forward a copy to the White House as soon as it is available.)

Food Security

-------------

Â¶ 8. (C/NF) Similarly, the Vatican is very worried about declining nutrition in the poorest countries. The Vatican has not taken a formal position on genetically modified (GM) crops -- some Church leaders oppose them because GM technology is mostly in the hands of multinational corporations, while others support their use as an element in a larger strategy to address world hunger. In his World Food Day message in October

2008, the Pope noted that the world can produce enough food to meet increasing needs, but said factors like speculation in foodstuffs, corrupt public officials, and growing investments in weapons prevented food from reaching the hungry. He called on world leaders to conclude negotiations to

ensure food security, and to pursue relations â€œbased on the reciprocal exchange of knowledge, values, rapid assistance and respect.â€

Environmental Issues

VATICAN 00000078 003.2 OF 005

--------------------

Â¶ 9. (C/NF) The Pope speaks frequently about the importance of caring for

Godâ€™s creation. Vatican City is the worldâ€™s first carbon-neutral state, offsetting its emissions through use of renewable energy and a reforestation project. It has not, however, taken a position on carbon emissions trade. The Vatican is now using solar energy to power some facilities and is reducing its energy consumption overall, planning to be

20% energy self-sufficient by 2020. The Holy See is an active observer at the UN Environment Program, Food and Agriculture Organization and other international fora, and will participate in the December Copenhagen

Conference also as an observer. The Pope has even joined with other religious leaders like Ecumenical Patriarch Bartholomew to issue moral appeals to their faithful on humanityâ€™s responsibility to be good stewards of nature. The Vaticanâ€™s environmental message is consistent: nature is a gift from God, so human beings have a responsibility to care for and not to abuse it.

Arms Reduction

--------------

Â¶ 10. (C/NF) The Vatican welcomed your call to eliminate nuclear weapons, and has long advocated arms reductions and non-proliferation. The Holy See was one of the initial signatories to the Convention on Cluster Munitions in December 2008 - and ratified it the same day. (The Vatican of course has no such weapons itself and becomes party to such agreements to serve as a moral example.) The Pope has advocated the elimination of land mines, and the Holy See is a party to the Mine Ban Treaty. Speaking at the UN in May, the Vatican envoy reaffirmed the Vaticanâ€™s support for nuclear nonproliferation and outlined five steps for nations to take to eliminate the nuclear weapons threat: adherence to the Comprehensive Test Ban Treaty, opening negotiations for a Fissile Material Cutoff Treaty, ending reliance on nuclear arms as part of military policy among nuclear states, giving the

International Atomic Energy Association oversight over peaceful use of nuclear energy and expanding it role to include non-proliferation, and developing a new international agreement on nuclear fuel.

Inter-faith Understanding

-------------------------

Â¶ 11. (C/NF) The Vatican praised your Cairo speech, especially the sections on religious freedom and diversity, the Israeli-Palestinian situation, and

Iran. The Vatican itself has worked for decades on improving understanding with the Islamic world, including through a pontifical institute for the study of Arabic and Islam. It stepped up inter-faith discussions after the

September 11 attacks, and then again following the negative Muslim reaction

to a 2006 speech by the Pope that some argued demeaned Islam. Key dialogues are with: the â€œgroup of 138â€ - moderate Muslim scholars and clerics - supported by Jordan; Iranian clerics; Al-Azar University in Cairo, which co-hosted your speech; and Saudi authorities. The Vaticanâ€™s primary objective for these talks is to promote religious freedom. The Holy See does not believe theological agreements with Islam are possible, but is convinced that better mutual knowledge will allay suspicions and facilitate peaceful co-existence, which they consider an even higher goal than simple

â€œtolerance.â€ Another Vatican goal is supporting pragmatic inter-faith cooperation on social welfare programs. The Vatican believes governments should ensure religious freedom, but not be directly involved in interreligious dialogue (which by its nature should be between religious leaders).

Middle East Peace Process

-------------------------

Â¶ 12. (C/NF) Peace in the â€œHoly Landâ€ is one of the Vaticanâ€™s top priorities, and was one of the central themes of the Popeâ€™s May visit to

Israel, Jordan and the Palestinian territories. Despite criticism from some media and extremists, the trip was substantively successful. The Pope avoided any major mis-steps (always a difficult prospect for a Pontiff in visiting this area) and delivered the message that a two-state solution is the key to peace. He emphasized that the use of violence to achieve political objectives is morally unacceptable. He called for

VATICAN 00000078 004.2 OF 005 inter-faith dialogue and protection of Christian minorities. His messages largely mirror the U.S. approach to the region. This provides opportunities for further engagement with the U.S. in advancing peace initiatives there.

Iraq and Christians

-------------------

Â¶ 13. (C/NF) The Holy See publicly opposed U.S. intervention in Iraq. Once fighting began, however, the Vatican focus shifted to securing peace and justice, rebuilding the Iraqi economy, and protecting minority Christian communities. Holy See officials welcome your proposals for responsible withdrawal of U.S. troops, provided this does not create a security vacuum, particularly in Christian areas. The Vatican appreciates U.S. resettlement of the most vulnerable Iraqi victims of persecution -- including many

Christians-- but seeks to avoid large-scale exodus of Christians from that country. (Regional bishops estimate as many as half of the regionâ€™s 300-

400,000 Chaldean Christians have left, and believe they will not return.)

The Vatican was deeply concerned last fall that quotas set for Iraqâ€™s provincial elections system might reduce Christian representation in local governments, fueling further emigration. It took the unusual step of formally asking the USG to press the Iraqis to increase the quotas for

Christians. Despite a boycott threat, Christians ultimately participated in the provincial elections. The future of the Christian communities in Iraq will remain high on the Vatican agenda before and after the U.S. military drawdown.

Africa

------

Â¶ 14. (C/NF) The Pope travelled to Africa in March. He grabbed headlines with an interview he gave en route saying that the use of condoms contributed to the spread of AIDS. The Vatican later clarified the Popeâ€™s comments, saying that condoms are not always 100% effective and noting studies that show condom distribution increases promiscuity. Benedict XVI has called on world leaders to pay special attention to the needs of the

Continent - where one in four people suffer from chronic hunger -- this year. In a letter to the German President, Pope Benedict wrote that the

â€œsupport of the international community is needed...precisely because the current financial and economic crisis is particularly affecting Africa.â€

The Pontiff has pledged the Churchâ€™s continued assistance to the weakest sectors of Africaâ€™s population. (The UN estimates that Catholic charities provide 17% of health care in sub-Saharan Africa; the Church also runs schools, homes for the aged, re-integration centers for child soldiers and other programs there.) Bishops from Africa will gather in Rome in October for a month to discuss needs on the continent.

Cuba

----

Â¶ 15. (C/NF) The Church is the only major institution in Cuba that is independent from the government. The Vatican hopes for a transition to democracy in Cuba, but is not at the forefront of that battle because it is more concerned about protecting its small space for operations in Cuba. The

Vatican opposes the U.S. embargo, which it believes hurts poor Cubans disproportionately. It welcomed your decision to remove limits on family visitation and remittances. Vatican officials believe that exchanging the five Cuban spies imprisoned in the U.S. for political prisoners in Cuba is worth discussing, and have urged the U.S. to grant visas to the wives of the spies to allow them to visit.

Turkey EU Accession

-------------------

Â¶ 16. (C/NF) As Cardinal Ratzinger, the Pope had expressed uneasiness about the notion Turkish accession to the EU. The Holy Seeâ€™s position now is that as a non-EU member the Vatican has no role in promoting or vetoing

Turkeyâ€™s membership. The Vatican might prefer to see Turkey develop a special relationship short of membership with the EU, but Vatican Secretary of State (Prime Minister-equivalent) Bertone has stated that Turkey should become a member if it meets all the EU

VATICAN 00000078 005.2 OF 005 criteria - including full protection of human rights and religious freedoms.

Iran

----

Â¶ 17. (C/NF) The Holy See is deeply concerned about the recent violence and ongoing human rights violations in Iran. It has been publicly silent to date on the current crisis, in part to preserve its ability to act as an intermediary if an international crisis emerges. (The Vatican helped secure the release of British sailors detained in Iranian waters in April 2007.)

It is unclear how much clout the Vatican really has with Iran, however.

NOYES

Viewing cable 10ASUNCION97, GOP SEEKS TO IMPLEMENT NEW CELL PHONE

INTERCEPT SYSTEM, BUT



10ASUNCION97

2010-02-18

20:08

2010-12-22

21:09

SECRET//NOFORN

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Asuncion

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DS/TIA/ITA

E.O. 12958: DECL: 2035/02/18

TAGS: PGOV SNAR ASEC PREL PA

SUBJECT: GOP SEEKS TO IMPLEMENT NEW CELL PHONE INTERCEPT SYSTEM, BUT

PROMISES TO KEEP SIU PROGRAM INTACT

CLASSIFIED BY: Ambassador Liliana Ayalde, Ambassador, State, Front

Office; REASON: 1.4(B), (D)

Â¶ 1. (S/NF) SUMMARY: Interior Minister Filizzola told the Ambassador

February 10 that the GOP would soon be rolling out a new, expanded cell phone intercept program, which would continue to cover counternarcotics but would also include anti-kidnapping cases as the GOP ratchets up efforts to capture the EPP. Filizzola assured the Ambassador that the DEA-SIU cell intercept program would remain alive, but encouraged the Embassy to allow the use of the

DEA-funded cell intercept software to the GOP or it would be rendered obsolete. Despite some initial technical doubts, it appears that Filizzola's plan is technically feasible. However, we want to ensure that the DEA-supported program is not compromised in the process. Given the pressures on the GOP to arrest the EPP members responsible for the Zavala kidnapping, there is no doubt that the Lugo government will press to increase its intercept capability. Our participation and concurrence is key to our counternarcotics-- and broader law enforcement-- goals in Paraguay.

END SUMMARY.

--------------------------------------------- ----------------------

-----------

FILIZZOLA INFORMS AMBASSADOR OF NEW GOP PROGRAM

--------------------------------------------- ----------------------

------------

Â¶ 2. (S/NF) Interior Minister Rafael Filizzola told the Ambassador

February 10 that the GOP would soon be rolling out a new, expanded cell phone intercept program, which would continue to cover counternarcotics but would also include anti-kidnapping cases as the GOP ratchets up efforts to capture members of the Paraguayan

People's Army (EPP) involved in the Fidel Zavala kidnapping.

Since September 2009, DEA has had an active cell phone intercept program limited solely to counter-narcotics, managed by the

Anti-Drug Secretariat (SENAD) (which is independent of the Interior

Ministry). On several occasions since the October kidnapping of rancher Zavala by the EPP, Minister Filizzola asked Ambassador

Ayalde and/or DEA to allow the Interior Ministry access to the cell intercept program so that it could pursue leads in the kidnapping case. Embassy declined access to the system, but cooperated with the Interior Ministry in order to monitor 12 lines related to the kidnapping. On February 10, Minister Filizzola told the Ambassador that the GOP had everything in place (legal framework, equipment, etc.) for a broader intercept program, but he learned that his program would impact the DEA-SIU program. The Ministry procured

Brazilian intercept equipment for USD 1.2 million but needed access to the software available via the DEA-SIU program at SENAD in order to make it operational. The Minister further said that he now understood that the technology did not permit both programs to operate independently. Thus the USG could either authorize the

Ministry to link up with the DEA software or the GOP would procure the rest of its own system which would mean that the USG program housed in SENAD would be shut down. While acknowledging that drugs are a serious problem, the Minister stated that they are not the only security issue confronting Paraguay. Kidnapping, arms trafficking and corruption, the Minister stated, could not be subordinated to the war on drugs. Filizzola said the GOP's top priority was capturing the EPP, which had to take precedence over counternarcotics. He was specifically concerned about the USD

550,000 the EPP received during the Zavala kidnapping, the EPP's interest in generating instability, and the leads the GOP had on

some other possible kidnappings. "Counternarcotics are important," he said, "but won't topple our government. The EEP could."

Â¶ 3. (S/NF) Filizzola assured the Ambassador that the DEA-SIU cell intercept program would continue, but encouraged the Embassy to cede access to its cell intercept software to the GOP or it would be rendered obsolete. The Minister said SENAD would still be able to intercept lines, but the Ministry of Interior would need to utilize our software. Filizzola said President Lugo had approved the new program, and would speak to SENAD Minister Cesar Aquino regarding same. (NOTE: As of this writing, Lugo had not broken the news to Aquino. END NOTE). Filizzola told the Ambassador that he wanted to ensure transparency with the Embassy and secure our continued cooperation. The Minister stressed that he had the support and legal framework from the courts, Public Ministry, and the telephone regulatory agency CONATEL. The Minister noted that since the DEA already owns the connecting software (LMNS) equipment, it would be more sensible and helpful to the GOP if the

U.S. would authorize its use by the Ministry. The alternative-the

GOP starting from scratch-- would waste precious time in the GOP's urgent effort to capture members of the EPP and would render our equipment/software obsolete.

Â¶ 4. (S/NF) The Ambassador made clear that the U.S. had no interest in involving itself in the intercept program if the potential existed for it to be abused for political gain, but confirmed U.S. interest in cooperating on an intercept program with safeguards, as long as it included counternarcotics. While noting that the

Interior Ministry's current personnel are trustworthy, the

Ambassador noted that others could abuse this technology in the future. The Minister concurred and added that both he and the

President were keenly aware of the potential risks. The Minster added that he believes there are currently three or four clandestine pieces of equipment in Paraguay capable of intercepting cellular phone calls. This equipment was purchased by members of the previous government using questionable funding and disappeared once the Lugo government took over. Both Filizzola and Vice

Minister Caballero, who was also present for the meeting, confirmed that controls are crucial. Caballero assured the Ambassador that the following judicial and procedural protections are in place: 1) the intercept room will be managed by Public Ministry prosecutors and the Interior Ministry; 2) cellular phone providers will know which lines the GOP is listening to and will only grant permission based on a judicial order; 3) judicial orders can only be issued by three Asuncion-based judges, which are the same judges authorized to issue the orders under the current DEA-SENAD program;

4) the Supreme Court will ensure that only authorized taps are in place; 5) the equipment purchased by the GOP automatically tracks every action taken and its historical account cannot be altered or erased; and 6) the law only permits cell phone interception for anti-kidnapping (in this case, pursuit of the EPP) and counter-narcotics; there are no other lawful purposes.

--------------------------------------------- ----------------------

-----------------------

IN SPITE OF SOME QUESTIONS, THE PROGRAM APPEARS TO BE FEASIBLE

--------------------------------------------- ----------------------

-----------------------

Â¶ 5. (S/NF) Despite some initial technical questions from DEA, it appears that Filizzola's plan is feasible given the GOP's purchase of additional technology. The highly technical nature of this

program has lent itself to confusion about what is and is not possible. From Filizzola's first request to use the software

(LMNS) that the Embassy installed at SENAD, we had consistently indicated that DEA Washington had to weigh in. So the Embassy arranged for a February 17 video-teleconference (VTC) between the

Minister, Vice Minister Caballero, and Filizzola's Chief of Staff

Claudia Guanes and DEA Washington, led by John Zaginailoff, DEA's

Unit Chief Coordinator for the Science and Technology Section.

Also present were the Ambassador and DEA Country AttachC) Scott

Gonzalez.

Â¶ 6. (S/NF) During the VTC, Minister Filizzola laid out his plans for the program in general terms, highlighting its urgency. He said his program would start with cell phone provider PERSONAL, which is the only currently operational cell provider using the DEA-procured

LMNS. Filizzola asked about the status of the second DEA- procured

LMNS for TIGO, and expressed the GOP's commitment to continue the counternarcotics intercept program. He discussed the technical limitations with the DEA experts and concluded that expansion of the intercept program was technically possible with the purchase of additional hardware and licenses. The Minister saw two alternatives: (1) the Ministry buys additional equipment/software and replaces the DEA-purchased LMNS; or (2) the Ministry and SENAD

(read DEA-supported program) share the connecting software (LMNS).

Both DEA and the Minister asked some clarifying questions which demonstrated that the Ministry had the equipment for the Monitoring

Center and only needed the use of the DEA software currently in use at PERSONAL. Between PERSONAL and the next cell provider scheduled to come on-line, TIGO, they would cover 90% of the cellular telephone market. DEA indicated that it took them over a year to install the PERSONAL system because full cooperation from the company is required. The Minister emphasized that this would not be an issue because they already had the decree from CONATEL

(telephone industry regulator) that forces the telephone companies to cooperate, in addition to the proper legal authorities (based on the Constitution and the anti-kidnapping law).

Â¶ 7. (S/NF) In light of the highly sensitive nature of this program, the Ambassador asked Minister Filizzola to provide the Embassy with a written request for access to the existing cell intercept software, along with copies of the laws that serve as a legal basis for the expanded program. Both Supreme Court President Fretes and

SENAD Minister Aquino expressed doubts to Emboffs about the legality of the expanded program. (NOTE: While Fretes told

Filizzola that he was "on board," it is very common for Paraguayans to avoid voicing disagreement. Aquino's concerns, in turn, may have more to do with his rivalry with Minister Filizzola. END

NOTE). TIGO (Millicom), one of Paraguay's leading cell phone providers, told the Ambassador that though they had concerns about the GOP's decision to move forward with an intercept program, they felt that U.S. involvement in the program would provide them with some "cover."

--------------------------------------------- ----------------

COMMENT: GET ON BOARD OR GET LEFT BEHIND

--------------------------------------------- ----------------

Â¶ 8. (S/NF) Given the political pressures on the GOP to arrest the

EPP members responsible for the Zavala kidnapping, there is no doubt that the Lugo government will continue intense efforts to improve its intercept capability. Our participation and concurrence is key to our counternarcotics-- and broader law

enforcement-- goals in Paraguay. If we are not supportive, the GOP will view us as an obstacle to a key priority, which could jeopardize our broader relationship and the DEA's ability to pursue counternarcotics leads. Capturing the EPP has become a top priority of the Paraguayan government, and there is a real sense of urgency that it happen quickly. We now have an opportunity to help the GOP and be viewed as a reliable and valuable partner, as well as to ensure that U.S. interests in counternarcotics are protected. However, we want to limit our involvement to protecting

DEA's program, as opposed to legitimizing the GOP's broader CT intercept program. DEA will send John Zaginailoff to Asuncion in coming weeks, who will offer advice to the GOP on how to best set up the program (in order to protect our part of it). We have carefully navigated this very sensitive and politically sticky situation, and hope that we can move forward quickly in order to make the most of it. It appears that we have no other viable choice. END COMMENT.

AYALDE

Viewing cable 09BRASILIA1230, QOM REPORT GETS THE BRAZILIANS THINKING



09BRASILIA1230

2009-10-07

17:05

2010-12-23

07:07

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CONFIDENTIAL

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SIPDIS

DEPARTMENT FOR P; PARIS FOR US MISSION UNESCO

E.O. 12958: DECL: 10/07/2019

TAGS: PREL PGOV KNNP BR IR

SUBJECT: QOM REPORT GETS THE BRAZILIANS THINKING

REF: A. BRASILIA 1170

Â¶ B. BRASILIA 1103 BRASILIA 00001230 001.2 OF 002

Classified By: Charge D'Affairs Lisa Kubiske for reasons 1.4 (b) and (d ).

Â¶ 1. (C) Summary. During an October 1 meeting with poloff, Ministry of

Foreign Relations (MRE or Itamaraty) Central Asia (including Iran,

Afghanistan, Pakistan, India) Director Ricardo Luis Pires Ribeiro da Silva acknowledged that the September 24 report to the IAEA on the Qom nuclear facility challenges Brazil's prevailing outlook that Iran is building a nuclear program primarily for civilian purposes. Pires shared his readout of President Lula's September 23 meeting with Iranian President Mahmoud

Ahmadinejad at UNGA, and emphasized that neither Lula nor Itamaraty knew anything substantive about the Qom report in advance of the meeting. Pires said that Itamaraty was particularly concerned that Israel would strike against the Qom facility quickly, even before sanctions could be agreed upon, if the Geneva talks did not appear to produce tangible results. In follow-up correspondence, Pires praised the USG for holding extended talks with Iran in Geneva. End summary.

Qom Nuclear Facility --------------------

Â¶ 2. (C) Pires, who had a chance to review the September 24 IAEA presentation talking points several days in advance of the meeting and confer with senior MRE officials about them, noted quickly and often that the Qom enrichment plant is different in nature from the Natanz enrichment plant. While he believed that Qom production levels could be viewed as suitable for research rather than weaponmaking, Pires feared that Israel would see the facility as an imminent threat even if access to IAEA inspectors were granted. He said the GOB believes Israel has a date in mind

for bombing the facility if the Geneva talks fail or if strong sanctions are not established, and sought USG assurances that Israel would not take action soon. Pires reiterated support for the current USG approach to

Israel-Palestine negotiations, but wondered if we were taking a harder line on Iran to keep the Israelis happy so that they would make concessions on

West Bank settlements.

Â¶ 3. (C) Iran can be convinced to agree to a thorough IAEA inspection of the Qom facility, Pires said, though he acknowledged that this would not necessarily resolve concerns about the facility's ultimate use. He believed that Russia would ultimately side with the United States, United Kingdom, and France on the core approach to Iran's nuclear program, including a future decision to impose sanctions, which would place pressure on China to follow suit. He suggested that Brazil will be watching Russia closely for clues about how to position itself on the issue in the UN. Pires characterized Iran's recent missile launch as "really stupid" and needlessly provocative to Israel especially, but also to countries like

Russia, India, and Turkey. He believed there was a good chance that Iran had received technological upgrades from North Korea since their last missile launch.

Lula and Ahmadinejad at UNGA ----------------------------

Â¶ 4. (C) Pires also shared MRE's readout of President Lula's one-hour meeting with Ahmadinejad at UNGA on September 23, emphasizing several times that Lula told Ahmadinejad that IAEA access to all nuclear facilities will be needed to show that they will be used for civilian energy purposes. He said that Lula emerged from the meeting enthusiastic about developing further commercial relations with Iran and skeptical about reports of nuclear weaponmaking, as reported in the press. Pires emphasized, however, that Lula was not aware at the time of the forthcoming report to IAEA about the Qom facility, or at least not about the report's content. Pires also said that Lula asked Ahmadinejad about the Holocaust toward the end of the meeting. According to the GOB report, Ahmadinejad acknowledged that it did, in fact, occur, and then went on a diatribe about Germany and the creation of the state of Israel. Pires described Lula's response to a reporter's subsequent question on Ahmadinejad's recognition of the Holocaust as

"unfortunate and not representative" of the discussion at the meeting.

BRASILIA 00001230 002.2 OF 002 O ther Issues: Visitors, UNESCO ------------------------------

Â¶ 5. (C) MRE reconfirmed that Israeli President Shimon Peres will visit

Brasilia on November 11. He said that no dates had been confirmed for visits by Ahmadinejad or Palestinian President Mahmoud Abbas, but said that the Ahmadinejad visit will happen in late November, which would push back the Abbas visit into December at earliest.

Â¶ 6. (C) Pires also spoke briefly about Brazil's decision to back Egyptian candidate Farouk Hosni over Irina Bokova for the UNESCO Director General

(ref B). Several local publications have criticized the GOB position on

this matter, calling it a "diplomatic defeat" dictated by Lula's desire to strengthen relations with Iran and the Middle East. These same reports, apparently based on leaked sources from Itamaraty, also questioned why

Brazil did not make the case to promote one of its own, UNESCO Deputy

Director-General Marcio Barbosa. When asked about the matter, Pires smiled wryly, shook his head and said, "these are the things we have to do sometimes."

KUBISKE

Viewing cable 10BRASILIA59, BRAZIL: AMBASSADOR'S MEETINGS WITH MRE

UNDER SECRETARIES FOR



10BRASILIA59

2010-02-19

22:10

2010-12-23

07:07

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INFO RUCNDT/USMISSION USUN NEW YORK 0014



RUEHCV/AMEMBASSY CARACAS

RUEHDE/AMCONSUL DUBAI

RUEHGV/USMISSION GENEVA

RUEHLP/AMEMBASSY LA PAZ

RUEHRI/AMCONSUL RIO DE JANEIRO

RUEHSO/AMCONSUL SAO PAULO


SIPDIS

CONFIDENTIAL

Embassy

Brasilia

AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE

E.O. 12958: DECL: 2020/02/19

TAGS: PREL KNNP IR CH BR

SUBJECT: BRAZIL: AMBASSADOR'S MEETINGS WITH MRE UNDER SECRETARIES FOR

POLITICAL AFFAIRS

REF: STATE 12108

CLASSIFIED BY: Thomas A. Shannon, Ambassador, State, Embassy

Brasilia; REASON: 1.4(B), (D)

Â¶ 1. (C) Summary. In separate meetings with Ambassador Shannon

February 9, MRE Under Secretaries for Political Affairs I Vera

Machado and Political Affairs II Roberto Jaguaribe both focused on concerns that Iranian domestic issues would make a solution to the nuclear issues difficult to achieve. Machado, who covers relations with the United States, among other issues, said the GOB is looking forward to a visit by Secretary Clinton and focused the discussion on South America regional issues. Jaguaribe, who is responsible for

East, Central, and South Asia and Iran, spoke at length about

Brazil's views on Iran, relations with China, and the upcoming BRIC

(Brazil, Russia, India, and China) summit in Brasilia. End summary.

Iran and Nuclear Issues

Â¶ 2. (C) Consistent with his message in previous engagements,

Jaguaribe offered broad praise for President Obama's efforts to

"interface with Iran in a more comprehensive way," and emphasized that Iran's eventual acceptance of the core P5+1 proposal is the only plausible solution to the crisis. Jaguaribe expressed doubts that Iran would accept the solution in its current political climate, and suggested that the strong anti-Iranian positions taken in the United States and the European Union have conditioned the

Iranian government and people to think that any offer made by the

United States cannot be acceptable. Jaguaribe called Iran's

nuclear program an expression of national identity, a symbol galvanizing popular support for the regime. Likewise he viewed any sanctions as automatically strengthening the position of hard-line elements in the Iranian government. He strongly encouraged more engagement with Iran before considering sanctions in the UN.

Jaguaribe said that third-party engagement - including Turkey, but

"not necessarily Brazil" - would be a key to success given Iranian skepticism of the United States and Europe as primary messengers.

He expressed interest in continuing discussion with U.S. officials concerning Iran. For her part, Machado, who also covers non-proliferation and UNSC issues, reiterated the GOB view that

Iran has a right to peaceful nuclear power, but expressed concern about how the situation with Iran was developing. She suggested a

"new path" was needed, but like Jaguaribe, she worried that multiple centers of power within Iran would make it difficult to find a way forward.

Iran and Human Rights

Â¶ 3. (C) When pressed about human rights in Iran, Jaguaribe acknowledged a negative and worsening situation but also asked why we were singling out Iran when several of its neighbors are less democratic with worse human rights performance. The Ambassador laid out the concerns in reftel, including our objections to Iran's potential bid for a seat on the UN Human Rights Council.

Jaguaribe had no immediate response to the demarche points but emphasized that Brazil has registered its human rights concerns with Iran several times, particularly concerning treatment of the

Baha'i. He added that Iran's increased use of paramilitaries in order to maintain order is a sign of the regime's weakness.

Jaguaribe acknowledged the Brazilian's Embassy lack of capacity to assess popular support for the government but still spoke of Iran's government as essentially stable and capable of reaching and honoring agreements.

Regional Stability

Â¶ 4. (C) Machado said the GOB would welcome a visit by Secretary

Clinton and discussed a number of Brazil's neighbors with the

Ambassador. She said that Brazil is watching the situation in

Venezuela carefully, noting that Chavez faces a number of internal problems. She thought that there was a chance for improvement following the September 2010 legislative elections because there were a number of "lesser known" political figures who may emerge with more influence. Machado believed that the situation in

Bolivia had stabilized but remained concerned about connections between the government and coca growers. She acknowledged the threat to the region of drug trafficking but identified the primary source of the problem as consumption in rich countries.

Building with BRICs

Â¶ 5. (C) Recently returned from a trip to China in preparation for the April 15-16 BRIC summit in Brasilia, Jaguaribe spoke candidly about the difficulties in developing an agenda and an overall mission for BRIC. China, he felt, presented a particular challenge to Brazil given different perceptions by the Chinese about what a group like BRIC would mean. Jaguaribe emphasized that China is very cautious not to make BRIC look like a group opposing the interests of established powers and as a result works to make the agenda less than fully precise. China is also especially sensitive to concerns from developing nations that don't want BRIC to purport to speak as the voice for developing countries. The Under

Secretary also spoke about the difficulty of organizing a group agenda under these circumstances, commenting, "This is a very heterogeneous group of countries with different goals, but the interest is there."

China: The "Communist Dynasty"

Â¶ 6. (C) Jaguaribe joked that the Chinese government would one day be referred to as the "Communist Dynasty," and expressed minor exasperation about the difficulty of finding the right person in

the government to talk with about major issues. Ambassador Shannon noted that China's capacity to engage successfully in South America has evolved rapidly. What began as a commercial and trade-based relationship is now gaining a political component. The Chinese, he noted, are constantly evaluating their performance and improving their game. He told Jaguaribe, "China will be a tough competitor, for the United States and Brazil."

SHANNON

Viewing cable 09ISTANBUL352, IRAN: REGIME PRESSURE REACHING SOME

ISTANBUL



Consulate

Istanbul

09ISTANBUL352

2009-09-15

09:09

2010-12-29

21:09

SECRET

VZCZCXRO5656


DE RUEHIT #0352/01 2580952

ZNY SSSSS ZZH

P 150952Z SEP 09

FM AMCONSUL ISTANBUL


INFO RUCNIRA/IRAN COLLECTIVE PRIORITY

S E C R E T SECTION 01 OF 02 ISTANBUL 000352

SIPDIS

LONDON FOR MURRAY; BERLIN FOR ROSENSTOCK-STILLER; BAKU FOR

MCCRENSKY; ASHGABAT FOR TANGBORN; BAGHDAD FOR POPAL; DUBAI

FOR IRPO

E.O. 12958: DECL: 09/14/2034

TAGS: PINS PREL PGOV PINR IR TU

SUBJECT: IRAN: REGIME PRESSURE REACHING SOME ISTANBUL

CONTACTS

REF: (A) ISTANBUL 47 (B) ISTANBUL 94 (C) ISTANBUL 138

(D) ISTANBUL 189 (E) ISTANBUL 207 (F)

ISTANBUL 244 (G) ISTANBUL 290

Classified By: ConGen Istanbul Deputy Principal Officer Win Dayton; Rea son 1.5 (d).

Â¶ 1. (S) Several Istanbul-based contacts of ConGen Istanbul's

NEA Iran Watcher have separately cautioned us in the past week that they been asked (or warned) by Iranian officials to cease contact with "American diplomats asking questions about

Iran." In one case, a key contact -- XXXXXXXXXXXX-- is returning temporarily to Iran to

"clear everything up." Comment: A number of State

Iran-Watchers' Iran-based contacts have suffered harassment, intimidation, and detention since the post-election crackdown. Reporting from IRPO Dubai and others underscores the likelihood that regime pressure on Iranians with U.S. or western links will only worsen. These recent warnings to our

Istanbul-based contacts, however, may represent a new element in this campaign of intimidation, and reconfirms that the regime pays attention to our outreach efforts outside Iran.

In response, we will take additional steps to protect local contacts and stay vigilant against regime efforts to track our interactions with them, while redoubling efforts to expand the range of Turkey-based contacts willing to share

Iran-related insights. End comment.

Â¶ 2. (S) In the past week, we heard separately from three valuable Istanbul-based contacts that they each received recent requests or warnings from Iranian officials to limit or cease contacts with American diplomats in Istanbul.

Â¶ 3. XXXXXXXXXXXX

Â¶ 4. (S) A UK national who has worked as the Istanbul correspondent for Iran's satellite news channel "Press TV" since summer 2007 and has been willing to share insights into

Press TV and Islamic Republic of Iran Broadcasting (IRIB) editorial and press operations (ref d), told us that her

Tehran-based editor warned her last week to stop having contact with "any American diplomats there asking about

Iran." She speculated that Iranian consulate officials in

Istanbul may have seen her talking to ConGen Istanbul's Iran

Watcher at any number of recent functions and, as they are presumably aware of ConGen Istanbul Iran Watcher's portfolio, they may have sent word back to Press TV management to warn her off of such contacts. She told us her response to her editor was that as a journalist her job is to gather information from all informed sources in Istanbul including diplomats, and that any contact she has with U.S. or other diplomats in Istanbul is strictly in support of her own reporting. She told us that because she is a UK citizen and living in Turkey, and considers herself one of Press TV's best international correspondents, she is not afraid of pressure from Press TV management since "the worst they can do is fire me, which they won't." (Comment: In an incident that may or may not have been related, but that this contact found suspicious, her apartment was broken into on June 26 and her laptop was stolen, though her purse, jewelry, and other valuables were left alone.) She expressed a willingness to continue occasional contacts with us, though

ISTANBUL 00000352 002 OF 002 we agreed not to have contacts at conferences or other fora where Iranian consulate officials might be present.

Â¶ 5. (S) We recently contacted the coordinator for the

Turkish-Iran Business Council (ref b), responsible for

setting up the TIBC's frequent meetings and trade fairs with

Iranian counterparts. He is a Turkish national who has been a helpful contact since late 2007. We contacted him to request a meeting with the TIBC to discuss recent developments in Turkish-Iranian commercial relations, in advance of a biannual "Turkish-Iranian Business Council

Forum" next month in Tehran and Mashhad. Our contact told us by email that two members of the TIBC's executive board were queried by "Iranian acquaintances of theirs" (NFI) at a

Ramadan Iftar dinner ceremony at the Iranian Ambassador to

Turkey's residence last week about the TIBC's contacts with the US Consulate in Istanbul, including what specific questions we have asked the TIBC about Iran-Turkey commerce.

Our contact did not know how the Iranian Embassy was aware of the TIBC's occasional meetings with us. (Comment: We have met about six times with TIBC executive board members, including a November 2008 courtesy call on the board by

NEA/IR's Office Director; additionally, ConGen Istanbul's

Iran Watcher has met numerous times socially with this contact, usually for coffee at a local cafe. End comment.)

He said a TIBC board member told him they brushed aside the

Iranian queries, but they also cautioned him that the TIBC needs to be more careful in ensuring that its Iranian partners are not given a reason "to doubt our commitment to expanding bilateral commerce while staying out of politics."

This contact pledged to try to help set up a meeting for us with the TIBC executive board, but declined an offer to meet socially in the near-term.

Comment

------

Â¶ 6. (S) Comment: A number of State Department "Iran

Watchers" and others have seen both professional contacts and friends in Iran suffer harassment, intimidation and in many cases detention and worse, especially following the recent, post-election crackdown on Mousavi supporters and others

activists. Reporting from IRPO Dubai and elsewhere underscores the likelihood that the regime will only intensify the crackdown against Iranians who have U.S. and western contacts. However, these recent warnings to our

Istanbul-based contacts may represent a new element in this campaign of intimidation. These examples are a clear indication that the Iranian regime is aware of at least some of our Istanbul-based contacts' interactions with us, and willing to use varying degrees of pressure -- even against non-Iranians over whom it has some leverage -- to try or limit to stop further contact with us. (Overt Iranian physical intimidation against contacts in Turkey, however, is unlikely, as it would cross a red-line not crossed since the

GOT expelled then-Iranian Ambassador Mottaki -- now Iran's

Foreign Minister -- in 1989 for playing a likely role in the kidnapping and/or assassination of several dozen Iranian dissidents in Turkey in the mid and late 1980s.)

Â¶ 7. (S) Engaging with Iran-related contacts, even in Turkey, has always been a sensitive undertaking, but now it is becoming even more so. In response, we make every effort to try to protect our local contacts, take additional measures to ensure confidentiality in our meetings with them, and remain vigilant against Iranian efforts to track our interactions with them. But we will also redouble efforts to maintain, and even expand, the range of contacts in Turkey willing to brave such threats to share valuable insights with us. End comment.

WIENER

Viewing cable 09ISTANBUL399, IRAN-TURKEY COMMERCE: AN "INSIDER" SAYS ITS

ALL



09ISTANBUL399

2009-10-19

06:06

2010-12-29

21:09

SECRET

Consulate

Istanbul

VZCZCXRO3102


DE RUEHIT #0399/01 2920628

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P 190628Z OCT 09

FM AMCONSUL ISTANBUL



S E C R E T SECTION 01 OF 02 ISTANBUL 000399

SIPDIS

LONDON FOR MURRAY; BERLIN FOR ROSENSTOCK-STILLER; BAKU FOR

MCCRENSKY; BAGHDAD FOR POPAL; ASHGABAT FOR TANGBORN; DUBAI

FOR IRPO

E.O. 12958: DECL: 10/09/2029

TAGS: ECON

SUBJECT: IRAN-TURKEY COMMERCE: AN "INSIDER" SAYS ITS ALL

WHO YOU KNOW

REF: A. (A) ISTANBUL 279 (NODIS

Â¶ B. NOTAL) (B) ISTANBUL 336 (C) ISTANBUL 394

Classified By: Deputy Principal Officer Win Dayton; Reason 1.5 (d)

Â¶ 1. (S) Summary: A Turkish businessman who deals extensively in Iran told us that the only way to do business there safely is through an Iranian partner with high-level regime connections, in his case a partner he claims is connected to the son of Supreme Leader Khamenei. Our contact cautioned that two state-owned Turkish banks -- Halk and Ziraat -- are exploring opening up branch offices in Tehran to give Turkish businesses a banking option other than Bank Mellat. Our

contact is working with the Tehran municipality to open a new shopping mall, which has brought him into close contact with

Tehran Mayor Qalibaf's staff. Those interlocutors told him that Qalibaf is already setting himself up to be the establishment's choice for president in 2013. Our contact also urged the USG to "make a deal" with Iran soon, because

"time is running out", hinting that Khamenei's health is a concern, and that the succession of a new Leader could lead to a period of instability inconducive to engagement between

Iran and the U.S. Comment: We cannot confirm the veracity of our contact's claims that his business partner is close to the Khamenei family, but that Iranian partner's claims are at least plausible. We also have no basis to judge his claims of failing health on the part of Supreme Leader Khamenei, beyond having heard similar rumors from other contacts. We give serious credence to our contact's claim that for a foreign company to do business effectively in Iran, it needs to have a regime-affiliated partner or protector working on its behalf within the system. End summary.

An insider's perspective

----------------------

Â¶ 2. (C) We met recently with Keyhan Ozdemir (please strictly protect), a director of Pars-Invest, a Turkish company with construction, real estate, and energy investments in Iran.

Ozdemir claims to have Iranian business partners with direct connections to Supreme Leader Khamenei's family, including an

Iranian business partner who claims a close personal connection to Khamenei's son Mojtaba. Ozdemir does not participate in Turkish business-sponsored conferences or trade fairs with Iranian counterparts, such as the early

October Turkey-Iran Business Council (TIBC) conference (ref

C), dismissing them as "window dressing". Instead, he candidly asserted to us that to get deals done in Iran a foreign company needs a well-connected Iranian "protector", preferably a partner with IRGC or Supreme Leader connections.

Reinforcing that point, Ozdemir explained that the

Turkey-Iran commerce has slowed down considerably in 2009 in large part for three reasons, two political and one economic:

(1) Most Turkish companies, which are not politically

"plugged-in" inside Iran, drew back from Iranian investment following the June elections out of fear of political risk.

"These are the companies that need trade associations like the TIBC to make introductions for them." (2) Turkish companies that had been well connected to former President

Rafsanjani's business empire have been edged out since June by IRGC companies and by IRGC-affiliated Bonyads

(politically-connected charitable foundations that act as holding companies), and (3) Turkey's investment of Iranian hydrocarbons has been down significantly in 2009. On the other hand, Ozdemir concurs with the conventional wisdom that

Turkey-Iran trade will increase in the remainder of 2009 and into 2010. He says he is optimistic that his own biggest pending deal -- to develop a modern shopping mall in Tehran

-- will soon receive funding approval from the Tehran municipality, reflective of the Iranian economy's resiliency even in hard times.

Â¶ 3. (C) The key sector to watch, according to Ozdemir, is the banking sector, as Turkish-Iran trade cannot expand significantly without more efficient banking cooperation.

Ozdemir told us that Turkish state-owned banks Halk and

Ziraat have been quietly seeking Turkish and Iranian government permission to open bank branch offices in Tehran.

(Halk and Ziraat already have small "representative offices" in Tehran, he claimed, but these offices do not perform banking functions.) The primary function would be to offer banking services to Turkish companies and investors in Iran, to give them a banking option other than Bank Mellat, the lone Iranian bank that operates in Turkey. According to

Ozdemir, the GoT has cautioned Halk and Ziraat to "go slow" until it becomes more clear whether international diplomacy with Iran succeeds or fails, and thus whether the risk of

significantly tougher banking sanctions on Iran lessens or

ISTANBUL 00000399 002 OF 002 increases. Most of Ozdemir's deals in Iran are paid in

Euros, as "Iranians prefer Euros to (Turkish) Lira and Turks definitely don't want (Iranian) Rials."

Â¶ 4. (C) Regarding Iran's approach to privatization, Ozdemir asserted that privatizing certain sectors is a genuine priority for Khamenei, though he does not want to push the bureaucracy (including the IRGC) too hard. According to

Ozdemir, Khamenei is willing to continue to push for so-called privatization in the petrochemical industry, electricity production and distribution, transportation,

"some" shipping and banking, and some Bonyads. But Ozdemir underscored that Khamenei is committed to keeping the telecommunications and hydrocarbon sectors is "safe hands."

The chief problem is that Iranian decision-makers "don't understand what privatization means." Selling a state-run bank or a telecommunications company to a holding company that itself is controlled by regime entities (per ref C) "is not privatization." Ozdemir said that Tehran Mayor Qalibaf, alone among Iran's top leadership, understands and supports the western concept of privatization and the need for Iran to have a stronger private sector.

Qalibaf already running for 2013 Presidential elections

--------------------------------------------- --------

Â¶ 5. (C) From discussions with Tehran municipality officials reporting directly to Tehran Mayor Qalibaf, Ozdemir assessed that Qalibaf is already in full campaign mode for the 2013

Iranian Presidential election. Qalibaf is actively maneuvering behind the scenes to lock in support from Supreme

Leader Khamenei, and indeed Qalibaf's decision not to run in

the June election this year was based on an unspoken understanding that staying out this time would position him well to be the establishment's preferred choice next time.

According to Ozdemir, Qalibaf is using the benefits of his office to build a sizable war-chest of campaign funds, though he is careful to ensure that his and his staff's "energetic" collection of such funds does not adversely impact Tehran's municipal services or other operations, or his reputation as an effective manager.

"Time is Running Out" to make a deal with Khamenei

--------------------------------------------- -----

Â¶ 6. (C) Turning to a brief discussion of current diplomacy vis-a-vis Iran, Ozdemir urged the USG to "make a deal" with

Iran soon, because "time is running out". He hinted that

Ayatollah Khamenei's health is a concern. Khamenei wants to ensure a smooth succession for his son, Mojtaba, to succeed him, but Ozdemir assessed that the installation of a new

Supreme Leader in Iran, if it becomes necessary in the coming year or two, could lead to a period of instability that would be inconducive to engagement between Iran and the U.S.

Comment

------

Â¶ 7. (S) We cannot confirm the veracity of Ozdemir's claim that his Iranian business partner is personally close to

Mojtaba Khamenei, although we have met that Iranian business partner (ref A) and can confirm that his claims to a Khamenei family connection are at least plausible. We also have no basis to judge Ozdemir's claims of failing health on the part of Supreme Leader Khamenei, beyond having heard similar rumors from other contacts (Ref B). We give serious credence to Ozdemir's claim that for a foreign company to do business effectively in Iran, it must have a regime-affiliated partner or protector working on its behalf within the system.

WIENER

Viewing cable 09STATE97244, POTUS EUROPEAN-BASED MISSILE DEFENSE

DECISION



SECRET

Secretary of

State

09STATE97244

2009-09-18

18:06

2010-12-30

21:09

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S E C R E T SECTION 01 OF 06 STATE 097244

SIPDIS

E.O. 12958: DECL: 09/15/2014

TAGS: EZ MARR PREL

SUBJECT: POTUS EUROPEAN-BASED MISSILE DEFENSE DECISION

(SECOND CORRECTED COPY OF STATE 96519)

REF: A. STATE 96519 B. STATE 96550

Classified By: T U/S Ellen O. Tauscher for Reasons 1.4 a,b,and d.

Â¶ 1. (U) (CORRECTED COPY FOR THE RECORD. NO ACTION REQUESTED.

THIS CORRECTED COPY HAS A REPLACEMENT SIXTH TICK IN THE

RUSSIA TALKING POINTS IN PARAGRAPH 6. PLEASE DISREGARD THE

SIXTH TICK IN THE RUSSIA TALKING POINTS IN THE EARLIER

TRANSMISSIONS OF THIS CABLE. SEE REFTELS.) This is an ACTION

REQUEST. Please see paragraph 3. ALL MATERIALS IN THIS

CABLE ARE TO BE EMBARGOED FROM DELIVERY TO HOST GOVERNMENTS

UNTIL 25 MINUTES PRIOR TO A PRESIDENTIAL STATEMENT RELEASED

ON SEPTEMBER 17, 2009 AT 9:55 A.M. (EASTERN DAYLIGHT TIME -

WASHINGTON, D.C.).

Â¶ 2. (SBU) BACKGROUND: The White House is expected to announce a Presidential decision at approximately 9:55 a.m.(Washington, D.C.) on September 17 regarding a U.S.

European-based BMD adaptive regional architecture, which is significantly different from the Bush Administration's plan to deploy 10 ground-based interceptors in Poland and a BMD tracking radar in the Czech Republic. END BACKGROUND.

Â¶ 3. (SBU) ACTION REQUEST: Addressee Posts are instructed to deliver the talking points to Host Governments in paragraph 4 on Thursday, September 17, as a non-paper, but no earlier than 9:30 a.m. (Easter Daylight Time - Washington, D.C.).

USNATO, Embassies in NATO Capitals (except for Embassies

Warsaw and Prague), Embassy Tokyo, Embassy Moscow, and

Embassies in the Gulf Cooperation Council (GCC) States

(Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab

Emirates) are instructed also to deliver the tailored talking points for NATO, Japan, Russia, and the GCC States in paragraphs 5-8. Action Request addressees should attempt to provide pre-notifications immediately prior to the public announcement of the Presidential decision but not before 9:30 a.m. EDT; with the different time zones involved, Washington recognizes that some notifications may not occur until after the White House public announcement. Posts may draw upon the

Questions and Answers to be provided reftel for use with Host

Governments on an "if asked" basis, or as Posts determine is appropriate. The Questions and Answers in reftel may be drawn upon by Posts but should not/not be handed over to Host

Governments. Materials for public diplomacy (e.g., Fact

Sheet, Questions and Answers, and POTUS Statement) will be provided to Posts septel. Posts please notify the Department regarding date of delivery, recipients, and reaction, if any.

END ACTION REQUEST.

Â¶ 4. (U) BEGIN TEXT OF TALKING POINTS:

U.S. MISSILE DEFENSE POLICY - EUROPEAN DECISION

- The White House announced that the President has approved

Secretary Gates and the Joint Chiefs of Staff's unanimous recommendation for improved missile defenses in Europe against the threat from Iran to our forces and families deployed to the region and to our Allies.

- Iran already has hundreds of ballistic missiles that can threaten its neighbors in the Middle East, Turkey, and the

Caucasus and it is actively developing and testing ballistic missiles that can reach more and more of Europe.

-- Our concern regarding Iranian missile capabilities is further increased by the fact that our Intelligence Community continues to assess that Iran, at a minimum, is keeping open

the option to develop nuclear weapons.

- The new "Phased, Adaptive Approach" recommended by

Secretary Gates updates and revises the previous program for missile defense in Europe based on two key findings of the

DoD review:

STATE 00097244 002 OF 006

-- First, the threat from Iran's regional ballistic missiles has developed more rapidly than previously expected. At the same time, the threat from potential Iranian intercontinental ballistic missiles (ICBMs) has been slower to develop than we previously expected.

-- Second, our missile defense capabilities and technologies have advanced significantly. Improved interceptor capabilities, such as the currently deployed Standard

Missile-3 (SM-3) interceptor and advanced variants that are already in development, permit a more flexible and capable architecture.

- Therefore, the President has approved a Phased, Adaptive

Approach that is responsive to the current threat, but also can incorporate new technologies quickly and cost-effectively to adapt as the threat and our technologies continue to change. It will unfold in phases:

-- The first phase will speed protection of U.S. deployed forces, civilians, and families and our Allies in Europe against the current threat from Iran by deploying proven systems by 2011 ) about six or seven years earlier than the previous program.

-- Subsequent phases will add advanced variant sea- and land-based versions of the SM-3 and cover additional territory in Europe should the Iranian threat expand.

-- In the fourth and final phase we will anticipate augmenting our existing capabilities to defend the United

States against potential advances in Iran's ICBM capability with advanced versions of the SM-3. This would be a similar capability to that provided in the program of record.

- This improved approach removes the need for a Ground Based

Interceptor field in Poland and features a distributed interceptor and sensor architecture that does not require the single large, fixed radar originally planned to be located in the Czech Republic.

-- Under the new approach, land- and sea-based missile defense interceptors and sensors offer some flexibility to be redeployed as the regional ballistic missile threat dictates.

This distributed network approach also will increase the survivability of the system and provide more opportunities for collaboration with Allies and partners.

-- We are beginning consultations with Poland, the Czech

Republic, and other Allies on the new approach, and will work with our NATO Allies on determining locations for the sensors and interceptors, and on integrating the Phased, Adaptive

Approach with their missile defense capabilities and with the emerging NATO command and control network.

- Strong missile defenses will strengthen our efforts to find a solution that brings Iran into compliance with its international obligations: the more we can diminish the coercive value of Iran's missiles, the less Iran stands to gain by continuing to develop these destabilizing capabilities.

- This set of recommendations comes from an ongoing

Congressionally-mandated review that is taking a comprehensive examination of our global approach to missile defense and is consistent with the Defense Department's budget choices for fiscal year 2010:

-- For example, we added additional funding to field more systems such as Aegis BMD ships and SM-3 interceptors.

END TEXT OF TALKING POINTS.

Â¶ 5. (S/REL NATO) BEGIN TEXT OF TALKING POINTS FOR USNATO AND

EMBASSIES IN NATO CAPITALS (TALKING POINTS BELOW SHOULD BE

USED FOR ALL NATO CAPITALS EXCEPT FOR POLAND AND THE CZECH

REPUBLIC; WARSAW AND PRAGUE WILL RECEIVE SEPARATE TAILORED

TALKING POINTS TO BE DELIVERED ON SEPTEMBER 17 BY THE

FLOURNOY-TAUSCHER DELEGATION):

GENERAL

- NATO leaders have all agreed that ballistic missile proliferation poses an increasing threat to Allies' forces,

STATE 00097244 003 OF 006 territory, and populations.

- As a result, NATO has noted the significant contribution to

Alliance security by those Allies who possess, or are acquiring, missile defense capabilities.

- At the 2008 Summit, NATO leaders agreed to consider options for a NATO missile defense system that would cover all remaining areas of Allied populations and territory. To date, those efforts have focused on missile defense systems to protect deployed forces from shorter-range ballistic missile threats.

- At the 2009 NATO summit, Heads of State and Government tasked experts to examine the potential expansion of the

ALTBMD program ) which is designed to be the command and control "backbone" for theater missile defense for deployed forces.

- The United States now proposes a "Phased Adaptive

Approach," which will reinforce and strengthen on-going NATO efforts. Specifically, we believe that the Phased Adaptive

Approach is fully supportive of the decision to pursue options for a complementary NATO-wide multi-layered BMD architecture, which currently is envisioned to use NATO's command and control backbone architecture. This is a flexible and cost-effective approach that leverages proven technologies against a known threat.

- Most importantly, the Phased Adaptive Approach is designed to work in concert with Allied efforts to provide protection against ballistic missile attack for all NATO Allies, reflecting the Alliance principle of indivisibility of security.

- The Phased Adaptive Approach will provide our most proven and operational missile defense capabilities in the near-term, defending Allied territory sooner against the current Iranian threat.

- U.S. missile defense efforts will of course be fully interoperable with those of NATO.

- We propose that -- subsequent to Alliance discussions and follow-on briefings in greater detail -- the Alliance examine how we can integrate the U.S. Phased Adaptive Approach with

NATO missile defense. This can be discussed further at the upcoming defense ministerial in Bratislava.

- The Phased Adaptive Approach would serve to greatly strengthen NATO's missile defense capabilities in the face of a growing threat to Alliance security.

- We look forward to engaging the Alliance in political and technical discussions in the weeks ahead.

FINANCING (if raised)

- We will work closely with Allies to examine broader resourcing requirements for defense of Allied forces, territories and populations, including the integration of our

Phased Adaptive Approach.

ROLE FOR NATO MEMBERS

- We have already consulted with the two Allies that had agreed to host missile defense assets under the previous plan. I want to reiterate that we are deeply appreciative of their readiness to take difficult political decisions to respond to the need to better protect allied territories and populations against the threat of ballistic missiles.

- We intend to engage in active consultations at NATO on the best way forward.

- The "Phased Adaptive Approach" is flexible and could be integrated into a NATO territorial missile defense system.

There will be a requirement for Allies to host the sensors and interceptors to be included in the Phased Adaptive

STATE 00097244 004 OF 006

Approach. There are many possibilities, and we look forward to continuing our NATO consultations.

- If pressed: At this time, I would prefer not to get into specific issues related to potential Host Nations. We have many options in this flexible architecture ) sea- and land-based, northern and southern Europe. We intend to engage soon at NATO with Allies on those questions.

- We expect that Allied national systems or current NATO systems will be able to integrate well with the overall phased approach.

- Allied contributions can be interoperable with the Phased

Approach missile defense architecture to ensure they form a cost-effective and comprehensive architecture.

GROUND BASED INTERCEPTORS

- If needed: The U.S. will continue to develop the GBI technology for CONUS defense because domestically it remains a cost-effective option. However, we have no plans to pursue

GBIs in Europe given the promise and track record of SM-3 technology.

END TEXT OF TALKING POINTS FOR NATO.

Â¶ 6. (C/REL RUSSIA) BEGIN TEXT OF TALKING POINTS FOR RUSSIA:

- The President's missile defense in Europe decision will publicly be announced at 10:00 a.m. Washington, D.C. time.

The National Security Advisor, General Jones, will be delivering a similar message to Ambassador Kislyak before the announcement.

- The decision is the result of a long review process; new information on the Iranian ballistic missile program drove the decision.

- Iran has made more progress on short-range and medium-range ballistic missiles, and less progress on ICBMs than anticipated. Now the threat is greater to the Middle East and to Europe, with a less immediate threat to the United States.

- We do not plan to deploy GBIs in Poland and we will not base the European Mid-Course radar in the Czech Republic.

Instead, there will be an adaptive, phased approach.

- We believe that Iran plans to deploy hundreds of these short-range and medium-range ballistic missiles. Our old plan was designed to intercept only small numbers of ICBMs.

- We continue to assess that Iran, at a minimum, is keeping open the option to develop nuclear weapons. Tehran could choose at any time to restart its nuclear weapons program and, eventually, arm its missiles with nuclear warheads.

- The new plan for European missile defense is better designed to protect Europe from this Iranian threat that is emerging. We intend to deploy the SM-3 interceptor which is what we are deploying in the Middle East as well. SM-3s do not have the capability to threaten Russian ICBMs.

- In the first stages of deployment, we also are seeking to place these interceptors closer to Iran (from what I understand, this is exactly the idea that President Putin proposed to President Bush during their July 2007 meeting at

Kennebunkport, Maine).

- The new plan calls for radars and detection systems to be deployed closer to Iran. These radars will not have the capacity to track Russian ICBMs.

- With this decision behind us, we now want to move aggressively to launch serious cooperation on missile defense with Russia.

- As the President said during his meeting with President

STATE 00097244 005 OF 006

Medvedev in April, we want to begin by standing up the Joint

Data Exchange Center (JDEC). The hope is to share data from our respective early-warning systems.

END TEXT OF TALKING POINTS FOR RUSSIA.

Â¶ 7. (C/REL JAPAN) BEGIN TEXT OF TALKING POINTS FOR JAPAN:

- The U.S. greatly appreciates Japan's partnership in BMD; we remain deeply committed to strengthening regional BMD capabilities including operational cooperation, joint research, and co-development.

- Recent North Korean provocations serve as a reminder of the importance of our cooperative missile defense efforts, which help underpin a strong U.S.-Japan Alliance and contribute to regional stability.

- We remain committed to an effective defense of the U.S. and our Allies against rogue ballistic missile threats, including

North Korea and, if it continues down its current path, Iran.

- As you are aware, the BMD Review has undertaken a comprehensive examination of our approach to missile defenses, including an in-depth look at our approach to

European missile defense and in other regions around the world.

-- USG discussions with the MOD and MOFA over the last several months made clear that you have particular interest in the European missile defense analysis -- we understand these strategic decisions have an impact in the Asia-Pacific region and want to make sure you are fully informed of our results.

-- Throughout the review process the U.S. recognized and factored in Japanese concerns/equities especially those related to our on-going discussions with the Russian

Federation.

- Although the BMD Review report is not due to Congress until this January, we have already reached some important conclusions. We have decided to move forward with discussing results now so we do not delay deploying improved defenses

for ourselves or our allies.

OTHER CONSULTATIONS

- We would like to explain the President's decision to you before our public announcement and before we speak with

Russia. We are discussing this new European approach with

Poland, the Czech Republic, and NATO, as we speak.

-- As a close and trusted ally, we consider it important to share this information with you. However, in light of past problems with information security, we must insist that you take every precaution to ensure that this information will not be leaked. Any leaks would have significant implications for our European missile defense approach, and would be damaging to our bilateral relationship. Should there be a security breach elsewhere, it is important that our governments not officially confirm leaked information if it appears in the media before official release by the U.S.

Government.

THE PHASED ADAPTIVE APPROACH

- As you have seen, the new plan for European missile defense will use the SM-3 interceptor, both land- and sea-based, rather than GBIs included in the previous program.

- In many ways, your leadership and partnership in the development of the SM-3 and in operational coordination have been critical to our development of this new approach to

Europe. Just as we have cooperatively deployed proven and transportable missile defenses to help defend against ballistic missile threats in the Asia-Pacific region, we will deploy those same technologies and capabilities in Europe.

STATE 00097244 006 OF 006

- At this time, the new European approach is based on

U.S.-owned SM-3s. However, we will want to look at future missile defense opportunities with NATO and our European allies that could include potential sales of a number of missile defense capabilities. We would very much like to work with Japan to make strategic decisions about whether and how our jointly developed missile (i.e., the SM-3 Block IIA) could be part of that future, and perhaps part of a future networked global system of regional missile defense architectures.

- We look forward to continuing our strong partnership on missile defense and growing our cooperative activities.

BMD FOR JAPAN AND EAST ASIA

- As mentioned previously, the phased approach in Europe is in many ways similar to the approach we have taken with you.

We believe that our current approach in the Asia- Pacific region is sound and forms a model that we can draw upon elsewhere. Naturally, we will re-engage with you soon on the full findings of our BMD Review.

IF ASKED ABOUT BURDEN SHARING AT NATO:

- As you well know, this type of approach creates opportunities for participation ) for example, in command and control, sensors, and interceptors ) and enhanced cooperation, similar to the type that we already enjoy. We look forward to engaging with NATO soon about how our new approach contributes to common defenses and how we can share responsibilities in that effort.

END TEXT OF TALKING POINTS FOR JAPAN.

Â¶ 8. (U) BEGIN TEXT OF TALKING POINTS FOR GULF COOPERATION

COUNCIL STATES (BAHRAIN, KUWAIT, OMAN, QATAR, SAUDI ARABIA,

UNITED ARAB EMIRATES):

- The USG has adopted a phased adaptive approach for the ballistic missile defense (BMD) of Europe. The approach in

Europe complements the emerging BMD architecture in the Gulf, which is currently defending against potential Iranian air and missile threats to our partners and U.S. forces in the

Gulf region.

-- We are working to optimize limited assets to ensure that programs in Europe will not be executed at the expense of our friends and commitment to the defense of the Gulf Cooperation

Council.

-- BMD programs in Europe will not require a diversion of

U.S. assets from the Gulf.

- The United States has deployed BMD systems to the Middle

East to protect against the Iranian missile threat, including

AEGIS BMD presence in the Persian Gulf and two PATRIOT batteries each in Bahrain, Kuwait, Qatar, and the UAE.

-- These U.S. systems complement the indigenous BMD systems in the region including PAC-II capability in Saudi Arabia and

Kuwait, and Shared Early Warning capability with the UAE.

-- The USG is exploring the possibility of providing additional BMD coverage to Gulf Cooperation Council nations if the circumstances warrant.

-- The USG will continue to work with its Gulf partners to develop regional, integrated air and missile defense systems.

END TEXT OF TALKING POINTS FOR GCC STATES.

CLINTON

Viewing cable 09ANKARA1472, SCENESETTER: YOUR VISIT TO TURKEY



09ANKARA1472

2009-10-13

08:08

2010-12-30

21:09

SECRET//NOFORN

Embassy

Ankara

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NOFORN

SIPDIS

OSD FOR ASD VERSHBOW FROM AMBASSADOR JEFFREY

E.O. 12958: DECL: 10/07/2019

TAGS: PREL PARM PTER TU

SUBJECT: SCENESETTER: YOUR VISIT TO TURKEY

Classified By: Ambassador James F. Jeffrey reasons 1.4 (b) and (d)

Â¶ 1. (S) Sandy, Glad you'll be able to visit Turkey at this key time. Your short visit will give you an opportunity to engage with key Turkish leaders on, first and foremost in their minds, missile defense. The Turks are keen to learn more about U.S. plans, in particular what role the U.S. wants/expects Turkey and others in Europe to play. The

Turkish General Staff (TGS) will be interested in our ideas for HLDG reform, even if they may be slow to accept them.

Â¶ 2. (S) You know how broad our agenda is with Turkey. As you will have a short time in country, I suggest you focus on a few key issues.

Be sure to raise:

------------------

- Missile Defense, with emphasis on how the U.S. will look to several Allies - not just Turkey - for help (para 3)

- Repeat our commitment to our intel and other support for strikes against the PKK (para 5-6)

- Appreciation for Turkey's efforts on Afghanistan/Pakistan

(para 13)

- Float the idea of HLDG reform and ensure Guner knows we expect him in Washington (para 4)

- Press for a realistic assessment of Turkey's view of the threat assessment from Iran (para 10)

Watch Out For:

---------------

- Pressure for direct U.S. milops against the PKK (paras

11-12)

- Conflation of Turkey's exploration of air defense capabilities with our Missile Defense needs (para 3)

Missile Defense

----------------

Â¶ 3. (S) The Turks will appreciate your update on U.S. missile defense plans and in particular will expect you to have specific ideas on how Turkey would contribute to the PAA.

While the top-level bureaucrats with whom you will meet will understand the rationale for the PAA and will be ready to explore ways Turkey can help, the political environment for a request to base assets in Turkey is mixed, and Turkey's perception of the Iranian threat to its territory differs from ours. The GOT continues to tread a fine line in

managing its strong relationship with the U.S. and its ties with both the Islamic world and Russia. The government must be able to demonstrate that any missile defense program is not specifically anti-Iran, nor blatantly pro-Israel.

Â¶ 4. (S) Likewise, it will want to ensure that Russia is not opposed to Turkey's role. Also important will be clarity on the degree to which this system is a NATO one, under NATO

Command and Control (C2). The PAA would presumably complement Turkey's effort to establish a domestic missile defense capability that would protect Turkey's major population centers. The PAC-3 has been offered in response to Turkey's air defense tender and you should highlight the system's ability to be interoperable with any future NATO command and control architecture.

HLDG

-----

Â¶ 5. (C) You will need to outline U.S. views to streamline and alter the current HLDG format to make it into a more substantive discussion. The Turks are shy to stray from the status quo; you should emphasize why we feel this change is necessary while underscoring that it is vitally important the

DCHOD Guner attend the upcoming HLDG in December, when decisions about future dialogues will be agreed upon. (We have learned that the new position of TGS number three, a four-star slot held by General Balanli (with a focus on hardware), might get the nod for the HLDG representative.

We've told Guner it should be his.) You should also be prepared for the Turkish General Staff to raise the Shared

Defense Vision document, as they await a response to their latest proposed text.

PKK

----

Â¶ 6. (C) Turkey's counter-terrorist efforts against the PKK have evolved in the past year and have expanded beyond military action alone. Although the government's Democratic

(i.e., Kurdish) Initiative is not yet fully developed, the government has increased social and economic support to ethnic Kurds in southeast Turkey, has dramatically broadened the rights of Kurds to use their own language, and increased educational opportunities as well. It is our view that the

TGS military success against the PKK, supported by our intelligence--sharing operation, has given the civilians the political space to explore this "opening." Turkish military operations against the PKK continue, however, and on October

6 Parliament extended the government's mandate to conduct cross-border operations against the PKK in Iraq for another year.

Â¶ 7. (C) Our 2007 decision to share operational intelligence was a turning point for the bilateral relationship, and

President Obama's declaration before the Turkish Parliament of our continuing commitment to support Turkey's fight against the PKK was warmly welcomed. This cooperation has helped to improve our bilateral relationship across the board. Turkey's military leaders value this intelligence and the advice our military leaders give them. Our work has made it difficult for PKK terrorists to use northern Iraq as a safe haven. Turkish causalities are still occurring, however, and an increasing proportion are from IEDs. Due to pressure on Chief of Staff General Basbug and the Turkish

General Staff (TGS) to "finish off" the PKK this year, the government wants and has requested direct U.S. kinetic action against the PKK; we have refused this request to date due to our own rules of engagement. The GOT has also requested the sale of armed MQ-9/Reaper UAVs, which will be a challenge to fulfill (see para 10).

Northern Iraq

--------------

Â¶ 8. (C) Turkey will not consider any alternative to the political unity and territorial integrity of Iraq, but has become more flexible on how it engages "the local authorities of northern Iraq" (how Turkey refers officially to the

Kurdish Regional Government (KRG)). Turkey's policy remains focused on the government in Baghdad, but its outreach to the

KRG is expanding. This outreach is reinforced by the continued dominance of Turkish products and investments in the KRG's healthy economy. It is also tied to turkey's new opening to its own Kurds, by far the biggest and most controversial domestic political issue here.

Â¶ 9. (S) The U.S.-Turkey-Iraq Tripartite Security talks continue regularly and a new Tripartite operational office in

Erbil, established to share counter-PKK intelligence was established over the summer. The Turks remain shy to share data; they are not convinced that they can trust

Iraqi/Kurdish individuals to keep information concerning operations secret. Nevertheless, it is a step in the right direction. Turkish military officials have become more strident in their calls for KRG officials to take action against the PKK.

U.S. Drawdown through Turkey

-----------------------------

Â¶ 10. (S) Habur Gate and the Incirlik Cargo Hub -- vital to our sustainment operations -- could be helpful in our drawdown if other options prove too difficult. Minister of National

Defense Vedci Gonul suggested to Secretary Gates in June that

Turkey was ready to agree to the increased use of Incirlik for this purpose. Using the surface route from Habur Gate to

Mediterranean ports (Iskenderun, Mersin) is also worth exploring, and we may be able to involve Turkish commercial shippers in support of the Northern Distribution Network. We caution that the rough terrain, security environment, and the

cantankerous nature of the Turkish government bureaucracy will challenge any U.S. operation. Nevertheless, we are evaluating these options in cooperation with CENTCOM and

EUCOM partners.

Iran

------

Â¶ 11. (C) Turkey understands and partially shares U.S. and international concerns about Iran's nuclear ambitions, but is hesitant to use harsh language in public statements, in part due to its dependence on Iran as an energy supplier and as a trade route to Central Asian markets. PM Erdogan himself is a particularly vocal skeptic of the U.S. position. Turkey believes international pressure against Iran only helps to strengthen Ahmadinejad and the hard-liners. However, it continues to press Iran quietly to accept the P5 plus 1 offer. The GOT is a strong partner in our non-proliferation efforts, with several significant results. Politically,

Turkey will try to position itself on Iran between wherever we are and where Russia is. In a pinch or if pressed, the

Turks will slant to us.

UAVs and Attack Helicopters

----------------------------

Â¶ 12. (C) Turkey seeks to acquire, on an urgent basis, its own

UAV capability. The administration has made clear at high levels that we support this goal, and Turkey has pending request to acquire armed Reaper UAVs. Ultimate approval for armed Reapers is complicated due to MTCR obligations and Hill concerns. However, even if those could be overcome, the delivery pipeline for these systems is long, and Turkey's leaders have sought reassurance that we will not pull our intelligence support until they can replace it. We have not made this commitment to date.

Â¶ 13. (C) Additionally, bad procurement decisions led Turkey to a severe shortage of attack helicopters, desperately needed for its fight against the PKK Turkey has looked to us to help them bridge the capability gap, asking to purchase additional AH-1W Super Cobra aircraft. These aircraft are in short supply in our own inventory, but Secretary Gates and

VCJCS Cartwright have promised to try to support with request within a few years (four each in 2011, 2012, and 2013). The

Turks took this as an affirmative, and recently started pressing for delivery in 2010 instead of 2011.

Afghanistan/Pakistan

----------------------

Â¶ 14. (C) Turkey has commanded ISAF twice since its inception and will take command of RC-Capital this November. Turkey leads PRT Wardak and plans to open a second PRT in Jawzjan in early 2010. Turkey has sponsored the "Ankara Process" dialogue, one of several efforts to encourage constructive communications between Kabul and Islamabad and is a leading participant in the Friends of Democratic Pakistan. Turkey pledged significant aid to both countries: USD 200 million to Afghanistan and USD 100 million to Pakistan. Because of its culture, history and religious orientation, as well as

Foreign Minister Davutoglu's strategic ambition, Turkey is well disposed to act as an agent of the international community's goals in Afghanistan and Pakistan. Constraining

Turkey's potential is a lack of resources. Our conversations with Turkish interlocutors have helped us identify several areas in which Turkey can be of particular help: education and health, military training and support, economics, counter-narcotics, and trilateral engagement. (Note: Turkey will not support any CT operations in Afghanistan. They do not believe there is a NATO/ISAF mandate to engage in these operations, and they additionally have national caveats preventing them from participating in NATO/ISAF CT

operations. The GOT also believes that ISAF should not/not be engaged in the counter-narcotics fight, believing that foreign fighters who engage in this fight just produces antipathy against foreign forces in the local population. I do, however, believe the GOT are willing to engage the training of Afghan security forces.)

Caucasus

--------

Â¶ 15. (C) Turkey seeks to develop itself as a regional power and recognizes that the Caucasus region, stymied in its growth by frozen conflicts, could turn to Turkey for develop.

The signing of the Protocol document in Zurich on October 10 was a landmark for the region, and should serve as a starting point for establishing bilateral relations and, ultimately, the opening of its closed border. Nevertheless, future relations will still be heavily linked to the 1915 "genocide" issue and the resolution of the Nagorno-Karabakh conflict between Armenia and Azerbaijan. Turkey consistently warns that any U.S. determination of the events of 1915 as

"genocide" would set off a political firestorm in Turkey, and the devastating effect on our bilateral relationship -- including political, military, and commercial aspects -- would be unavoidable.

Political Environment

----------------------

Â¶ 16. (C) PM Erdogan's Islamist-leaning Justice and Development

(AK) Party is squarely in the driver's seat, but fears an erosion of its political base from more conservative/Islamist parties. Civilian-military relations remain complex. Chief of Staff General Basbug has worked out a modus vivendi with

PM Erdogan, but the long-running struggle between Turkey's

secularists (with the Army as its champion) and Islamists

(represented by the government) naturally puts them at odds.

Erdogan has the clear upper hand, a fact with which Basbug has seemingly learned to live. Alleged past military involvement in coup contingency planning or even deliberate generation of internal chaos remains political theme number one and preoccupies both Erdogan and Basbug and their respective underlings.

Israel

-------

Â¶ 17. (C) While the Foreign Ministry and the Turkish General

Staff agree with us that a strong Turkey-Israel relationship is essential for regional stability, PM Erdogan has sought to shore up his domestic right political flank at the expense of this relationship. His outburst at Davos was the first in a series of events the results of which we and his staff have sought to contain. The latest of these was Exercise

Anatolian Eagle. Erdogan canceled Israel's participation hours before the exercise was to begin. With an Israeli strike - across Turkish airspace - against targets in Iran a possibility, Erdogan decided he could not afford the political risk of being accused of training the forces which would carry out such a raid. Through some remarkable work with Allies and with the inter-agency, we engineered a public

"postponement" of the international portion of the exercise, but the relationship has begun to sour.

JEFFREY

"Visit Ankara's Classified Web Site at http://www.intelink.s gov.gov/wiki/Portal:Turkey"

Viewing cable 09ANKARA1654, TURKEY: A/S GORDON PRESSES FM DAVUTOGLU

ON IRAN



09ANKARA1654

2009-11-17

17:05

2010-12-30

21:09

SECRET

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S E C R E T SECTION 01 OF 02 ANKARA 001654

SIPDIS

DEPARTMENT ALSO FOR EUR/SE

E.O. 12958: DECL: 11/17/2019

TAGS: KNNP PREL TU IR

SUBJECT: TURKEY: A/S GORDON PRESSES FM DAVUTOGLU ON IRAN

REF: ANKARA 1626

Classified By: Ambassador James Jeffrey, for reasons 1.4(b,d)

Â¶ 1. (S) Iran dominated A/S Gordon's 40-minute meeting November

12 with Foreign Minister Davutoglu. The FM had just gotten off the phone with El-Baradei and had discussed in detail the

IAEA proposal to send Iran's low enriched uranium to Turkey.

El-Baradei had said he would "call Washington" that same morning. This had followed two long "harsh" sessions with the Iranians in Istanbul on Sunday evening. The Iranians have said they are willing to meet with Solana, but have told

Embassy

Ankara

the Turks that they have serious problems with Cooper and the

British. They have "more trust" in the U.S. The Iranians would also prefer to get fuel from the U.S. rather than the

Russians.

Â¶ 2. (S) Davutoglu said the Iranians: a) are ready to send a delegation to Vienna to work out the specifics on this proposal; b) have given their "full trust" to Turkey; c) continue to face serious domestic problems inside Iran. He said the Turks actually see Ahmadinejad as "more flexible" than others who are inside the Iranian Government.

Ahmadinejad is facing "huge pressure" after statements from some P5 members to the effect that a nuclear deal would succeed in weakening Iran,s nuclear capability -- which is interpreted by some circles in Iran as a virtual defeat.

Â¶ 3. (S) Given this context, the Turks had asked Ahmadinejad if the core of the issue is psychological rather than substance.

Ahmadinejad had said "yes," that the Iranians agree to the proposal but need to manage the public perception.

Accordingly, the Iranians are proposing that the first 400 kilos be transferred to Kish Island -- thereby keeping it on

Iranian soil -- and would receive right away an equivalent amount (30-50 kilos) of enriched fuel. The second stage would focus on the management of Iranian public opinion, after which Tehran would proceed with the Turkey option for the remaining 800 kilos, probably in two tranches. Davutoglu said Baradei agreed to consider this.

Â¶ 4. (S) Davutoglu noted that he had spoken to NSA General

Jones Wednesday, who had said that we should perhaps suggest to the Iranians that they transfer 600 kilos to Kish Island and 600 kilos to Turkey simultaneously. A/S Gordon said he could not give an official response to the proposal as this is the first time we heard it, but that he anticipates much skepticism about providing fuel to Iran before all the LEU has been taken out. It would be better to get all 1200 kilos

out right away.

Â¶ 5. (C) Davutoglu noted that these are two different proposals. The first is Iran's request for fuel for its nuclear reactor. Even if this takes place, he said, we still need to work on limiting Iran's nuclear enrichment capability. If we succeed with this proposal, he said, it will create "confidence" and a "new momentum" and would allow room for negotiation.

Â¶ 6. (C) Noting that Davutoglu had only addressed the negative consequences of sanctions or the use of military force,

Gordon pressed Davutoglu on Ankara's assessment of the consequences if Iran gets a nuclear weapon. Davutoglu gave a spirited reply, that "of course" Turkey was aware of this risk. This is precisely why Turkey is working so hard with the Iranians. President Gul himself had spent two hours

Sunday with Ahmadinejad in Istanbul.

Â¶ 7. (C) Gordon noted that while we acknowledge that Turkey can be helpful as a mediator, some of the Prime Minister's recent public comments raise questions about how Turkey sees this issue. Davutoglu said he is aware of these concerns, but contended that the Guardian newspaper had not accurately presented its recent interview with the Prime Minister. The

PM's comments had been taken out of context. Erdogan had been asked if he views Iran as a friend. If he had said

"no," it would not have been possible to convince Tehran to cooperate on this latest proposal. Only Turkey can speak bluntly and critically to the Iranians, Davutoglu contended, but only because Ankara is showing public messages of friendship.

Â¶ 8. (C) Gordon pushed back that Ankara should give a stern public message about the consequences if UN resolutions are ignored. Davutoglu countered that Erdogan had given just such a statement in Tehran when he visited. He emphasized

that Turkey's foreign policy is giving a "sense of justice" and a "sense of vision" to the region. Turkey has provided a

"third option" in addition to Iran and the Saudis (who he contended are viewed as "puppets" of the US). The result, he said, is that we "limit Iranian influence in the region." We

ANKARA 00001654 002 OF 002 need a "pro-Western approach AND a sense of justice."

Â¶ 9. (C) A/S Gordon has cleared this cable.

JEFFREY


Viewing cable 10ANKARA126, SECRETARY GATES' TURKEY BILATERAL VISIT:



SECRET

Embassy

Ankara

10ANKARA126

2010-01-26

11:11

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RUEHKB/AMEMBASSY BAKU PRIORITY 1658


RUEHBUL/AMEMBASSY KABUL PRIORITY 0180

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SIPDIS

FOR BACKGROUND

E.O. 12958: DECL: 01/22/2020

TAGS: PREL PGOV MASS MARR TU AF PK IR IZ IS AM

SUBJECT: SECRETARY GATES' TURKEY BILATERAL VISIT:

SCENESETTER

Classified By: Ambassador James F. Jeffrey, Reasons 1.4 (a,b,d)

Â¶ 1. (S) PM Erdogan welcomed President Obama's reiteration of support to the fight against the PKK during the December 7 meeting in the Oval Office, but the Secretary should expect questions about how we will operationalize that commitment as plans to withdraw from Iraq move forward. A key issue will be how to reduce the gap between the time when the U.S. is no longer able to provide ISR support and when we will be able to help Turkey acquire its own capability. On missile defense, we will look for the Secretary's help in advancing our work with Turkey to persuade the Turks to allow a key radar system to be based here. The Turks are struggling to define what they will need in terms of NATO political cover to lessen the high cost - both in terms of domestic politics and in relations with Iran - that Erdogan's government

believes it will have to pay should they agree.

Â¶ 2. (S) Although our agenda with Turkey is broad and complex, the following issues are likely to come up during the

Secretary's trip:

"Need To Raise"

----------------

- Our commitment to continue sharing real-time intelligence to support Turkey's counter-PKK fight, but caution that the process for Turkey to acquire an armed UAV system from the

U.S. will be long and complex. (para 3-5, 14)

- The need for a NATO BMD system with Turkey's participation and the Iranian threat against NATO interests. (para 6-9)

- Appreciation for Turkey's efforts on Afghanistan/Pakistan, particularly for its new commitments to training security forces. (para 10-11)

- Appreciation for support to OIF/OEF through Turkey's territory, including the Incirlik Cargo Hub; easing transit of non-lethal mil cargo shipments from Iraq to Afghanistan.

(para 12)

- Our advocacy support for Raytheon and Sikorsky on sales of air defense systems and utility helicopters (para 13).

"Be Ready To Respond On"

------------------------

- Pressure for direct U.S. milops against the PKK (paras 5)

- Turkish requests for 24/7 Predator coverage of the

Turkey-Iraq border to counter PKK operations and activities

(para 5).

- Turkish requests for immediate delivery of AH-1W helicopters (para 15)

Counter - PKK Operations: Still Turkey's Top Priority

--------------------------------------------- --------

Â¶ 3. (C) Turkey's counter-terrorist efforts against the PKK have evolved in the past year and have expanded beyond military action alone. Although the government's renamed

National Unity Project (initially called the "Kurdish

Opening") was not fully developed when launched and appears to be moving slowly, the government has increased social and economic support to ethnic Kurds in southeast Turkey, dramatically broadened the rights of Kurds to use their own language, and increased educational opportunities as well.

It is post's view that the military success against the PKK, supported by our intelligence-sharing operation, has given the civilians the political space to explore this opening and to deal directly with Masoud Barzani and other Iraqi Kurds.

Turkish military operations against the PKK continue, however, and on October 6, 2009 Parliament extended the government's mandate to conduct cross-border operations against the PKK in Iraq for another year. Turkey's leaders have learned from us and from their own experience that only a whole-of-government approach will succeed against the PKK insurgency.

Â¶ 4. (C) Our November 2007 decision to share operational intelligence was a turning point for the bilateral relationship, and President Obama's declaration before the

Turkish Parliament in April 2009 and during his oval office meeting with Erdogan in December 2009 of our continuing commitment to support Turkey's fight against the PKK were warmly welcomed. Our cooperation has helped to improve the bilateral relationship across the board, particularly by

making it difficult for PKK terrorists to use northern Iraq as a safe haven. We can never reiterate enough our continuing committment, as President Obama did effectively with PM Erdogan in December.

Â¶ 5. (C) Nevertheless, Turkish causalities are still occurring.

Turkey still looks for more support, and will press us for more concrete action before the U.S. completes its withdrawal from Iraq. CHOD Basbug will likely repeat the GOT's request for laser-designation of targets and/or direct U.S. operations against the PKK. In December, PM Erdogan also asked POTUS for 24-hour Predator coverage. At present we provide approximately 12-hour coverage, with an occasional surge to 24 hours to support specific Turkish operations, such as against High Value Targets. A move to 24-hour coverage is not easy due to resources requirements elsewhere; however, we may be able to provide a few weeks of 24-hour coverage during crucial spring months, and are working with

TGS to determine exactly where and when it would be most useful to do so, and what assets the Turkish military would employ if additional UAV support is made available.

Missile Defense

----------------

Â¶ 6. (S) The Turks asked us to postpone a return visit from

Ellen Tauscher, Undersecretary of State for Arms Control and

International Security, as they are still considering how best to respond to our request to base an AN/TPY-2 and

(potentially) other MD assets in Turkey. While some of the

Turks' technical questions remain unanswered, the key questions are now political. During his meeting with

President Obama, PM Erdogan said that such a system must be implemented in a NATO context to diminish the political cost that his government will likely bear, both in terms of domestic politics and in Turkey's relations with Iran. The ball is now in the court of the civilian leaders here to

determine just "how much NATO" will be enough for them politically; NATOs inability to fund an "interim capability" makes it harder for us to show parallel development of a NATO

BMD system with PAA. Erdogan is concerned that Turkey's participation might later give Israel protection from an

Iranian counter-strike.

Â¶ 7. (S) We have made the point to the Turks that a decision to not base the AN/TPY-2 radar in Turkey is essentially a decision to opt out of missile defense coverage for Turkey; this would not be a political consequence, but just a fact based on physics and geometry. It is important to make this point again (gently) with PM Erdogan, but also underscore that we value Turkey's participation and will try to

"NATOize" the system, if Turkey will tell us how much NATO would be enough.

Â¶ 8. (S) Behind all this, we fear, is a manifestation of both the Turkish government's, and to some degree the Turkish public's, growing distancing from the Atlanticist world view now that most dangers for Turkey are gone. While Turks are not naive about Iran (see below), MD places them in a pickle, forcing them to choose between the U.S./West and a Middle

East "vocation" - which, while not necessarily includes coddling Iran, requires palpable space between Turkey and

"the West."

Iran

----

Â¶ 9. (S) Turkey understands and partially shares U.S. and international concerns about Iran's nuclear ambitions, but is hesitant to use harsh language in public statements, in part due to its dependence on Iran as an energy supplier and as a trade route to Central Asian markets. It has worked quietly with us to prevent some proliferation-sensitive shipments to and from Iran. Turkey's top civilian and military officials

may have come to the conclusion that a military strike against Iran would be more harmful for Turkey's interests than Iran gaining a nuclear weapons capability; they believe international pressure against Iran only helps to strengthen

Ahmadinejad and the hard-liners. PM Erdogan himself is a particularly vocal skeptic of the U.S. position. However,

Turkey did press Iran (albeit quietly) to accept the P5 plus

1 Tehran Research Reactor (TRR) offer and FM Davutoglu had been personally engaged in trying to rescue the TRR deal, which would have removed a significant portion of Iran's lowly-enriched uranium stockpile. As a current member of the

UNSC, the Turks would be very hesitant to support sanctions against Iran. We need nevertheless to encourage PM Erdogan to support UN actions if Iran does not comply with Iran's international obligations while underscoring that we view

Iran's program as a serious threat to NATO interests in

Europe and would like to see a non-military solution

(including Turkish participation in NATO BMD).

Afghanistan/Pakistan

----------------------

Â¶ 10. (SBU) Turkey has been a dedicated partner in Afghanistan.

It has commanded ISAF twice since its inception and again took command of RC-Capital in November. Turkey leads PRT

Wardak and plans to open a second PRT in Jawzjan (also covering Sar-e-Pol) in mid-2010. Turkey has sponsored the

"Ankara Process" dialogue, one of several efforts to encourage constructive communications between Kabul and

Islamabad, and is a leading participant in the Friends of

Democratic Pakistan. It hosted a trilateral summit on

January 25 and a Afghanistan Regional Summit (including all of Afghanistan's immediate neighbors as well as select other countries including the U.S.) on January 26, just prior to the January 28 London Conference on Afghanistan.

Â¶ 11. (C) Turkey pledged significant aid to both countries:

USD 200 million to Afghanistan and USD 100 million to

Pakistan, as well as USD 1.5 million to the ANA. There are

1750 Turkish troops in Afghanistan, and Turkey has four OMLTs currently in Kabul and, since December, pledged two more

OMLTs and one POMLT. Because of its culture, history and religious orientation, as well as Foreign Minister

Davutoglu's strategic ambition, Turkey is well disposed to act as an agent of the international community's goals in

Afghanistan and Pakistan. In 2010, Turkey has pledged to offer 6-8 week trainings for up to a brigade's worth of

Afghan military and police personnel in Turkey and will establish a training center in Kabul capable of training up to 600 ANSA personnel at a time.

Retrograde through Turkey

-------------------------

Â¶ 12. (S) Turkey's agreement to allow us to use its territory, facilities and airspace has been essential to our ability to support operations in Iraq and Afghanistan. We now look to expand current capabilities to transit materiel from Iraq to join up with the Northern Distribution Network (NDN) to

Afghanistan. CENTCOM logisticians, working with us and our

EUCOM Office of Defense Cooperation, seek to take advantage of improved commercial ties between Turkey and Iraq to move non-lethal equipment across Turkey to join the NDN. We are working to expand our current retrograde agreements to minimize the time and bureaucracy involved, and to expand permissions to allow non-lethal military equipment, including armored transport vehicles.

Advocacy for U.S. Defense Industry

----------------------------------

Â¶ 13. (C) We much appreciate SecDef's help in advocating for

U.S. firms competing for key projects in Turkey, and hope he can raise both Sikorsky's and Raytheon's cases in person.

Sikorsky's "International Blackhawk" proposal holds remarkable benefits. This deal represents a new level of industrial partnership; Sikorsky guarantees that it would build in Turkey - for sale outside of Turkey - one Blackhawk for each one the GOT builds and buys for itself; this is a boon of hundreds of millions of dollars for the Turkish economy. On Air Defense, Raytheon's PAC-3 is competing in a tender for Turkey's air defense. Raytheon also seeks to take advantage of Turkish industry's ability to co-produce complex systems with us and would produce systems for sale in the UAE and elsewhere. The benefit to Turkey's economy from such co-production would likely exceed USD 1 billion. Technically and operationally, there is no system which can compete with the PAC-3, but Turkey's Defense Ministry seeks to broaden competition to include lower-cost options from Russia and even from European producers. Raytheon often asks us to remind the Turks that a decision on requests for support on

Missile Defense should not necessarily affect a decision on

PAC-3.

UAV's, Attack Helicopters, and Intel Surge

------------------------------------------

Â¶ 14. (C) Turkey seeks to acquire, on an urgent basis, its own

ISR capability to replace the US assets currently being used in anti-PKK operations. President Obama told PM Erdogan in

December that we support Turkey's request to acquire armed

Reaper UAVs. Nevertheless, approval for armed Reapers is complicated due to Hill concerns. We have explained this to the Turks. However, even if those could be overcome, the delivery pipeline for these systems is long, and Turkey's leaders have sought reassurance that we will not pull our intelligence support until they can replace it. While we are working to enhance Turkey's ISR capabilities, we have not made this commitment to date.

Â¶ 15. (C) Bad GOT procurement decisions led Turkey to a severe

shortage of dual engine, high altitude attack helicopters, which it desperately needs to fight the PKK. PM Erdogan raised this issue with the President in December 2009; SecDef should expect this issue to be a top priority in meetings with Minister Gonul and with GEN Basbug. The Turks took

SecDef's May 2009 letter to provide up to four AH-1W helicopters each in 2011, 2012 and 2013 as a firm commitment, and now have asked us to advance that date to 2010. They do not accept our explanation that these aircraft are simply not available from our inventory, as they believe they have -- just like the U.S. -- "troops in contact" and need the close tactical support. While SecDef should make no commitment, we should also explore whether we can persuade Taiwan to sell or lease some of its own AH-1W aircraft now that Taiwan is taking delivery of Apaches.

Support For The US-Turkey-Iraq "Tripartite Security Dialogue"

--------------------------------------------- ----------------

Â¶ 16. (S) SecDef's visit will take place just as USFI's GEN

Odierno will have left. We expect that GEN Odierno's visit will give a political boost to the U.S.-Turkey-Iraq

Tripartite Security talks. Turkey's civilian leaders are taking heat from their domestic political opposition for pressing the "Kurdish Opening" while casualties from PKK attacks continue. They hope to use GEN Odierno's visit to show that their whole-of-government approach against PKK insurgency is producing results and that it has the support of senior USG officials in Iraq.

Â¶ 17. (S) Trilateral meetings continue regularly and a new

Tripartite operational office in Erbil, established to share counter-PKK intelligence was established over the summer.

The most recent tri-lat meeting took place in Baghdad in

December, followed by a joint Turkey-Iraq visit in Erbil.

The Turks remain frustrated that, in their view, the KRG is not doing enough to combat the PKK. The Turks remain shy in

sharing intelligence data; they are not convinced that they can trust Iraqi/Kurdish individuals to keep information concerning operations secret. Turkish officials have become more strident in their calls for KRG officials to take action against the PKK. The cooperation that does exist is a step in the right direction; however, it will need to improve significantly prior to the U.S. pullout of Iraq. CHOD Basbug and PM Ergodan want the U.S. to put more pressure on the

Iraqis - and particularly Masoud Barzani - to take actions to cut PKK supply and logistics lines in northern Iraq. We should stress the need for more trust and collaboration between Turkey and Iraq, eventually on Turkish CBOs. Absent greater cooperation, we could see significant bilateral problems post-2011, to include Iraqi claims of Turkey's violation of its sovereign territory.

Northern Iraq

--------------

Â¶ 18. (C) Turkey will not consider any alternative to the political unity and territorial integrity of Iraq, but has become more flexible on how it engages "the local authorities of northern Iraq" (how Turkey refers officially to the

Kurdish Regional Government (KRG)). Turkey's policy remains focused on the government in Baghdad, but its outreach to the

KRG is expanding. This outreach is reinforced by the continued dominance of Turkish products and investments in the KRG's healthy economy.

Armenia

-------

Â¶ 19. (S) The signing of the Protocols to reestablish

Turkish-Armenian relations and open the common border in

Zurich on October 10 was a landmark for the region. However, neither Turkey nor Armenia have taken steps toward

ratification; the GOT argues that progress toward withdrawal of Armenian forces from Azerbaijani provinces surrounding

Nagorno-Karabakh is a pre-condition. (Note: This was not/not part of the agreement, and not a position the U.S. supports. End note.) Future relations will nevertheless still be heavily linked to the 1915 "Armenian genocide" issue. Any U.S. determination of the events of 1915 as

"genocide" would set off a political firestorm in Turkey, and the effect on our bilateral relationship -- including political, military, and commercial aspects -- would be devastating.

Israel

------

Â¶ 20. (C) While the Foreign Ministry and the Turkish General

Staff agree with us that a strong Turkey-Israel relationship is essential for regional stability, PM Erdogan has sought to shore up his domestic right flank through continued populist rhetoric against Israel and its December 2008 Gaza operation.

His outburst at Davos and the last-minute cancellation of

Israel's participation in the Fall 2009 Anatolian Eagle

Exercise (a multilateral Air Force exercise which had US,

Turkey, Italy, and Israel as planned participants) were the most noticeable examples of this rhetoric, which we and his staff have sought to contain. The latest incident, a snub in early January of the Turkish Ambassador by Israeli Deputy

Foreign Minster Danny Ayalon, almost caused the GOT to both recall its Ambassador and cancel the visit of Israeli Defense

Minister Ehud Barak. However, the very public row was resolved with an Israeli apology and Barak's visit on January

17 helped to stem the downward spiral for now. Nevertheless, we assess that Erdogan is likely to continue anti-Israel remarks and the issues will continue to cast a shadow on the

TU-IS bilateral relationship.

Political Environment

---------------------

Â¶ 21. (C) PM Erdogan's Islamist-leaning Justice and Development

(AK) Party remains Turkey's strongest political party, but its poll numbers are slumping, and it continues to fear an erosion of its political base from more conservative/Islamist parties. Civilian-military relations remain complex. Chief of Staff General Basbug has worked out a modus vivendi with

PM Erdogan, but the long-running struggle between Turkey's secularists (with the Army as its champion) and Islamists

(represented by the government) naturally puts them at odds.

Erdogan has the clear upper hand, a fact with which Basbug has seemingly learned to live. Alleged past military involvement in coup contingency planning or even deliberate generation of internal chaos remains political theme number one and preoccupies both Erdogan and Basbug and their respective underlings. Public trust in the military is starting to decline, the result of several very public on-going investigations into the alleged planning against the government.

Jeffrey


Viewing cable 10ANKARA251, SECRETARY OF DEFENSE GATES'S MEETINGS WITH

TURKISH



10ANKARA251

2010-02-16

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SIPDIS

E.O. 12958: DECL: 02/16/2020

TAGS: PARM PREL PTER TU

SUBJECT: SECRETARY OF DEFENSE GATES'S MEETINGS WITH TURKISH

MINISTER OF NATIONAL DEFENSE AND CHIEF OF THE TURKISH

GENERAL STAFF, FEBRUARY 6, 2010

Classified By: Ambassador James F. Jeffrey for reason 1.4 (b, d)

Â¶ 1. (S/NF) Summary: Secretary of Defense Robert Gates

(SecDef) met with Turkish Minister of National Defense Mehmet

Vecdi Gonul (MND Gonul) and the Chief of the Turkish Genral

Staff General Ilker Basbug (Gen Basbug) in separate meetings during his bilateral visit to Ankara on February 6, 2010.

SecDef thanked Gonul and Basbug for Turkey's valuable contributions in Afghanistan and Pakistan. Gonul stressed

Turkey's important role in Afghanistan as a Muslim country in the Alliance and Basbug hailed continuing U.S. and Turkish support to Afghan National Security Force training and assistance to the Pakistani Armed Forces. SecDef and Gonul discussed the importance of a Turkish role in European

Missile Defense. On combating the PKK in Turkey, SecDef

agreed with Basbug that the key to further progress is greater Iraqi cooperation with Turkey. SecDef highlighted to

Gonul opportunities to increase military capability and gain economic benefits through choosing Sikorsky helicopters or

Raytheon Patriot PAC-3 systems in ongoing tenders.

----------------------

Bilateral Relationship

----------------------

Â¶ 2. (C) MND Gonul stressed the importance of the SecDef's visit, noting that it built on the Prime Minister's December meeting in Washington with President Obama in December.

SecDef agreed on the importance of the bilateral relationship, and recalled that Turkish-American solidarity extended from the Korean War through the present in

Afghanistan. SecDef said he believed that Turkey was undervalued as an Ally by many Europeans.

-----------

Afghanistan

-----------

Â¶ 3. (S/NF) In both meetings SecDef conveyed U.S. appreciation for Turkey's contributions to Afghanistan -- including providing troops, OMLTs, POMLTs, a PRT, commanding

RC-Capital, providing access through the Incirlik air base, and allowing the transit of non-lethal goods to Afghanistan through Turkish air space. Regarding Turkey's contributions to ISAF, GEN Basbug said that "we are trying to do our best" with the PRT in Wardak province and command of RC-Capital.

He observed that the hardest aspect of the fight against the

Taliban was differentiating between the real Taliban and those that merely helped or supported the Taliban or even indigenous forces not aligned with the Taliban. However,

Basbug was hopeful that Allies could win over some of those who were sympathetic to the Taliban through a reintegration

strategy.

Â¶ 4. (S/NF) Gonul emphasized that Turkey had a "special connection" with the people of Afghanistan due to common

Islamic roots. Turkey's involvement in ISAF offered a way of refuting insurgents' attempts to use Islam as ideological justification for their efforts. SecDef agreed that having

Muslim soldiers participate in ISAF drives home the fact that the fight in Afghanistan is not against Islam but rather against terrorists who "pervert Islam."

Â¶ 5. (S/NF) Basbug was upbeat about prospects for success in

Afghanistan, noting that the positive tone of GEN

McChrystal's brief at the NATO CHODs conference had inspired more optimism among his colleagues than had his original

September brief on his assessment. SecDef said he agreed with McChrystal's latest assessment that the situation was serious but no longer deteriorating, but warned that no one should exaggerate how well things were going. At the

Istanbul Ministerial as well, he said, there had clearly been a change in mood among the Ministers present. Significantly,

Defense Minister Wardak had told him that for the first time he had begun to hope for a successful outcome in Afghanistan.

Â¶ 6. (S/NF) Basbug described the terrorist attacks in Kabul on

January 18th as serious, but said that the ANSF response ultimately offered an "outstanding" example of how to manage a very complex operation. Nine terrorists were killed and two were captured, and the terrorists did not ultimately achieve their objectives. Describing post-attack operations as "a cause for optimism," Basbug said that the Afghan forces involved showed they were motivated, well disciplined, and well prepared for the fight. Basbug then reviewed Turkey's plans for training the ANA and the ANP, stressing that the

priority was to provide unit training both in Turkey and in

Afghanistan. So far, he said, Turkey had trained three

Afghan companies and would open a training center in Kabul to do battalion-level training soon.

--------

Pakistan

--------

Â¶ 7. (S/NF) Basbug also raised Pakistan, recalling his October visit at the invitation of General Kayani. During his visit to Swat province he had witnessed a hundred-fold improvement in security since his previous visit, citing the return of civilian populations to the region as a clear success for

Pakistani forces. Sec Def agreed, observing that the degree of success by Pakistani forces ran counter to all of our intelligence predictions.

Â¶ 8. (S/NF) Basbug highlighted the TGF's support for Pakistan's armed forces - especially on logistics and maintenance of equipment, including spare parts for their Air Force. He said that although overall relationships with Pakistan were sometimes difficult, cooperation remained solid at the military level.

----------------

Counterterrorism

----------------

Â¶ 9. (S/NF) Basbug raised the issue of Turkey's protracted fight against the PKK, highlighting progress over the past year due to the elimination of key leaders, divisions within

PKK ranks, and dwindling morale of PKK fighters. This progress, Basbug said, was the result of increased

U.S.-Turkish cooperation since the end of 2007, including intelligence sharing, provision of ISR support, and use U.S.

UAV assets in Northern Iraq. Basbug concluded by requesting

additional support from the United States government, Iraqi government, and KRG. Drawing a parallel to U.S. actions in the cross-border region of Pakistan, Basbug said that in order to continue to eliminate the PKK threat, Turkey needs more support from all stakeholders to pursue the top PKK leadership.

Â¶ 10. (S/NF) Addressing Turkey's outstanding Reaper UAV requests, SecDef reaffirmed to Basbug that the U.S. is committed to the sale of Reapers to Turkey, but offered the caveat that the sale would first have to be approved by

Congress. SecDef added that the Pentagon is also looking at additional reconnaissance capabilities in addition to the

Predators currently flown by the U.S. The U.S. he said, is considering some UAVs with shorter dwell times, which have proven to be effective in Iraq. Regarding current UAV support -- which already provides an average of 16-17 hours of coverage daily -- SecDef said that Gen Odierno will look at ways to surge up to 24-hour coverage when necessary, e.g. for operations involving high-value targets.

Â¶ 11. (S/NF) SecDef emphasized that Turkey's dialogue with KRG was very important. In his meeting the previous week with

KRG President Barzani, SecDef said he pressed him once again to work with the PKK to persuade them to abandon violence.

Basbug agreed and said Turkey's dialogue with the KRG was particularly important as a measure to persuade the KRG to take a more proactive approach to the PKK.

Â¶ 12. (S/NF) Basbug expressed concern about the U.S. drawdown of forces from Iraq, lamenting that while Turkey has been successful in reducing the PKK threat, it will be difficult to finish off the threat after U.S forces leave. He concluded that Turkey would need to "finish the problem" before the U.S. drawdown was complete.

------------------------

Missile Defense and Iran

------------------------

Â¶ 13. (S/NF) MND Gonul said he considered the new US Phased

Adaptive approach better than the previous Administration's approach, since the previous system did not cover Turkey.

SecDef agreed, noting that the Polish and Romanian agreement to host SM-3 missiles. He further emphasized that without a radar based in Turkey, significant areas in the eastern part of the country would not be covered by the system.

Â¶ 14. (S/NF) Gonul told SecDef that discussions about the radar were ongoing within the Turkish government and inquired about what alternate sites the U.S. was considering. SecDef responded that other countries in Southeast Europe might be interested in hosting the radar, but reiterated that Turkey was the optimal site. SecDef explained that one of the reasons why he had embraced the new administration's approach was that it provided protection for Allies and troops earlier than the previous program without reducing protection of the

U.S.

Â¶ 15. (S/NF) Turning to Iran, Gonul cited the enrichment program and acknowledged that Ankara is "concerned about the

Iranian threat," but said that the international community does not yet have evidence that there is a weapons program.

Gonul said that even though Turkey does not expect an attack from Iran, the threat from Iran to Turkey's European allies would make an air defense capability important. (Comment: His acknowledgement of an Iranian threat to Europe diverges from previous Turkish statements underplaying such a threat.) He repeated that the system would be designed to defend all of

Europe, and not solely Turkey.

Â¶ 16. (S/NF) SecDef counseled that if Iran goes forward with a

nuclear weapons program, other states in the region were likely to proliferate as well. Additionally, there was a good chance Israelis would at some point decide that military action was necessary. As Turkey would inevitably be unable to sit out on any conflict in the region, it is important to be prepared militarily and Ankara should not hesitate to acquire defensive systems, even as the international community works to stop Iran's efforts.

--------------------

Acquisition Advocacy

--------------------

Â¶ 17. (C//NF) During his meeting with Gonul, SecDef advised that Turkey had opportunities to increase its military capabilities while gaining economic benefits by selecting

U.S. companies in currently open tenders. First, Sikorsky, was prepared to guarantee that for every helicopter produced in Turkey and bought by Turkey, Sikorsky would produce a second helicopter in Turkey for export. SecDef explained that in addition to providing modern equipment for Turkey, this offer would provide hundreds of millions of dollars in export revenue. Gonul replied that Sikorsky had told him

Turkey was the largest consumer of Sikorsky helicopters after the U.S. and that Turkey already was buying 70 Sea Hawk helicopters (as well as 14 heavy lift helos (CH-47s) from

Boeing). The tender for the new project had been running for two years and the short list included Sikorsky and an Italian company. Gonul believes Sikorsky has a good chance to win.

Â¶ 18. (C/NF) A second opportunity involves the co-production of

Raytheon PAC-3 Patriot systems. Demand for these systems in the Gulf States could potentially yield hundreds of millions of dollars in export revenue. SecDef stressed that "nothing can compete with the PAC-3 when it comes to capabilities."

These opportunities are a chance for Turkey to earn revenue while simultaneously enhancing capabilities and creating

jobs.

Â¶ 19. (C/NF) Gonul said this competition right now was between the U.S., Russia and China, but noted that French MoD Morin had indicated in Istanbul that the French would also make a bid including co-production arrangements. Gonul observed that as this was an expensive project and he had limited familiarity with the PAC-3: he needed to be careful to make the right choice. SecDef pointed out that the Raytheon package would be easier to integrate with the command and control of the U.S. and others using the same system.

--------------------

Joint Strike Fighter

--------------------

Â¶ 20. (C) Gonul said Turkey was pleased to be part of the joint

Strike Fighter (JSF) program and noted his belief that it was important for Turkey to have maintenance facilities in

Turkey. SD remarked that because the program was recently restructured, cost estimates were now realistic. SecDef noted he had directed the JSF program manager to put additional funding in the FY2011 and FY2012 budget for JSF.

However, because of contractor delays, the timeline had slipped about a year. In conclusion, Gonul raised Turkey's

F-16 modernization program and expressed concern that new upgrades precluded Turkish access to computer systems and software modification previously allowed. Turkish Under

Secretary for Industry Bayar told SecDef he would pursue this issue in greater detail with Under Secretary of Defense for

Acquisition Ash Carter.

Â¶ 21. (U) SecDef has cleared this cable. Drafted by OSD staff.

Jeffrey


Viewing cable 08NAPLES38, ORGANIZED CRIME III: CONFRONTING ORGANIZED

CRIME IN



08NAPLES38

2008-06-06

17:05

2011-01-07

21:09

CONFIDENTIAL

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DE RUEHNP #0038/01 1581720

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R 061720Z JUN 08

FM AMCONSUL NAPLES


INFO RUEHNP/AMCONSUL NAPLES 0951

RUEAIIA/CIA WASHDC


RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

RUEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC

RHMFISS/DEPT OF JUSTICE WASHINGTON DC

RUEATRS/DEPT OF TREASURY WASHINGTON DC


RHMFISS/JOINT STAFF WASHINGTON DC

RHMFISS/FBI WASHINGTON DC

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RHMFISS/CDRUSAREUR HEIDELBERG GE

RHMFISS/HQ USAFE RAMSTEIN AB GE

RUETIAA/DIRNSA FT GEORGE G MEADE MD

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Consulate

Naples

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RUEHMIL/AMCONSUL MILAN 0101

C O N F I D E N T I A L SECTION 01 OF 08 NAPLES 000038

SIPDIS

STATE PLEASE PASS TO ONDCP; TREASURY FOR OFAC

E.O. 12958: DECL: 6/6/2018

TAGS: PGOV KCRM ECON SNAR KCOR IT

SUBJECT: ORGANIZED CRIME III: CONFRONTING ORGANIZED CRIME IN

SOUTHERN ITALY

REF: (A) NAPLES 36, (B) NAPLES 37 (C) 07 NAPLES 118

NAPLES 00000038 001.2 OF 008

CLASSIFIED BY: J. PATRICK TRUHN, CONSUL GENERAL, AMCONGEN

NAPLES, STATE.

REASON: 1.4 (b), (d)

Â¶ 1. (C) Summary: This is the third of a three-part series (see reftels A-B for parts I and II); this message offers views on how to combat organized crime in Italy. The USG has a significant stake in the fight against organized crime in Italy.

The Italian crime syndicates help support terrorist groups in

Colombia and Central Asia through drug trafficking; violate the intellectual property rights of American businesses and artists; buttress organized crime in the United States; pose potential public health risks to U.S. military and dependents stationed in southern Italy; and weaken an important ally. Law enforcement cooperation has led to many important arrests, particularly in

Sicily, but could be strengthened. However, the apprehension of criminals is not enough. Trials need to be swifter and sentences tougher. The seizure of mob assets, not only in

Southern Italy but in the North and in other countries, is another way to hit hard at these groups, and the economy needs to offer young people an honest alternative to crime. Education and awareness-raising among politicians, average citizens and students are essential elements to any successful strategy against organized crime. The Italian Catholic Church can also play a more prominent role, as a couple of brave clerics have demonstrated. We can also publicly support grassroots strategies to foster a societal rejection of organized crime.

ConGen Naples strongly supports OFAC's decision to add the

'Ndrangheta to its Drug Kingpin list. End summary.

Â¶ 2. (C) The first two cables in this three-part series were descriptive, explaining how organized crime is the greatest threat to economic growth in Southern Italy. This message is prescriptive, proposing a multi-faceted approach to more effectively combat organized crime in Italy. Specifically, we propose consideration of the following tactics as part of a multi-faceted approach by the USG:

-- Publicly acknowleding both the scope of Italy's organized crime problem and USG support for Italian efforts to combat it.

-- The committing of greater resources to law enforcement cooperation with Italy.

-- Fostering closer cooperation between Italian law enforcement officials and counterparts in other key countries.

-- Conveying to the GOI the view that it has far too few anti-Mafia magistrates in Calabria, home to the country's largest criminal organization.

-- Pressing the GOI to root out corruption at its ports.

-- Cooperating more closely with Italy's Central Bank, and pressing other countries (e.g., Switzerland, Liechtenstein,

Monaco) to cooperate more, in order to crack down on money laundering.

-- Working with the GOI to improve a flawed judicial system. If organized crime is to be brought under control, sentences must be tougher, appeals limited, and the judicial process made more efficient. Convicted prisoners cannot be set free because judges failed to complete paperwork on time.

-- Sharing the USG experience on penal institutions. One of

Italy's biggest problems is a lack of prisons, which means many of the accused are never jailed and many convicts are released far in advance of completing their sentences.

-- Giving more visible support for grassroots efforts to fight organized crime (e.g., groups in Sicily that are leading a public rebellion against paying extortion).

NAPLES 00000038 002.2 OF 008

-- Helping raise public awareness about the deleterious effects of organized crime and how it has been dealt with in the United

States.

-- Enlisting the assistance of the Roman Catholic Church to be more outspoken against organized crime.

-- Encouraging the GOI and EU to invest in infrastructure, particularly improvements to public security, in southern Italy and at the same time to tighten accountability for how this money is spent.

Why We Should Care

------------------

Â¶ 3. (SBU) The USG can and should become more engaged for several key reasons:

-- Drug trafficking by Italian mobs sends money to narcotraffickers (and thus indirectly to terrorist groups) in

Colombia and Afghanistan, affecting U.S. national security.

-- A 2005 FBI intelligence assessment reported that "Criminal interaction between Italian organized crime and Islamic extremist groups provides potential terrorists with access to funding and logistical support from criminal organizations with established smuggling routes and an entrenched presence in the

United States." In a public statement given on April 19, 2004,

Italy's national anti-Mafia prosecutor, Pierluigi Vigna, indicated a link between Islamic militant groups and the

Camorra, stating that evidence existed implicating the Camorra in an exchange of weapons for drugs with Islamic terrorist groups.

-- Counterfeiting and piracy of American-made products

(particularly movies, music and software) directly impact U.S. economic interests.

-- Ties between Italian and U.S. organized crime mutually reinforce these groups. The links between the Sicilian Cosa

Nostra and the U.S. Mafia go back nearly a century, but the

Camorra and 'Ndrangheta also have affiliates in the United

States, according to the FBI.

-- Amcit residents (including thousands of Navy personnel and their families in Campania and Sicily) and tourists are affected by street crime and potentially by the Campania waste crisis

(which result in large part from organized crime -- see reftels) and illegal toxic dumping in the region.

-- U.S. businesses that would like to invest in Southern Italy refrain from doing so because of concerns about organized crime.

-- Organized crime weakens an important ally politically, economically and socially.

Why Law Enforcement Alone is Not Enough

----------------------------------------

Â¶ 4. (U) In its efforts to defeat organized crime, the Italian government has been most successful in Apulia, where the Sacra

Corona Unita has been mostly dismantled, and Sicily, where a multi-faceted approach has led to the arrests of dozens of Cosa

Nostra bosses, important seizures of mob assets, and a growing rebellion by business owners against the protection racket. Law enforcement has been one of the keys to progress in Sicily, where authorities cracked down following the 1992 mob assassinations of anti-Mafia prosecutors Giovanni Falcone and

Paolo Borsellino. Wiretapping, plea-bargaining agreements, the strengthening of a witness protection program, and greater

NAPLES 00000038 003.2 OF 008 security for judges and prosecutors have resulted in the apprehension of hundreds of Mafia members and associates. The captures of top bosses Toto Riina in 1993, Bernardo Provenzano in 2006, and Salvatore Lo Piccolo in 2007 proved to be significant blows to an organization built on a pyramidal hierarchy. However, law enforcement successes have not been the only factor in Sicily's progress against organized crime.

Sicilian citizens' efforts to reject the Mafia are finally getting traction. The Industrialists Confederation

(Confindustria) has started expelling members who have paid protection money and not complained to police. At least two new anti-racket NGOs have been formed, one by consumers and one by business owners (more below). And even the Church, long considered complicit for not refusing to preside at lavish Mafia funerals, has seen a bishop forced to seek police protection for

just that.

Â¶ 5. (C) The situation is starkly different in Campania and

Calabria. Because the Camorra in Campania is not one organization, but a multitude of armed gangs, there is no one boss whose capture could cause a significant blow to organized crime in the region. The war on the 'Ndrangheta in Calabria has been even more difficult. With members recruited on the basis of family ties, the 'Ndrangheta is virtually impervious to police infiltration. "Every cell is composed of people who belong to family, and this is why there are no justice collaborators," according to Nicola Gratteri, Calabria's senior anti-Mafia prosecutor, who adds that only 42 turncoats have come from the 'Ndrangheta, compared with 700 to 1,000 from the Cosa

Nostra and 2,000 from the Camorra. It would be difficult to completely duplicate the Sicilian strategy in Campania and

Calabria, but what is clear is that relying merely on arrests is not enough. As another anti-Mafia prosecutor, Catania-based

Giuseppe Gennaro, told us, "You can apprehend mobsters, but most are released within five years."

Â¶ 6. (C) Law enforcement alone, however, cannot solve Italy's organized crime problem. Apulia's success in dismantling Santa

Corona Unita was certainly facilitated by economic development which offered its citizens an honest alternative; it is southern

Italy's principal economic success story (ref C). Cosenza sociology professor Giap Parini explained to us that any overall strategy must include political, economic, and socio-cultural components in addition to law enforcement elements. Banco di

Napoli President Antonio Nucci told the CG that "the police can lock up all the people they want, but it won't be enough if crime is the only job that pays."

Â¶ 7. (SBU) A multi-faceted approach must necessarily include components designed to change public attitudes towards organized crime. Ivan Lo Bello, the President of the Sicilian

Industrialists Confederation, told us in December 2007 that the

first step is to "reject the fatalist perspective that things cannot change. To defeat the Mafia, you need society to band together. Sanction by society hurts more than sanction by the state. Gaining greater consensus is the solution, not bringing in the army." With this in mind, the prescription must include education and awareness-raising, and support for grassroots organizations that are standing up to the criminals.

Law Enforcement Approaches

--------------------------

Â¶ 8. (C) As noted above, law enforcement successes have been one of the keys to the progress in Sicily. A February 2008 joint

U.S.-Italian sting, called "Operation Old Bridge," resulted in the arrests of over 80 suspects in the United States and over 30 in Sicily, and exposed attempts by the Cosa Nostra to reestablish ties with New York's Gambino family that would have increased drug trafficking to Italy. Ironically, there are

NAPLES 00000038 004.2 OF 008 significantly more anti-Mafia prosecutors and magistrates in

Sicily and Campania than in Calabria, where the largest and most dangerous mob, the 'Ndrangheta, is based. The USG should consider:

-- Greater cooperation with Italian authorities (on the order of

"Old Bridge"), committing more resources and intelligence-sharing to fighting the Camorra and the

'Ndrangheta; we could also foster much closer cooperation between Italian authorities and their counterparts in Colombia,

Albania, Bulgaria, Turkey, Nigeria, Afghanistan and elsewhere.

At least two prosecutors have complained to us about the ineffectiveness of authorities in Spain to combat drug trafficking by Italian and Spanish organized crime groups.

(Comment: DEA, by contrast, has found Spain to be an

outstanding partner in international drug investigations. The issue may be one of poor cooperation, rather than any lack of dedication or competence on either side. End comment.)

-- The need to impress on Italian authorities that far more law enforcement resources are needed in Calabria, including dramatically increased numbers of anti-Mafia judges and prosecutors.

-- Pressing Italian authorities to root out corruption at

Italy's ports. There are USG Container Security Initiative officials present at some ports, but they are focused on containers destined for the United States. Having seen the tight security at Calabria's Gioia Tauro port (ref A), ConGen

Naples believes that the reported in-flow of narcotics there can only be done with the assistance and complicity of corrupt personnel.

Financial and Economic Strategies

----------------------------------

Â¶ 9. (C) Anti-Mafia prosecutor Gennaro believes that seizure of assets is a much more important weapon than arrests. "To defeat the Mafia, you have to attack their profits and investments," he told us in Catania, Sicily in January 2008. Gennaro expressed frustration over the discovery that many banks in Italy do not report suspicious transactions to the Central Bank. It has also been very difficult for Italian authorities to obtain information from banking authorities in Switzerland,

Liechtenstein and Monaco, where Mafia members stash away their earnings in secret accounts. In February 2008, the Treasury

Police in Sicily confiscated mob assets with an estimated worth of nearly 309 million euros (USD 487 million) -- "a tremendous blow," according to then-Interior Minister Giuliano Amato, one that could lead to "a crisis for the entire organization."

Unfortunately, confiscations of this sort happen much less frequently in Campania and Calabria, let alone in northern

Italy, where much of the money laundering takes place. The USG should consider:

-- Working more closely with Italy's Central Bank and Fiscal

Police, perhaps via greater sharing of intelligence and information obtained from investigations, to identify organized crime assets and ensure that they are frozen or confiscated.

-- Adding all three major Italian mobs to the Office of Foreign

Assets Control's Drug Kingpin list. OFAC has included the

'Ndrangheta on the Tier One list, which could eventually lead to sanctions on companies dealing with the organization and front companies that launder money. The 'Ndrangheta is by all accounts one of Western Europe's biggest drug trafficking groups, but the Cosa Nostra and Camorra are also heavily engaged in the narcotics trade.

-- Reinforcing and re-orienting existing programs such as the

NAPLES 00000038 005.2 OF 008

Partnership for Growth, to increase economic growth, which will create more well-paying alternatives to organized crime.

Judicial Weapons

-----------------

Â¶ 10. (C) In February 2008, the son of Cosa Nostra boss Toto

Riina was released from jail under a law that frees those who have been held for five years without a trial, and a prosecutor was recently skewered by the press for allowing several Mafia cases to expire (resulting in the release of suspects).

Naples-based former Senator Lorenzo Diana, an organized crime expert, believes that the Italian justice system needs quicker trials and stiffer sentences. And Gratteri (the top anti-Mafia prosecutor in Calabria) contends that, in order to bring down

the 'Ndrangheta, new legislation is needed. "We have no laws that are proportional to the force of the 'Ndrangheta," he told us, echoing Gennaro's lament that well-behaved convicts can leave prison after five years. "I would like ... [them] not to be released before 30 years." Diana also believes the system that conducts background checks on those bidding on government contracts is not working. Unfortunately, the country's politicians are not focused on these issues, as was clear from the March-April 2008 election campaign in which organized crime was barely mentioned. Strengthening the efficiency of the judiciary and its ability to impose stronger sentences should be a priority for the next parliament. Furthermore, Italy must improve civil and criminal courts to enforce commercial contracts, consumer protections, criminal law, health and safety standards, building codes, and general quality-of-life standards. As long as the court systems are dysfunctional, it will be impossible to reduce organized crime to a manageable level.

Â¶ 11. (C) We may also want to consider sharing with the GOI the

U.S. experience in construction, management and privatization of prisons. One of the most serious issues facing Italian law enforcement is the lack of prisons. At the end of 2007, according to the Justice Ministry, Italian jails held 113 inmates for every 100 beds. In 2006, the GOI granted early release to several thousand convicts in an effort to alleviate the overcrowding; MOJ statistics show the recividism rate to be

31 percent. A Carabinieri colonel complained to the CG in April

2008 that police are frustrated by their inability to keep accused or suspected mobsters in jail because of the lack of cells.

Support for Grassroots Change

----------------------------

Â¶ 12. (C) Lo Bello, the President of the Sicilian Confindustria, took the bold step in September 2007 of instituting a policy

(adopted by unanimous vote) of expelling members who have paid protection money to the Mafia and not complained to police.

Since that time, around 35 members have been asked to leave the

Confederation. This courageous move has been praised by business owners, the media and political leaders. Lo Bello told us in January 2008 that "The time has come [for Sicily] to move from an archaic, feudal past to modernity." When we met with them in late 2007, the Calabrian Industrialists were much more timid, looking over their backs before telling us that the time is not right for business owners to take a public stand against extortion there. (In June 2006, one of the founders of the

Calabria anti-racket association, Fedele Scarcella, was brutally assassinated; his charred corpse was discovered in his burned car in what authorities described as "very probably a Mafia homicide.") Nonetheless, the media reported in March 2008 on talks between the two regions' Industrialists Confederations on collaborating against organized crime. Lo Bello was quoted as declaring, "It may seem simple, but what has happened has

NAPLES 00000038 006.2 OF 008 changed the framework of the entire region: the idea that the fight against the Mafia cannot be delegated only to the State, but needs to include an assumption of responsibility on the part of Southern Italian society: in this case, the world of entrepreneurship." Also in March, the Industrialists

Confederation in Caserta (Campania) took initial steps toward a similar policy, drawing praise from the anti-Mafia prosecutor.

Lo Bello hopes to enlist other business and trade associations to adopt similar rules. Unfortunately, most Sicilian business owners are still unwilling to complain about extortion. In May

2008, a prominent businessman, Vincenzo Conticello, who has refused to pay protection money for his Palermo focaccia restaurant, told the CG that he had heard (probably from his police escort) that of 170 companies named in the accounting books of apprehended Mafia boss Salvatore Lo Piccolo, only three

have owned up to it, while the others claim the accounts are in error.

Â¶ 13. (SBU) Sicilian businesses, emboldened by the arrests of top

Mafia bosses, are openly defying the Mafia by signing on with a grassroots organization called "Addiopizzo" (Goodbye "Pizzo," the Italian word for extortion payments), which brings together businesses in Palermo that are resisting extortion. The campaign was launched in 2004 by a group of youths thinking of opening a pub. They started off by plastering Palermo with anti-pizzo fliers, reading "AN ENTIRE PEOPLE THAT PAYS THE PIZZO

IS A PEOPLE WITHOUT DIGNITY," and eventually brought their campaign online where it struck a chord with Sicilians fed up with Mafia bullying. The rebellion has since spread to other strongholds of the most ruthless Mafia clans, including places such as Gela, an industrial coastal town, where some 80 business owners in recent months have denounced extortion attempts. This is a dramatic turn since the early 1990's, when a Gela merchant who denounced extortion was slain by the Mafia, and a Gela car dealer, whose showroom was repeatedly torched, had to move his family and change his name after he testified in court.

"Addiopizzo" has recently launched a supermarket selling products certified as being "pizzo" free, and maintains a public list on the internet of businesses rejecting extortion. Another

NGO was launched last November by forty Sicilian business owners to assist entrepreneurs who refuse to pay extortion money. The group is called "Libero Futuro," which translates "Free Future," but also pays homage to Libero Grassi, a Sicilian businessman who was murdered in 1991 for refusing to pay protection money.

In response to the organization's founding, Palermo mayor Diego

Cammarata promised 50,000 euros to assist merchants who have been victims of extortion. "This rebellion goes to the heart of the Mafia," says Palermo prosecutor Maurizio De Lucia, who has investigated extortion cases for years. "If it works, we will have a great advantage in the fight against the Mafia."

Â¶ 14. (SBU) For authorities battling the 'Ndrangheta, a welcome

ally has been "Ammazzateci Tutti," ("Kill Us All") formed three years ago by fed-up young people in the wake of the mob assassination of Calabria regional Vice President Fortugno. In a recent news interview, Bruno Marino, a student whose father was killed by the 'Ndrangheta, likened the 'Ndrangheta to "an octopus that tries to control everything and to kill all of the fish." Since its founding, Ammazzateci Tutti has held regular demonstrations designed to pressure the Italian state into taking action against the 'Ndrangheta. In February 2007, a protest in Reggio Calabria drew thousands into the streets.

Later in the year, the group staged regular protests against the government's pending transfer of Luigi De Magistris, an anti-Mafia prosecutor investigating links between politicians and the 'Ndrangheta. "Ammazzateci Tutti is a message that expresses both hope and challenge to the 'Ndrangheta, saying,

'See if you have enough lead to kill us all,' " according to

Aldo Pecora, a law student and spokesman for the group. "It is also a challenge to normal people to rebel against the the

NAPLES 00000038 007.2 OF 008

'Ndrangheta." These groups are having an impact, but they remain fledgling organizations with little official backing.

The USG can lend public support to these groups (a member of

Addiopizzo, for example, was selected for the State Department's

International Visitor program.)

Education and Public Awareness

------------------------------

Â¶ 15. (SBU) Many of our interlocutors believe that the long-term solution to organized crime is education. This means breaking the pervasive culture of organized crime which controls societies through power and fear. It means destroying the glamorous image that young people have of Mafia bosses and more openly and directly supporting those who defy the Mafia. It

means getting consumers to realize that the prices of a bottle of olive oil, a jar of tomato sauce, a bottle of wine -- the staples of Italian life -- have been inflated by organized crime, or that the products themselves have been adulterated by the same sources. It also means breaking the culture of illegality that is so rampant in Southern Italy but also felt countrywide; that is, the blatant disregard for the law by average citizens and the lack of a sense of civic responsibility. Naples Chief Prosecutor GianDomenico Lepore told the CG -- while lighting a cigar in a no-smoking office to underscore his point -- that Neapolitans have something "in their DNA" that causes them to react to any law by breaking it.

Campania Carabinieri General Franco Mottola told the CG that the

Camorra exploits a general atmosphere of delinquency in Naples.

He suggested the change needed to start in the schools, but added that first teacher training would be required ("they can't teach what they don't know"). We could perhaps encourage the

Italian government to make greater outreach efforts in poor neighborhoods, and to offer alternatives to a life of crime for young people. There is a conspicuous lack of a visible police presence throughout Naples, and there have been countless cases of Neapolitans protecting criminals from police trying to apprehend them.

Â¶ 16. (U) Instead of Mafia dons, those fighting them need to be regarded as the real role models. Roberto Saviano, whose book

"Gomorrah" was an international best-seller in 2007, may be well on his way. He appears regularly in print and broadcast media as not just an authority on the mob, but more importantly as a moral compass for those willing to listen. The film version, released in May 2008, will probably have an even bigger impact, as it underscores the Camorra's influence in toxic waste dumping and features hip young actors and a score by popular musicians.

Saviano's book and the film (for which he wrote the screenplay) are also keys to convincing Italians that organized crime is not just a southern problem, but an Italian problem. When asked how the USG could best assist in the fight against organized crime

beyond law enforcement cooperation, Saviano told the CG in April

2008, "Just talking about it, you give the issue a credibility that the rest of the world, including the Italians, cannot ignore."

The Role of the Church

-----------------------

Â¶ 17. (C) The Italian Catholic Church has often come under fire for not taking a stronger public stance against organized crime.

One of the few priests who have, Father Luigi Merola, is now under police escort after working against the Camorra in the poor Naples neighborhood of Forcella. In February 2008, he inaugurated a foundation for at-risk youth in the confiscated villa of a former Camorra boss. ConGen Naples and local U.S.

Navy personnel are lending their support to the foundation by volunteering to teach English, build sports facilities and coach the kids who participate in the foundation's programs, which are

NAPLES 00000038 008.2 OF 008 designed to offer the kids an alternative to crime. Another

Church official, Bishop Michele Pennisi of Piazza Armerina in

Sicily, is also under police escort after refusing to preside over funerals of mafiosi. We may want to consider seeking greater Church cooperation against organized crime, perhaps through channels at the Holy See or with Italian Church leaders.

"Heal the Periphery" - Improve Infrastructure

--------------------------------------------- -

Â¶ 18. (SBU) The GOI and European Union should be encouraged to review the way public money is invested in Southern Italy. As noted in ref B, infrastructure contracts often wind up going to mob-owned businesses, who steal millions while building sub-standard roads, tunnels, bridges and public housing.

Instead, recommends Naples-based former Senator Diana, "Heal the periphery. Take ten places and invest 100 - 200 million euros in them." He says that money could be spent building parks and improving security (e.g., with lighting and video cameras), creating conditions unfavorable to organized crime.

Â¶ 19. (C) Comment: Although law enforcement, business associations, citizens' groups, and the church, at least in some locations, are demonstrating promising engagement in fighting organized crime, the same cannot be said of Italy's politicians, particularly at the national level. As Roberto Saviano has reminded us, the subject was virtually absent from the

March-April election campaign. At the national level it is generally referred to, if at all, as a "southern" issue, although it affects the entire country and although the South's criminal organizations have made worrying advances in the North.

Even in Sicily, where regional elections were precipitated by former governor Cuffaro's conviction for Mafia-related crimes, discussion of crime was not a major part of the campaign (and

Cuffaro was elected to the Senate). We should work to convey to

Italy's new government that organized crime is a serious USG priority, and that the dramatic economic costs of organized crime present a convincing argument for immediate action.

However, we should not limit our support for Italy's organized crime efforts to private conversations; on the contrary, our public advocacy for the efforts of Confindustria, Addiopizzo,

Church clerics, and others will give them both greater visibility and enhanced credibility, just as many Italians ignored the impressive innovations of their own research institutions before the Mission's Partnership for Growth program began to champion them. End comment.

Â¶ 20. (U) This three-part cable series was coordinated with and cleared by relevant agencies and sections in Embassies Rome and

Vatican.

TRUHN

Viewing cable 09ATHENS1685, Greece: New Government Tackles Migration and

Asylum Issues



09ATHENS1685

2009-12-04

16:04

2011-01-11

18:06

SECRET

Embassy

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E.O. 12958: DECL: 2019/12/04

TAGS: PGOV PREL PHUM PREF PTER SMIG KCRM GR

SUBJECT: Greece: New Government Tackles Migration and Asylum Issues

REF: A) ATHENS 315; B) ATHENS 1349; C) ATHENS 1641; D) ATHENS 2038

CLASSIFIED BY: Daniel V. Speckhard, Ambassador; REASON: 1.4(B), (D)

Â¶ 1. (C) SUMMARY: Greeceâ€™s new PASOK-led government has placed migration and asylum policy reform high on its agenda, announcing new measures to combat organized human smugglers, ease naturalization requirements for immigrants born in Greece, provide status to illegal economic migrants, and transfer Greeceâ€™s asylum process to a new independent authority. This flurry of activity, all coming during PASOKâ€™s first two months in office, reflects the deep importance Greek officials and voters attach to immigration and its social, economic, and security implications for Greece.

Prime Minister George Papandreou and his cabinet are acutely aware of the criticism leveled at Greeceâ€™s asylum process and migrant detention centers by human rights organizations. The new Greek strategy involves not only domestic policy reforms but also â€œEuropeanizingâ€ the issue of migration enforcement: putting pressure on the EU to provide more support on border security, urging Turkey to crack down on human smuggling in the

Aegean and to take back deportees, and revamping the Dublin II agreement, which saddles Greece with responsibility for all migrants entering Europe through its borders. Despite some success in placing migration on the broader EU agenda, however, the government faces daunting challenges in toughening migration enforcement and implementing a comprehensive, effective migration policy. END SUMMARY.

----------------------------------------

Migration: A Key Geopolitical and Social Challenge -----------------------

-----------------

Â¶ 2. (SBU) Greece has become the EU entry point of choice for illegal migrants and refugees, many of whom seek residence in Western Europe and seek only to transit through Greece. Since 2004, the number of illegal immigrants arrested has surged by 325 percent, from 44,987 to 146,337 in

2008--and this number is only a fraction of the true number of migrant arrivals. Greeceâ€™s long coastline and the proximity of its islands to

Turkey makes the country particularly attractive to maritime human smugglers, many of whom have shifted their operations away from more heavily patrolled Spanish and Italian waters. The undersized and illequipped Greek Coast Guard has struggled to keep up. Even if the migrants move on to other European destinations, under the Dublin II protocol,

Greece is responsible for their asylum applications as the EU country of first entry--a situation neither the Greeks nor the immigrants like.

Â¶ 3. (C) While nearly half of all illegal migrants come from neighboring

Albania, the more visible surge in immigrants from conflict zones in the

Middle East, South Asia, and Africa has Greeks particularly worried.

Migrants participated in the violent protests in Athens between December

2008 and March 2009 (see REF A), and immigrant squatters have taken over some Athens neighborhoods and exacerbated â€œGreek flightâ€ from downtown areas. Without legal status, lacking opportunities for economic and social

integration, and chafing under Greek refusals to build an official mosque,

Muslim illegal migrants--especially young men from Pakistan, Afghanistan,

Iraq, and Somalia--may be vulnerable to Islamic radicalization in the underground prayer rooms that have proliferated throughout major cities

(see REF A). Until recently, Greece was an immigration sending country, and the rapid transition to receiving migrants has been jarring--many Greeks see uncontrolled waves of illegal immigration as a major economic and social destabilizer. In fact, there are key political implications as well: public dissatisfaction with the previous New Democracy governmentâ€™s handling of migration policy and enforcement likely contributed to its

October electoral loss, and LAOS, a far-right party, has surged in recent elections on a nationalist, anti-immigration platform.

ATHENS 00001685 002 OF 004

Â¶ 4. (S) The large number of migrants entering Greece also poses risks. As an example, in July, Greek authorities deported Iraqi citizen Muâ€™ammar

Latif Karim (a.k.a. Abu Sajjad), a Shâ€™ia insurgent commander, back to

Iraq (see REF B). Other reporting indicates that multiple travel facilitators for special interest aliens continue to operate in Athens. A recent operation by DHS/ICE demonstrated that a smuggling organization run by an Iraqi national could easily smuggle special interest individuals from

Greece to Central America and then into the United States.

----------------------------------------

Greece to Reform Much-Criticized Asylum Policies -------------------------

---------------

Â¶ 5. (SBU) For the last several years, international organizations and regional and domestic NGOs have roundly criticized Greece for its treatment of refugees and its failed asylum processes. Human rights organizations ranging from Amnesty International and Doctors Without Borders (MSF) to the

UN Human Rights Council and European monitoring bodies have condemned squalid detention centers, a lack of separate facilities for women and unaccompanied minors, and alleged nighttime summary deportations to Turkey without due process. UNHCR and the International Organization for Migration

(IOM) have criticized Greeceâ€™s 0.03 percent first-instance asylum approval rate, the lack of an independent appeals process, and rampant corruption and inefficiencies during application intake. Some European countries have even suspended the return of migrants and asylum seekers to

Greece under the Dublin II protocol. During the last two years, Sweden,

Norway, and the Netherlands have intermittently halted returns to Greece, citing human rights concerns. In September 2009, UNHCR reiterated its recommendation that EU member states not return asylum seekers to Greece.

Â¶ 6. (SBU) Greeceâ€™s new PASOK government has committed to addressing many of these concerns, and has moved quickly to revamp asylum processes and take measures that should improve the governmentâ€™s ability to interdict migrants. It has consolidated law enforcement agencies (the

National Police, fire service, port police, and Coast Guard elements) into the new, DHS-like Ministry for Citizenâ€™s Protection. This should help the government better coordinate among security services on combating illegal migration. Fulfilling a PASOK campaign promise, Minister for

Citizenâ€™s Protection Michalis Chrysochoidis formed an asylum expertsâ€™

committee to propose reforms. The committee, composed of representatives from UNHCR, NGOs, academics, and officials, first met on November 26. NGO and government insiders expect new legislation to take up to six months to formulate, and are looking at stopgap measures to address pending asylum applications. NGOs have largely welcomed the governmentâ€™s proposals to create a new, independent asylum authority separate from the police, and have lauded promises to raise Greeceâ€™s asylum approval rate to the

â€œEuropean average.â€ However, they note that the situation on the ground hasnâ€™t changed at all, detention centers are still filled beyond capacity, and asylum processing by the Aliens Police has all but stopped pending new guidelines.

----------------------------------------

New Migration Policies and â€œEuropeanizingâ€ Enforcement ---------------

-------------------------

Â¶ 7. (C) The governmentâ€™s dire fiscal straits may politically

ATHENS 00001685 003 OF 004 hamstring the governmentâ€™s broader agenda to reshape enforcement and asylum policy, so officials have proposed additional specific migration reforms. PASOK leaders recently reaffirmed their campaign pledge to provide citizenship to children of immigrants, and Minister of Interior Giannis

Ragousis told Ambassador Speckhard that the government was considering a new round of amnesties for illegal migrants. Officials admitted that it would take time to pass new legislation, but committed to allowing immigrant children born and raised in Greece to apply for full citizenship.

(NOTE: Greek citizenship is difficult to obtain for individuals of non-

Greek descent; citizenship criteria are not revealed to the public. END

NOTE.) Over the last decade, Greece has had three rounds of amnesties, providing temporary residence permits to large tranches of illegal migrants, and Ragousis said a new amnesty might apply to up to 200,000 immigrants. To prevent an amnesty from attracting even more migrants, officials claim border enforcement would be strengthened. However, Greek law enforcement agencies, despite the recent ministerial reorganizations, remain woefully underprepared for large-scale interdiction of smugglers, and investigators and courts lack the expertise and patience to pursue the leaders of the organized criminal networks that profit most.

Â¶ 8. (C) Because of these domestic shortfalls in migration enforcement, the

Greeks have also focused on â€œEuropeanizingâ€ the issue, using a threepronged approach: putting pressure on the EU to provide more border security support, urging Turkey to crack down on maritime human smuggling and to take back deportees, and pressing for changes to the Dublin II agreement. To raise awareness on migration issues, Greece hosted the Global

Forum for Migration and Development, an informal conference bringing together governments and NGOs, in November (see REF D). Over the last six months, Greek leaders have tried multiple tactics to pressure the EU: signing a four-way enforcement cooperation agreement with Malta, Cyprus, and Italy and jointly submitting an illegal migration whitepaper; bilateral meetings with EU border states focusing on enforcement and migration

burden-sharing; raising migration issues at EU gatherings of foreign and interior ministers; pressing the EU to forge readmissions agreements with migration sending countries; and inviting FRONTEX, the EU border agency, to increase its presence in the Aegean (see REF C). Greek officials have tried to use the EU to pressure Turkey to live up to its 2001 bilateral protocol to readmit third-country aliens.

Â¶ 9. (C) The Greeks have been successful at gaining the attention of EU leaders. In July, EU Justice Commissioner Jacques Barrot noted that uncontrolled immigration risked â€œdestabilizing Greek democracyâ€ and called on Turkey to do more to stop migration flows. Gil Arias-Fernandez, deputy director of FRONTEX, stated during an October visit that Turkey was uncooperative in stanching illegal immigration. FRONTEX has increased the number of air patrols and maritime observers in the Aegean during the year.

However, the Greeks havenâ€™t been able to change the dynamics on the ground. Western European officials have told us there is no chance that the

Dublin II agreement will be revised according to Greek wishes. Papandreou has tried to foster more positive atmospherics with Turkey and has refrained from harsh criticism on migration. In November, Turkish PM Recep

Tayyip Erdogan sent a letter to Papandreou with an offer to cooperate on migration; a response is expected soon.

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COMMENT: Not Just a Greek Issue, but a European One ----------------------

------------------

Â¶ 10. (C) As the migration doorway into Europe, Greece shoulders a disproportionate burden of illegal immigrants and asylum seekers. However, the broader political challenges posed by these waves of migration, especially from conflict zones in the Middle East, South

ATHENS 00001685 004 OF 004

Asia, and Africa, are applicable to all European nations. Migration is a key crosscutting political, national security, human rights, and socioeconomic phenomenon, and has already had a strong effect on politics throughout European countries this year--for example, right-wing, antiimmigration parties surged in June 2009 European Parliament elections. In our view integration programs are of crucial importance; in the aftermath of the economic crisis, immigration and labor policies are under increased scrutiny; and the EUâ€™s commitment to human rights for refugees and asylum seekers is being tested by the political reality of voters fed up with illegal migration. END COMMENT. Speckhard

Viewing cable 10ATHENS57,



10ATHENS57

2010-01-29

15:03

2011-01-11

18:06


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TO AMCONSUL LEIPZIG AMEMBASSY BELGRADE PASS TO AMEMBASSY PODGORICA

AMEMBASSY HELSINKI PASS TO AMCONSUL ST PETERSBURG AMEMBASSY ATHENS PASS TO

AMCONSUL THESSALONIKI AMEMBASSY MOSCOW PASS TO AMCONSUL VLADIVOSTOK

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2035/01/29 TAGS: PREL PGOV PTER KTIP SNAR PINR SMIG KCOR KCRM KHLS GR

CLASSIFIED BY: Daniel V. Speckhard, Ambassador, State, EXEC; REASON:

1.4(B), (C), (D) 1. (C)

SUMMARY: During a 45-minute meeting on January 22 Greek Minister of Citizen

Protection Chrysochoidis provided the ambassador with a status report of his ambitious plan to reorganize and energize all of Greeceâ€™s civilian security agencies. The Hellenic Coast Guard will be renamed and reorganized by April along the model of the U.S. Coast Guard to focus on maritime border and port security. The Greek National Intelligence Service will be completely overhauled via a draft law that is being drawn up. Within the

Hellenic National Police a new agency will be created and staffed with 100 new hires to work on cyber crime and organized crime. The police know the identities of most of the members of Greeceâ€™s domestic terrorist groups, but lack the evidence to arrest and prosecute them. Chrysochoidis embraced the ambassadorâ€™s proposal to create a local working group on counterterrorism between the embassy and the ministry and welcomed training from the U.S. side for all of the ministryâ€™s agencies as they underwent far-reaching reform. END SUMMARY.

Â¶ 2. (C) On January 22 Ambassador Speckhard met for 45 minutes with the

Greek Minister of Citizen Protection, Michalis Chrysochoidis. This was the third in a series of meetings by the ambassador to hear from senior Greek officials about the ongoing reorganization of Greeceâ€™s security, intelligence, and law enforcement agencies under the umbrella of the

Ministry of Citizen Protection (MCP), which was formed after the election of the center-left Pan-Hellenic Socialist Movement (PASOK) government in

October 2009. This meeting was intended to obtain a status report on the ambitious plan that Chrysochoidis discussed with the ambassador at their

previous meeting on November 12, 2009 (Ref A). The meeting was held in

Chrysochoidisâ€™ office in the headquarters of the MCP. The ambassador was accompanied by the DCM, the RAS chief, Legatt, and the ICE chief, while

Chrysochoidis was unaccompanied.

Â¶ 3. (C) Chrysochoidis began the meeting by noting that he had just returned from Toledo, Spain, where he had been with the Secretary of

Homeland Security on 21 January. He said that the two main issues that he had taken away from the conference were the challenges for EU countries of internally coordinating authorities and sharing intelligence and of cooperating effectively with the United States in counterterrorist initiatives. He remarked that it was pointless for each country to amass large amounts of information and intelligence but not to share that body of data to produce results.

Â¶ 4. (C) The ambassador said that in the two previous days he had held meetings with the commandant of the Hellenic Coast Guard (Ref B) and the chief of the Hellenic National Police (HNP) (Ref C) and had noted their focus on creating an atmosphere of interagency cooperation. He asked

Chrysochoidis for an update on how his reorganization under the MCP was proceeding and how successfully were agencies cooperating inside of the

MCP. The ambassador informed Chrysochoidis that he had proposed to HNP

Chief Ikonomou the creation of a local MCP-Embassy working group on counterterrorism, so that the U.S. side could best reinforce and support the Greek sideâ€™s efforts.

Â¶ 5. (C) Regarding the Hellenic Coast Guard (HCG), Chrysochoidis said that his goal was to organize its functions around its natural missions, namely protection of Greeceâ€™s maritime borders and ports. At the end of January he will propose a bill in the parliament to create a new Coast Guard, whose changed role will be reflected in its new name. Currently its name in

Greek means Harbor Corps (limeniko soma), but henceforth its name in Greek really will mean Coast Guard (aktofylaki). It will be modeled very closely on the U.S. Coast Guard and oriented to fighting crime and protecting

Greeceâ€™s maritime borders. Chrysochoidis predicted that the new HCG would be up and running by April.

Â¶ 6. (C/NF) Chrysochoidis severely criticized the state of EYP, Greeceâ€™s domestic security and intelligence service. He said bluntly, â€œEYP is nothing.â€ It does not serve its mission of protecting Greece and in fact is dangerous to national security because of its many shortcomings, not the least of which is a unionize d labor force. As a result, Chrysochoidis declared, he intends to â€œcollapse and rebuild itâ€ via a draft law that is in the process of being drawn up.

ATHENS 00000057 002 OF 002

Â¶ 7. (C) As for the HNP, he repeated his many public comments that

Greeceâ€™s police force is not up to task of safeguarding society. As a result, he is restructuring it and trying to instill in it a new attitude toward its duties. Part of that drives includes creation of a new agency to fight cyber crime, organized crime, etc. Vacancy notices already have gone out for 100 new positions to be filled by economists, computer specialists, etc., who will bring new, modern skills to the HNP. These 100 new hires will be merged with other officers and located in a new building, so that a

fresh modern agency can be built. Chrysochoidis announced that this plan would be rolled out by the end of February, so that it can begin work in

March.

Â¶ 8. (SBU) Chrysochoidis said of the Firefighting Service, which now falls under the MCP, that it has enjoyed good cooperation with U.S. counterparts but that he was open to all suggestions about increasing collaboration and training.

Â¶ 9. (C/NF) On domestic terrorism, Chrysochoidis said that the police know the identities of almost all the members of the current terrorist-anarchist groups, but they lack the evidentiary basis for arresting and imprisoning them. He cited the recent example of a bombing on Syngrou Avenue, saying that the police know who carried it out but do not have the concrete evidence to move against them. He said that the great challenge for the police is collecting the information necessary to prosecute terrorists. He repeated earlier claims (Ref C) that there are links between some domestic terrorist groups and the Middle East, including Iran. Chrysochoidis expressed optimism that if his newly invigorated counterterrorist teams at

EYP and HNP did their work well, especially their technical collection operations, they would succeed in wrapping up all of the main terrorist groups in the first half of 2010.

Â¶ 10. (C/NF) Chrysochoidis expressed full support for the ambassadorâ€™s proposal for a local counterterrorist working group consisting of HNP, EYP, and HCG on the Greek side and FBI, DEA-ICE, and RAS on the American side.

He said that he would call the embassy in the near future to get the idea started. He stated forcefully that he wanted outstanding cooperation with the United States and that the MCP did not want to have any secrets from the American side when it came to work against terrorists. He welcomed training across the MCPâ€™s agencies as each underwent fundamental reform.

Â¶ 11. (SBU) Chrysochoidis had just started to respond to the ambassadorâ€™s question about Greek work against human trafficking, especially child labor and the sex industry, when he received a call that summoned him to the prime ministerâ€™s office. As he was getting ready to leave, he did say that Greece was taking active steps to deal with the problems associated with illegal immigration, including passage of a law on citizenship that would grant legal status to many immigrants. In addition, Greek authorities were trying to end the demand for smuggling rings by closing the exit points to Europe, including the ports of Patra and Igoumenitsa. Greece also wanted to draw a line in the eastern Aegean, but needed the support of

Turkey.

Speckhard

Viewing cable 10ATHENS59, Hellenic Police Chief on Security Service Reorganization,



10ATHENS59

2010-02-

01 20:08

2011-01-11

18:06

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

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TAGS: PREL PGOV PTER GR SMIG PBTS SNAR

SUBJECT: Hellenic Police Chief on Security Service Reorganization,

Migration, C/T Cooperation

Â¶ 1. (SBU) SUMMARY: During a meeting on 21 January Hellenic National

Police (HNP) Chief Ikonomou told the Ambassador that the reorganization of the Ministry of Citizen Protection was far from complete, but that the overall goal was to foster interagency cooperation across Greeceâ€™s nonmilitary security agencies. The HNP itself will be reorganized, beginning with the creation of a new organized crime task force modeled on the FBI.

The problem of illegal immigration into Greece requires political solutions on the international level, but in the meantime Greece is sealing its exit points to prevent organized crime rings and the immigrants themselves from moving on to Western Europe. Ikonomou condemned the recent attack on a synagogue in Chania, Crete, and declared no tolerance for anti-Semitic and extreme-right violence. He said that domestic terrorism was a top priority for the police and predicted that the main terrorist groups would be dismantled in the relatively near future. He reacted positively to the

Ambassadorâ€™s proposal to create a local working group on counterterrorist consisting of senior HNP and EYP officials on the Greek side and FBI and other embassy officials on the U.S. side. END SUMMARY.

Â¶ 2. (SBU) On 21 January 2010 the Ambassador met for 75 minutes with the chief of the Hellenic National Police (HNP), Eleftherios Ikonomou, in the latterâ€™s office at the headquarters of the Ministry of Citizen Protection

(MCP). This was the second in a series of meetings by the Ambassador to hear from senior Greek officials about the ongoing reorganization of

Greeceâ€™s security, intelligence, and law enforcement agencies under the

umbrella of the MCP, which was formed in October 2009. (The Ambassadorâ€™s meeting with the commandant of the Hellenic Coast Guard [HCG] on 20 January was reported in reftel.) Ikonomou became chief of the HNP on November 5,

2009, after the previous chief, Vasileios Tsiatouras, was unceremoniously and quite publicly fired on October 22 by the Greek Minister of Citizen

Protection, Michalis Chrysochoidis. The Ambassador was accompanied by the

DCM, the RAS chief, the Legatt, the ICE chief, and an LES interpreter, while Ikonomou was unaccompanied.

Â¶ 3. (SBU) This was the Ambassadorâ€™s first meeting with Ikonomou, so he began the meeting by congratulating Ikonomou on his appointment, expressing appreciation for the importance of his position for Greek society, and wishing him good luck in his duties. The Ambassador also extended his profound thanks for the excellent work done by the HNP to safeguard his personal security and to protect the embassyâ€™s facilities and personnel.

In reply, Ikonomou thanked the Ambassador for opening up a direct channel of communication. He commented on the historically close ties between

Greece and the United States and praised the extensive cooperation between the two countries in the area of security. He stated that â€œthe challenges of the timesâ€ required even closer collaboration, which he pledged to pursue.

Hellenic National Police Reorganization

-----------------------------------------

Â¶ 4. (SBU) Opening the substantive portion of the meeting, the Ambassador asked Ikonomou for his assessment of how the reorganization of the HNP was proceeding under the plans sketched out by Chrysochoidis. Ikonomou replied that the restructuring of the MCP was still in process, but its overarching goal was to organize Greeceâ€™s security agencies in a way that fostered cooperation. He described the decision to create the MCP on the basis of the former Ministry of Public Order but to fold in a number of agencies that had belonged to other government elements, most notably the HCG in its new form but also Civil Defense. It was essential to bring all of these agencies into the same structure, so that they could share a common base that spurred interaction institutionally and personally. Personal ties were essential, Ikonomou continued, noting that the new Deputy Director General of the Greek National Intelligence Service (EYP), Fotis Papageorgiou, was a long-time police official who formerly had headed the HNPâ€™s

Counterterrorism Unit. Ikonomou pointed out that he and the Director

General of EYP, Konstantinos Bikas, have traveled together to Italy and

France to hold discussions on bilateral cooperation. In essence,

Chrysochoidis was mandating the creation within the MCP of a crisismanagement system of the sort that characterized the various Greek agencies in the run-up to the Olympic Games in 2004, when all agencies worked together, many officers received training in modern security techniques, and many officers served rotations in other agencies.

Â¶ 5. (SBU) The Ambassador recognized the importance of close interaction between senior agency officials, but asked how much progress was being made at integrating the new constituent elements of the MCP at the working level. Ikonomou admitted that much work remained to be done in this regard.

He cited the challenge of fingerprinting illegal immigrants detained at border points. In Greece only the HNPâ€™s Criminal Investigations

Directorate is allowed to process and store fingerprints, but its capabilities and work practices are ill suited to the task. As a result, an initiative is underway to speed up access to this information and to employ modern technology to store and analyze data, so that an official at the border could search against the database and have immediate connectivity and results. It is also essential that these databases be linked in some way the resources and information held by other countries, including the

United States, via the most modern software.

The Challenge from Illegal Migration

------------------------------------

Â¶ 6. (SBU) Ikonomou described the Greek governmentâ€™s strategy for dealing with the challenge posed by illegal immigration. Most important, the borders need to be defended as well as possible. This will require close cooperation between the MCPâ€™s elements, especially HNP and HCG, and the military, including the army and the navy. The biggest problem is along

Greeceâ€™s eastern border, since Turkey Is not making any meaningful effort to stop the flow of illegal immigrants across both the land and sea borders. Ikonomou said that he appreciated that Turkey has its own problems with illegal immigration, which is why this is a problem for the international community that ultimately has to take into consideration the countries of origin. He pointed out that if the Greek authorities detained a Pakistani entering Greece illegally from Turkey, the illegal immigrant needed ultimately to be returned to Pakistan and not to Turkey. Given the possibility of the radicalization of illegal immigrants and refugees indefinitely staying in Greece, the government wants the European and international communities to focus on this issue as soon as possible.

Â¶ 7. (SBU) In the meantime, Ikonomou continued, Greece was taking some strong short-term actions. Most notably, the authorities were sealing

Greeceâ€™s exits to Western Europe, especially the ports of Corinth,

Patras, and Igoumenitsa, as well as the airports in Athens and

Thessaloniki. In their recent trip to Italy Ikonomou and Bikas explained this approach to their Italian counterparts, so that the services of both countries could conduct joint operations, share best practices, etc. By closing the exits, Greece wants to send a strong message to the organizedcrime rings, as well as the illegal immigrants themselves, that they cannot achieve their dreams of getting to Western Europe through Greece.

Organized Crime Task Force

--------------------------

Â¶ 8. (SBU) The Ambassador asked for an update on plans to create a new body within the HNP to deal with organized crime. Ikonomou replied that he was in full agreement with Chrysochoidis that the HNP needed a task force with jurisdiction over all Greek territory that dealt with serious crimes. The

MCP is still studying what kind of task force to create, although its outline is taking shape. It will report directly to the HNP chief. It will have divisions for cyber crime, homicides, robberies, kidnappings, extortion, economic crime, and human trafficking. A decision has not been made yet about what to do with counterterrorism, whether to make it a division within this task force or to create a separate counterterrorism

entity. The task force will have intelligence and analytical sections to collate, process, and study information from casework and ongoing investigations that is centralized in a single database. The software will ensure interconnectivity with other agencies, especially the HCG. It is intended to be a â€œsmall FBI,â€ building up from an initial group of 100 newly hired specialists, for whose positions vacancy notice already have been issued.

Chania Synagogue Arson

----------------------

Â¶ 9. (SBU) Replying to a direct question from the Ambassador, Ikonomou condemned the arson attack of January 16 on a synagogue in Chania, Crete.

He said that the HNP was taking the issue very seriously. He stressed that the police would have no tolerance for anti-Semitic or extreme-right violence in any form. The police had been caught off guard, because there had not been any previous problems in that region. The HNP has now instituted security measures around the synagogue and is investigating the incident fully. C/T

Cooperation

--------------------

Â¶ 10. (SBU) Asked for an update on the RPG attack against the embassy in

January 2007, Ikonomou stated that combating Greek domestic terrorism was a top priority for the HNP. He said that terrorist acts were condemnable from any point of view. Domestic terrorism was problematic not only because of its past focus on diplomatic missions, but also because of its potential to destabilize Greek society. Ikonomou said that the U.S. side knows what the

HNP knows about domestic terrorists, because it shares all of its information. He would not predict the timing of any arrests, but expressed optimism that the HNP was making significant progress and would be able in the relatively near future to dismantle these organizations. He stressed that it was important to act as soon as possible, because the groups on the extreme left acted as â€œwaiting roomsâ€ for future terrorists and because of the increasing intersection of domestic terrorist groups and organized crime. Ikonomou concluded by telling the ambassador that he should not hesitate to call him directly if he had any question or problem related to domestic terrorism.

Â¶ 11. (SBU) The Ambassador, reviewing briefly the history of counterterrorist training provided to the HNP, especially by FBI, DEA, and

ICE, urged the HNP to forward requests for training to assist with its reorganization and to instill new skills in its changing workforce. The ambassador proposed to Ikonomou that the two sides consider forming a local working group composed of senior HNP and EYP officials on the Greek side and senior FBI and embassy security officials on the U.S. side to discuss on a monthly basis the status and requirements of collaboration against domestic and international terrorists. Ikonomou replied that he was positively disposed to the idea and promised to discuss the notion with the leadership of EYP.

Speckhard

Viewing cable 07REYKJAVIK298, ICELAND PRESENTS ITS VISION FOR NATO AIR

POLICING



07REYKJAVIK298

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TAGS: MOPS NATO PREL MARR PGOV IC

SUBJECT: ICELAND PRESENTS ITS VISION FOR NATO AIR POLICING

Refs: A) NATO Document -- SG(2007)0516

B) Reykjavik 233

C) Reykjavik 247

Embassy

Reykjavik

Classified By: Amb. Carol van Voorst for reasons 1.4 (b) and (d).

Â¶ 1. (C) Summary: In advance of the November Force Generation

Conference, the Icelandic Defense Department briefed resident NATO ambassadors October 12 on Iceland's air policing wishlist: quarterly

Allied deployments featuring planes on the ground at Keflavik for up to three weeks at a time. As incentives, Iceland would offer participants low-level flying opportunities and will cover major costs. Iceland hopes for generous commitments covering 2008-2010 at the conference. While the proposal shows the GOI has high ambitions for allied support, the very fact that the MFA hosted a broad consultation on the topic represents a welcome change in thinking at the ministry. End Summary.

Â¶ 2. (NC) MFA Defense Department Director Thorir Ibsen -- who took over from his longtime predecessor Amb. Jon Egill Egilsson in early

September -- invited resident NATO ambassadors on October 12 to a presentation on Iceland's concept of air policing (AP) operations.

The presentation was based on the NATO Military Committee- and North

Atlantic Council-approved paper on peacetime air defense for Iceland, which passed silence in the NAC on July 26. That agreement envisions quarterly interceptor deployments to Iceland. Ibsen said that Iceland intends to formally invite NATO allies to provide AP services at the

Global Force Generation Conference scheduled to commence on November

Â¶ 8. He also indicated that Iceland will seek to secure commitments from participating countries for an initial deployment in March/April

2008 and subsequent deployments through 2010.

Â¶ 3. (NC) Ibsen stated that Iceland would provide extensive ground support services including hangar and maintenance space, messing and berthing facilities, and expects the deployed aircraft to maintain a robust schedule of training and exercise play. He pointed out that

Iceland offers opportunities for low altitude flying overland year round except for May-September. (Note: We do not yet know definitively if the Icelanders will provide fuel, as they did for the

Northern Viking exercise in 2007.)

Â¶ 4. (NC) Iceland's ideal AP scenario:

--participating NATO countries commit to participating in a three year rotational schedule (2008-2010);

--aircraft deployed on a quarterly basis, with the first quarterly deployment during the March / April 2008 timeframe;

--deployments in country for up to three weeks;

--a force composition of at least 4 fighters.

In give-and-take with the ambassadors, Ibsen displayed a healthy pragmatism about these goals. The GOI is aware that NATO allies' budgets and training schedules are probably already fixed for FY 2008 and in some instances FY 2009. He stressed that Iceland is willing to accept variations such as deployments shorter than three weeks or less than every quarter; more than one country at a time providing aircraft during the same deployment; and other possibilities. He admitted that it will be difficult to fill all four quarters in the first year but intends to use a high return on investment (i.e., lots of training opportunities and firm support from host nation) as a selling point.

Â¶ 5. (C) On the connection between quarterly deployments and annual military exercises, Ibsen said that Iceland hoped for an annual

Northern Viking defense exercise in addition to the four annual AP deployments. However, while this would be the ideal scenario for

Iceland, the GOI would accept what NATO allies were willing to offer.

Pressed on specific commitments, Ibsen noted that Turkey has ruled out participation entirely, while the Danes and Norwegians have expressed mild interest. The GOI intends to approach the German government in bilateral discussions later this month.

Â¶ 6. (C) Comment: The GOI's wishlist is ambitious, but two positive changes in its thinking are apparent. First, the MFA acknowledged that it is asking for considerable contributions from allies whose available assets and manpower are already under pressure. Ibsen was careful to note that variations would be acceptable and that Iceland would work to ease the burden on contributing Allies. Second, the fact that the MFA hosted a consultative meeting with all NATO

embassies in advance of making any formal proposal represents a sea change in the GOI's approach to these issues. Previous GOI initiatives at NATO uniformly came as a surprise to Allied ambassadors here; this new approach recognizes the need for better spadework in Reykjavik and in capitals. Both changes in tone and approach are welcome. Coming in addition to the GOI's announcement of

Iceland's first-ever defense budget earlier this month, these indicate a new maturity in Icelandic thinking about its responsibilities for defense and its place in the Alliance.

VAN VOORST

Viewing cable 08USUNNEWYORK176, ICELANDIC PRESIDENT GRIMSSON PITCHES

CANDIDACY FOR



08USUNNEWYORK176

2008-02-

25 22:10

2011-01-

13 05:05

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TAGS: PGOV PREL UNSC IC

SUBJECT: ICELANDIC PRESIDENT GRIMSSON PITCHES CANDIDACY FOR

SECURITY COUNCIL SEAT

Â¶ 1. (SBU) On February 22, Icelandic President Grimsson told

Ambassador Khalilzad that he had been "personally engaged" since last year in Iceland's race against Austria and Turkey for a seat on the Security Council in 2009-2010. Grimsson said Iceland had been offering potential supporters cooperation on clean energy and education, but "unlike our competitors, not financial assistance." President Grimsson also said he had heard complaints from small-to-medium-sized states that non-permanent members of the Security Council do not brief them on Council activity, so Iceland has been promising these states improved dialogue if it wins a Council seat.

Â¶ 2. (SBU) Grimsson asked whether the U.S. could support

Iceland's bid to which Khalilzad responded that the U.S. will give weight to Iceland's status as a NATO partner. Khalilzad agreed that we should aim for more openness and transparency in the Security Council. In response to a question from

Khalilzad regarding how the vote count looks, Grimsson said that Iceland has been "seeing momentum from the middle of last year up to now." One of Grimsson's aides noted that

Iceland's development cooperation with twenty-six countries in the Caribbean and South Pacific has been increasing as a result of Iceland's outreach. Grimsson also stated that

Security Council membership would allow Iceland to bring its traditionally strong relationship with the US and UK to a new level of cooperation.

Â¶ 3. (SBU) Ambassador Khalilzad asked Grimsson if Iceland had a main agenda it wanted to bring to the Security Council. He responded that it did not have an agenda as such, but is interested in focusing on human rights, refugees, women's issues and climate change. Grimsson discussed his views on climate change at length. (Note: Grimsson gave a climate change briefing at the UN's Dag Hammarskjold Library on

February 21. End note.)

KHALILZAD

Viewing cable 08REYKJAVIK91, Scenesetter for the Secretary's visit to Iceland May 30,

2008



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SIPDIS

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DEPT FOR S/ES-S

ALSO FOR E, EUR/FO, EUR/NB

OSD FOR WINTERNITZ

FROM AMBASSADOR VAN VOORST

E.O. 12958: DECL: 05/18/2017

TAGS: PREL MARR PINR NATO KWMN ECON UNSC IC

SUBJECT: Scenesetter for the Secretary's visit to Iceland May 30, 2008

Classified By: Amb. Carol van Voorst for reasons 1.4 (b) and (d).

Â¶ 1. (U) The Icelanders are delighted to welcome you to the High

North. Your visit to Reykjavik is the first by a Secretary of State since Secretary Powell attended the NATO Summit here in 2002, and the first bilateral visit since Secretary Albright overnighted in 2000.

Under Secretary for Political Affairs Burns was the last senior State official to visit in June of last year.

Â¶ 2. (SBU) In development and general prosperity, the Iceland you will see bears little resemblance to that of the Cold War years, when the country was struggling to emerge from a hardscrabble existence as one of the poorest countries in Europe. Leveraged investments of fishing profits and cheap, clean electricity translated into a booming economy for most of the last fifteen years. Though the economy has faltered in recent months as credit has dried up globally, life is now very comfortable for the vast majority of Icelanders.

Â¶ 3. (C) The governing coalition of the Prime Minister's Independence

Party and the Foreign Minister's Social Democratic Alliance (SDA) is strong and enjoys considerable public support, though a few fractures are emerging as economic worries strain the partnership. So far, the

SDA has taken the biggest hit in public confidence, as they have struggled to make the shift from opposition to government and have lost a number of coalition policy battles. Disagreement over EU membership may eventually drive the two parties apart, but most

likely not before the next scheduled elections in 2011.

FM Gisladottir: Atmospherics, topics

------------------------------------

Â¶ 4. (C) Foreign Minister Gisladottir's meeting with you in April was the last stop of an extremely heavy spring travel schedule. Both she and PM Haarde have been criticized for spending too much time abroad during a period of economic turmoil at home. She has focused more on her role as SDA leader in the last few weeks, though she did find time to visit the UK for consultations on development aid, to, lobby for Iceland's UN Security Council bid, and to sign an MOU on defense cooperation.

Â¶ 5. (C) Gisladottir is very appreciative of your visit and views it as confirmation of her role as the proponent of a more international-minded Iceland. Although her welcome will be warm and sincere, Gisladottir is also under pressure from within and outside of her party to show that she can hold her own at the table with the

U.S. She may feel she has to raise sensitive topics such as the

Guantanamo Bay detention facilities and renditions of terrorist suspects, if only to be able to report she made the point.

Â¶ 6. (SBU) Women's Empowerment: Gisladottir will be keen to follow up on your previous discussion of Iceland's proposal for a Women Leaders

Working Group.

Â¶ 7. (C) Middle East/Afghanistan: Gisladottir will be interested in a readout of the ICI Conference in Stockholm and developments in Iraq, as well as your sense of progress in the Israeli-Palestinian peace process. She has a genuine desire to hear your thoughts on what role small states such as Iceland can play in the peace process, and may point to Palestinian Authority President Abbas' comments here last month that perhaps Iceland could host a second "Reykjavik Summit," this time centered on peace in the Middle East.

Â¶ 8. (SBU) Defense and Security: The FM's focus here will be on

continuing her earlier conversation with you regarding NATO's involvement in the High North and broader security issues in the region, possibly foreshadowing the lunch conversation on Russia and the North Atlantic neighborhood. Gisladottir may also want to brief on Iceland's latest efforts in building robust defense and security ties with neighboring NATO allies, including recent progress with the

UK. She is also likely to cover the bilateral security relationship, and may raise the handover of the previously U.S.-run Iceland Air

Defense System (IADS) radar stations, on which DOD has the lead. We are hoping to complete that transfer soon but may not be able to get the price as low as Iceland wishes due to legal and regulatory hurdles.

Â¶ 9. (C) UN Security Council Bid: We doubt that Gisladottir will spend much time soliciting our vote for one of the two WEOG seats on the Security Council this fall (NOTE: Iceland is running against

Austria and Turkey). Rather, she will go forward from the premise that Iceland will be successful and will be looking for input on how

REYKJAVIK 00000091 002 OF 002

Iceland might shape its term on the UNSC. Should Iceland win election, it will hold the UNSC Presidency in February 2009, and

Gisladottir is exploring possible themes for Iceland's presidency, while also trying to prepare for the potential staffing headache for her small (250-person) foreign service.

Prime Minister Geir Haarde

--------------------------

Â¶ 10. (C) Warm, witty, and pragmatic, Prime Minister Haarde is at ease in domestic and international settings. Since you met him in

Washington in October 2006 to sign the bilateral Joint Understanding,

Haarde has only become more comfortable in the role of Head of

Government. Haarde spent much of the first half of this year on trips abroad, serving as the country's head cheerleader for

international audiences and protesting what he sees as the financial media's tendency to gang up on Iceland. Beyond economic pep talks, he also found time for bilateral visits with his Canadian and British counterparts in March and April, and in both places revitalized talks on defense and security cooperation that had become mired in the bureaucracy. He was most recently in the U.S. in April for anniversary celebrations of the international students program at

Brandeis, his undergraduate alma mater.

Â¶ 11. (C) You will find Haarde assured and affable, though possibly defensive on the issue of media carping and the influence of foreign speculators on the strength of the Icelandic currency. You may see a slight awkwardness in the interplay between Haarde and FM Gisladottir should the topic of EU membership come up; Gisladottir makes no secret of her view that Iceland should join, while Haarde and his party are opposed. On virtually all other points, however, the two leaders have put themselves firmly in sync, and in their year as coalition partners have skillfully presented a unified front on most international issues while ignoring the squabbling of their parties' respective fringe elements. Haarde has given Gisladottir a free hand to reorganize the Defense Department, housed within the MFA, and supported her as she pushed through Iceland's first defense budget.

While Haarde will defer to Gisladottir as your formal host, he is certain to make his own points to underline the central importance of the U.S. and NATO to Iceland's security.

PM/FM Working Lunch Topics: Russia, Global Economy

--------------------------------------------- -----

Â¶ 12. (C) Over lunch with PM Haarde and FM Gisladottir, we anticipate a wider scope to the discussion, focusing on issues of global concern. In particular, Iceland is keeping a close eye on developments in Russia, and the chattering classes here swing from criticism of U.S. "provocations" of the Russians to deep concerns over the increasingly assertive Russian foreign policy. This topic would provide an ideal opportunity to follow up on the NATO Bucharest

Summit and the issue of MAP for Georgia and Ukraine -- Iceland

supported MAP for both, but did not want to appear too far out in front. Further afield, both Haarde and Gisladottir would be interested in your views on developments in East Asia -- particularly

China -- and in Africa, two areas where Iceland is constructing new business or development ties.

Â¶ 13. (U) Haarde and Gisladottir may also want to briefly cover economic issues, both to talk up the Icelandic economy and to explore developments in the U.S. and global economy that have a bearing on

Iceland's highly leveraged financial sector. Haarde, who as Finance

Minister oversaw much of Iceland's startling economic transition, is particularly interested in reassuring the U.S. concerning Iceland's creditworthiness.

Â¶ 14. (C) Whaling will be in the news again shortly before your arrival, as the government issued a new quota for commercial hunting of minke whales on May 19. While Gisladottir and her fellow SDA ministers believe whaling harms Iceland's image abroad and serves no real domestic interest, Haarde's party controls the issue and the PM is a firm defender of what he sees as Iceland's sovereign right to manage its own marine resources. van Voorst

Viewing cable 08REYKJAVIK199, Iceland's Bid for the UN Security Council



08REYKJAVIK199

2008-09-

12 16:04

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TAGS: PREL UNSC UN AU TU IC

SUBJECT: Iceland's Bid for the UN Security Council

Classified by: Amb. Carol van Voorst for reasons 1.4 (b) and (d).

Â¶ 1. (C/NF) Summary: Iceland's bid for one of two available WEOG seats on the UN Security Council in 2009-10 is rapidly drawing to a close. The campaign, hamstrung by a slow start and tepid support at home, has found its legs over the last year under the enthusiastic direction of Foreign Minister Gisladottir. Iceland has campaigned on a strategy of "every vote counts," but in recent months has taken particular aim at competitor Austria. As a Security Council member,

Iceland would be generally supportive of U.S. priorities, though particular engagement would be necessary on questions of armed intervention. The small size of Iceland's foreign service and lack of depth on many issues would force Iceland to look often to its friends and neighbors for advice. Lobbying in other Nordic capitals will be of key importance should Iceland win a UNSC seat. End

Summary.

Getting a slow start at home and abroad

---------------------------------------

Â¶ 2. (C) Iceland is one of three candidates for two Western European and Other Group (WEOG) seats on the UN Security Council in 2009-10, running against Turkey and Austria. Iceland's bid for a Security

Council seat did not begin to properly get organized until late 2006 under then-Foreign Minister Valgerdur Sverrisdottir. Previous FMs -- particularly David Oddsson from 2004-2005 -- did little to win support at home or get organized overseas for the effort. Should

Iceland fail to win a seat, many supporters of the bid will point the finger at Oddsson and the Independence Party as a whole.

Â¶ 3. (C) Reflecting the ambivalence inside the government, the

Icelandic public has also split on the issue. The campaign's cost

(roughly $3.33 million from 2001 to 2007, with an additional $800,000 budgeted through October 2008) is an easy target for those who think

Iceland should have a less activist foreign policy as well as critics of government spending, particularly on the left end of the spectrum.

However, even some close to the Prime Minister's Independence Party and in favor of a robust foreign policy have told PolOff that they are dubious that Iceland can effectively carry out the responsibilities of a UNSC member. Under current FM Ingibjorg Solrun

Gisladottir, who has made winning a UNSC seat a priority, polls show support for Iceland's candidacy is only 46 percent, with 36 percent against.

Every vote counts...but especially if we take them from Austria

-------------------------------------------

Â¶ 4. (C) Valgerdur Sverrisdottir made the campaign more of a priority than her predecessors during her 2006-2007 tenure as Foreign

Minister, but it still gained little traction. Foreign Minister

Ingibjorg Solrun Gisladottir took several bold moves immediately after her arrival in May 2007 at the ministry. Pledging to make the

UNSC campaign simultaneously cheaper and more effective, Gisladottir appointed a special envoy to head the effort and allowed her to

assemble a dedicated team. FM Gisladottir also began a series of high-visibility trips to regions outside of the usual

Nordics-U.S.-Europe circuit: since May 2007, she has gone to the

Middle East five times, and Africa three times, as well as making visits to the Caribbean and Afghanistan.

Â¶ 5. (C/NF) Senior MFA officials as well as working-level officers in the UNSC campaign office have told post that in addition to the FM's travel, the ministry as a whole is racking up frequent-flyer miles.

Rather than targeting strategic countries to influence a whole regional bloc, the Icelandic approach has been one of stumping for each and every vote -- a huge strain on a foreign service of only 205 people worldwide. In a July 2 meeting with Ambassador, Permanent

Secretary Gretar Mar Sigurdsson allowed that the campaign "has been bloody hard for us," as he described having to spend the better part of a week on a Pacific islands trip to counter Micronesia's declaration of support for Austria.

Â¶ 6. (C/NF) Austria is Iceland's main target in the campaign. Though

Ministry officials declined to confirm this directly, the tone and content of MFA pitches to Ambassador and visiting USG officials indicate that they believe Turkey is a sure winner, but Austria's dubious economic and energy ties to Iran and Russia may create an opening for Iceland. Iran's nuclear efforts are likely to be the most significant challenge to the UNSC in 2009-2010, MFA PermSec

Sigurdsson has argued to Ambassador and visiting U.S. officials, and

Iceland has neither the problematic history of dealings with Iran nor the economic exposure that Austria does. Beyond substantive concerns, Icelandic officials have also accused Austria of unfairly leveraging Vienna's role as host to multiple UN agencies, and were incensed by UN Secretary General Ban Ki-Moon's comments in May 2008 apparently supporting Austria's bid -- in their eyes, another sign of shady campaigning by Austria.

Â¶ 7. (C/NF) The "every vote counts" perspective has also influenced

Icelandic performance on other foreign policy issues over the last year. Increased ties to the Middle East have translated into

contacts with both Syria and Iran. Similarly, Iceland has appeared reluctant to annoy Russia on recognition of Kosovo and the conflict with Georgia. Though in both cases Iceland eventually lined up with

USG views -- recognizing Kosovo within a couple of weeks of independence and eventually calling in the Russian Ambassador here regarding events in Georgia -- there were some questions as to whether the UNSC bid made the MFA more gun-shy than it might otherwise have been.

What would UNSC member Iceland do?

----------------------------------

Â¶ 8. (C/NF) Iceland has made a principled case for a UNSC seat based on its impeccable democratic credentials, support for the UN system, and the idea that all UN member states should have the chance to sit on the Security Council. What it has not done is present a concrete picture of what kind of Security Council member (and chair) it would be. Post's analysis is that Iceland would be generally in agreement with USG priorities. Some disagreements do exist, and the FM's discomfort with the use of military force would require strong engagement on questions of intervention. Iceland's initiatives would closely mirror the interests of FM Gisladottir: Iceland would work for progress on the empowerment and security of women, the broader concept of human security, and possibly even environmental security concerns.

Â¶ 9. (C/NF) In approaches to USG officials, Iceland has consistently appealed to the history of our bilateral relationship and our common membership in NATO. Post believes that our close defense ties and the U.S. treaty obligations as Iceland's first defender in war -- notwithstanding the withdrawal of U.S. military forces from Iceland in September 2006 -- and Iceland's voting record at the UN would translate into a commonality of views on most issues. We have consistently been on the same side of human rights issues in the UNGA

Third Committee and the UN Human Rights Council, and Iceland has been a staunch supporter of U.S. efforts on UNSCR 1820 on the security of women in conflic and the UNGA declaration on Prisoners of

Conscince.

Â¶ 10. (C/NF) Areas of disagreement do exist which may be exacerbated by Iceland's lack of amilitary and the Foreign Minister's personal discmfort with the use of force. Iceland shares a broad European skepticism on USG policy towards Cuba, and has not voted our way on the Cuba embargo resolution. Similarly, Iceland has followed the

Nordic line on anti-Israel resolutions in recent years. On Iraq, the previous Icelandic government pledged its political support to the invasion of Iraq in 2003 and later sent personnel in support of explosive ordnance disposal and the NATO Training Mission-Iraq.

However, FM Gisladottir campaigned in the 2007 elections on a pledge of "removing Iceland's name" from the Coalition of the Willing and called back the lone Icelander at NTM-I. Beyond simple opposition to the Iraq war, FM Gisladottir's views are colored by the fact that

Iceland has no military, which she thinks gives Iceland a unique moral role, as an honest broker and example, in world affairs. This does not translate into a complete opposition to armed intervention

-- under Gisladottir, the MFA has maintained financial and logistical support for NATO operations in Afghanistan -- but it means that

Iceland will need to be fully convinced that diplomatic efforts have run their course.

Â¶ 11. (C/NF) A final complication is the tiny size of Iceland's foreign service, which greatly limits both the information at hand as well as the ability to process that information. The International

Organizations Department Head noted wryly to PolOff that until now,

Iceland had the luxury of deciding which issues to follow, but that this will come to a swift end in October should Iceland be voted in.

The MFA's Security Council campaign office has carefully examined the

UNSC experience of Costa Rica, another comparatively small state without an army. Much of the expense of the UNSC campaign stems from the expansion of the permanent mission in New York; current plans are to double the size of the mission to 20 diplomats should Iceland win election. Given that this is nearly 10 percent of Iceland's total diplomatic corps, the entire personnel transfer season for this year is on hold pending the vote results.

Â¶ 12. (C/NF) In practical terms, this means the Icelanders will look more than usual to their Nordic colleagues for background and advice on key issues. A division of labor across issues already exists, according to MFA contacts and the Norwegian Embassy in Reykjavik, and the Norwegians are expecting to be asked for quite a bit more help.

This stems both from the traditionally close relationship between the two countries as well as the warm ties between FMs Gisladottir and

Stoere. Though Iceland has formally abandoned a previous proposal to dual-accredit other Nordic diplomats at the UN, Nordic ties and collaboration in New York and capitals will be very close if Iceland wins its bid. For the USG, this will mean that engagement in other

Nordic capitals will take on new significance in influencing

Iceland's position.

Â¶ 13. (C/NF) Comment: Despite some policy differences and the challenges of working with such a short-staffed diplomatic corps,

Post is confident that Iceland would work closely and productively with us on the Security Council. Iceland is a member of NATO with impeccable diplomatic credentials, and its default worldview is generally in line with U.S. values and priorities.

VAN VOORST

Viewing cable 08REYKJAVIK228, ICELANDIC ECONOMIC CRISIS: BANKERS ARGUE

GOI NEEDS TO



08REYKJAVIK228

2008-10-10

18:06

2011-01-13

05:05

VZCZCXRO3614

OO RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR

DE RUEHRK #0228 2841814

ZNY CCCCC ZZH

CONFIDENTIAL

Embassy

Reykjavik

O 101814Z OCT 08



INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE



SIPDIS

E.O. 12958: DECL: 10/07/2018

TAGS: EFIN ECON PGOV IC

SUBJECT: ICELANDIC ECONOMIC CRISIS: BANKERS ARGUE GOI NEEDS TO

SWALLOW PRIDE, IMF IS ONLY WAY OUT

REF: Reykjavik 227

Classified By: DCM Neil Klopfenstein for reasons 1.4 (b) and (d).

1.(C) Two Icelandic bankers met with Econoff today to emphasize that the Icelandic authorities have chosen the wrong path out of this crisis and appealed for Washington to provide guidance to the GOI.

The bankers shared a graph that showed of the 11 billion euro

Landsbanki debt, 31 percent belonged to the U.S. and Canada. They emphasized that Landsbanki had the smallest foreign debt of the three banks in Iceland and that American investors will lose billions.

They outlined a plan emphasizing the importance of bringing the creditors to the table, getting the IMF involved and finding a resolution through a multilateral approach. They stressed the need for the U.S. to become involved both to encourage the Icelandic authorities to "be rational and swallow their pride" and for the U.S. to build consensus within the IMF to allow Iceland access to the supplemental reserve facility such as Korea, Turkey and Russia have used in the past. They believe that the IMF stamp of approval will help bring creditors to the table and what is needed the most is a coordinated multilateral approach.

2.(C) Today's media showed an increasing chorus of calls for Iceland

to come to terms with the IMF as the only way out of disaster.

Embassy contacts in the business community this afternoon echoed this sentiment. We are told that Central Bank director David Oddson is fighting any move to come to terms with the IMF, but our sampling suggests that more people are coming to the reluctant conclusion that

Iceland will have to bite this bullet. The Prime Minister was repeatedly asked about a deal with the IMF at today's press conference. He brushed off suggestions that a deal had been made but stressed that the GOI is talking to the IMF in Reykjavik and in

Washington.

VAN VOORST

Viewing cable 09STATE17176, NORWAY, ESTONIA, TURKEY, LUXEMBOURG, ITALY

AND



09STATE17176

2009-02-24

21:09

O R 242149Z FEB 09

FM SECSTATE WASHDC

TO USMISSION USNATO IMMEDIATE

INFO NATO EU COLLECTIVE

AMEMBASSY ANKARA

AMEMBASSY LUXEMBOURG

AMEMBASSY OSLO

AMEMBASSY REYKJAVIK

AMEMBASSY ROME

AMEMBASSY TALLINN

AMEMBASSY TIRANA

AMEMBASSY ZAGREB

2011-01-13

05:05

UNCLASSIFIED

Secretary of

State

UNCLAS STATE 017176

E.O. 12958: N/A

TAGS: EN IC IT KTIA LU MARR NATO NO PARM PREL TU

SUBJECT: NORWAY, ESTONIA, TURKEY, LUXEMBOURG, ITALY AND

ICELAND ACCEPT ACCESSION TO NATO OF ALBANIA AND CROATIA

Â¶ 1. (U) Norway, Estonia, Turkey, Italy, Luxembourg and

Iceland have formally accepted the accession to NATO of

Albania and Croatia by depositing with the U.S. Department of

State, their instruments constituting acceptance of the NATO

Accession Protocols.

Â¶ 2. (U) Date of deposit: Norway, Estonia, Turkey and Italy:

February 20, 2009. Luxembourg: February 23, 2009. Iceland:

February 24, 2009.

Â¶ 3. (U) Mission is requested to inform Allies of these acceptances as appropriate.

Â¶ 4. (U) These deposits bring the total to nineteen Allies that have completed the approval process and formally accepted the

Protocols (Hungary, Latvia, Slovakia, Lithuania, United

States, Bulgaria, Poland, United Kingdom, Canada, Czech

Republic, Spain, Belgium, Denmark, Norway, Estonia, Turkey,

Italy, Luxembourg and Iceland). Washington will inform mission when further formal acceptances occur.

Â¶ 5. (U) Questions related to this procedure can be directed to

Dmitry Vovchuk (EUR/RPM) at 202-647-2097 or Francis Holleran

(L/T) at (202) 647-3089.

CLINTON

Viewing cable 09BERLIN485, MEDIA REACTION: SWINE FLU, IRAQ, OBAMA,

TALIBAN, CIA,



09BERLIN485

2009-04-27

13:01

2011-01-13

05:05

UNCLASSIFIED

Embassy

Berlin

INFO LOG-00 EEB-00 AMAD-00 INL-00 DOTE-00 PDI-00 DHSE-00

EUR-00 FAAE-00 UTED-00 VCI-00 TEDE-00 IO-00 LAB-01

CDC-00 VCIE-00 NEA-00 DCP-00 NSAE-00 ISN-00 GIWI-00

ISNE-00 DOHS-00 IRM-00 NCTC-00 FMP-00 BBG-00 R-00

ECA-00 IIP-00 SCRS-00 OCA-00 DRL-00 CARC-00 SAS-00

FA-00 /001W

------------------5A9C83 271329Z /38

R 271311Z APR 09

FM AMEMBASSY BERLIN

TO SECSTATE WASHDC 3926

INFO WHITE HOUSE WASHINGTON DC

SECDEF WASHINGTON DC

DIA WASHINGTON DC

CIA WASHINGTON DC

DEPT OF TREASURY WASHINGTON DC

FRG COLLECTIVE

AMEMBASSY BRUSSELS

AMEMBASSY LONDON

AMEMBASSY PARIS

AMEMBASSY ROME

USMISSION USNATO

USMISSION USOSCE

HQ USAFE RAMSTEIN AB GE

HQ USEUCOM VAIHINGEN GE//J5 DIRECTORATE (MC)//

CDRUSAREUR HEIDELBERG GE

UDITDUSAREUR HEIDELBERG GE

UNCLAS BERLIN 000485

STATE FOR INR/R/MR, EUR/PAPD, EUR/PPA, EUR/CE, INR/EUC, INR/P,

SECDEF FOR USDP/ISA/DSAA, DIA FOR DC-4A

VIENNA FOR CSBM, CSCE, PAA

"PERISHABLE INFORMATION -- DO NOT SERVICE"

E.0. 12958: N/A

TAGS: OPRC KMDR KPAO GM US IZ PK SF IC

SUBJECT: MEDIA REACTION: SWINE FLU, IRAQ, OBAMA, TALIBAN, CIA,

ARMENIA, SOUTH AFRICA, ICELAND

Â¶ 1. Lead Stories Summary

Â¶ 2. Outbreak of Swine Flu in Mexico

Â¶ 3. Secretary Clinton in Baghdad

Â¶ 4. President Obama's First 100 Days

Â¶ 5. Pakistan's Fight against the Taliban

Â¶ 6. CIA/Rule of Law

Â¶ 7. U.S.-Russian Disarmament Talks

Â¶ 8. Turkish Reaction to Obama Remarks on Armenia

Â¶ 9. South African Elections

Â¶ 10. Iceland Elections

Â¶ 1. Lead Stories Summary

Editorials focused on the debate over the possibility of social unrest if the financial crisis continues, the outbreak of swine flu and the outcome of the elections in South Africa. The headlines in the national press focused on the swine flu, while Berlin's dailies opened with stories on the failed campaign to allow Berlin students to take religion courses instead of mandatory ethics classes.

ZDF-TV's early evening newscast Heute and ARD-TV's early evening newscast Tagesschau opened with stories on swine flu.

Â¶ 2. Outbreak of Swine Flu in Mexico

Frankfurter Allgemeine headlined: "First suspected cases of Swine

Flu in Europe" and wrote: "the outbreak of the swine flu with a previously unknown virus has resulted in alarming statements from health authorities all over the world." The daily also carried a front-page commentary saying: "It is conspicuous that primarily young, healthy people have become sick, a parallel to the devastating 'Spanish flu' almost 100 years ago. But what this means for the pandemic potential of the Mexican flu will come to the fore only in the coming days."

"WHO is Afraid of Swine Flu Pandemic," Die Welt headlined, and reported: "Following the outbreak of the swine flu, more than 80 people have died and more than 1,300 people have been infected in

Mexico. German health authorities are beginning to prepare for the scenario that the virus will arrive in Germany. A spokesman for the

Robert-Koch Institute [which coordinates such efforts] said that

'the risk for Germany cannot yet be assessed.' The Foreign Ministry said that it will not yet issue a travel warning for Mexico." In a front-page editorial, the daily judged: "The WHO is using drastic words and is making it unmistakably clear that that the new virus has the potential for a pandemic. However, this is in strange contrast to the measures that have been proposed thus far."

Handelsblatt editorialized: "It is ironic that a similar plague

[such as SARS] among Mexican pigs is now causing new fears of a pandemic. At least it is now becoming visible how little mankind is able to do to defend itself with precautionary measures against the surprises of nature. Now it will be important to stop the spread of the virus with security measures especially at airports and to insist on the fact that countries where the virus broke out such as

Mexico and the United States prevent a further spread of the disease. But there is not a single reason for causing panic like two years ago."

In a front-page editorial, die tageszeitung had this to say: "If we surf on Twitter for too long, we get the unavoidable desire to run

to the next pharmacy to buy Tamiflu and breathing masks. One

Twitter page that is run by the U.S. Center for Disease Control had more than one million hits on Saturday alone. Of course, it is good to see how quickly important information is spread these days, but the problem is the assessment. The media and individual people make mistakes, get panicky and infect others, and do this faster than the swine flu does. When looking back at the last candidate for a pandemic, SARS, then we must say that little remained, at least here. Of course, we must take precautionary measures, but panic is not the right antidote."

Â¶ 3. Secretary Clinton in Baghdad

Frankfurter Allgemeine wrote under the headline; "Clinton: We

Continue to Stick to Withdrawal Plans," and added: "During her first visit to Baghdad since taking office, Secretary of State Hillary

Clinton confirmed that, despite the increase in violence, the United

States would stick to its withdrawal plans from Iraq. On Thursday and Friday, more than 150 people were killed during the worst attacks in this year." The paper added: "U.S. and Iraqi government officials said that one of the reasons for the most recent attacks is that the U.S. withdrawal and the transfer of responsibilities to

Iraqi security forces has resulted in security gaps which are now being exploited by the Jihadists."

Sueddeutsche carried a report under the headline: "First Visit to a

Country in Fear" and quoted an unnamed Iraqi citizen as having said:

"To be frank we are scared, and many people have no confidence in the Iraqi security forces." The daily added: "This is a problem that Hillary Clinton is likely to have addressed in talks with U.S.

Chief of Staff, Admiral Mike Mullen, who also traveled for a surprise visit to Iraq. There are also a few U.S. generals who are afraid that the troop withdrawal, which President Obama promised, will take place too fast and that this is one of the reasons for the

[recent] violence."

Frankfurter Allgemeine commented: "For many months it looked like

Iraq had calmed down a great deal. However, the recent attacks made clear that fanatics could dash the hopes for a permanent pacification of the country at any time.... One can assume that

Sunni extremists are behind the attacks. However, this is not certain at all. Let's hope that the [Iraqi] government's recently successful attempts to reduce the violence will work again in the future because the sooner the date for the American withdrawal comes, the greater the risk for new violence."

Frankfurter Rundschau argued: "Following the most recent devastating attacks in Iraq, Hillary Clinton's words sound like holding out slogans. During her visit, she gave Iraq assurances that the United

States would offer unrestricted support, but that the U.S. would also continue to stick to its withdrawal strategy. But what else could she have said? The most recent problems will bind U.S. forces much more than the planners are thinking. This could jeopardize the

U.S. strategy for Afghanistan and Pakistan, where the U.S. wants to create calm with more soldiers. These are not good prospects for anyone."

Â¶ 4. President Obama's First 100 Days

Sunday's Frankfurter Allgemeine highlighted in a feature article on

President Obama's first 100 days: "Although the President is popular, many people believe he is overreaching.... Obama started his presidency with messianic furor... Since Obama's inauguration,

600,000 jobs have been lost every month, the number of foreclosures is still rising, house prices continue to fall, the flow of loans is still bumpy, and bankruptcy is the key word in Detroit. Given all this, was it really necessary to start a dispute over the brutal interrogations of the CIA .... Less would have been more in the first 100 days."

Under the headline "The Riddle of Obama," Sueddeutsche commented on the President: "The day will come when this man will be human again

- no longer a demigod - who has been enchanting the world as a verbal magician. He will no longer be the one who walks on water,

but an ordinary politician.... This day of soberness will come, but nobody is talking of it this week as America's idol is celebrating his 100th day in office... The President has achieved more in the first three months than all his predecessors since Franklin D.

Roosevelt.... Obama always succeeds in selling his policy as a necessity - a simple result of sheer reason, a logical step that is not based on any ideology. However, tedious pragmatism does not explain the hysteria. The key to the riddle is his personality, which meets the desire for visionary leadership."

Tagesspiegel editorialized: "The majority of the Americans would still make the same decision. Obama is their President. He is not coming to terms with Bush through the courts, but by showing through his policies and reforms that America can change."

Â¶ 5. Pakistan's Fight against the Taliban

A Sueddeutsche editorial highlighted that "Pakistan can't stop focusing on India, although the Taliban pose the greatest threat" and added: "The U.S. is having nightmares over the idea that the

Pakistani nuclear arsenal could fall into the hands of radical

Muslims, who are also leading the fight against the West in

Afghanistan. The U.S. has little understanding for Pakistan's sentiments. Washington hopes in vain that the fight against terrorism will be a uniting bond. Pakistan has an archenemy and this is India, not the Taliban. The Pakistani perception is overblown. However, we have to deal with it.... U.S. Secretary

Clinton now admitted a mistake made in the past. This was overdue.

The U.S. cannot mediate between Pakistan and India at the moment.

The resentment is too big."

Sunday's Die Welt commented: "Pakistan's future is at stake. This is not just important for Pakistan, but also for whole international community because the country posses nuclear weapons.... As the

Taliban are leaving their refuge of the Swat Valley and moving towards Islamabad, alarm bells are ringing, particularly in

Washington.... President Obama, who is willing to hold talks, will

not make compromises when it comes to national security. The

Pakistani government of Zardari is under extreme international and particularly American pressure. It must end its hesitating and ambiguous policies.... It must realize that the Taliban pose a threat to a democratically organized civilian society. A

Talibanization of Pakistan would have a serious impact on the war in

Afghanistan, which the West must win if it wants to prevent the return of the breeding ground of terrorism that led to September

11."

Sunday's Frankfurter Allgemeine remarked: "Regardless of whether the peace agreement was a sign of weakness or simply a failed attempt to drive a wedge between the Islamist groups in the country, Islamabad does not seem to have a strategy for fighting the extremists in its own country. The capture of Islamabad is not imminent... but the situation is a cause for concern. The consequences of the mixture of weak state structures, social misery and Islamic radicalization in the region can be studied in the neighboring Afghanistan."

Â¶ 6. CIA/Rule of Law

Under the headline "Torture must be punished," Die Welt commented:

"President Obama's amnesty for CIA officials who applied brutal interrogation methods might be understandable. However, it is not appropriate. The mistreatment, torture and harassment that were part of the interrogation of detainees in Guantanamo violate

American and international laws. The majority of inmates were terrorists. The interrogations were about protecting America's and the world's security.... However, torture must not be the tool to gather information. This had never been the case in the U.S. until

September 11, 2001 changed the country. One can understand the amnesty, but it is not right."

Â¶ 7. U.S.-Russia Disarmament Talks

According to Frankfurter Allgemeine, "the chances for a quick success are nowhere as great as in the U.S.-Russian talks about a

reduction of strategic nuclear weapons. The START treaty expires at the end of this year. Even before the change of government in

Washington, both governments agreed that there should be a follow-on agreement with lower ceilings for nuclear warheads and carrier systems. That is why it is no surprise that, after the beginning of the talks in Rome, people see a promising beginning. Each disarmament step begins with START, but time will tell whether

Russia will turn into a reliable partner at eye level."

Â¶ 8. Turkish Reaction to Obama Remarks on Armenia

Frankfurter Allgemeine opined: "Even though President Obama did not explicitly use the term 'genocide' in his statement, leading Turkish politicians expressed their dissatisfaction with his view on the

'Armenian atrocities.' Turkey insists on the establishment of a

'commission of historians' and this view is based on the opinion that Turkey's version is likely to be reconfirmed. But what would happen if this did not come true? This controversy cannot be kept away from politics. But probably, the government in Ankara would be more accessible if Armenia did not always question the Kars-G|mr border treaty from 1912. Turkey is also afraid of compensations payments. The issue is not about 'honor' alone."

According to an editorial in Die Tageszeitung under the headline:

"Not a Big Disaster," at first glance, "Barack Obama was unable to reconcile all sides involved. The only ones whose irritation is now well-founded, however, are the Azeris, because the Turkish government, in consent with Barack Obama, is of the opinion that only a new real rapprochement between Turkey and Armenia can improve the poisoned atmosphere between both sides. The opening of borders and the free exchange of people and goods would be an important step for this. Thus far, no U.S. president wanted to insult Turkey. But it was Obama, who, a few weeks ago, addressed the issue of coming to terms with the past. Publisher Hrant Dink, who was killed in

Istanbul three years ago, once said: 'I consider the conscience of my Turkish friend to be more important than the things the powers-that-be in the world have to say.' And at the beginning of

the year, 30,000 Turks signed a declaration in which they apologize for the 'Great Disaster from 1915 to their Armenian neighbors. Thus

President Obama knows what he is talking about."

Â¶ 9. South African Elections

In a front-page editorial, Frankfurter Allgemeine had this to say:

"The ANC has now lost four percent in the elections, and thus its two-thirds majority. Basically, the real winner of this election is the Democratic Alliance (DA) with Capetonian Mayor Hellen Zille at the helm. These elections signal a change, but more than the DA,

Cope is responsible for it. It achieved two goals at the same time: it was able to convey in a credible way that it is not tantamount to treason not to vote for the ANC, and to establish itself as a reservoir for the black and white middle class. The ANC will now have to adjust to the view that it will be unable to increase its share beyond 66 percent. The party will rather be threatened with a massive loss of votes if it is again unable to create the promised jobs and inexpensive housing. After a long lasting economic boom, the country is now in a recession, and more than 300,000 jobs will be cut in the mining and automobile sectors. It will be the Zuma government's prime task to reduce this social unrest until the next elections. However, it is unclear how to do this in view of an inefficient educational system, economic decline, and an unemployment rate of almost 40 percent."

Regional daily Schwaebische Zeitung of Leutkirch argued: "Jacob Zuma has often been characterized as a bogeyman, as unpredictable and as an enemy to the economy. But this is exaggerated. Of course, Zuma is a populist. He played the card of left-wing populism in the campaign in order to be elected. Trade unionists and the party's left wing have paved his way to the presidency. They will now demand something in return. In view of the high expectations, it will be impossible for Zuma to avoid disappointments."

Â¶ 10. Iceland Elections

"Iceland's Left-Wing Achieves Absolute Majority," is the headline in

Frankfurter Allgemeine which noted: "In the early Icelandic elections, in the voters have reacted to the financial debacle with a clear slide to the left... However, the result was less obvious that previous opinion polls allowed us to assume. Iceland's new

Prime Minister Sigurdardsttir called the outcome a 'day of reckoning with Neo-liberalism.'"

Sueddeutsche Zeitung editorialized: "Following these elections, the outcome of the referendum on Iceland's accession to the EU is totally open. Prime Minister Sigurdardsttir will have difficulty convincing her people of the advantages of the EU, for Europeans and

Icelanders have totally differing expectations of an accession. The

Icelanders like the EU because of the strong euro, but in other areas, they do not want to have any EU interference such as in fishery policies. If the EU, however, were able to convince the

Icelanders of these advantages, this would have a symbolic effect, and Brussels would be able to strengthen its influence in a strategically and economically important region."

In an editorial, Frankfurter Rundschau noted: "The early elections in Iceland have resulted in the expected day of reckoning with the ones who were politically responsible for the financial chaos. Now the island is knocking at the EU's doors. But making this happen will be difficult because only the Social Democrats clearly advocated Iceland's accession to the EU."

Die tageszeitung opined: "Now the Icelanders have achieved all the things for which they took to the streets over the past few weeks.

The old government stepped down, the heads of the Central Bank were fired, and early elections took place over the weekend. In any case, the high voter turnout signals that that the Icelanders have not lost their confidence in the political system. And the election result shows that they think they have found the ones to blame for the misery, and a majority voted for a social democratic/green coalition."

KOENIG

Viewing cable 09VIENNA912, AUSTRIA: EU TO DISCUSS AHMADINEJAD

INAUGURATION AT



09VIENNA912

2009-07-22

14:02

2011-01-13

05:05

CONFIDENTIAL

VZCZCXRO3574

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DE RUEHVI #0912 2031429

ZNY CCCCC ZZH

P 221429Z JUL 09

FM AMEMBASSY VIENNA



C O N F I D E N T I A L VIENNA 000912

SIPDIS

DEPARTMENT FOR EUR/ERA

E.O. 12958: DECL: 07/22/2019

TAGS: PGOV PREL EUN IR IC AU

SUBJECT: AUSTRIA: EU TO DISCUSS AHMADINEJAD INAUGURATION AT

GAERC

REF: A. 07/16/09 EUR/ERA EMAIL

Â¶ B. VIENNA 895

Classified by: Economic-Political Counselor Philip Kaplan

(acting) for reasons 1.4 (b) and (d).

Embassy

Vienna

Â¶ 1. (C) Polchief discussed agenda items for the July 27-28

GAERC on July 22 with Klaus Famira, MFA European

Correspondent. Famira said GAERC participants will discuss

EU-Iran relations in light of the latest election and the crackdown on protesters. They will consider options for handling the inauguration for President Ahmadinejad. One option, Famira said, would be for EU embassies in Teheran to send deputies to the event, while another would be for

Ambassadors to attend on the understanding that they will leave en masse if Ahmadinejad makes any "unacceptable" comments.

Â¶ 2. (C) Famira said the EU will also consider whether to informally obstruct the travel of Iranian officials involved in the crackdown on post-election demonstrations. Under one proposal, EU missions in Teheran would be advised to delay the processing of visa applications from certain Iranian officials. Famira said GAERC participants are not expected to make any decisions regarding tightening Iran sanctions, nor are they planning to discuss Iran's nuclear program in depth. He said participants are also not expected to discuss the detention of UK embassy personnel; he noted that the UK employees have been released, while acknowledging that a

French citizen remains in custody.

Â¶ 3. (U) Famira said participants will also discuss Iceland's decision to seek EU membership. Some member states will likely argue that the EU should complete the Lisbon Treaty process before initiating accession talks with Iceland.

Others are expected to raise concerns about fisheries and a possible perception of unfairness if Iceland is moved ahead of longstanding EU aspirants like Turkey, Croatia and Albania.

Â¶ 4. (U) GOA views on the question of U.S. participation in the

EU Monitoring Mission in Georgia were reported reftel B.

HOH

Viewing cable 09USNATO334, RASMUSSEN TAKES CHARGE; ANNOUNCES

STRATEGIC



09USNATO334

2009-08-03

16:04

2011-01-13

05:05

UNCLASSIFIED

Mission

USNATO

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ZNR UUUUU ZZH

O 031605Z AUG 09

FM USMISSION USNATO

TO RUEKJCS/SECDEF WASHINGTON DC IMMEDIATE


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RUEHXD/MOSCOW POLITICAL COLLECTIVE


RUCNOSC/ORG FOR SECURITY CO OP IN EUR COLLECTIVE

RUEHAD/AMEMBASSY ABU DHABI 0251

RUEHAS/AMEMBASSY ALGIERS 0570

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RUEHEG/AMEMBASSY CAIRO 0153

RUEHBY/AMEMBASSY CANBERRA 0640

RUEHDO/AMEMBASSY DOHA 0167

RUEHKU/AMEMBASSY KUWAIT 0118

RUEHMK/AMEMBASSY MANAMA 0123

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RUEHRB/AMEMBASSY RABAT 0860

RUEHUL/AMEMBASSY SEOUL 0615

RUEHGP/AMEMBASSY SINGAPORE 0414



RUEHTU/AMEMBASSY TUNIS 0804

RUEHWL/AMEMBASSY WELLINGTON 0038

UNCLAS SECTION 01 OF 04 USNATO 000334

SIPDIS

E.O. 12958: N/A

TAGS: NATO PGOV PREF PTER MOPS MAR IC

SUBJECT: RASMUSSEN TAKES CHARGE; ANNOUNCES STRATEGIC

CONCEPT ROADMAP

REF: USNATO 00247

Â¶ 1. (U) SUMMARY On August 3--his first day of official business at NATO Headquarters--new NATO Secretary General

(SYG) Anders Fogh Rasmussen released his roadmap for completing NATO's new Strategic Concept in time for a NATO

Summit in the fall of 2010. He also named the 12 individuals he has chosen to serve in their personal capacities on a

Group of Experts who will lay the ground for the new

Strategic Concept. Former Secretary Albright will Chair this

Group of Experts, while former Royal Dutch Shell President and CEO Jeroen van de Veer will serve as the Vice-Chair.

Rasmussen has invited the Group of Experts to Brussels on

September 4 for an informal meeting with NATO PermReps. In a press conference announcing these decisions, Rasmussen said that the process should be the most open and inclusive process of policy development NATO has ever conducted. END

SUMMARY

-----------------

The Experts Group

-----------------

Â¶ 2. (U) According to Rasmussen the twelve individuals were chosen in order represent a broad range of Allies, as well as to bring a broad range of skills and expertise to the job.

They are:

- Madeleine Albright as Chair of the Experts Group, the

United States, former Secretary of State

- Jeroen van der Veer as Vice-Chair, the Netherlands, former president and CEO of Royal Dutch Shell

- Giancarlo Aragona, Italy, currently Italy's Ambassador to the UK

- Marie Gervais-Vidricaire, Canada, currently Canada's

Ambassador to Austria and Permanent Representative to the

International Organizations in Vienna

- Geoff Hoon, the United Kingdom, member of parliament

- Umit Pamir, Turkey, former Turkish Ambassador to the UN,

Senior Diplomatic Advisor to the Prime Minister

- Fernando Perpina-Robert Peyra, Spain, currently the

Secretary General of the Club of Madrid

- Hans-Friedrich von Ploetz, Germany, former German

Ambassador to Russia, the UK, and Permanent Representative to

NATO

- Bruno Racine, France, currently President of the

Bibliotheque Nationale de France

- Aivis Ronis, Latvia, currently the Director of the

Latvian-American Financial Forum (COMMENT: Ronis was nominated jointly by Latvia, Lithuania and Estonia as the

Baltic candidate. END COMMENT)

- Adam Daniel Rotfeld, Poland, currently Chairman of the

International Consultative Committee at the Polish Institute of International Affairs

USNATO 00000334 002 OF 004

- Yannis-Alexis Zepos, Greece, currently Greek Ambassador to

Egypt

Â¶ 3. (U) The text of Rasmussen's roadmap for the new Strategic

Concept is outlined below:

- BEGIN TEXT -

A ROADMAP FOR THE NEW STRATEGIC CONCEPT

At the NATO Summit in Strasbourg/Kehl on 4 April 2009, Heads of States and Government (HoSG) tasked the Secretary General to develop a new NATO Strategic Concept. This exercise should be completed by the time of NATO's next Summit which is expected to take place in Lisbon in late 2010. The Summit also tasked the Secretary General to convene and lead a broad based group of qualified experts who will lay the ground for the new Strategic Concept. This will be done with the active involvement of the North Atlantic Council (NAC).

GUIDING PRINCIPLES

NATO's current strategic concept dates back to 1999. A sound transatlantic consensus on a new NATO strategy is an indispensable element of the Alliance's strategic adaptation.

The Strategic Concept is a central piece of NATO's acquis.

Politically, it occupies place second only to the Washington

Treaty.

This calls for an inclusive and participatory approach from the biggest to the smallest Ally. Moreover, the process should engage Partners in the Euro-Atlantic Partnership

Council, the Mediterranean Dialogue and the Istanbul

Cooperation Initiative as well as partners across the globe.

Furthermore, the process should be transparent and engage other key international actors such as the EU and UN as well as other types of NATO interlocutors, like NGOs. Finally, an interactive dialogue with the broader public is encouraged.

To this end, a web-page dedicated to the process leading to the new Strategic Concept has been established.

THE GROUP OF EXPERTS

In order to facilitate the working process, the Secretary

General has today appointed a broad based Group of Experts.

The 12 group members have been appointed in their personal capacities. The Group of Experts includes a broad spectrum of large and small NATO members and offers a balanced combination of insiders and outsiders, including from the private sector, think tanks and the academic community. Dr.

Madeleine Albright, former US Secretary of State, will chair the Group of Experts with Mr. Jeroen van der Veer, former CEO in Royal Dutch shell, as vice-chair. To ensure close coordination between the Group of Experts and NATO

Headquarters, the Secretary General has designated a small

NATO team led by Dr. Jamie Shea, head of Policy Planning

Unit, to function as a secretariat and staff support.

A THREE-PHASED APPROACH

The process leading to a new Strategic Concept will have three distinct phases: a reflection phase through a series of seminars; a consultation phase with allied capitals; and a drafting and final negotiation phase.

USNATO 00000334 003 OF 004

Reflection phase:

A series of seminars hosted by individual allies will take place in order to enhance the strategic debate. The seminars will engage all stakeholders and relevant players - Permanent

Representatives, Military Representatives, NATO Strategic

Commands, the Military Committee, officials from capitals, strategic thinkers and partners as appropriate. Each seminar will cover a specific aspect of the Strategic Concept.

- One seminar will look at NATO's core tasks and functions: the meaning of collective defence and deterrence in today's environment; how to confront broader spectrum of threats to our populations; NATO's role in disarmament, arms control, and non-proliferation.

- Another seminar will look at NATO as a part of a network of security actors in contributing to global civil and military crisis management and NATO's likely tasks with a view to enhancing cooperation with international organizations and

NGOs.

- A third seminar will look at NATO and the Euro-Atlantic security environment; NATO's role in building security in the

Euro-Atlantic area, enlargement and NATO's partnerships including relations with Russia.

- A fourth seminar will look at forces and capabilities, including defence planning and transformation. IT will also look at procurement at a time of increased financial constraints - that requires flexibility and prioritization.

The Group of Experts may also, as appropriate, explore other relevant topics.

The Group of Experts will start its work on 4 September when the Secretary General convenes an informal meeting with NAC for an initial exchange of vies. The Group of Experts will meet periodically with the Secretary General and will submit a progress report in time for the Foreign Ministers meeting in December 2009.

Consultation phase:

Following the seminars, experts will visit Allied capitals to discuss their findings and proposals with governments, and where possible, parliamentary committees. Public outreach events could be organized on these occasions by the capitals concerned.

In April 2010 the Group of Experts should present their analysis and recommendations to the Secretary General.

Based on the experts' analysis and recommendations and

Allies' initial reactions the Secretary General will produce his own report on elements in a new Strategic Concept. It will be submitted to governments and- before the summer holiday - the Secretary General will collect political guidance on the drafting of the new Strategic Concept.

Drafting and final negotiation phase:

After the summer 2010 the Secretary General will prepare his draft of the concept, and he will meet with Permanent

Representatives to discuss the evolving drafts. Finally ,the

USNATO 00000334 004 OF 004

Secretary General will present his Strategic Concept text to the NATO summit expected to be held in the autumn of 2010.

After approval by HoSG it henceforth becomes NATO's new

Strategic Concept.

END TEXT

Â¶ 4. (U) COMMENT: In the press conference announcing these decisions, Rasmussen gave a strong impression that he sees the new Strategic Concept as a project to be executed clearly under his leadership and that he intends to control the process. He made clear that the chosen experts will participate in their individual (not national) capacities and that they answer to him. At the same time, he demonstrated his appreciation for the public dimension of this exercise, launching a public program of consultation to that effect.

He suggested a hands-on approach by stating that he will conduct town halls in Allied capitals to listen to those from all walks of life. END COMMENT

DAALDER

Viewing cable 09REYKJAVIK204, OBSERVATIONS FROM A DANISH AMBASSADOR'S

THREE



09REYKJAVIK204

2009-11-17

13:01

2011-01-13

05:05

VZCZCXRO3671

RR RUEHBC RUEHDE RUEHDIR RUEHKUK RUEHTRO

DE RUEHRK #0204/01 3211314

ZNY CCCCC ZZH

R 171314Z NOV 09


CONFIDENTIAL

Embassy

Reykjavik



RUEAIIA/CIA WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 REYKJAVIK 000204

SIPDIS

E.O. 12958: DECL: 11/16/2019

TAGS: PGOV PREL PHUM IR IC

SUBJECT: OBSERVATIONS FROM A DANISH AMBASSADOR'S THREE

YEARS IN TEHRAN

REYKJAVIK 00000204 001.2 OF 002

Classified By: CDA SAM WATSON FOR REASONS 1.4 (B) AND (D)

Â¶ 1. (C) Summary and introduction. Charge d'Affaires (CDA) met

November 13 with Soren Haslund, the newly arrived Danish

Ambassador to Iceland, to discuss his time spent in Iran.

Haslund served as the Danish Ambassador in Tehran for three years, arriving in 2006 and departing the country on July 26,

Â¶ 2009. He was pleased to share his insight with CDA regarding the political, human rights and infrastructure situation in

Iran. End summary and introduction.

Political Structure

--------------------

Â¶ 2. (C) In a conversation with CDA on November 13, Danish

Ambassador Soren Haslund said that the political structure in

Iran is composed of an incredibly small number of elites, which includes not just Supreme Leader Ali Khamenei and

President Mahmoud Ahmadinejad, but also opposition leader

Mir-Hossein Mousavi. There is, Haslund warned, a tendency by the West to attribute huge differences to those in power and those in the opposition when, in fact, they are all part of the same small group. There is no true opposition faction in

Iran, he opined, really only "nuances of black" exist.

Â¶ 3. (C) Haslund termed the relationship between Khamenei and

Ahmadinejad one of "mutual hostages." That is, they have become almost symbiotically dependent on one another.

Haslund felt that Khamenei had essentially thrown his lot in entirely with Ahmadinejad and the veterans of the Iran-Iraq war. This, he suggested, signified something of a change on the part of the Supreme Leader who previously tried to remain above the fray and to balance the interests of both those who served in the Iran-Iraq war and also the old guard who could trace their roots back to the revolution of 1979.

Â¶ 4. (C) Khamenei, according to Haslund, has an elaborate structure of civil servants around him. These people, he continued, are not clerics but rather highly trained technocrats that serve almost as a parallel structure to government. They are organized into what Haslund described as departments but the entire structure, he said, was almost clan like. These technocrats, whom he estimated numbered more than 1,000, insulate the spiritual leader. Very few diplomats were granted meetings with Khamenei. Haslund never obtained a meeting with the Supreme Leader, though he did meet with the President on several occasions along with other diplomats.

Â¶ 5. (C) The entire government structure, according to Haslund, is corrupt. This includes both the official government as well as the informal structure that surrounds Khamenei.

There is, he said, a great deal of nepotism but that is unsurprising considering the large role that clans play in society. There is also "real" corruption. Haslund cited the example of how significant profits from state imports and exports are siphoned off into the religious foundations called Bonyads. This process, he said, is legal but no one knows what happens to this money once it is received by the

Bonyads. He said that he had heard, anecdotally, that these

religious foundations could possess holdings worth as much as nine billion U.S. dollars.

Iran's Place in the World

--------------------------

Â¶ 6. (C) According to Haslund, Iranians consider themselves religiously, linguistically and ethnically superior to their neighbors. This Persian arrogance, he argued, plays a large role in Iran's foreign policy. Iran tends to use proxies and money to accomplish its regional goals, he said, and would prefer not to interact with its neighbors face-to-face.

Syria, he had heard, was receiving one billion dollars to act as just such a proxy for Iran in what he termed a marriage of convenience between the two countries. Haslund suggested that Turkey, as a secular country, might potentially serve as a regional ally for Iran. Somewhat surprisingly, he also suggested that Israel could eventually become a regional ally. The Iranians, he said, have no particular hatred for

Israel and the approximately 30,000 Jews that live in the country are treated well.

Â¶ 7. (C) Haslund also said that most of the Iranians he met viewed America as the most natural candidate to become a long-term global ally. For historical reasons, he suggested,

Iran has a deep mistrust of the British and Russians.

America, however, is viewed in a different light. The

Iranians, he joked, have noticed who is responsible for deposing of Sadam Hussein in Iraq and the Taliban in

Afghanistan. It does not hurt the United States' reputation in Iran, he said, to be responsible for having removed two of the country's greatest enemies.

REYKJAVIK 00000204 002.2 OF 002

Human Rights

-------------

Â¶ 8. (C) The human rights situation in Iran, according to

Haslund, is deplorable. The government is "tightening the screws on people" and is doing so with impunity. He said that sometimes human rights dissidents would be involved in suspicious "accidents" or "disappear." More often, however, abuses were carried out openly. The government makes a point of letting everyone know what it is doing and the people are, understandably, cautious and scared. Haslund said that when he met with dissidents he never did so at the

Danish Embassy. He would sometimes visit them in their homes but, more often than not, his wife would pick them up in her personal vehicle and transport them to the Ambassador's residence for a meeting. He said that dissidents were often willing to meet because they believed that increased exposure would actually make them safer. He met Nobel Prize winner

Shriia Ebadi frequently.

Infrastructure

---------------

Â¶ 9. (C) Haslund said that there were no noticeable effects of the trade embargo on Iranian infrastructure, which he described as excellent and up to Western standards. There is the occasional loss of electricity in Tehran but this only occurred when there was too little rain and was indicative of the country's limited hydroelectric capabilities rather than the embargo. Haslund noted that several of the airline's passenger jets were outdated but seemed to be holding up in part because of recent arrival of spare parts. He said that he flew Boeing 747s, Air Buses, and Tupolevs while he was there.

Biographical Information

-------------------------

Â¶ 10. (C) Haslund has previously served as Denmark's Ambassador to Mexico as well as Chief of Protocol for nine years in

Copenhagen. He also served at the United Nations and in

Washington. Haslund speaks fondly of his year as an undergraduate at Hamilton College in New York.

WATSON

Viewing cable 05THEHAGUE789, SCENESETTER FOR DEPUTY SECRETARY

ZOELLICK'S APRIL



05THEHAGUE789

2005-03-24

12:12

2011-01-16

00:12

SECRET

Embassy The

Hague



SIPDIS

TO THE DEPUTY SECRETARY FROM AMBASSADOR SOBEL

E.O. 12958: DECL: 03/22/2025

TAGS: PREL PGOV NL EUN NATO

SUBJECT: SCENESETTER FOR DEPUTY SECRETARY ZOELLICK'S APRIL

1 VISIT TO THE NET...


SIPDIS

TO THE DEPUTY SECRETARY FROM AMBASSADOR SOBEL

E.O. 12958: DECL: 03/22/2025

TAGS: PREL PGOV NL EUN NATO

SUBJECT: SCENESETTER FOR DEPUTY SECRETARY ZOELLICK'S APRIL

1 VISIT TO THE NETHERLANDS

Classified By: AMBASSADOR CLIFFORD M. SOBEL FOR REASONS 1.4(B) AND (D).

Mr. Deputy Secretary:

Â¶ 1. (C) My staff and I are eager to welcome you to the

Netherlands for your first visit here as Deputy Secretary.

Your trip reinforces the message of transatlantic cooperation delivered by the President and Secretary Rice, and will help focus the Dutch, in particular, on taking practical steps on the important issues. Foreign Minister Bot has time and again demonstrated his keen interest in reinvigorating the transatlantic partnership and its institutions, including

NATO, to face the challenges of the 21st Century. Your meetings with him and with a select group of senior opinion makers demonstrates the value we place on Dutch leadership in this endeavor.

Â¶ 2. (C) During the Dutch presidency of the EU (June-December

2004), Foreign Minister Bot pushed the EU to engage more actively in Iraq, guided the EU to set a date for accession negotiations with Turkey, helped stiffen the EU's spine to face down Russia over Ukraine, and pressed for increased

U.S.-European cooperation in the Middle East. On the China

Arms Embargo, Bot began the Dutch EU presidency trying to convince us that a lift was inevitable, but ultimately used the authority of the Presidency both to prevent a lift and to ensure that EU committed itself to no quantitative or qualitative increases in arms sales following a lift. Bot, like many Dutchmen, sees no contradiction between being a strong ally of the United States and a good European; the

China Arms Embargo experience demonstrates his willingness to buck conventional European wisdom at times to ensure that

U.S. interests are understood and taken into account. If anything, his experience during the EU presidency has only strengthened his basic transatlantic orientation, and he continues to look for ways to use his unique experience

(which includes a decade as Dutch permrep to the EU) and perspective to build bridges across the Atlantic. This was the main reason for his request to meet with Secretary Rice in Washington prior to the President's European trip.

Â¶ 3. (S) The Dutch also deserve credit for promoting U.S.-EU

Counter-Terrorism cooperation during their EU presidency and for initiating high-level U.S.-European exchanges of

information and intelligence. Recent events in the

Netherlands, including the murder of controversial filmmaker

Theo van Gogh by a radical Dutch Islamist and subsequent heightening of tensions here, have sensitized the Dutch to the fact that Europe faces a real and present terrorist danger. The recent decision to deploy special forces to

Afghanistan in a combat role -- over the objections of the largest opposition party in parliament -- represents a major shift in the way the Dutch think about their military, and demonstrates the government's determination to do its part in the global war on terrorism.

Â¶ 4. (S) Naturally, the Dutch and we do not see eye-to-eye on all issues, and you should be prepared for some tough questioning (in the typically Dutch blunt style) on the handling of enemy combatants at Guantanamo in particular at the roundtable. This issue has taken on added importance with the deployment of Dutch special forces to Afghanistan.

We have responded quickly to Bot's requests for expert-level consultations -- Deputy Assistant Secretary of Defense Waxman will be here March 24 to discuss this issue -- but he is under intense pressure from Parliament to demonstrate that

Dutch concerns are being taken seriously. I expect he will raise this issue with you, if for no other reason than to be able to tell Parliament honestly that he has done so.

Â¶ 5. (C) Bot and the Dutch leadership are still sensitive to criticism that they pulled the Dutch contingent out of

Al-Muthanna too early (a judgment we believe Bot personally shares). The reasons for the decision not to extend the

Dutch deployment for a third time are complicated and grounded in domestic politics. Bot led the effort within the cabinet to extend the troops, and has taken pains to ensure that government remains committed to the Iraqi effort. Iraq.

The Dutch were among the first to offer trainers to the NATO training mission and have let it be known that they can do more -- possibly even including additional future deployments

-- provided other allies also step up to the plate. In your discussion with Bot, you may want to probe further to see how

far the Dutch are prepared to go at this time and in the future, and to discuss what more the Dutch can do to leverage additional commitments from other European partners.

Â¶ 6. (C) Finally, as an astute observer and participant in inter-European decision making, Bot can be relied on to provide an honest assessment on the current state of play within the EU on the China Arms Embargo, where the Dutch will be happy to join, but not lead, a stalling campaign. Bot departs April 4 on a trip to Asia that will include stops in

Japan and China, so it will also be useful to arm him with our latest arguments against a lift. Bot can also provide useful insights into EU thinking on Turkey, where Bot, as a former Dutch Ambassador to Ankara, has a proprietary interest in getting both sides successfully to October 3, and the

Balkans, where the Dutch remain among the most stalwart supporters of the ICTY and holding regional governments

(including Croatia's) to account.

SOBEL

Viewing cable 04THEHAGUE2415, TURKEY'S EU CANDIDACY AND DUTCH POLITICS



04THEHAGUE2415

2004-09-22

15:03

2011-01-17

00:12

CONFIDENTIAL

Embassy The

Hague


221547Z Sep 04

C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 002415

SIPDIS

E.O. 12958: DECL: 09/09/2014

TAGS: PREL TU NL

SUBJECT: TURKEY'S EU CANDIDACY AND DUTCH POLITICS

REF: A. THE HAGUE 1290 (NOTAL)

Â¶ B. USEU BRUSSELS 4009

Classified ...

20867,9/22/2004 15:47,04THEHAGUE2415,"Embassy The Hague",

CONFIDENTIAL,04THEHAGUE1290,"This record is a partial extract of the original cable. The full text of the original cable is not available.

221547Z Sep 04

","C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 002415

SIPDIS

E.O. 12958: DECL: 09/09/2014

TAGS: PREL TU NL

SUBJECT: TURKEY'S EU CANDIDACY AND DUTCH POLITICS

REF: A. THE HAGUE 1290 (NOTAL)

Â¶ B. USEU BRUSSELS 4009

Classified By: Ambassador Sobel for reasons 1.4 (b) and (d).

Â¶ 1. (C) Summary: The recent defection of one member of parliament from the Liberal (VVD) party over the issue of

Turkish accession to the EU is forcing the Dutch government to consider potential domestic repercussions of the Turkish

EU debate. So far, PM Balkenende has set the tone of the discussion by stressing that a ""deal is a deal,"" and the coalition cabinet has demonstrated admirable discipline in toeing this line. As several critical dates approach, however, domestic political debate is expected to heat up considerably. End Summary.

Â¶ 2. (C) The debate over Turkey is sharpening as a starting date for accession talks looms and opponents speak out.

Recent think tank and panel reports and a public squabble between Liberal MP's in the Netherlands are making it harder for Prime Minister Balkenende's government to continue

framing the issue as a neutral question of logic and fairness

- ""if"" Turkey fulfills the political Copenhagen criteria,

""then"" the EU will fulfill its side of the bargain by opening negotiations on accession. This strategy has been inherently strengthened by the Dutch government's efforts to portray itself as a neutral ""honest broker"" during the Dutch EU presidency.

Domestic Politics in Flux

-------------------------

Â¶ 3. (C) In a major falling out, the VVD (conservative liberal party and junior partner in the coalition) recently expelled mid-level MP Geert Wilders for his vociferous anti-Turkey stance and refusal to toe the party line favoring

Turkey. It may have ended his mainstream career, however, recent polls suggest he could head a list of parliamentary candidates today and capture between four and nine seats in the second chamber. Marnix Krop, Director General for EU affairs at the MFA, told the DCM recently that Wilders could springboard to prominence by arousing difficult-to-manage populist sentiments based on deeply held fears and prejudices. This would repeat the experience of the late Pim

Fortuyn whose far-right LPF, now in disarray, was founded on anti-immigrant feelings.

Â¶ 4. (C) A more immediate concern for the Dutch government is the impact the Wilders' affair could have on the ruling coalition. Interestingly, Wilder's challenge appears to have pushed the VVD -- traditionally Euro- and Turkey-skeptics -- to clarify its position on Turkey in favor of the

Government's line. While the cabinet remains united, the parties themselves are clearly worried about public anti-Turkish accession sentiments. Following the Wilders' debacle, VVD Chief Jozias Van Aartsen publicly stated that the VVD ""unanimously"" supported the Government's position, but also left the door open to suggestions that the issue could be put to a referendum in the (distant) future. A senior spokesman in the PM's own party confided recently that a majority of CDA members would vote against Turkish

accession if given the opportunity ""to vote their conscience.""

Opinion Makers Lining Up on Both Sides, with Public Opinion Still Coalescing

---------------------------------------

Â¶ 5. (C) The Dutch government has not commented officially on any of the recently published think pieces and advisory panel reports that have come down on both sides of the Turkey question. They await instead the October 6 Commission report, which will ""actually have an impact"" on EU decision making

Â¶ 6. (C) At the September 8 presentation of the Ahtisaari

Commission report in The Hague, European Ambassadors, senior diplomats and representatives from academia worried that the

EU politicians and media have failed in their duty to build a solid public case for Turkey. This is certainly the case in the Netherlands, where the leadership's ""deal is a deal"" argument has only limited resonance outside official circles.

The recent flap over Turkey's adultery law has not helped.

Emboffs' recent informal discussions with Dutch colleagues, from a range of backgrounds and interests, reveal anger and frustration over Turkey. Worry based on substantive issues seems equally matched by anger over being railroaded by politicians to accept a preset plan, come what may.

Tie-in to the Constitutional Referenda

--------------------------------------

Â¶ 7. (C) Several observers, including Krop, noted that Dutch voters could punish politicians by rejecting the Treaty of

Constitution in the tentative March 2005 referendum if they feel an unpopular decision on Turkey was foisted upon them.

If turnout is low -- as it generally is for EU-related votes

-- then a small, motivated group could influence the result and use this ""success"" as a springboard for broader political ambitions. (This is one of the scenarios some feel Wilders may be pursuing.) The referendum is the first in Dutch history and its legal status remains somewhat vague.

Nevertheless, the government would not be able to ignore an

expression of public will on a vital issue

The Commission Report

---------------------

Â¶ 8. (C) At least until the recent set back of the penal code reform in Turkey, Dutch officials privately encouraged us to expect a ""positive"" EU Commission report on October 6. Dutch

FM Bot told Ambassador Sobel recently that the ""impact statement"" would be a important element in determining how the public approaches Turkish accession talks. The impact statement would address central worries, such as how the EU will share structural, agricultural and solidarity benefits with Turkey, assuming these programs will look the same then as they do now. Bot noted (based on his discussions with

Commissioner Verheugen) that the impact statement might include some ""surprises"" that would help make it easier to deal with public fears. On the main report itself, in a meeting on September 10 with EUR/ERA Director Peter Chase and the DCM, Jaap Werner said the question for the Dutch government is not just whether Turkey gets a ""yes,"" but what extra ""tools are put around it.... No new tests but what accompanying measures"" to assuage public concerns. He admitted that the EU is not above "temporization, including proposing a longer period to negotiate."

SOBEL

Viewing cable 04THEHAGUE2735, CAUTIOUS DUTCH REACTION TO EC REPORT ON

TURKEY



04THEHAGUE2735

2004-10-

22 15:03

2011-01-

17 00:12

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

The Hague


UNCLAS SECTION 01 OF 02 THE HAGUE 002735

SIPDIS

SENSITIVE

E.O. 12958: N/A

TAGS: PREL PGOV TU NL EUN

SUBJECT: CAUTIOUS DUTCH REACTION TO EC REPORT ON TURKEY

THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE

ACCORDINGLY.

1...

21950,10/22/2004 15:09,04THEHAGUE2735,"Embassy The Hague",UNCLASSIFIED//FOR

OFFICIAL USE ONLY,,"This record is a partial extract of the original cable.

The full text of the original cable is not available.

","UNCLAS SECTION 01 OF 02 THE HAGUE 002735

SIPDIS

SENSITIVE

E.O. 12958: N/A




ACCORDINGLY.

Â¶ 1. (SBU) Summary: The Dutch government has officially characterized the October 6 European Commission report on

Turkey, including its recommendation that a date be set for accession negotiations, as ""a good basis for decision making by the European Council in December."" Parliament also received the report favorably, with all major parties in favor of starting negotiations -- albeit disagreeing on when. The Dutch public, however, remains skeptical about

Turkey's European credentials, although calls for a

referendum on Turkish accession have so far gained no momentum. The government will continue to tread cautiously on Turkey, seeking to balance its EU Presidency obligations against the mixed feelings of Dutch citizens while trying to avoid divisions within the ruling coalition. End summary.

Government's public reaction

----------------------------

Â¶ 2. (SBU) Immediately following the October 6 publication of the EC report on Turkey, acting Dutch Prime Minister Gerrit

Zalm described the report as ""thorough and balanced"" and ""a good basis"" for decision making in December."" Zalm, who had formerly been highly critical of Turkish accession to the

EU, stopped short of endorsing beginning negotiations, but stressed that Dutch citizens should be ""reassured"" by

Commission proposals for an extended transition period for

Turkish migrants after accession and the condition that accession not drain the EU budget. He also stressed that

""positive developments"" in the areas of human rights, freedom of speech, and religious freedom ""must continue.""

Perhaps anticipating domestic criticism of the government's response to the report, Zalm emphasized that the

Netherlands' ""mouth is gagged"" while it holds the EU

Presidency as other member states monitor Dutch comments closely.

Â¶ 3. (SBU) A few days later on October 15, the GONL sent a letter to parliament reiterating Zalm's earlier comments.

Again finding the Report to be ""a good basis for decision making in December,"" the letter stated that ""The decision on whether or not to open negotiations will have to take into account the suggestions and issues raised by the Commission""

-- again stopping short of an outright endorsement of beginning negotiations.

Â¶ 4. (SBU) Explaining the government's letter to the press, acting Prime Minister Zalm hinted that the Dutch cabinet was itself divided on how soon negotiations with Turkey should begin. He was confident, however, that the cabinet would have a clear position on the matter by the time of the

December European Council. Zalm described Foreign Minister

Bot's public speculation that negotiations could probably start in the second half of 2005 (and could not be put off until 2008, as some suggested) as premature.

Parliament's reaction

---------------------

Â¶ 5. (SBU) The Commission report was well received in the

Dutch parliament. All the main political parties supported starting negotiations with Turkey on the conditions proposed by the Commission. They remain divided, however, as to when these negotiations should begin. Spokesmen for the coalition Christian Democratic (CDA) and Liberal (VVD) parties urged caution; CDA floorleader Verhagen, for example, argued against setting a date until Turkey is in full compliance with the Copenhagen criteria on respect for human rights and the rule of law. Verhagen and the spokesmen for the other major parties, however, also made clear that they would not bind the government's hands, and that they would support an EU consensus decision.

Public opinion skeptical but can be won over

--------------------------------------------

Â¶ 6. (SBU) Large elements of public, and some smaller parties in parliament, remain skeptical about the benefits of

Turkish accession. Geert Wilders, the former VVD (Liberal) party member who recently split with the party leadership on this issue, continues to attract followers from those worried about inflows of Turkish workers. Several recent polls indicate that if a referendum on Turkish accession (as proposed in France) were held today, a majority would oppose. On the other hand, although some politicians, including VVD leader van Aartsen, have called for a such a referendum, so far there has been no obvious momentum for it.

Â¶ 7. (SBU) While skeptical, the Dutch public does not come out strongly opposed to starting negotiations on Turkish accession. According to an October 5 poll, 53 percent support starting negotiations, and 61 percent support future

accession if Turkey has complied with a clear set of criteria. Supporters list among Turkey's advantages that it would be a bridge to the Arab world, that membership would enhance European security, and that Turkey would benefit to the Union's economy.

COMMENT:

-------

Â¶ 8. (SBU) Although skeptical, the pragmatic Dutch seem prepared, in the main, to go along with an EU consensus decision to begin negotiations on Turkish accession on a date to be determined by the European Council in December.

That said, underlying doubts about Turkish accession -- and suspicions about the EU in general -- still have the potential to create domestic political challenges for the coalition, especially if Wilders or others are able to mobilize this dissatisfaction into an effective political force. For now, the government is treading cautiously rather than aggressively preparing the population for a positive decision in December.

Russel

Viewing cable 05THEHAGUE1434, NETHERLANDS/EU: WHERE'S PLAN B? DUTCH

BRACE FOR



05THEHAGUE1434

2005-05-26

16:04

2011-01-17

00:12

CONFIDENTIAL

Embassy The

Hague


261646Z May 05


SIPDIS

E.O. 12958: DECL: 05/23/2015

TAGS: PREL PGOV NL EUN

SUBJECT: NETHERLANDS/EU: WHERE'S PLAN B? DUTCH BRACE FOR

"NO" VOTE ON EU CONSTITUTION

REF: A. THE HAGUE 393

...

33343,5/26/2005 16:46,05THEHAGUE1434,"Embassy The

Hague",CONFIDENTIAL,05THEHAGUE393,"This record is a partial extract of the original cable. The full text of the original cable is not available.

261646Z May 05


SIPDIS

E.O. 12958: DECL: 05/23/2015



""NO"" VOTE ON EU CONSTITUTION


Â¶ B. 5/25 ""POLITICS IN THE NETHERLANDS"" E-MAIL REPORT

AND PREVIOUS.

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.4(B) AND (D).

Â¶ 1. (C) SUMMARY: With polls showing a clear majority opposed to ratifying the EU Constitutional Treaty, the Dutch government is belatedly stepping up its efforts to obtain a

""Yes"" vote in the June 1 referendum. At the same time, Prime

Minister Balkenende is actively distancing his government from the results of the referendum and seeking to shift responsibility for dealing with a defeat to Parliament.

Opponents and supporters of the Treaty agree that voter dissatisfaction with the Dutch and European political establishment is a major motivation for ""No"" voters. Both sides concede that a ""Yes"" vote is not completely out of the

question, and at least one recent poll suggests that the tide might be starting to turn, but there is very little time to turn the electorate around. The Balkenende government will almost certainly survive a negative outcome, but such a public defeat will provide a clear boost to populist/nationalist politicians hoping to capitalize on public discontent in the runup to parliamentary elections scheduled for 2007. END SUMMARY.

Â¶ 2. (C) With all recent polls showing the ""No"" camp likely to prevail -- possibly by 60 percent or more -- in the June 1 referendum on the EU's Constitutional Treaty, the Dutch government is stepping up its ""Yes"" campaign while seeking to minimize the political consequences of a defeat. In several recent interviews, Dutch Prime Minister Balkenende reminded voters that the referendum was a parliamentary initiative initially opposed by the two largest members of his coalition government; a vote against the referendum, therefore, would not be taken as a vote of no-confidence in his government.

Some observers give Balkenende credit for at least making an effort in support of the Treaty despite his skepticism about the referendum while the main opposition Labor Party/PvdA, which was largely responsible for pushing the referendum legislation through parliament, has been missing in action.

Far more, however, blame Balkenende and his government for incompetently managing the issue from the beginning. Geert

Wilders, the maverick Dutch populist politician who has become one of the most visible leaders of the ""No"" campaign, told POLCOUNS on May 24 that the government's missteps had probably done more to boost the ""No"" vote than any efforts by opponents of the treaty.

WHY VOTE NO? BECAUSE WE CAN.

-----------------------------

Â¶ 3. (C) Both camps agree that many ""No"" voters are basing their decision on factors unrelated to the Treaty itself.

Frustration with Balkenende (whose personal popularity ratings are at an all time low, hovering around 16 percent) and anger at a perceived Dutch-European political elite that

pays little attention to the concerns of common citizens are clearly fueling the ""No"" movement. A group of students from

Leiden University told the DCM on May 18 that they intended to vote against the Treaty precisely because Balkenende was

""telling them to vote for it."" Strong supporters of the treaty such as Lousewies van der Laan (foreign policy spokesman for the Liberal Democrat/D-66 party) and Jan

Gooijenbier (a public relations/marketing expert brought in to head the government's Referendum Task Force) admitted in recent meetings with POLCOUNS that overcoming the public's lack of confidence in the current Dutch leadership and EU institutions has been the hardest hurdle for the ""Yes"" camp to overcome. During his current bus ""tourNEE"" of the

Netherlands, Wilders claimed to have been surprised by the

""level of hate"" routinely expressed for Balkenende's government, and agreed that for many the vote would be ""all about a lack of trust."" The ""No"" campaign also draws strength from an eclectic mix of parties on the left

(Socialist Party) and right (including the two small

Christian parties) worried that a strengthened EU will reduce their ability to influence domestic politics, as well as a host of single-issue voters opposed to Turkish accession, increased immigration, and expansion of the EURO zone among other issues.

Â¶ 4. (C) The fact that this will be the first national referendum in modern Dutch history, and that it is technically non-binding, has also played strongly into the hands of the ""No"" camp. According to Gooijenbier, the government's own polls suggest that many voters see the current referendum as an opportunity to vent retroactively on earlier decisions made without their input, such as switching from the guilder to the EURO (a move many blame for subsequent inflation) and EU expansion (including possibly to

Turkey). The polls also show that most voters believe that their vote in a non-binding referendum will not be taken seriously, and therefore feel comfortable casting ""protest"" vote without regard to consequences. (Note: Although the

referendum is legally non-binding, most political parties have announced formula under which they would ""accept"" the results; the Christian Democrats, for example, insist on a 30 percent turnout with 60 percent opposed; others, such as the

Liberal Democrats (pro) and Socialists (con) will accept any result regardless of turnout or margin of victory.) Recent statements by opposition leader Wouter Bos suggesting that a

""No"" vote could lead to a second referendum were quickly seized upon as further evidence that the political establishment will ignore the people's will if faced with a negative vote. Foreign Minister Bot's suggestion in parliament on May 23 that those wavering about the Treaty should stay home rather than vote no further reinforced the view that the government just doesn't ""get it.""

OVERSOLD AND UNDERWHELMED

-------------------------

Â¶ 5. (C) The ""Yes"" camp has been plagued from the beginning by disagreements over strategy and message. While some advised minimizing the impact of a negative outcome by seeking to reduce turnout (ref a), others -- including Justice Minister

Donner and Economic Affairs Minister/Deputy Prime Minister

Brinkhorst -- engaged in scare tactics, suggesting that a

""no"" vote could return Europe to an era of chaos and war no seen in the past 60 years. Not surprisingly, the public reacted negatively to both tactics. The media and public have also been quick to point out apparent divisions within the cabinet, as when Finance Minister/Deputy Prime Minister

Zalm reportedly refused to join the rest of the Cabinet in personally handing out pro-treaty leaflets outside the Prime

Minister's office. (Balkenende recently began hosting daily strategy sessions with key cabinet officials, including Bot,

Zalm, Brinkhorst, and State Secretary for Foreign Affairs

Atzo Nicolai to ensure all agree on a single, coordinated message.) Even more damaging has been the failure of the government and the opposition PvdA party to develop a coordinated strategy in favor of the Treaty. During a recent meeting with Ambassador Sobel and POLCOUNS, Wouter Bos openly

admitted that he found it distasteful to be seen cooperating with the government as the head of the opposition, even though a vote against the treaty would essentially harm both as members of the political ""establishment.""

Â¶ 6. (C) The government was restrained from campaigning aggressively in favor of the Treaty both by Dutch tradition and by the referendum legislation, which tasked the government with administering the referendum in a neutral fashion. As noted ref. a, the ""revelation"" that the government had established a contingency fund of 1.5 million

Euros to counter negative campaigning triggered a mini-scandal in parliament. The government's over-reliance on ""information"" -- its first pro-Treaty hand-out consisted entirely of excerpts from the Treaty text -- and speeches by government officials to pitch the treaty backfired, with voters reacting indifferently to the first and negatively to the second. Farah Karimi, a Green-Left member of parliament and one of the three original sponsors of the referendum legislation, told POLCOUNS on May 26 that most members of parliament ""never dreamed"" that the Dutch public would reject the treaty, so did not make any provisions for a ""pro"" campaign.

THE FRENCH CONNECTION

---------------------

Â¶ 7. (C) All parties agree that the results of the May 29 referendum in France will influence the Dutch vote, but opinions vary on exactly how. Arno Brouwers, a journalist for Volkskrant, jokingly told POLCOUNS that a French ""Non"" could be the only thing that would convince the Dutch to vote

""Ja,"" as it would give Dutch voters a new target for expressing their frustration. Geert Wilders similarly suggested that some ""no"" voters might reconsider their view of the Treaty if the French reject it, reflecting the commonly-held view that what is good for France in the EU is generally bad for the Netherlands. A more likely scenario, however, is that a negative result in France would convince many voters to remain home on June 1, lowering overall

turnout but probably raising the ""no"" percentage. According to Gooijenbier, the government has developed two campaigns to follow the French vote referendum. If the vote is positive, the government will stress that ""280 million Europeans are already in favor of the Treaty;"" if not, then the theme will be along the lines of: ""Don't let the French tell you how to vote."" According to the British Embassy, Prime Minister

Balkenende has also quietly asked Prime Minister Blair to weigh in with Dutch voters following the French vote, either by traveling to the Netherlands (doubtful, according to the

UK Embassy) or by recording a direct appeal for broadcast.

The option of canceling the Dutch referendum is not on the table.

ENOUGH TIME TO TURN THE TIDE?

-----------------------------

Â¶ 8. (C) Despite most polls showing a growing a clear majority opposing the treaty, both camps are stepping up their campaigns in the final days before the referendum. The government, having recently defeated a court action intended to prevent it from spending additional funds on the ""Yes"" campaign, has just budgeted an additional 7 million Euros for an intense pro-Treaty print and radio advertising blitz, according to Gooijenbier. (Gooijenbier noted that he had also proposed television advertising, but that the Cabinet decided engaging in ""partisan"" television advertising was ""a bridge too far."") Familiar national figures, including all four living former Prime Ministers, have started to campaign actively in favor of the Treaty. Gooijenbier cited a May 23 poll showing a slight decrease in the number of ""No"" voters

(from 60 percent to 57 percent) and increase in ""Yes"" voters

(from 40 percent to 43 percent) although they still constituted a majority) as evidence that Dutch voters might be starting to ""wake up and pay attention"" to the possible consequences of a negative vote. Van der Laan, who last week predicted a ""colossal no"" in a press interview, privately suggested that the government might just barely pull ""a rabbit out of a hat"" but was not optimistic. Wilders also

conceded that a dramatic turnaround in voter sentiment was not out of the question, and put the chances of a ""Yes"" vote at about 20 percent.

THE DAY AFTER

-------------

Â¶ 9. (C) Partly to convince voters to take the referendum seriously, the government has deliberately refrained from engaging in debate over what would happen in case of a ""No"" vote, and in fact appears to have no ""Plan B."" Parliament will almost certainly insist on a debate on the Treaty -- which is already in Parliament and should be ratified before

November 2006 -- within days of the referendum, regardless of the outcome. If there is a negative result, the government will probably argue that it has done its duty and any further steps are the responsibility of Parliament, which forced the referendum on the government in the first place. Balkenende has stated for the record that he and his government will not resign in the event of a negative result, although some observers speculate privately that State Secretary for

Foreign Affairs Atzo Nicolai, as the Cabinet member directly responsible for European integration issues, might choose to leave the government. A Nicolai resignation would probably not bring down the government, however, as under the coalition agreement his party (Conservative Liberal/VVD) could replace him from its ranks. Unless turnout is so small as to be absolutely meaningless, any effort to proceed with ratification following a ""No"" vote would provoke a more serious political crisis, as coalition partner the Liberal

Democrats/D-66 is on the record refusing to accede to such a plan. Most likely, the government and parliament will decide to delay definitive action for some period of time to see how the Treaty is received in other European countries holding referenda.

COMMENT:

-------

Â¶ 10. (C) On paper, the pro-Treaty coalition is impressive: 85 percent of parliamentarians, all major unions and employer

associations, most major media, and many notable public figures have come out in favor of the Treaty. The fact that these traditional sources of influence have failed to produce a positive majority is viewed by many as proof that the populist ""revolution"" against the traditional political elite begun by Pim Fortuyn continues to be a major factor in Dutch politics. While a ""Yes"" vote is not impossible, there is very little time left to turn around a deeply skeptical and angry electorate, and the government has so far shown little skill in guiding public opinion effectively. There is little question that Balkenende's coalition government will survive a ""No"" vote in the short term, as all three partners are down in the polls and desperate to avoid early elections. That said, a highly visible defeat in the referendum would clearly undermine Balkenende's standing among his European colleagues and would heighten the domestic perception of him as a weak and ineffectual leader. Although the Labor Party/PvdA, as the main opposition party in Parliament, might gain a few poll points at Balkenende's expense, the real winners are likely to be populist, nationalist figures like Geert

Wilders, who will seek to transfer the anti-establishment, anti-EU votes into a real political force prior to the 2007 elections.

SOBEL

",

Viewing cable 04THEHAGUE2735, CAUTIOUS DUTCH REACTION TO EC REPORT ON

TURKEY



04THEHAGUE2735

2004-10-

22 15:03

2011-01-

17 00:12

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

The Hague



SIPDIS

SENSITIVE

E.O. 12958: N/A




ACCORDINGLY.

1...

21950,10/22/2004 15:09,04THEHAGUE2735,"Embassy The Hague",UNCLASSIFIED//FOR

OFFICIAL USE ONLY,,"This record is a partial extract of the original cable.

The full text of the original cable is not available.

","UNCLAS SECTION 01 OF 02 THE HAGUE 002735

SIPDIS

SENSITIVE

E.O. 12958: N/A




ACCORDINGLY.

Â¶ 1. (SBU) Summary: The Dutch government has officially characterized the October 6 European Commission report on

Turkey, including its recommendation that a date be set for accession negotiations, as ""a good basis for decision making by the European Council in December."" Parliament also received the report favorably, with all major parties in favor of starting negotiations -- albeit disagreeing on when. The Dutch public, however, remains skeptical about

Turkey's European credentials, although calls for a referendum on Turkish accession have so far gained no momentum. The government will continue to tread cautiously on Turkey, seeking to balance its EU Presidency obligations against the mixed feelings of Dutch citizens while trying to avoid divisions within the ruling coalition. End summary.

Government's public reaction

----------------------------

Â¶ 2. (SBU) Immediately following the October 6 publication of the EC report on Turkey, acting Dutch Prime Minister Gerrit

Zalm described the report as ""thorough and balanced"" and ""a good basis"" for decision making in December."" Zalm, who had formerly been highly critical of Turkish accession to the

EU, stopped short of endorsing beginning negotiations, but stressed that Dutch citizens should be ""reassured"" by

Commission proposals for an extended transition period for

Turkish migrants after accession and the condition that accession not drain the EU budget. He also stressed that

""positive developments"" in the areas of human rights, freedom of speech, and religious freedom ""must continue.""

Perhaps anticipating domestic criticism of the government's response to the report, Zalm emphasized that the

Netherlands' ""mouth is gagged"" while it holds the EU

Presidency as other member states monitor Dutch comments closely.

Â¶ 3. (SBU) A few days later on October 15, the GONL sent a letter to parliament reiterating Zalm's earlier comments.

Again finding the Report to be ""a good basis for decision making in December,"" the letter stated that ""The decision on whether or not to open negotiations will have to take into account the suggestions and issues raised by the Commission""

-- again stopping short of an outright endorsement of beginning negotiations.

Â¶ 4. (SBU) Explaining the government's letter to the press, acting Prime Minister Zalm hinted that the Dutch cabinet was itself divided on how soon negotiations with Turkey should begin. He was confident, however, that the cabinet would

have a clear position on the matter by the time of the

December European Council. Zalm described Foreign Minister

Bot's public speculation that negotiations could probably start in the second half of 2005 (and could not be put off until 2008, as some suggested) as premature.

Parliament's reaction

---------------------

Â¶ 5. (SBU) The Commission report was well received in the

Dutch parliament. All the main political parties supported starting negotiations with Turkey on the conditions proposed by the Commission. They remain divided, however, as to when these negotiations should begin. Spokesmen for the coalition Christian Democratic (CDA) and Liberal (VVD) parties urged caution; CDA floorleader Verhagen, for example, argued against setting a date until Turkey is in full compliance with the Copenhagen criteria on respect for human rights and the rule of law. Verhagen and the spokesmen for the other major parties, however, also made clear that they would not bind the government's hands, and that they would support an EU consensus decision.

Public opinion skeptical but can be won over

--------------------------------------------

Â¶ 6. (SBU) Large elements of public, and some smaller parties in parliament, remain skeptical about the benefits of

Turkish accession. Geert Wilders, the former VVD (Liberal) party member who recently split with the party leadership on this issue, continues to attract followers from those worried about inflows of Turkish workers. Several recent polls indicate that if a referendum on Turkish accession (as proposed in France) were held today, a majority would oppose. On the other hand, although some politicians, including VVD leader van Aartsen, have called for a such a referendum, so far there has been no obvious momentum for it.

Â¶ 7. (SBU) While skeptical, the Dutch public does not come out strongly opposed to starting negotiations on Turkish accession. According to an October 5 poll, 53 percent

support starting negotiations, and 61 percent support future accession if Turkey has complied with a clear set of criteria. Supporters list among Turkey's advantages that it would be a bridge to the Arab world, that membership would enhance European security, and that Turkey would benefit to the Union's economy.

COMMENT:

-------

Â¶ 8. (SBU) Although skeptical, the pragmatic Dutch seem prepared, in the main, to go along with an EU consensus decision to begin negotiations on Turkish accession on a date to be determined by the European Council in December.

That said, underlying doubts about Turkish accession -- and suspicions about the EU in general -- still have the potential to create domestic political challenges for the coalition, especially if Wilders or others are able to mobilize this dissatisfaction into an effective political force. For now, the government is treading cautiously rather than aggressively preparing the population for a positive decision in December.

Russel

Viewing cable 05THEHAGUE1434, NETHERLANDS/EU: WHERE'S PLAN B? DUTCH

BRACE FOR



05THEHAGUE1434

2005-05-26

16:04

2011-01-17

00:12

CONFIDENTIAL

Embassy The

Hague


261646Z May 05


SIPDIS

E.O. 12958: DECL: 05/23/2015



"NO" VOTE ON EU CONSTITUTION


...


Hague",CONFIDENTIAL,05THEHAGUE393,"This record is a partial extract of the original cable. The full text of the original cable is not available.

261646Z May 05


SIPDIS

E.O. 12958: DECL: 05/23/2015



""NO"" VOTE ON EU CONSTITUTION


Â¶ B. 5/25 ""POLITICS IN THE NETHERLANDS"" E-MAIL REPORT

AND PREVIOUS.

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.4(B) AND (D).

Â¶ 1. (C) SUMMARY: With polls showing a clear majority opposed to ratifying the EU Constitutional Treaty, the Dutch government is belatedly stepping up its efforts to obtain a

""Yes"" vote in the June 1 referendum. At the same time, Prime

Minister Balkenende is actively distancing his government from the results of the referendum and seeking to shift responsibility for dealing with a defeat to Parliament.

Opponents and supporters of the Treaty agree that voter dissatisfaction with the Dutch and European political establishment is a major motivation for ""No"" voters. Both

sides concede that a ""Yes"" vote is not completely out of the question, and at least one recent poll suggests that the tide might be starting to turn, but there is very little time to turn the electorate around. The Balkenende government will almost certainly survive a negative outcome, but such a public defeat will provide a clear boost to populist/nationalist politicians hoping to capitalize on public discontent in the runup to parliamentary elections scheduled for 2007. END SUMMARY.

Â¶ 2. (C) With all recent polls showing the ""No"" camp likely to prevail -- possibly by 60 percent or more -- in the June 1 referendum on the EU's Constitutional Treaty, the Dutch government is stepping up its ""Yes"" campaign while seeking to minimize the political consequences of a defeat. In several recent interviews, Dutch Prime Minister Balkenende reminded voters that the referendum was a parliamentary initiative initially opposed by the two largest members of his coalition government; a vote against the referendum, therefore, would not be taken as a vote of no-confidence in his government.

Some observers give Balkenende credit for at least making an effort in support of the Treaty despite his skepticism about the referendum while the main opposition Labor Party/PvdA, which was largely responsible for pushing the referendum legislation through parliament, has been missing in action.

Far more, however, blame Balkenende and his government for incompetently managing the issue from the beginning. Geert

Wilders, the maverick Dutch populist politician who has become one of the most visible leaders of the ""No"" campaign, told POLCOUNS on May 24 that the government's missteps had probably done more to boost the ""No"" vote than any efforts by opponents of the treaty.

WHY VOTE NO? BECAUSE WE CAN.

-----------------------------

Â¶ 3. (C) Both camps agree that many ""No"" voters are basing their decision on factors unrelated to the Treaty itself.

Frustration with Balkenende (whose personal popularity ratings are at an all time low, hovering around 16 percent)

and anger at a perceived Dutch-European political elite that pays little attention to the concerns of common citizens are clearly fueling the ""No"" movement. A group of students from

Leiden University told the DCM on May 18 that they intended to vote against the Treaty precisely because Balkenende was

""telling them to vote for it."" Strong supporters of the treaty such as Lousewies van der Laan (foreign policy spokesman for the Liberal Democrat/D-66 party) and Jan

Gooijenbier (a public relations/marketing expert brought in to head the government's Referendum Task Force) admitted in recent meetings with POLCOUNS that overcoming the public's lack of confidence in the current Dutch leadership and EU institutions has been the hardest hurdle for the ""Yes"" camp to overcome. During his current bus ""tourNEE"" of the

Netherlands, Wilders claimed to have been surprised by the

""level of hate"" routinely expressed for Balkenende's government, and agreed that for many the vote would be ""all about a lack of trust."" The ""No"" campaign also draws strength from an eclectic mix of parties on the left

(Socialist Party) and right (including the two small

Christian parties) worried that a strengthened EU will reduce their ability to influence domestic politics, as well as a host of single-issue voters opposed to Turkish accession, increased immigration, and expansion of the EURO zone among other issues.

Â¶ 4. (C) The fact that this will be the first national referendum in modern Dutch history, and that it is technically non-binding, has also played strongly into the hands of the ""No"" camp. According to Gooijenbier, the government's own polls suggest that many voters see the current referendum as an opportunity to vent retroactively on earlier decisions made without their input, such as switching from the guilder to the EURO (a move many blame for subsequent inflation) and EU expansion (including possibly to

Turkey). The polls also show that most voters believe that their vote in a non-binding referendum will not be taken seriously, and therefore feel comfortable casting ""protest""

vote without regard to consequences. (Note: Although the referendum is legally non-binding, most political parties have announced formula under which they would ""accept"" the results; the Christian Democrats, for example, insist on a 30 percent turnout with 60 percent opposed; others, such as the

Liberal Democrats (pro) and Socialists (con) will accept any result regardless of turnout or margin of victory.) Recent statements by opposition leader Wouter Bos suggesting that a

""No"" vote could lead to a second referendum were quickly seized upon as further evidence that the political establishment will ignore the people's will if faced with a negative vote. Foreign Minister Bot's suggestion in parliament on May 23 that those wavering about the Treaty should stay home rather than vote no further reinforced the view that the government just doesn't ""get it.""

OVERSOLD AND UNDERWHELMED

-------------------------

Â¶ 5. (C) The ""Yes"" camp has been plagued from the beginning by disagreements over strategy and message. While some advised minimizing the impact of a negative outcome by seeking to reduce turnout (ref a), others -- including Justice Minister

Donner and Economic Affairs Minister/Deputy Prime Minister

Brinkhorst -- engaged in scare tactics, suggesting that a

""no"" vote could return Europe to an era of chaos and war no seen in the past 60 years. Not surprisingly, the public reacted negatively to both tactics. The media and public have also been quick to point out apparent divisions within the cabinet, as when Finance Minister/Deputy Prime Minister

Zalm reportedly refused to join the rest of the Cabinet in personally handing out pro-treaty leaflets outside the Prime

Minister's office. (Balkenende recently began hosting daily strategy sessions with key cabinet officials, including Bot,

Zalm, Brinkhorst, and State Secretary for Foreign Affairs

Atzo Nicolai to ensure all agree on a single, coordinated message.) Even more damaging has been the failure of the government and the opposition PvdA party to develop a coordinated strategy in favor of the Treaty. During a recent

meeting with Ambassador Sobel and POLCOUNS, Wouter Bos openly admitted that he found it distasteful to be seen cooperating with the government as the head of the opposition, even though a vote against the treaty would essentially harm both as members of the political ""establishment.""

Â¶ 6. (C) The government was restrained from campaigning aggressively in favor of the Treaty both by Dutch tradition and by the referendum legislation, which tasked the government with administering the referendum in a neutral fashion. As noted ref. a, the ""revelation"" that the government had established a contingency fund of 1.5 million

Euros to counter negative campaigning triggered a mini-scandal in parliament. The government's over-reliance on ""information"" -- its first pro-Treaty hand-out consisted entirely of excerpts from the Treaty text -- and speeches by government officials to pitch the treaty backfired, with voters reacting indifferently to the first and negatively to the second. Farah Karimi, a Green-Left member of parliament and one of the three original sponsors of the referendum legislation, told POLCOUNS on May 26 that most members of parliament ""never dreamed"" that the Dutch public would reject the treaty, so did not make any provisions for a ""pro"" campaign.

THE FRENCH CONNECTION

---------------------

Â¶ 7. (C) All parties agree that the results of the May 29 referendum in France will influence the Dutch vote, but opinions vary on exactly how. Arno Brouwers, a journalist for Volkskrant, jokingly told POLCOUNS that a French ""Non"" could be the only thing that would convince the Dutch to vote

""Ja,"" as it would give Dutch voters a new target for expressing their frustration. Geert Wilders similarly suggested that some ""no"" voters might reconsider their view of the Treaty if the French reject it, reflecting the commonly-held view that what is good for France in the EU is generally bad for the Netherlands. A more likely scenario, however, is that a negative result in France would convince

many voters to remain home on June 1, lowering overall turnout but probably raising the ""no"" percentage. According to Gooijenbier, the government has developed two campaigns to follow the French vote referendum. If the vote is positive, the government will stress that ""280 million Europeans are already in favor of the Treaty;"" if not, then the theme will be along the lines of: ""Don't let the French tell you how to vote."" According to the British Embassy, Prime Minister

Balkenende has also quietly asked Prime Minister Blair to weigh in with Dutch voters following the French vote, either by traveling to the Netherlands (doubtful, according to the

UK Embassy) or by recording a direct appeal for broadcast.

The option of canceling the Dutch referendum is not on the table.

ENOUGH TIME TO TURN THE TIDE?

-----------------------------

Â¶ 8. (C) Despite most polls showing a growing a clear majority opposing the treaty, both camps are stepping up their campaigns in the final days before the referendum. The government, having recently defeated a court action intended to prevent it from spending additional funds on the ""Yes"" campaign, has just budgeted an additional 7 million Euros for an intense pro-Treaty print and radio advertising blitz, according to Gooijenbier. (Gooijenbier noted that he had also proposed television advertising, but that the Cabinet decided engaging in ""partisan"" television advertising was ""a bridge too far."") Familiar national figures, including all four living former Prime Ministers, have started to campaign actively in favor of the Treaty. Gooijenbier cited a May 23 poll showing a slight decrease in the number of ""No"" voters

(from 60 percent to 57 percent) and increase in ""Yes"" voters

(from 40 percent to 43 percent) although they still constituted a majority) as evidence that Dutch voters might be starting to ""wake up and pay attention"" to the possible consequences of a negative vote. Van der Laan, who last week predicted a ""colossal no"" in a press interview, privately suggested that the government might just barely pull ""a

rabbit out of a hat"" but was not optimistic. Wilders also conceded that a dramatic turnaround in voter sentiment was not out of the question, and put the chances of a ""Yes"" vote at about 20 percent.

THE DAY AFTER

-------------

Â¶ 9. (C) Partly to convince voters to take the referendum seriously, the government has deliberately refrained from engaging in debate over what would happen in case of a ""No"" vote, and in fact appears to have no ""Plan B."" Parliament will almost certainly insist on a debate on the Treaty -- which is already in Parliament and should be ratified before

November 2006 -- within days of the referendum, regardless of the outcome. If there is a negative result, the government will probably argue that it has done its duty and any further steps are the responsibility of Parliament, which forced the referendum on the government in the first place. Balkenende has stated for the record that he and his government will not resign in the event of a negative result, although some observers speculate privately that State Secretary for

Foreign Affairs Atzo Nicolai, as the Cabinet member directly responsible for European integration issues, might choose to leave the government. A Nicolai resignation would probably not bring down the government, however, as under the coalition agreement his party (Conservative Liberal/VVD) could replace him from its ranks. Unless turnout is so small as to be absolutely meaningless, any effort to proceed with ratification following a ""No"" vote would provoke a more serious political crisis, as coalition partner the Liberal

Democrats/D-66 is on the record refusing to accede to such a plan. Most likely, the government and parliament will decide to delay definitive action for some period of time to see how the Treaty is received in other European countries holding referenda.

COMMENT:

-------

Â¶ 10. (C) On paper, the pro-Treaty coalition is impressive: 85

percent of parliamentarians, all major unions and employer associations, most major media, and many notable public figures have come out in favor of the Treaty. The fact that these traditional sources of influence have failed to produce a positive majority is viewed by many as proof that the populist ""revolution"" against the traditional political elite begun by Pim Fortuyn continues to be a major factor in Dutch politics. While a ""Yes"" vote is not impossible, there is very little time left to turn around a deeply skeptical and angry electorate, and the government has so far shown little skill in guiding public opinion effectively. There is little question that Balkenende's coalition government will survive a ""No"" vote in the short term, as all three partners are down in the polls and desperate to avoid early elections. That said, a highly visible defeat in the referendum would clearly undermine Balkenende's standing among his European colleagues and would heighten the domestic perception of him as a weak and ineffectual leader. Although the Labor Party/PvdA, as the main opposition party in Parliament, might gain a few poll points at Balkenende's expense, the real winners are likely to be populist, nationalist figures like Geert

Wilders, who will seek to transfer the anti-establishment, anti-EU votes into a real political force prior to the 2007 elections.

SOBEL

",

Viewing cable 05THEHAGUE2309, AMBASSADO Râ€™S PARTING THOUGHTS ON

TAKING THE DUTCH



05THEHAGUE2309

2005-08-22

17:05

2011-01-17

00:12

SECRET

Embassy The

Hague



SIPDIS

EO 12958 DECL: 08/18/2025

TAGS PREL, PGOV, PTER, ECON, EAID, NL, EUN, USUN

SUBJECT: AMBASSADORâ€™S PARTING THOUGHTS ON TAKING THE DUTCH

TO THE NEXT LEVEL

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.4 (B) AND (D).

Â¶ 1. (S) SUMMARY: With the EU divided and its direction uncertain, the

Dutch serve as a vital transatlantic anchor in Europe. As one of the original six EU members, the Dutch ally with the British to counter Franco-

German efforts to steer Europe off a transatlantic course. The

Netherlandsâ€™ solid European and international credentials create a powerful â€œmultiplierâ€ effect. In Iraq, Dutch forces provided the physical and political cover for Japan to deploy and the Dutch are using their NATO Training Mission commitment to push others to do more. In

Afghanistan, the Dutch drove much of the Phase III planning for ISAF and deployed Dutch troops in combat operations for the first time in more than

30 years. The Dutch have led Europe in launching pilot projects to strengthen international counterterrorism cooperation, and initiated the

U.S.-EU dialogue on terrorist financing which laid the groundwork for a proposed major international Terrorism Financing Conference in 2006.

Â¶ 2. (S) (SUMMARY CONTINUED) The Dutch are expanding their leadership beyond Europe. Dutch strategic interests in the Caribbean make them logical partners to counter Venezuelan meddling in the region. They are expanding their military involvement in Africa, in part to provide a secure environment for their robust development assistance program, and in part to add â€œeyes and earsâ€ on the ground. In the Middle East, the Dutch enjoy good relations with Israel and the Palestinians and would welcome a more active role; they quickly promised funds for an expanded Multinational

Observer Force (MFO) and might, under the right circumstances, commit troops. Even in areas where we disagree, such as drugs and trafficking in persons, Dutch views may be shifting. As the headquarters for major international legal institutions, the Netherlands offers a unique opportunity for advancing foreign policy goals far beyond Dutch borders.

Â¶ 3. (S) (SUMMARY CONTINUED) The coalition government, headed by PM

Balkenende, is naturally inclined to work closely with the U.S. The balance could shift toward Brussels, however, if a center-left government comes to power in 2007 (or earlier), as predicted by most polls. The nearly one million Muslim immigrants are largely non-integrated, which is forcing the

Dutch to question long-standing assumptions about Dutch â€œtoleranceâ€ and

â€œidentity.â€ The murder of Theo van Gogh focused attention on Islamic extremism, and the Dutch feel they are ahead of much of Europe in addressing this growing problem. Strengthening U.S.-Dutch ties across the political spectrum is necessary to ensure that the Dutch continue to enlist others to pursue interests in line with the U.S., especially in the political-military sphere. Early and active consultations are the key to harnessing Dutch energies in enhanced pursuit of U.S. interests. END

SUMMARY.

LEADERS IN EUROPE

-----------------

Â¶ 4. (S) Along with the British, the Dutch form a strong, reliable transatlantic anchor in Europe. As a founding member of NATO, one of the original six members of the EU, and Britainâ€™s strongest ally on continent, the Dutch are an influential voice in Europe despite having a population of just under 16 million. Prime Minister Balkenende states often that the Dutch â€œtake their responsibilities seriouslyâ€ and therefore expect to be heard. While the Dutch â€œnoâ€ to the EUâ€™s constitutional treaty embarrassed Balkenende, the vote revealed that the search for EU integration and consensus has its limits, capping a trend that started in the 90â€™s with then Liberal Party leader (and later EU Commissioner) Fritz

Bolkesteinâ€™s proposals to redefine the scope of European integration to protect Dutch national interests.

Â¶ 5. (S) With the French-German engine of European integration stalled,

German elections pending, and the EU unable to agree on finances, leadership opportunities for the Dutch are growing. This trend is enhanced by the gravitation of EU decision making to smaller groups, as Dutch participation can make or break internal groupings. The Dutch and Italian refusal to attend a â€œgroup of sixâ€ meeting recently proposed by

Schroeder, for example, effectively squelched his initiative. The British

Ambassador here recently confided that Blair sees the Dutch as essential to pursuing his European objectives and ensuring that transatlantic relations remain high on the European agenda. The leaders of the Netherlands, UK,

Norway, Denmark, and Sweden already meet quietly several times a year to coordinate positions prior to EU Council and other high-level EU meetings.

Â¶ 6. (S) Dutch leadership within the EU does not weaken their commitment to

NATO, where they are â€œgo-to guysâ€ for resolving potential EU-NATO conflicts. Their active, if often behind the scenes, support for NATO SYG

(and former Dutch Foreign Minister) Jaap de Hoop Scheffer, as well as their commitment to the NRF (and SRF, ISAF, and NTM-I), have helped push back efforts, such as Tervuren, which might otherwise create tensions between the NRF and EU battlegroups or other emerging ESDP capabilities. Foreign

Minister Bot recently proposed restructuring NATOâ€™s decision-making and funding mechanisms to make them more effective. The appointment of Herman

Schaper, the former deputy director general of political affairs at the

Dutch MFA and a good friend of the U.S., as the new Dutch permrep to NATO should create more opportunities for productive cooperation.

POLITICAL-MILITARY COOPERATION BEYOND THE EU

--------------------------------------------

Â¶ 7. (S) The Dutch are increasingly aware that strategic interests outside

Europe warrant their attention and leadership, especially in the politicalmilitary sphere. For example:

- Venezuela: The Dutch have strategic interests in the Caribbean (i.e., the

Netherlands Antilles and Aruba) and are deeply concerned about Chavezâ€™ meddling in the region. As a Caribbean power, the Dutch have good reasons to lead an effort to balance traditional Spanish dominance on Latin

American issues in the EU, but the U.S. and others will need to push them to take this role. The Dutch are active partners in regional drug enforcement efforts, and recently demonstrated their ability to deploy military forces (F-16â€™s) on short notice. Persuading the Dutch to counter

Chavezâ€™s destabilization efforts more actively would give us a reliable

European partner in the region.

- Afghanistan: According to CENTCOM, the Dutch took a strong lead in organizing and soliciting forces to staff ISAF Phase III, and are now preparing to deploy up to 1,400 personnel in conjunction with British,

Canadian, and possibly Australian forces. Separately, the Dutch deployment of Special Forces in a combat role represents a major shift in Dutch priorities away from peace-keeping to combat missions for the first time since the 1960â€™s. The Dutch remain a strong supporter in the war on terrorism in Afghanistan. We should encourage them both to continue to make significant contributions, and to push others to do more.

- Africa: Senior Dutch military officials say they are considering expanding their military presence in Africa to include Burundi, Rwanda,

Eastern Congo, Botswana, Zambia, and Ivory Coast, adding new â€œeyes and earsâ€ on the ground. The Dutch have requested embedding a cell at EUCOM

(similar to that already operating in CENTCOM) to coordinate their actions with the U.S. and other allies. One objective of the Dutch military deployments is to provide a secure environment for what is already one of the most ambitious assistance programs in the world. The Dutch are the fourth largest provider of assistance to Africa world-wide. In 2005 they established a 110 million Euro Stability Fund for security sector reform in the African Great Lakes Region and Sudan (as well as Afghanistan and Iraq.)

Dutch deployments in Africa have solid support in Parliament, while the focus on security as an aspect of development provides an attractive justification for potential European partners. We should not only encourage the Dutch to increase their direct involvement in Africa, but also explore whether the Dutch could act as a â€œclearinghouseâ€ for other interested parties. - Iraq: The Dutch were instrumental in providing early logistic support to U.S. forces in Iraq (including permitting transshipments through

Rotterdam when other ports in Europe would not.) The Dutch deployed 1,200 troops directly to the southern province of al-Muthanna for 20 months, including two controversial extensions. Although the Dutch have since withdrawn from al-Muthanna, their presence provided the political and military cover necessary for Japan to commit forces. The Dutch provided 25 trainers for the NATO Training Mission in Iraq, and have offered to provide up to 100 if other countries would make comparable contributions. We should urge the Dutch to continue to push their EU and NATO partners to do more in

Iraq.

- Middle East: The Dutch enjoy a reputation for â€œbalanceâ€ almost unique in Europe, as they are strong supporters of Israel, yet trusted by Arabs.

Given Foreign Minister Botâ€™s expressed willingness to take a more active regional role. We should look for opportunities to harness Dutch interest through participation in the Forum for the Future and other initiatives.

The Dutch have already promised to make a financial contribution to an

expanded Multinational Observer Force (MFO) if asked, and, under the right circumstances, might be prepared to send peace-keepers to the region as well.

Â¶ 8. (S) These commitments demonstrate how the Dutch â€œtake their responsibilities seriouslyâ€ in practice by committing real resources -- money, troops, hardware, and political capital -- to tackle real problems, as well as their â€œmultiplierâ€ effect in the political-military realm.

The fact that the Dutch are providing the head (Peter Feith) and observers to the EUâ€™s new monitoring mission in Aceh is the latest example of their assuming leadership of an important international mission in a region where they feel special ties (as witnessed by FM Botâ€™s historic decision this year to attend the commemoration of Indonesian independence, the first such visit by a senior Dutch official since Indonesian independence).

Â¶ 9. (S) The Dutch have one of the largest, most geographically diverse deployments of military forces in the world, with more troops deployed as a percentage of their total forces than any other ally. Defense Minister Kamp and CHOD Berlijn recently restructured the Dutch military to eliminate layers of bureaucracy, including independent service chiefs, thereby creating a leaner, more deployable force. Kamp and Berlijn believe firmly in the â€œuse or loseâ€ principle, and have accordingly sought increasingly challenging operations -- such as the Special Forces deployment to Afghanistan and potential operations in sub-Saharan Africa.

Their desire to maximize the militaryâ€™s capabilities and their preference for U.S. equipment, even when alternative European suppliers exist, make the Dutch strong supporters of the Joint Strike Fighter (JSF) program. The

Dutch are one of only two countries (Italy is the other) whose financial contributions merit Tier II status in JSF development. Berlijn is pushing to lock in an early commitment for 50 planes (out of a total of 85) to prevent JSF from becoming an issue in the 2007 elections. The Dutch are also seeking Tactical Tomahawks for Dutch frigates, additional lift capacity (CH-47, C-130, KDC-10), and are continuing to update their remaining hardware (AH-64D, F-16â€™s, Patriot Missile System, etc.) all of which are focused on meeting their Prague Capability Commitment objectives as well as their ability to sustain extended expeditionary operations outside the European theater.

COUNTERTERRORISM COOPERATION

----------------------------

Â¶ 10. (S) Faced with growing threats in their own country, as witnessed by the murder of Theo van Gogh in November 2004, the Dutch believe they are in the forefront of Europe with regard to counterterrorism, arguing that legislation and other steps earlier adopted by the Dutch are only now being considered in countries like the UK and Italy. Led by Justice Minister

Donner and Finance Minister Zalm, the Dutch were the first in Europe to implement the Container Security Initiative (CSI), Radiological Gates,

DOEâ€™s Megaports program, U.S. Customsâ€™ Green Lane Program, and, soon,

Trusted Flyers. China has engaged the Dutch on next generation protocols and standards for transport security, includng RFID technology. It will be important to monitor and work with the Dutch as they work with China. The

Dutch have also expressed an interest to participate in DHSâ€™s â€œCenters of Excellence.â€ While the EU was arguing with us and itself over releasing personal records to airlines, the Dutch allowed U.S. immigration

teams (IAP) to operate at Schipol airport. The Dutch were instrumental in pushing the EU in 2003 to designate Hamas in its entirety as a terrorist entity; an EU-wide designation of the Dutch branch of the Al-Aqsa followed.

During their EU Presidency the Dutch hosted an EU-wide seminar to raise awareness of terrorist financing issues and have offered to host a major international conference on the same subject in 2006. The Dutch continue to push for EU designation of Hizballah in its entirety and to strengthen the

EUâ€™s â€œClearinghouseâ€ designation process. Given their record, we should continue to look to the Dutch to launch joint pilot programs in

Europe, and, more generally, to push counterterrorism issues to the top of the European agenda more generally.

DEVELOPMENT ASSISTANCE

----------------------

Â¶ 11. (S) The Netherlands is among the worldâ€™s leading aid donors, having budgeted USD 4.2 billion (0.74 percent of GDP, with a target of raising it to 0.8 percent) in assistance in 2004. It is a top donor of unearmarked assistance to UN humanitarian programs. In 2003, the Netherlands introduced a more focused aid strategy, which phased out smaller aid programs in wealthier countries. Dutch bilateral aid is now directed to 36 partner countries, including 18 in Africa. In 2003, President Bush and Prime

Minister Balkenende signed an MOU to coordinate HIV/AIDS programs in Ghana,

Zambia, Rwanda and Ethiopia that emphasizes public-private partnerships.

Balkenende recently expressed interest in using the Millennium Challenge

Corporation as a model for promoting public-private partnerships worldwide. USAIDâ€™s involvement with a Heineken AIDS treatment and education program in Rwanda has been particularly successful, and the World Bank has adopted it as a model. Dutch creativity and credibility in development makes them good potential partners for future joint initiatives with the

U.S. We should also take advantage of their experience and insights to help shift global aid efforts in the direction of sustainable long-term development.

CENTER OF INTERNATIONAL LAW AND HUMAN RIGHTS

--------------------------------------------

Â¶ 12. (S) With the International Court of Justice (ICJ), International

Criminal Tribunal for the former Yugoslavia (ICTY), the Permanent Court of

Arbitration (PCA), the Iran-U.S. Claims Tribunal, the International

Criminal Court (ICC) and other international legal institutions all located in The Hague, our ability to have an impact in the Netherlands on international issues ranging from Iraq to the Balkans is unique. With a historical interest in international law dating back to Grotius, the Dutch view themselves as natural defenders of international legal norms and practices. This tradition made them the perfect hosts for a conference of

Iraqi judges in The Hague in 2004, and has pushed them to the forefront of international efforts to train a new generation of Iraqi jurists. While their legalistic approach can be frustrating, they are flexible. Their concerns about U.S. interpretations of the Geneva Protocols have not prevented their Special Forces from deploying in Afghanistan. The Dutch also helped sway the EU to vote against the Cuban-sponsored resolution on

Guantanamo at the Human Rights Commission last year despite concerns about the treatment of detainees. But, as Foreign Minister Bot told Deputy

Secretary Zoellick recently, over the long run Dutch human rights concerns

must be addressed to ensure that public and parliamentary support does not erode; we and the Dutch need to work together to resolve this concern.

Finally, the Dutch combination of seeking pragmatic solutions while remaining true to their legal principles could make the Dutch an important asset in resolving our differences with the EU over the ICC and article 98 agreements under the right circumstances.

ECONOMICS AND TRADE

-------------------

Â¶ 13. (S) Balkenende shares our interest in promoting an open international trading system and has been an ally in U.S.-EU trade disputes such as

Boeing-Airbus and the Foreign Sales Corporation Tax. The Dutch share with the British a vision of a market-friendly Europe driven by free trade. They are the third largest investor in the U.S. and the fourth largest recipient of U.S. investment world-wide. Their efforts to shift the Lisbon agenda in a more cooperative direction and to promote innovation and competition are creating additional opportunities for U.S. investors in Europe. Because the

Netherlands has one of the highest broadband penetrations in Europe, emerging research efforts in the areas of nanotechnology, life sciences, and other IT-related areas, and a new tax treaty, the country offers U.S. companies an important gateway into Europe. If consulted early and regularly, the Netherlands can also be an important ally in navigating the

EUâ€™s regulatory environment and removing obstacles.

DRUGS AND TRAFFICKING IN PERSONS

--------------------------------

Â¶ 14. (S) Narcotics and trafficking in persons remain areas of difficulty.

Despite fundamental differences regarding â€œsoft drugsâ€ and legalized prostitution, the Balkenende government has worked to prevent these differences from defining our relationship. There are also signs that Dutch attitudes may be shifting. The Dutch remain a major producer of synthetic drugs. On the other hand, Dutch Health Minister Hoogevorst recently signed a precedent-setting MOU with the U.S. to share information on the health risks of new strains of marijuana with higher concentrations of THC, which may convince the Dutch to rethink their approach to â€œsoft drugsâ€ in general. The Dutch are addressing drug tourism -- a recent proposal to restrict the sale of marijuana to Dutch passport holders in Maastricht, for example, could cut down on cross-border smuggling and other drug-related crime. We should support such initiatives actively.

BALKENENDE SOLID INTERNATIONALLY...

-----------------------------------

Â¶ 15. (S) We are fortunate to have in the Balkenende government an outwardlooking partner for whom working with the U.S. and the U.K. comes naturally. Balkenende and FM Bot take pride in building bridges between the

U.S. and Europe. Nowhere was this more evident than during the Dutch presidency of the EU. On two issues of great importance to the U.S. -- the

China Arms Embargo and accession talks for Turkey -- the Dutch moved, with

our active urging, from following an EU â€œconsensusâ€ set by others to redefining the issue on their, and our, terms. In both cases, Bot and

Balkenende overcame initial skepticism and concluded that Dutch and U.S. interests coincided -- a pattern we have seen repeated on other less important issues. FM Bot began the EU presidency telling us that lifting the Arms Embargo was a â€œdone deal.â€ Later, however, he actively intervened to prevent a lift on â€œhisâ€ watch, saying that he did not want the blame for causing a rift between the U.S. and EU. Despite

Balkenendeâ€™s personal skepticism about bringing Turkey into the EU, he and Bot (a former Ambassador to Turkey) worked hard to ensure that Turkey got its date to start accession talks with the EU during the Dutch presidency, and want to see the agreement they helped negotiate successfully implemented. We will want the Dutch to continue to draw on the relationships they developed during the presidency to coax both sides to move in the right direction as October 3 approaches.

Â¶ 16. (S) Specific U.S. policies provoke squalls of anger and frustration here, but President Bushâ€™s visit to the Netherlands in 2005 to commemorate V-E day at the WWII Dutch American Cemetery at Margraten was met with universal acclaim and provoked remarkably little protest. Even

Dutch opposed to U.S. policies warmly welcomed the visit as a reminder of enduring, shared values forged in the crucibles of World War II and the

Cold War. This mission has pursued an ambitious program of outreach to future Dutch leaders to ensure that these emotions are passed to the next generation. In this effort, the Presidentâ€™s youth roundtable in

Maastricht and former Secretary of State Powellâ€™s town hall meeting with young leaders in The Hague were notable successes, which can serve as models for future efforts. Given the disproportionate influence wielded by the Dutch in international fora, we should expand our active exchange programs (including the Fulbright and International Visitor Leadership

Programs) to help shape the successor generation.

...BUT FACES DOMESTIC CHALLENGES

--------------------------------

Â¶ 17. (S) Unfortunately, the outward-looking, transatlantic orientation of the Balkenende cabinet is offset domestically by strong strains of Eurocentralism and Dutch-provincialism. This division will become more pronounced as the parties prepare for local elections in March 2006, and national elections in May 2007. Current polls show that Balkenendeâ€™s center-right coalition (his second government) is falling in the polls, while the main, center-left opposition Labor party (PvdA) and fringes on the right and left are gaining. Balkenende is gambling that his economic reform agenda will pay dividends in time for the 2007 elections, but that is uncertain. There is a strong chance that a center-left government dominated by the PvdA will come to power in 2007 -- or earlier if the 2006 local election results prompt national elections.

Â¶ 18. (S) Although U.S.-Dutch relations should remain fundamentally sound despite a shift to the center-left, a PvdA-led government would present new challenges. PvdA leader Wouter Bos has made clear his tendency to look to

Brussels first in setting Dutch international priorities. He sees the

Netherlands less as a transatlantic â€œbridge builderâ€ than as a follower of EU consensus. As with Schroeder in Germany, Bos might also find it tempting to adopt a critical attitude toward the U.S. during elections to

lock in his left flank. The PvdA is already raising allegations of U.S. abuses to challenge the rationale for Dutch deployments in Afghanistan, and does not support the JSF program. It is in our interest both to support the current governmentâ€™s transatlantic orientation and to engage actively with the opposition to shift them in a favorable direction.

THE ISLAMIC FACTOR

------------------

Â¶ 19. (S) A new, but potentially serious factor in Dutch domestic politics is its large, poorly integrated Muslim population, currently numbering just under 1 million, or 5.8 percent of the population. USG-sponsored polls show that 83 percent of Dutch Muslims identify much more strongly with their religion than with their host country, while 51 percent have little or no faith in the Dutch government as an institution. While the problems of

Dutch integration captured international headlines following the van Gogh murder, the Dutch believe they have an early start on the rest of Europe in seeking creative ways to address these concerns. Their strong interest in sharing and soliciting ideas has opened up opportunities for Embassy and

USG outreach and consultations throughout Dutch society, providing insights into a growing problem throughout Europe. We expect our experiences here will provide good indications of broader European trends as well as opportunities to influence their direction.

CONCLUSIONS

-----------

Â¶ 20. (S) The Netherlands is a complicated, multi-layered society.

Prevailing myths about the Dutch -- e.g., they are homogenous, universally tolerant, pacifist, etc.-- do not accurately gauge differences within society or reflect Dutch potential to influence international events. While the Dutch prefer to see themselves as â€œbalancingâ€ between Europe and the U.S., this balance can shift due to domestic and international factors.

Â¶ 21. (S) The key to maximizing Dutch effectiveness is to involve them early through high-level consultations and exchanges. Dutch pragmatism and our similar world-views make the Netherlands fertile ground for initiatives others in Europe might be reluctant, at least initially, to embrace.

Â¶ 22. (S) As multipliers, the Dutch should be encouraged to play an increasingly prominent role on the global stage. Coaxing the Dutch into the spotlight can take effort, but pays off royally. Dutch credentials, credibility, and capabilities make them effective leaders across a wide range of geographic regions and substantive issues.

Â¶ 23. (S) The Dutch are actively and favorably involved in Afghanistan,

Africa, Iraq, the Middle East, the Balkans, the Caribbean, Indonesia, and elsewhere. They are our best partner in developing pilot projects in the counterterrorism area, and are world leaders in development, free trade, international law and human rights. In pursuit of U.S. interests in all

these areas of interest and leadership, we should build upon our successes to date to take the Dutch to the â€œnext level.â€

SOBEL

Viewing cable 06THEHAGUE997, NETHERLANDS/JSF: OPPOSITION GETTING VOCAL,

WHILE



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STATE FOR EUR/UBI

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SUBJECT: NETHERLANDS/JSF: OPPOSITION GETTING VOCAL, WHILE

GOVERNMENT STILL ON TRACK

Embassy The

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TAGS: MARR PREL PGOV NL

SUBJECT: NETHERLANDS/JSF: OPPOSITION GETTING VOCAL, WHILE

GOVERNMENT STILL ON TRACK

Classified By: Ambassador Roland Arnall, reasons 1.4 (b,d)

Â¶ 1. (C) Summary: Dutch opponents of the Joint Strike Fighter

(JSF) fired the opening salvo in their efforts to perusade

Cabinet not to sign the JSF follow-on MOU by the end of the year. A member of the main opposition Labor Party (PvdA) claimed Labor would cancel a signed MOU should Labor come to power following the 2007 national elections. Meanwhile, the

Dutch MOD remains confident the MOU will be signed -- assuming the Dutch are allowed to participate in the operational test and evaluation phase. End summary.

Opposition Tips Its Hand?

-------------------------

Â¶ 2. (C) The Dutch press reported May 3 extensively on comments made by Labor (PvdA) Defense Acquisitions spokesperson Luuk

Blom, who called on the Dutch Cabinet not to sign the JSF follow-on MOU at the end of the year. Blom said during an interview in the Dutch weekly ""Intermediair"" that the Labor

Party did not want to inherit JSF when it comes to power following the 2007 national elections. He said a

Labor-dominated government would cancel a signed MOU -- ""not a single JSF will be bought under Labor."" Blom argued that the JSF business plan is ""based on quicksand,"" and that there was no guarantee that the Dutch would see a return on their investment. He also said all contracts awarded to the Dutch to date have been granted to Stork, representing ""covert government support"" for a single company.

Â¶ 3. (C) The Dutch newspaper ""Telegraaf"" (center-right) carried an editorial May 3 arguing that the Labor Party should ""come to its senses"" because JSF is the best and cheapest option.

According to Telegraaf, canceling JSF will cost the Dutch hundreds of jobs and its international credibility. Instead, the Dutch Cabinet should make a decision of JSF in the fall.

Government on Track

------------------

Â¶ 4. (C) The Ambassador met with MOD State Secretary Cees van der Knaap and MOD Director for Defense procurement Dirk van

Dord May 2. Also in attendance were MOD Advisor to the State

Secretary Marleijn van Diepen, and Office of Defense

SIPDIS

Cooperation Chief COL David Kelly, LTC Ralph King, and polmiloff Jason Grubb.

Â¶ 5. (C) Van der Knaap and van Dord said the GONL remains

positive on JSF; the defense procurement aspect of JSF has been staffed at the MOD working level. Van Dord said the

Dutch Cabinet will soon become more involved in preparation for the planned JSF follow-on MOU signing at the end of the year. He noted that Norway's recent reservations may slightly complicate matters, as the GONL will then be forced to explain to Cabinet why a JSF partner chose to abandon the program. The ambassador noted that Norway's possible departure may result in more contracts for Dutch industry, while COL Kelly said any departure might result in more expensive planes and questions of confidence.

Â¶ 6. (C) Van der Knaap raised the Dutch request to be included in the operational test and evaluation phase of JSF, and noted Dutch plans to buy three planes in advance for just such a reason. If the Dutch cannot participate in the testing phase, then there is no reason to buy the advance planes -- or even make a purchase order for the rest, van der

Knaap said. The ambassador noted the Dutch position was clear. COL Kelly said Washington principals were well aware of the Dutch request, as indicated by a letter from Dutch

CHOD Gen. Berlijn to Gen. Myers. He added that Washington was currently examining details that might allow the Dutch to participate in the testing phase.

Â¶ 7. (C) Van der Knaap and van Dord also raised possible plans for a ""European footprint"" through a JSF sustainment and support center. They said the Dutch and Italians had agreed

Italy would provide the final assembly line for the aircraft built in Europe, while the Netherlands would be responsible for engine maintenance. Van Dord said Denmark, Turkey and

Norway have agreed to this approach, and were currently discussing further details. COL Kelly noted the JSF

Executive Committee in Oslo in mid-May would present an ideal opportunity for the Dutch and Italians to present their proposal; van Dord replied they were considering such a

presentation.

Â¶ 8. (C) From the political side of things, van der Knaap said the Dutch government already possessed a majority in

Parliament to support the signing of the follow-on MOU, despite the apparent opposition of the Labor Party as made known by Blom's comments. Van der Knaap said Labor was

""crazy -- and crazy about JSF"" and now seemed committed to making it an election issue. He said Labor's objections are purely political -- JSF was the best plane for the best price, and would bolster Dutch employment. As such, he had a difficult time believing Blom's remarks represent Labor's true position. The ambassador said labor unions play a key role; van der Knaap agreed, and noted Lockheed Martin VP Tom

Burbage's meeting with Dutch labor unions on May 12. The ambassador said he would attend the meeting.

Â¶ 9. (C) The ambassador asked for van der Knaap's bottom line: was he worried, especially as Labor appeared poised to control the government coalition following the elections in

2007? Van der Knaap said Labor leaders had indicated during negotiations of the latest Balkenende government that JSF would not be an issue; he still believes that is the case, and that recent Labor opposition is nothing more than political posturing. He added that recent news of yet another contract award by Dutch industry -- to be announced during Burbage's meeting with union leaders -- would be very helpful in undermining critics who claim the Dutch will not see a return on their investment.

Comment

-------

Â¶ 10. (C) Blom's remarks likely represent a trial-balloon from

Labor to determine if JSF will play well in the elections -- it is hard to believe Blom's bluster that Labor would

""cancel"" an MOU signed by the previous government, especially

if Labor looks to form a coalition with several parties from the current coalition. Nevertheless, we take Labor's opposition seriously -- if this is the hand they are playing, we will work on the labor unions to mitigate Labor's message.

Meanwhile, the Dutch MOD continues to proceed as though JSF will happen -- as long as the Dutch are included in the testing phase.

ARNALL

Viewing cable 09THEHAGUE543, AMBASSADOR DAALDER PRESSES DUTCH TO

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COURSE IN AFGHANISTAN



Classified By: Ambassador Daalder for reasons 1.5(b,d)

Â¶ 1. (C) SUMMARY: U.S. Permanent Representative to NATO,

Ambassador Ivo Daalder, argued for the extension of the

Netherlands, military deployment and aid to Afghanistan beyond 2010 during high-level meetings, a speech, press interviews, and a reception in The Hague on September 3,

Â¶ 2009. This cable covers conversations with Development

Minister Koenders (paragraphs 2 - 8), FM Verhagen (paragraphs

9 - 13), and senior foreign policy officials (paragraphs 14 -

24). Dutch officials uniformly responded that selling an extended military deployment to the Dutch parliament will be difficult, but that some Dutch involvement in Afghanistan past 2010 is almost certain. Daalder also exchanged views with the Dutch on the NATO strategic concept (paragraphs 13,

24). Paragraph 25 summarizes Dutch participation and reactions at the speech and reception. END SUMMARY.

-----------------------------

Development Minister Koenders

-----------------------------

Â¶ 2. (U) September 3, 2009; Dutch Foreign Ministry; The Hague,

Netherlands.

Â¶ 3. (U) Participants:

United States

-------------

Ambassador Hartog Levin

Ambassador Daalder

Jennifer Davis, U.S. Mission to NATO

Eric Falls, Embassy The Hague

Netherlands

-----------

Bert Koenders, Minister for Development Cooperation

Ms. Joke Brandt, MFA DG for Development Cooperation

Ms. Godie van de Paal, MFA Task Force Uruzgan

Â¶ 4. (SBU) Ambassador Daalder emphasized President Obama,s commitment to success in Afghanistan through cooperative effort with Allies. The new U.S. strategy has two key themes, he said. First, it is more narrowly defined to ensure it is tied to our core interests and to ensure it is achievable. Second, the U.S. is boosting support for the strategy through regional cooperation, the &3D8 approach of defense, diplomacy, and development, and through rapid build-up of Afghan security forces. Daalder also emphasized our mission in Afghanistan is a combined effort -- forty percent of the troops in ISAF, as well as forty percent of our casualties, are from our non-U.S. Allies.

Â¶ 5. (C) Ambassador Daalder explained that we hope the Dutch will stay in Afghanistan as we value their expertise. He added that we understand that the number of Dutch troops may decline after 2010. Nonetheless, he said we believe there are two key messages that may help convince the Dutch public and parliament to support an extension of the Dutch mission.

First, the new U.S. president is extremely popular in Europe and that popularity might result in deeper support for the mission in Afghanistan. Second, the United States depends on cooperation of important Allies like the Netherlands, which has taken a real leadership role in development efforts and relationship-building in Afghanistan.

Â¶ 6. (C) Koenders responded with a review of previous Dutch decisions on Afghanistan and an explanation of the current political situation. The first Dutch deployment was a

Qpolitical situation. The first Dutch deployment was a

&sensitive8 decision for the Labor party four years ago.

(Background: Koenders is from the Labor party. The

Netherlands, current governing coalition includes the

Christian Democrats, the Christian Union, and the Labor party, which is the most skeptical member of the coalition regarding Afghanistan. See reftel A, B. End Background.)

&I supported the decision, but it was difficult,8 he said.

THE HAGUE 00000543 002 OF 005

The Labor party required a development component to the mission, the &soft approach,8 though he &didn,t think it was soft,8 and he knew troops &would be killed.8 After intensive parliamentary discussions, the party agreed to a two-year deployment, until 2008. The decision to extend the deployment until 2010 was also difficult, with Labor and other parties expressing significant concerns about burden-sharing. The Labor Party was &unhappy8 with the final decision.

Â¶ 7. (C) Looking ahead, Koenders said the Dutch would continue development efforts in Uruzgan -- the Dutch leadership is civilian and the Dutch have been successful. However, the government,s credibility is at stake with any military redeployment. The government will decide whether the military will &leave completely8 or &just leave Uruzgan.8

To make the case to the Labor party, the Dutch parliament, and the Dutch people, Koenders said it would be helpful to show greater burden sharing and more collaboration on development aid. President Obama and the new U.S.

Afghanistan strategy are also helpful elements, he added.

&The picture has changed completely.8 In addition, there should be &no mission creep for ISAF8 and UNAMA needs a larger role. On selling the new strategy, Koenders said the

Dutch people would need to see some element of success and a realistic strategy with a final goal that we can achieve.

Koenders wondered whether it made sense for the Netherlands to lead on aid coordination, given its &small8 contributions relative to the United States. However, he said it would be worthwhile to follow up on his good discussions with the previous USAID director, particularly on the disorganized effort in Pakistan.

Â¶ 8. (C) Daalder said that President Obama agrees we need to

establish a realistic exit goal by shifting security to

Afghanistan itself and show some real progress on the ground within 12-18 months in order to sustain political support.

He added we will work on follow-on meetings about development cooperation.

-----------

FM Verhagen

-----------

Â¶ 9. (U) September 3, 2009; Dutch Foreign Ministry; The Hague,

Netherlands.


United States

-------------


Ambassador Daalder



Netherlands

-----------

Maxime Verhagen, Foreign Minister

Mr. Marcel De Vink, Private Secretary to the Minister

Mr. Maarten Boef, Head of MFA Task Force Uruzgan

Â¶ 11. (C) Daalder emphasized the importance of the

Netherlands, decision on Afghanistan: if the Netherlands pulls out, he said, we will not be able to convince Canada to reverse its withdrawal decision and we could then lose the UK in a &domino effect.8 The USG wants to help the Dutch government support an extension of Dutch troops, although

Daalder said &we won,t tell you what to do,8 knowing that public pressure from the U.S. would be self-defeating.

Daalder added we understand the Dutch must withdraw as &lead nation8 in Uruzgan, although with the new ISAF command

Qnation8 in Uruzgan, although with the new ISAF command structure that is less relevant. He said the United States hopes the Dutch will maintain troops in the &four figure8 level, including enablers, F-16s, and medical units, adding that lower profile deployments might be helpful in making the

case to the public. In addition, he said we are making the shift from a direct security role to partnering with the

Afghan National Army (ANA). President Obama,s popularity

THE HAGUE 00000543 003 OF 005 and our new strategy are also key arguments.

Â¶ 12. (C) Verhagen responded, &I am ready to defend a new decision8 on the Netherlands, troop deployment, given the new situation in Afghanistan, the new U.S. president, the new

U.S. strategy in Afghanistan, broader participation by

Allies, and the Netherlands, involvement at the G20.

However, he said, these arguments are not sufficient.

Verhagen said the Dutch government won the vote in parliament by setting a 2010 timetable for pull-out, and needed to show reduced corruption in Afghanistan, better coordination of aid, and a greater role for German and French troops.

Greater contributions from Allies like France and Germany are key for winning votes from the Liberal party (VVD), he explained. Verhagen emphasized that the United States should

&invest in the VVD8 and VVD leaders such as Mark Rutte.

The most recent meeting with VVD leaders regarding Uruzgan

&was not positive.8 (Background: The VVD, or Liberal party, is in the opposition but nonetheless considered essential in supporting an extension, as Dutch governments need to win support of a broad coalition for military deployments. End background.)

Â¶ 13. (S) Daalder concluded with a review of upcoming discussions on NATO,s &strategic concept,8 being headed by former Secretary of State Albright. The group of experts should discuss all issues responsibly, he said; in the past some Allies have hesitated to work on difficult issues.

Verhagen welcomed Daalder,s suggestion, noting that a discussion of Article 5 and &out of area8 initiatives would be key. Verhagen said he supports the German proposal to include disarmament efforts as part of the discussion and said he has blocked internal Dutch discussions on the presence of nuclear weapons in the Netherlands because that is a matter for NATO to consider. However, Verhagen said the

Netherlands is open to frank NATO discussions and is sending a delegation to Washington to discuss nuclear posture (Note:

MOD Policy Director General Lo Casteleijn will lead the delegation on September 9. End note.) Daalder thanked

Verhagen and emphasized that Allied agreements on nuclear weapons in Europe would be indispensable to good transatlantic relations and should include the &Quad,8 weapons-basing countries, and Lithuania, amongst others.

---------------------------------

Lunch with Senior Dutch Officials

---------------------------------

Â¶ 14. (U) September 3, 2009; Societeit de Witte; The Hague,

Netherlands.


United States

-------------


Ambassador Daalder

Captain Daniel Braswell, Defense Attache, Embassy The Hague



Netherlands

-----------

Mr. Karel van Oosterom, PM,s National Security Adviser

Mr. Pieter de Gooijer, MFA DG for Political Affairs

(Political Director)

Mr. Lo Casteleijn, MOD DG for Policy

Lt. Gen. F. Meulman, Deputy Chief of Defense

Mr. Robert de Groot, MFA Deputy Political Director

Mr. Henk Swarttow, MFA Director of Security Affairs

QMr. Henk Swarttow, MFA Director of Security Affairs

Ms. Erica Schouten, MFA Head of NATO Affairs

Mr. Maarten Boef, MFA Head of Uruzgan Task Force

Â¶ 16. (C) Over lunch, Daalder met with the &Triad8 -- the leading Dutch civilian advisers to the Prime Minister,

Foreign Minister, and Minister of Defense -- to emphasize the importance of Dutch contributions in Afghanistan. Daalder

emphasized key points from his discussions with Verhagen and

Koenders (paras 4, 5, and 11 above).

THE HAGUE 00000543 004 OF 005

Â¶ 17. (C) MFA Political Director De Gooijer said Afghanistan is the &most pressing issue8 for the Triad and added &our job is to help our bosses8 -- six ministers -- make a decision.

(Note: The six key ministers are PM Balkenende, Deputy PM and

Finance Minister Bos, Deputy PM and Minister of Youth and

Family Affairs Rouvoet, Foreign Minister Verhagen, Defense

Minister Van Middelkoop, and Development Minister Koenders.

End note.) De Gooijer explained that Dutch leaders are heavily influenced by a clear Afghanistan strategy as well as prospects for success, as well as Dutch domestic politics.

He said the Dutch appreciated U.S. sensitivity in letting the

Dutch make its &own decision.8 In addition, he noted the

Dutch were in a different stage of the decision-making process than the United States: &You have rolled out a new strategy, while we are considering a redeployment; you are engaging in a surge, while we are looking to pull back.

We need to bridge this concept. The Dutch press will also want to know how these results benefit the Netherlands,8 he said.

Â¶ 18. (C) Mr. Van Oosterom, the National Security Adviser equivalent, welcomed President Obama,s remarks on

Afghanistan and emphasized that the United States should avoid public pressure on the Dutch. He said while Dutch government officials would like to see a quick decision on a new Dutch deployment, the decision process would be complex.

Â¶ 19. (C) MOD Policy Director Casteleijn noted there is tremendous Dutch enthusiasm for President Obama. He encouraged continued emphasis on development aid and a

&broad concept8 for the Afghanistan strategy. He suggested avoiding &NATO-ization8 of the Afghanistan mission through greater involvement by the EU, UN, and other international organizations. Waiting 18 months for good results will be risky for the Dutch, he added, given that some Dutch government officials are trying now to extend the deployment

for two years. He also noted there is a perception in the

Netherlands that the Dutch have done &their fair share.8

He said promoting greater contributions from some Allies who haven,t &punched in their weight class8 would be important to demonstrate.

Â¶ 20. (C) Lt. General Meulman said the Dutch military had the capacity to support an extension beyond 2010, although it would be difficult to continue at the same level -- 1,800 troops in Afghanistan -- and it would be difficult to leave some elements like several helicopters for much longer.

Meulman also urged better coordination among ISAF, the UN, and the GOA.

Â¶ 21. (C) MFA Deputy Political Director De Groot added there is significant mixing of strategies, such as counterinsurgency and development. At the same time, he said we have seen disappointing results in state-building and need an overarching development strategy as well as a new Afghanistan

Compact in 2010.

Â¶ 22. (C) Daalder noted President Obama,s strong support for metrics to show results on the ground. He added that

McChrystal,s forthcoming assessment of troops-to-task in

QMcChrystal,s forthcoming assessment of troops-to-task in

Afghanistan may provide the Dutch government with a clearer picture of the way forward and improve civilian and military coordination. He said the Netherlands and Canada have been the most thoughtful of the Allies on a comprehensive approach in Afghanistan, so it would be particularly damaging if they leave the coalition.

Â¶ 23. (C) (Note: In a private discussion after lunch, De

Gooijer encouraged Daalder to ask Secretary Geithner to tell

Finance Minister Bos that the Netherlands would not have a seat in G20 discussions but for its contributions in

Afghanistan. Bos is head of the Labor party and key to the

Dutch cabinet,s decision on Afghanistan (reftel A, B). End

Note.)

Â¶ 24. (C) On NATO generally, Daalder thanked De Gooijer for the choice of former Dutch Shell CEO Jeroen van der Veer as Vice

THE HAGUE 00000543 005 OF 005

Chair of Secretary Albright,s NATO Strategic Concept group of experts. Van der Veer will bring &a breath of fresh air,8 he said, to the discussion. Daalder added the group should address everything, including points of strong disagreement like nuclear weapons, Articles 4, 5, and 10 of the NATO Treaty, and Russia. On NATO-EU cooperation, Daalder said it was likely not productive to castigate Turkey and

Greece as the new SYG had recently done. He suggested that to improve cooperation, NATO and the EU should consider regular, informal meetings to focus the &transatlantic8 discussion and that Sweden,s FM Bildt could help in this role. De Gooijer said FM Bildt could certainly help bring

Sweden into NATO, and any successor to Solana should commit to addressing NATO-EU cooperation. Daalder flagged

Finland,s joining NATO as a future point of contention with

Russia.

-----------------

Speech, Reception

-----------------

Â¶ 25. (C) Ambassador Daalder spoke to a full house at the

Societeit De Witte on the afternoon of September 3. More than 150 members of parliament, journalists, diplomats, academics, and students attended. Responding to questions for a half hour, Daalder explained the new U.S. strategy and priorities in Afghanistan. In one question, former Dutch

Chief of Defense Berlijn urged the United States to pressure the government of Afghanistan to improve its performance and reduce corruption. The new Dutch representative to NATO,

Ambassador Majoor, urged a more integrated approach by NATO to support development and diplomacy. On the evening of

September 3, at a well-attended reception hosted by

Ambassador Levin, Daalder also engaged a similar audience, including the leading foreign policy or defense spokespersons for the major political parties in parliament.

GALLAGHER

Viewing cable 02ANKARA8305,



02ANKARA8305

2002-11-15

12:12

2011-01-18

10:10

SECRET

Embassy

Ankara

P 151240Z NOV 02

FM AMEMBASSY ANKARA

TO SECSTATE WASHDC PRIORITY 6070

INFO AMCONSUL ADANA PRIORITY

AMCONSUL ISTANBUL PRIORITY

Cable dated:2002-11-15T12:40:00S E C R E T SECTION 01 OF 05 ANKARA

008305S/CT FOR REAPE.O. 12958: DECL: 11/14/2012 TAGS: PTER TU

Â¶ 1. (U) CLASSIFIED BY DCM ROBERT S. DEUTSCH; REASONS 1.5 (B) AND (D).

--------

OVERVIEW

--------

Â¶ 2. (U) COMBATING TERRORISM HAS LONG BEEN A PRIORITY FOR THE GOVERNMENT OF

TURKEY (GOT). IN ITS EARLY AND STRONG SUPPORT OF THE COALITION IN THE

GLOBAL WAR AGAINST TERROR AND ITS SUBSEQUENT TAKING-OVER OF ISAF

LEADERSHIP, THE GOT HAS REAFFIRMED ITS COMMITMENT TO FIGHTING DOMESTIC AND

INTERNATIONAL TERRORISM. DOMESTIC AND TRANSNATIONAL TERRORIST GROUPS HAVE

TARGETED TURKS AND FOREIGNERS, OCCASIONALLY INCLUDING USG PERSONNEL, FOR

OVER 40 YEARS. INTERNATIONAL AND DOMESTIC TERRORIST GROUPS OPERATING IN

TURKEY INCLUDE MARXIST-LENINIST, RADICAL ISLAMIST, SEPARATIST, AND PRO-

CHECHEN. IN RESPONSE TO THESE THREATS, GOT HAS DEVELOPED BOTH STRONG

DETERMINATION AND THE CAPABILITY TO FIGHT TERRORISM. TURKEY CONTINUES TO

SUPPORT THE USGâ€™S INTERNATIONAL, COORDINATED APPROACH.

Â¶ 3. (U) FOLLOWING SEPTEMBER 11, 2001, TURKEYâ€™S INTERNAL TERRORIST

ORGANIZATIONS ALTERED THEIR OPERATING PROCEDURES. WITH THE WORLD PUBLIC

OPINION STRONGLY AGAINST TERRORISM AND THE GLOBAL COALITION INCREASING

INTERNATIONAL COOPERATION, THESE ORGANIZATIONS ENTERED INTO A PERIOD OF

LITTLE OR NO ACTION. ACTING AS INTELLIGENCE OPERATIONS, MANY OF THESE

GROUPS HAVE REVERTED TO RECRUITMENT OF SUPPORTERS AND STRATEGY PLANNING.

U.S. DESIGNATED TERRORIST ORGANIZATIONS

Â¶ 4. (U) ON OCTOBER 8, 1997, THE SECRETARY OF STATE NAMED THE SEPARATIST

KURDISTAN WORKERSâ€™ PARTY (PKK) AND THE MARXIST-LENINIST REVOLUTIONARY

PEOPLEâ€™S PARTY/FRONT (DHKP/C, FORMERLY KNOWN AS REVOLUTIONARY LEFT, DEV-

SOL), MAKING THEM SUBJECT TO THE ANTI-TERRORISM AND EFFECTIVE DEATH PENALTY

ACT OF 1996. ON OCTOBER 11, 2001, THE SECRETARY OF STATE RENEWED THOSE

DESIGNATIONS FOR ANOTHER TWO YEARS. (THE PKK HAS SINCE CHANGED ITS NAME TO

THE KURDISTAN FREEDOM AND DEMOCRACY CONGRESS, KADEK.) MARXIST-LENINIST

Â¶ 5. (U) THE MAIN RADICAL-LEFT TERROR ORGANIZATION, DHKP/C, CONDUCTS SMALL-

SCALE OPERATIONS AGAINST TURKS AND FOREIGNERS ALIKE (ARMED ATTACKS ON

UNIFORMED POLICE, SUICIDE AND OTHER BOMBINGS, ASSASSINATIONS). THIS

ORGANIZATION HAS NOT CONDUCTED ANY MAJOR EVENTS WITHIN TURKEY IN 2002,

ALTHOUGH IT CONTINUES TO ORGANIZE ITSELF, PREDOMINANTLY WITHIN EUROPE.

ACCORDING TO GOVERNMENT AUTHORITIES, DHKP/C COOPERATES WITH OTHER GROUPS IN

EUROPE BY PROVIDING SUPPORT, SHELTER, AND ARMS TO EACH OTHERâ€™S

ORGANIZATIONS. TURKISH AUTHORITIES SEIZED DHKP/C WEAPONS FROM A CAR AT THE

KAPIKULE BORDER IN SEPTEMBER 2002. THESE WEAPONS WERE SUPPOSED TO BE USED

IN OPERATIONS CAUSING DISTURBANCES PRIOR TO THE TURKISH NATIONAL ELECTIONS

HELD IN NOVEMBER 2002.

Â¶ 6. (U) OTHER FAR-LEFT TERRORIST ORGANIZATIONS STILL ACTIVE INCLUDE THE

TURKISH COMMUNIST PARTY/MARXIST-LENINIST (TKP/ML), THE TURKISH WORKERSâ€™

AND PEASANTS LIBERATION ARMY (TIKKO), AND THE MARXIST-LENINIST COMMUNIST

PARTY (MLKP). TKP/ML AND TIKKO PRIMARILY OPERATE IN THE AREAS OF ORDU,

TOKAT, AND SAMSUN. MLKP CONDUCTS SMALL-SCALE TERRORIST OPERATIONS, USUALLY

USING PIPE BOMBS, WITHIN METROPOLITAN AREAS. RADICAL ISLAMIST

Â¶ 7. (U) THE PRIME, RADICAL ISLAMIST TERROR GROUP OF TURKEY IS THE TURKISH

HIZBULLAH. ALTHOUGH KNOWN TO FIGHT RIVALS, NAMELY THE PKK AND OTHER RIVAL

ISLAMIC GROUPS, IN FAVOR OF CONFRONTATIONS WITH AUTHORITIES, TURKISH

HIZBULLAH HAS NOT CARRIED OUT ANY MAJOR OPERATIONS IN 2002. IT STAGED A

SPECTACULAR JANUARY 2001 AMBUSH IN DIYARBAKIR THAT TOOK THE LIFE OF

DIYARBAKIR SECURITY DIRECTOR GAFFAR OKKAN AND FIVE OF HIS BODYGUARDS. TWO

UNDERCOVER POLICE WERE KILLED IN ANOTHER HIZBULLAH ATTACK IN OCTOBER 2001.

ACCORDING TO STATE AUTHORITIES, HIZBULLAH CONTINUES TO MAINTAIN ITS

ACTIVITIES ON A THEORETICAL BASIS.

Â¶ 8. (U) OTHER ISLAMIC GROUPS INCLUDE THE GREAT EASTERN RAIDERâ€™S FRONT

(IBDA-C), FEDERAL ISLAMIC STATE OF ANATOLIA (KAPLANCILAR), SELAM GROUP,

ISLAMIC MOVEMENT ORGANIZATION (IHO), THE JERUSALEM WARRIORS, SELEFILER,

SOFULAR, AND BEYYIAT-I EL-IMAM. BOTH IBDA-C AND BEYYIAT-I EL-IMAM ARE KNOWN

TO BE SYMPATHETIC TO AL QAIDA. SEPARATIST

Â¶ 9. (U) KADEK, FORMERLY KNOWN AS THE PKK, REPRESENTS THE LARGEST

SEPARATIST ORGANIZATION GROUP IN TURKEY, THOUGH ITS CAPABILITY TO OPERATE

HAS BEEN DRASTICALLY REDUCED DUE TO VIGOROUS AND ON-GOING COUNTER-

INSURGENCY EFFORTS OF THE TURKISH ARMED FORCES, JANDARMA, TURKISH NATIONAL

POLICE (TNP), AND VILLAGE GUARDS (A PARAMILITARY GUARD FORCE RECRUITED FROM

LOCAL VILLAGERS). THIS EFFORT ULTIMATELY LED TO THE ARREST AND CONVICTION

OF PKK LEADER ABDULLAH OCALAN IN 1999. THE EUROPEAN UNION (EU) DESIGNATED

THE PKK A TERRORIST ORGANIZATION IN MAY 2002.

Â¶ 10. (U) IN APRIL 2002 THE GROUP UNDERWENT A RE-ORGANIZATION AND NAME

CHANGE. RENAMED THE KURDISTAN FREEDOM AND DEMOCRACY CONGRESS (KADEK), THE

ORGANIZATION HAS EXPANDED ITS OPERATIONS BY FOCUSING UPON MORE POLITICAL

ACTIVITIES. KADEK RETAINS THE SAME SYMBOL AND PRESIDENTIAL COUNCIL

MEMBERSHIP OF THE PKK, THOUGH IT HAS EXPANDED THIS COUNCIL TO ELEVEN

INSTEAD OF NINE MEMBERS. ACCORDING TO TURKISH GOVERNMENT EXPERTS AND NGOS,

KADEK ALSO MAINTAINS APPROXIMATELY 500-ARMED MILITANTS IN TURKEY AND UP TO

5000 ARMED MILITANTS IN NORTHERN IRAQ. WHILE THE ORGANIZATION LARGELY

CONTINUES TO FOLLOW THE PKKâ€™S SELF-PROCLAIMED SEPTEMBER 1, 1999, CEASE-

FIRE, IT HAS ISSUED WARNINGS VIA SUPPORTIVE NEWSPAPERS OF FUTURE ARMED

ATTACKS IF CERTAIN ACTIONS ARE NOT TAKEN. SMALL CELLS AND SYMPATHIZERS

REMAIN THROUGHOUT TURKEY, BUT THESE HAVE BEEN SUPPRESSED TO THE POINT THAT

LAW ENFORCEMENT OFFICIALS, RATHER THAN THE MILITARY, OVERSEE MOST

OPERATIONS AND INVESTIGATIONS. CHECHENS IN TURKEY

Â¶ 11. (U) IN APRIL 2002, MUSTAFA YILMAZ SEIZED THE MARMARA HOTEL IN

ISTANBUL AND HELD 13 HOSTAGES FOR APPROXIMATELY TWENTY MINUTES UNTIL HE

SURRENDERED WITHOUT INCIDENT. YILMAZ, WHO IS OF CHECHEN ORIGIN, IS BELIEVED

TO HAVE STAGED THE RAID TO PROTEST RUSSIAN ACTIONS IN CHECHNYA. HE IS

PRESENTLY IN CUSTODY AND ON TRIAL IN THE ISTANBUL BEYOGLU SECOND HEAVY

CRIMINAL COURT UNDER A VARIETY OF CHARGES, ALTHOUGH NOT UNDER TURKEYâ€™S

TOUGH ANTI-TERROR LAW. THIS FOLLOWS AN APRIL 22, 2001, SEIZURE OF

ISTANBULâ€™S SWISS HOTEL BY 13 PRO-CHECHEN TURKISH CITIZENS WHO HELD 150

HOSTAGES, INCLUDING 37 AMERICANS, FOR APPROXIMATELY 12 HOURS. LARGE NUMBERS

OF TURKS, MANY WITH ROOTS IN THE CAUCASUS, ARE SYMPATHETIC TO CHECHEN

AMBITIONS.

Â¶ 12. (U) THE CAPITALIZED TITLES BELOW CORRESPOND TO REFTEL QUESTIONS.

--------------------------------------------- ------

GOT ACTIONS SUPPORTING THE GLOBAL COALITION AGAINST TERRORISM (A)

--------------------------------------------- ------

Â¶ 13. (U) TURKISH SUPPORT FOLLOWING THE ATTACKS OF SEPTEMBER 11 CEMENTED

GOTâ€™S COMMITTED POLICY ON FIGHTING TERROR. GOT ISSUED STRONG PUBLIC

STATEMENTS CONDEMNING THE ATTACKS. IN THE FACE OF STRONG PUBLIC OPPOSITION,

PARLIAMENT, UNDER THE LEADERSHIP OF PM ECEVIT, PASSED A RESOLUTION ALLOWING

THE GOVERNMENT TO SEND TURKISH TROOPS ABROAD AND TO PERMIT THE STATIONING

OF FOREIGN TROOPS ON TURKISH SOIL IN SUPPORT OF OPERATION ENDURING FREEDOM

(OEF). TURKEY WAS ONE OF THE FIRST COUNTRIES TO CONTRIBUTE FORCES TO ISAF

AND ASSUMED THE LEADERSHIP ROLE IN JUNE 2002.

Â¶ 14. (U) THE ARREST OF THREE AL QAIDA SUSPECTS IN THE SOUTHEASTERN CITY OF

VAN IN FEBRUARY 2002 AND ONE IN ISTANBUL IN AUGUST 2002 HIGHLIGHT TURKISH

NATIONAL POLICE (TNP) EFFORTS TO COMBAT TERRORISM. FIRAS SULEYMAN, YUSUF

SALIM HUSAYN, AND AHMAD MAHMUD WERE ARRESTED AND CHARGED WITH ENTERING

TURKEY ILLEGALLY VIA IRAN IN FEBRUARY 2002. MEMBERS OF BAYT AL-IMAM, A

JORDANIAN GROUP WITH CLOSE TIES TO AL QAIDA, THE THREE MEN WERE FOUND TO

HAVE MET AND RECEIVED MATERIAL SUPPORT FROM USAMA BIN LADEN AND HAD BEEN

PLANNING BOMBING ATTACKS ON ISRAELI AND US TARGETS IN THE MIDDLE EAST.

THESE MEN WERE RETURNED TO JORDAN IN SEPTEMBER 2002. AHMET ABDULLAH WAS

ARRESTED IN ISTANBUL IN AUGUST 2002 AFTER AN OPERATION CONDUCTED BY THE

ISTANBUL SECURITY FORCES BECAUSE OF HIS LINKS TO BAYT AL-IMAM.

Â¶ 15. (U) TURKEY HAS FULLY COMPLIED WITH UN SECURITY RESOLUTION 1373,

RATIFYING ALL UNITED NATIONS CONVENTIONS ON COMBATING TERRORISM. THE

COUNCIL OF MINISTERS HAVE FROZEN THE ASSETS OF THOSE TERRORIST

ORGANIZATIONS, PERSONS, AND ENTITIES FOUND ON UN SECURITY COUNCIL

RESOLUTIONS BY ISSUING A DECREE TO FREEZE ALL FUNDS AND RELATED ASSETS. THE

INITIAL DECREE, NO. 2001/2483, DATED DECEMBER 22, 2001, HAS BEEN UPDATED BY

NO. 2002/3873, DATED MARCH 21, 2002, AND NO. 2002/4206, DATED MAY 16, 2002.

-----------------------------------

RESPONSE OF THE JUDICIAL SYSTEM (B)

-----------------------------------

Â¶ 16. (U) STATE SECURITY COURTS (DGM) IN EIGHT PROVINCES, WITH JURISDICTION

FOR ALL CRIMES THAT FALL WITHIN THE PURVIEW OF THE ANTI-TERROR LAW, TAKE A

VIGOROUS APPROACH TOWARDS PROSECUTING TERROR-RELATED CRIMES. AVERAGE TRIAL

TIMES RUN MORE THAN A YEAR, AND DEFENDANTS ARE USUALLY INCARCERATED DURING

THEIR TRIALS.

Â¶ 17. (U) ABDULLAH OCALAN, THE LEADER OF THE PKK CONVICTED OF TREASON IN

JUNE 1999 AND SENTENCED TO DEATH. FOLLOWING THE EU REFORM PACKAGE PASSED BY

THE TURKISH GRAND NATIONAL PARLIAMENT IN AUGUST 2002 OUTLAWING THE DEATH

PENALTY, OCALANâ€™S SENTENCE WAS CONVERTED TO LIFE IN PRISON.

-----------------------------------------

EXTRADITION OF SUSPECTED TERRORISTS (C/D) ---------------------------------

--------

Â¶ 18. (U) IN 2002, THE REPUBLIC OF TURKEY DID NOT SEEK THE EXTRADITION OF

ANY SUSPECTS FROM THE UNITED STATES ON TERROR-RELATED CHARGES, NOR DID THE

UNITED STATES SEEK THE EXTRADITION OF SUCH SUSPECTS FROM TURKEY. THERE ARE

NO IMPEDIMENTS TO HOST GOVERNMENT PROSECUTION AND/OR EXTRADITION OF

SUSPECTED TERRORISTS.

Â¶ 19. (U) IN THE PAST, TURKEY HAS FACED DIFFICULTY IN EXTRADITING TERROR-

RELATED SUSPECTS FROM EUROPEAN COUNTRIES. ACCORDING TO GOVERNMENT

OFFICIALS, TURKEY HAS REQUESTED THE EXTRADITION OF 245 HIGH LEVEL

ADMINISTRATORS FOR TERRORIST ORGANIZATIONS SINCE 1991. SYMPATHY WITH

KURDISH POLITICAL AND CULTURAL ASPIRATIONS IN SOME EUROPEAN STATES,

ALLEGATIONS OF TORTURE BY TURKISH OFFICIALS, AND TURKEYâ€™S LEGAL PROVISION

FOR THE DEATH PENALTY HAVE ALL PROVED IMPEDIMENTS TO SUCH EXTRADITIONS.

HOWEVER, IN AUGUST 2002, AS A PART OF THE EUROPEAN UNION REFORM PACKAGE,

THE TURKISH PARLIAMENT PASSED A LAW BANNING THE USE OF THE DEATH PENALTY.

------------------------------------

RESPONSES OTHER THAN PROSECUTION (E)

------------------------------------

Â¶ 20. (U) TURKS SEE THEMSELVES TO BE AMONG THE WORLDâ€™S PRIMARY VICTIMS OF

TERRORISM. THEY CITE THE 15-YEAR INSURGENCY OF THE KURDISTAN WORKERSâ€™

PARTY (PKK), AND THE WORLDWIDE ASSASSINATION CAMPAIGN AGAINST THE TURKISH

DIPLOMATS AND THEIR FAMILIES BY ARMENIAN ACTIVISTS OF THE 1970S AND 1980S.

THEY HAVE LONG COMPLAINED ABOUT LIBERAL EUROPEAN COUNTRIESâ€™ HARBORING

KURDISH (PKK), LEFTIST (DHKP-C) AND ISLAMIST (HIZBOLLAH, KAPLANISTS)

â€œTERRORISTS.â€ THEY FEEL OTHER NATIONS DO NOT APPRECIATE TURKEYâ€™S

SUFFERING AT THE HANDS OF THESE PARTIES. THUS, THE TURKISH GOVERNMENT AND

MEDIA WERE QUICK TO RESPOND TO THE EVENTS OF SEPTEMBER 11. AT ALL LEVELS,

THERE WAS AN OUTPOURING OF SYMPATHY AND SOLIDARITY. BUT THERE WAS ALWAYS

THE CONSTANT REMINDER THAT NOW OTHERS WERE BEGINNING TO EXPERIENCE WHAT

TURKS HAD LIVED WITH FOR YEARS. TURKEYâ€™S PRE-9/11 HISTORIC COOPERATION

WITH THE US IN LAW ENFORCEMENT, MILITARY AND INTELLIGENCE ACTIVITIES HAS

ONLY INCREASED IN THE LAST YEAR WITH PUBLIC COMMITMENTS OF SUPPORT FOR THE

GLOBAL WAR ON TERRORISM FROM THE PRESIDENT, THE PRIME MINISTER AND THE

MILITARY. THERE HAS BEEN VERY VISIBLE SUPPORT FOR THE SECURITY OF AMERICANS

AT OUR MISSIONâ€™S BUILDINGS BY LOCAL POLICE. AS THE STORM BROKE ON THE

NOVEMBER 17 ARRESTS IN GREECE, THERE WAS INTENSE COVERAGE WITH A NEW â€œI

TOLD YOU SOâ€ IMPLICATION IN THE GOVERNMENT PRINT MEDIA.

Â¶ 21. (U) THE TURKISH STAND ON TERRORISM HAS BEEN â€œSOFTERâ€ IN THE CASE

OF THE CHECHENS. CHECHENS ARE, OF COURSE, MUSLIMS AND THERE ARE CULTURAL

TIES BETWEEN TURKS AND CHECHENS AND LONG TIME RIVALRY WITH RUSSIA. THE

ARMED, BUT NOT VIOLENT, TAKEOVERS OF A FERRYBOAT IN 1996 AND A HOTEL IN

2001 IN ISTANBUL WERE TREATED MORE LIKE PROTESTS THAN LIKE TERRORIST

ATTACKS BY THE MEDIA. THAT CHANGED WITH THE OCTOBER 23, 2002 CAPTURE OF A

THEATER IN MOSCOW WITH OVER ONE HUNDRED DEAD. TURKEY DID CONDEMN THE

HOSTAGE-TAKING, BUT WITH THE MEDIA STILL ADDRESSING THE SUFFERING OF THE

CHECHEN PEOPLE.

Â¶ 22. (U) TURKEY HAS A FREE PRESS. IN THE LEFTIST AND ISLAMIC FRINGE PRESS,

CHECHEN REBELS, PALESTINIAN SUICIDE BOMBERS AND EVEN AL QAIDA MEMBERS CAN

BE PORTRAYED AS â€œFREEDOM FIGHTERS.â€ TERRORISM HAS LONG BEEN AN

INTEREST OF ACADEMICS AND WRITERS IN TURKEY. IN RECENT YEARS THERE HAVE

BEEN SEVERAL CONFERENCES ON THE TOPIC. THOSE ORGANIZED BY INSTITUTIONS OF

THE STATE HAVE BEEN SEEN AS TOOLS IN THE FIGHT AGAINST TERRORISM.

PRIVATELY-FUNDED ACADEMIC PROGRAMS HAVE BECOME MORE FOCUSED ON ANALYSIS OF

THE IMPACT OF TERRORISM AND THE ROOT CAUSES OF TERRORISM.

---------------------------------------------

MAJOR COUNTERTERRORISM EFFORTS BY THE GOT (F) -----------------------------

----------------

Â¶ 23. (U) THE GOVERNMENT OF TURKEY CONTINUED ITS AGGRESSIVE

COUNTERTERRORISM EFFORTS IN 2002. FOR EXAMPLE, IN A JOINT OPERATION, THE

TURKISH CUSTOMS GUARD AND THE NATIONAL INTELLIGENCE AGENCY (MIT) SEIZED

NINE KALASHINIKOV RIFLES AND ONE SCORPION ASSASSINATION PISTOL WITH

SILENCER FROM A CAR AT THE KAPIKULE BORDER GATE IN SEPTEMBER 2002. THESE

WEAPONS ARE BELIEVED TO HAVE BEEN INTENDED TO BE DELIVERED TO THE DHKP/C TO

BE USED IN SUPPOSED OPERATIONS TO CREATE DISTURBANCES PRIOR TO THE TURKISH

GENERAL ELECTIONS HELD IN NOVEMBER 2002.

Â¶ 24. (U) ADDITIONALLY, THE GOT APPREHENDED THREE SUSPECTED AL QAIDA

OPERATIVES NEAR THE IRANIAN BORDER (NEAR VAN). THE GOT FOLLOWED UP BY

ARRESTING DOCUMENT FORGERS ASSOCIATED WITH THE THREE, NEAR BURSA IN

NORTHWESTERN TURKEY.

Â¶ 25. (U) THE GOT CONTINUES ITS ACTIVE SUPPRESSION OF THE PKK/KADEK, THOUGH

ITS SECURITY OPERATIONS TEMPO HAS BEEN SIGNIFICANTLY REDUCED IN LINE WITH A

REDUCTION IN THE CONFLICT. IT CONTINUES TO MONITOR THE ORGANIZATIONâ€™S

POLITICAL MOVEMENTS IN AN EFFORT TO STEM ANY POTENTIAL DISTURBANCES.

------------------------------------

GOVERNMENT SUPPORT FOR TERRORISM (G) ------------------------------------

Â¶ 26. (U) THE GOT CONSISTENTLY AND STRONGLY OPPOSES BOTH DOMESTIC AND

INTERNATIONAL TERRORISM. TURKEY DOES NOT VIEW ITS MAINTENANCE OF DIPLOMATIC

OR ECONOMIC/COMMERCIAL RELATIONS WITH CUBA, IRAN, IRAQ, LIBYA, SUDAN, AND

SYRIA AS CONSTITUTING SUPPORT FOR INTERNATIONAL TERRORISM.

--------------------------------------------- -

SUPPORT STATEMENTS FOR TERRORIST COUNTRIES (H) ----------------------------

----------------- -

Â¶ 27. (U) TURKEY SHARES BORDERS WITH, AND HAS BEEN AN HISTORIC TRADING

PARTNER OF SYRIA, IRAN AND IRAQ. IT BALANCES A CONDEMNATION OF TERRORIST

ACTIVITIES IN THOSE COUNTRIES (INCLUDING PROVIDING HAVENS FOR THE PKK) WITH

THE NEED TO ACCESS HISTORIC TRADE ROUTES. THUS TURKEY WILL PROVIDE BASES

FOR OPERATION NORTHERN WATCH WHILE AT THE SAME TIME SENDING LARGE TRADE

DELEGATIONS TO BAGHDAD AND TEHRAN. PUBLIC STATEMENTS AGAINST STATE-

SUPPORTED TERRORISM ARE CLEAR.

--------------------------------------------- ---------

SIGNIFICANT CHANGES IN ATTITUDES TOWARDS TERRORISM (I) --------------------

------------------------- ---------

Â¶ 28. (U) SINCE THE ATTACKS OF SEPTEMBER 11, THE GOT HAS TAKEN AN ACTIVE

ROLE IN THE WORLDWIDE OPPOSITION AGAINST TERRORISM. IN MAY 2002 THE

EUROPEAN UNION PLACED THE PKK AND DHKP/C ON ITS LIST OF TERRORIST GROUPS

AFTER AN INTENSIVE PUSH BY THE GOT FOR THE EU TO ADOPT TOUGHER MEASURES

AGAINST TURKISH TERROR GROUPS OPERATING IN EUROPE. IT CONTINUES TO PRESS

THE INTERNATIONAL COMMUNITY TO RECOGNIZE KADEK AS THE SUCCESSOR OF THE PKK

AND THUS A TERRORIST ORGANIZATION.

--------------------------------------------- ------------

USG COUNTERTERRORISM EFFORTS AND INITIATIVES WITH GOT (J) -----------------

---------------------------- ------------

Â¶ 29. (U) TURKEY REMAINS A STAUNCH ALLY IN THE WAR ON TERRORISM. IN THE

FACE OF STRONG PUBLIC OPPOSITION, PARLIAMENT, UNDER THE LEADERSHIP OF PM

ECEVIT, PASSED A RESOLUTION ALLOWING THE GOVERNMENT TO SEND TURKISH TROOPS

ABROAD AND TO PERMIT THE STATIONING OF FOREIGN TROOPS ON TURKISH SOIL TO

SUPPORT OEF. AFTER THE PASSAGE OF THE RESOLUTION, TURKEY OFFERED A 90-MAN

SPECIAL OPERATIONS UNIT FOR DUTY IN AFGHANISTAN. THE TURKISH NATIONAL

POLICE (TNP) CONTINUE TO PROVIDE EXCELLENT PROTECTION OF US DIPLOMATIC AND

MILITARY FACILITIES THROUGHOUT TURKEY.

Â¶ 30. (U) IN 2002, TURKEY RATIFIED THE UN CONVENTION ON SUPPRESSION OF

TERRORIST FINANCING. IN ACCORDANCE WITH THIS CONVENTION, TURKEY ADDS TO ITS

DOMESTIC ASSET FREEZE LIST ALL NAMES ADDED TO THE ASSET FREEZE LIST

MAINTAINED BY THE UN SANCTIONS COMMITTEE UNDER UNSCRS 1267 AND 1373.

Â¶ 31. (U) TURKEY IS ALSO AN ACTIVE PARTICIPANT IN THE DEPARTMENTâ€™S ANTI-

TERRORISM ASSISTANCE PROGRAM. SINCE 1999, THE TURKS ACCEPTED ELEVEN ATA

COURSES, TO INCLUDE A SENIOR LEVEL FINANCIAL UNDERPINNINGS OF TERRORISM

SEMINAR AND A FOLLOW-ON FINANCIAL UNDERPINNINGS OF TERRORISM SEMINAR FOR

INVESTIGATORS. (INFORMATION FOR THE REPORTâ€™S CLASSIFIED ANNEX)

Â¶ 32. (S) THE TURKISH MILITARY HAS ALSO OFFERED THE USE OF AN ADDITIONAL

AIRBASE TO LIGHTEN THE LOAD ON INCIRLIK AFB AND EASED FLIGHT RESTRICTIONS

TO EASE US SUPPORT OF FORCES OPERATING IN AFGHANISTAN. OTHER TURKISH

ACTIONS IN SUPPORT OF OEF INCLUDE: - ONE OF THE FIRST COUNTRIES TO

AUTHORIZE DEPLOYMENT OF TROOPS ABROAD AND STATIONING OF ADDITIONAL FOREIGN

TROOPS IN TURKEY IN SUPPORT OF THE GLOBAL WAR ON TERRORISM; - ONE OF THE

FIRST COUNTRIES TO OFFER SPECIAL OPERATIONS FORCES (OFFER OF 90) -

ALLOWED THE US TO USE INCIRLIK AIR BASE AS THE KEY TRANSIT POINT FOR

HUMANITARIAN AND OTHER FORMS OF ASSISTANCE (INCLUDING LETHAL MUNITIONS) TO

THE NORTHERN ALLIANCE AND US SPECIAL OPERATION FORCES IN AFGHANISTAN; -

OFFERED THE USE OF ADDITIONAL AIR BASES IN TURKEY FOR OEF-RELATED

OPERATIONS; - AUTHORIZED THE US TO USE INCIRLIK AIR BASE TO TRANSIT

TALIBAN AND AL-QAIDA DETAINEES FROM AFGHANISTAN TO GTMO; - STREAMLINED

CUSTOM PROCEDURES AND GRANTED BLANKET OVERFLIGHT CLEARANCES FOR US OEF-

RELATED AIRCRAFT (OVER 5,000 FLIGHTS TO DATE); - PROVIDES KC-135 TANKER

SUPPORT AND BASING FOR THE WAR ON TERRORISM. TURKEY ALREADY HAS CONTRIBUTED

CLOSE TO 80 KC-135 OEF-RELATED MISSIONS FROM TURKEY.

------------------------------------------- COOPERATION-

INVESTIGATION/PROSECUTION (K/1) -------------------------------------------

(INFORMATION FOR THE REPORTâ€™S CLASSIFIED ANNEX)

Â¶ 33. (C) THE MUTUAL LEGAL ASSISTANCE TREATY BETWEEN THE UNITED STATES AND

TURKEY, WHICH ENTERED INTO FORCE IN JANUARY 1981, GOVERNS INVESTIGATIVE

COOPERATION. THE GOT HAS PROCESSED REQUESTS FOR INVESTIGATIVE ACCESS TO

EVIDENCE UNDER THIS TREATY. HOWEVER, IN SOME CASES THE GOT HAS LEFT

REQUESTS UNANSWERED FOR OVER THREE YEARS. CONSULTATIONS BETWEEN THE TURKISH

MINISTRY OF JUSTICE AND UNITED STATES DEPARTMENT OF JUSTICE CONTINUE IN AN

EFFORT TO STREAMLINE THE PROCESS.

----------------------------

COOPERATION-PREVENTION (K/2)

----------------------------

Â¶ 34. (U) THE GOT COORDINATES CLOSELY WITH THE USG ON ANTI-TERRORIST

FINANCING INITIATIVES. IN RESPONSE TO USG REQUESTS TO FREEZE TERRORIST-

RELATED FINANCIAL ASSETS, THE GOT HAS ADDED TO ITS DOMESTIC ASSET FREEZE

LIST ALL NAMES OF INDIVIDUALS AND FIRMS RELATED TO UNSCRS 1267 AND 1373

(NAMES RELATED TO FINANCING OF TALIBAN AND AL-QAIDA.) THE GOT ALSO

INVESTIGATES THESE NAMES AND FREEZES ASSETS FOUND IN TURKEY. TO DATE, THESE

EFFORTS HAVE RESULTED IN FREEZING ABOUT USD 2 MILLION IN FINANCIAL ASSETS

OWNED BY AN INDIVIDUAL ON AN USG EXECUTIVE ORDER FREEZE LIST. THE GOT IS

REVIEWING THE POSSIBILITY OF AMENDING ITS LEGAL PROCESS FOR FREEZING

FINANCIAL ASSETS IN ORDER TO FACILITATE QUICK REACTION TO NEW INFORMATION.

--------------------------------------------- -----

COOPERATION DURING PAST FIVE YEARS- PREVENTION (L) ------------------------

--------------------- -----

Â¶ 35. (U) OVERALL, IN THE LAST FIVE YEARS, THE GOT HAS WORKED CLOSELY WITH

THE USG IN THE APPREHENSION, CONVICTION, AND PUNISHMENT OF THOSE

RESPONSIBLE FOR TERRORIST ATTACKS IN TURKEY. GOT RESPONSE IS ALWAYS

IMMEDIATE AND SUBSTANTIAL WHEN ALERTED TO THREAT OR INCIDENT INVOLVING US

INTERESTS. PEARSON




06ANKARA331

2006-01-30

13:01

2011-01-18

10:10

SECRET

Embassy

Ankara


Cable dated:2006-01-30T13:38:00S E C R E T SECTION 01 OF 05 ANKARA 000331

SIPDISE.O. 12958: DECL: 01/27/2016 TAGS: MARR MASS MOPS PREL PGOV TU IZ AF

RU

Â¶ 1. (S) SUMMARY: Your visit to Turkey comes at an important time. The tone of the relationship has been improving since PM Erdogan,s visit to

Washington last June, but Iraq continues to dominate our agenda, including

Turkey,s concerns regarding the PKK, the Iraqi Kurds, independence aspirations, and the fortunes of Ankara,s perceived constituents, the Iraqi

Turkmen. While the Nov. 9-10 High Level Defense Group (HLDG) meetings in

Ankara ) the first in two years ) helped move our defense dialogue away from â€œall Iraq all the time,8 the issues have not gone away. You will want to acknowledge Turkey,s contribution to the war in Iraq and the overall Global War on Terrorism (GWOT): the logistics hub at Incirlik, the

Habur Gate GLOC, Turkey,s military and reconstruction contributions to

Afghanistan and engendering regional cooperation in the Black Sea. It will be important to respond to complaints about US inaction against the PKK in

Iraq by pointing to what we are doing to help Turkey to combat the PKK elsewhere and in other areas of the GWOT. Your visit also provides an opportunity to foster an atmosphere of increased engagement and cooperation in the near future. END SUMMARY.

Â¶ 2. (S) We arenâ€™t out of the woods yet, but our bilateral relationship is on the upswing from the trough that deepened in fall 2004 with MNF-I operations in Tal Afar and Fallujah, repeated Turkish truck driver abductions and killings, and factually incorrect and biased Turkish press coverage which Turkish officials failed to refute and in some cases abetted. Despite the continued unpopularity of the war in Iraq (over 95% of the population opposes the war) this no longer dominates the news. Then

DCHOD GEN Basbug took the first step toward improving relations in a

January 26, 2005 nationally-televised press conference, in which he underscored the importance of the bilateral relationship. Following US and

Turkish media stories in February 2005 about deteriorating bilateral relations, NSC Sec Gen Alpogan, FM Gul and others scrambled to match GEN

Basbugâ€™s words. In an April speech to the Istanbul War Academy, CHOD GEN

Ozkok called the bilateral relationship &too broad and important to be defined by one issue.

8 With the visits of PM Erdogan, FM Gul and DCHOD Basbug to Washington in early June, the Sept. 8-9 visit of GEN Jones and then-CENTCOM Deputy

Commander LTG Smith, the Sept. 24 visit to Ankara of APNSA Hadley, the

December visits to Ankara of FBI Chief Mueller and CIA Director Goss, and most recently the Jan. 17 visit of EUCOM Deputy Commander GEN Wald, both sides have demonstrated our commitment to rebuild our historically strong ties through concrete actions and by improving the tone of our public statements.

PKK -- GETTING CREDIT WHERE CREDIT IS DUE ---------------------------------

--------

Â¶ 3. (S) TGS Deputy Chief GEN Kosaner did not raise the PKK with EUCOM DCDR

GEN Wald on January 17 and may not with you. However, the PKK was one of the themes of TLFC Commander GEN Buyukanitâ€™s counterpart visit to the US in December, and he may raise the terrorist groupâ€™s presence in Northern

Iraq with you. Your response should point to what we have done and what we have offered to do to address the PKK problem more widely. During the

September visit of Generals Jones and Smith, TGS rejected EUCOMâ€™s offer of aerial surveillance inside Turkey, but welcomed CENTCOMâ€™s offer to continue aerial overflights of PKK camps on the Iraqi side of border; CF now carry out flights every two weeks. Turkey accepted EUCOMâ€™s offer of

Information Operations (IO) support; EUCOM staff is developing an interagency proposal that will assist TGS/MFA in developing a more effective IO program. TGS also welcomed an enhanced intelligence-sharing program on an intermittent basis tied to specific Turkish operations.

Indications are the intelligence provided was beneficial to GOT. CENTCOM offered to expand the list of PKK HVI on the CENTRIX system and to

facilitate TU/IZ mil-mil contacts, which may include joint border patrols.

These offers remain under discussion, but will likely not bear fruit in the short term.

Â¶ 4. (C) The interagency initiative to partner with Turkey and the

Europeans to pursue law enforcement cases against the PKK is continuing. A

CIA/DIA/FBI/DOJ/Treasury team visited Ankara in December; they and the

Turks identified two PKK operatives in Europe to pursue together. Your interlocutors may complain about the absence of kinetic action against the

PKK, but we have a good story to tell and we should tell it.

Â¶ 5. (S) Despite our efforts, with PKK attacks continuing to cause casualties among Turkish military personnel, the Turkish public and the political class continue to clamor for US military action in Iraq against the PKK, or for a Turkish cross-border operation. There is widespread public belief that lack of US action against the PKK is â€œpunishmentâ€ for Turkeyâ€™s March 2003 failure to give permission for US forces to transit Turkey en route to Iraq.

SPECIAL FORCES RE-ENGAGEMENT

----------------------------

Â¶ 6. (S) One of the casualties of the Iraq war was the relationship between our Special Forces (SF). The July 4, 2003 Suleymaniyah incident in which US forces hooded and handcuffed Turkish SF officers remains a wound in

Turkeyâ€™s military and national pride and with the Turkish public that will possibly take a generation to fully heal. We welcomed the Joint Staff invitation to Turkish Special Forces for a Washington Sept. 19-27 visit to begin to restore that once close relationship, and we continue to support a

SOCEUR-initiated SF JCET originally scheduled for March 2006, though budgetary constraints may force a postponement. Additionally, Turkish Land

Forces Commander GEN Yasar Buyukanit has just returned from the first

Counterpart Visit (CPV) with the U.S. Army Chief of Staff in nine years.

GEN Buyukanit was accorded full military honors and had a substantive program as well. We believe that visit will contribute greatly to restoring post-OIF army to army relations.

BEHIND THE SCENES INVOLVEMENT IN IRAQ

-------------------------------------

Â¶ 7. (SBU) Despite the unpopularity of the Iraq war, Turkey has provided significant logistical support to both Operation Iraqi Freedom and to OEF in Afghanistan. Turkey has approved multiple requests for the use of

Incirlik Air Base, including: a tanker refueling operation which has delivered over 28 million gallons since operations began in 2003 and flown over 2,600 sorties; the transit of 8,500 US troops on rotation from Iraq from January through April 2004; and the establishment in May 2005 of a logistics hub which allows 6 US military C-17 aircraft to move the amount of cargo it took 9-10 military aircraft to move from Germany. This hub has facilitated the movement of 41,339 tons of supplies since its inception; flown 1280 C-17 sorties; received 577 wide-bodies cargo aircraft; and

houses 150 TDY support personnel. Turkey also approved the use of hub flights for the emergency evacuation of US soldiers from Iraq.

Â¶ 8. (SBU) The Habur Gate, the only border crossing from Turkey into Iraq, provides 25% of fuel shipments to Coalition forces in Iraq and two-thirds of gasoline and diesel fuel shipments for the Iraqi people. Significant shipments of food and water for coalition forces also pass over the border.

Â¶ 9. (SBU) The Turkish government has also demonstrated its support through its public announcements of support for the recent elections; its plans to re-open its consulate in Mosul in early 2006; provision of training in

Turkey for Iraqi diplomats, political parties, and (as part of the NATO training mission) Iraqi Security Forces; hosting a conference for Iraqi constitution drafters in July, and a meeting of Iraqi Sunni leaders with

Ambassador Khalilzad in Istanbul in December.

Â¶ 10. (C) Turkey currently maintains approximately 1300 of its own forces in Northern Iraq in camps established prior to OEF. These forces contain elements of armor, mechanized infantry, commando, and Special Forces units commanded by the Turkish Special Forces Brigade HQ located in Silopi,

Turkey. This HQ also provides Turkish LNO teams to Coalition HQs in Kirkuk,

Mosul, and Tal Afar while hosting a US Liaison officer and NCO at the HQ in

Silopi.

PARTNER IN GWOT

---------------

Â¶ 11. (S/NF) Beyond its support for Iraq, Turkey has provided valuable assistance and cooperation to the GWOT. On Aug. 8, Turkey completed its second International Security Assistance Force (ISAF) command (II and VII) in Afghanistan, which it held for six months and during which time it contributed over 1,600 troops. Turkey, France and Italy have agreed on an eight month rotating command of the ISAF Kabul Regional Command starting the second half of 2006. The GOT permits OEF detainees (Operation

Fundamental Justice Flights) to transit Incirlik AB. Turkey also contributes to reconstruction and training efforts in Afghanistan. It is involved in the reconstruction of schools and is exploring counternarcotics training programs for Afghan police and alternative livelihood options for poppy farmers. Following PM Erdoganâ€™s May 2005 visit to

Afghanistan, the GOT increased its reconstruction budget for Afghanistan ten-fold, to $100 million. Turkey continues to provide significant personnel and assets for Operation Active Endeavor, KFOR, and Operation

Althea.

Â¶ 12. (U) Together with the US, Turkey coordinates military assistance to

Georgia and Azerbaijan, improving their abilities to protect key energy transport routes. Turkey subscribes to every security arrangement it is eligible to join, including the Proliferation Security Initiative (PSI). It will host the first PSI combined air, land and sea exercise (ANATOLIAN

DEER) in May 2006 and the US is committed to participate in both the

Command Post Exercise and the Live Exercise.

Â¶ 13. (C) Turkey continues to resist significant cooperation on Black Sea maritime security outside the context of BLACKSEAFOR and Operation BLACK

SEA HARMONY (OBSH). The Turks argue that an active U.S./NATO role would be threatening to the Russians, who might respond negatively. That said, they raise no objection to our naval engagement in the region provided we abide by the Montreux Convention which imposes restrictions on Bosporus Straits passage.

Â¶ 14. (C) While U.S. Navy ship visits to Turkey fell drastically in 2004 and 2005, with only four port visits each year, 2006 looks more promising.

CVN 71 Theodore Roosevelt and CG 56 San Jacinto are conducting a port visit in Marmaris during February with another port call proposed for DDG 51 USS

Burke later in the month. The July 2005 visit of the LPD USS Nashville to the port of Aksaz included the embarkation of 30 Turkish Naval Infantry for training while continued use of Mersin port by coalition fuel tankers are essential for fuels flowing into Iraq.

IRAN AND SYRIA

--------------------------------------------- ---

Â¶ 15. (S) Turkeyâ€™s watchword for both Syria and Iran is â€œengagement.â€

While the military and Ministry of Foreign Affairs are concerned about the dangers of the Iranian nuclear program, PM Erdoganâ€™s pro-Islam Justice and Development Party (AKP) government is not yet convinced. PM Erdogan told EU Ambassadors on January 20 that he does not believe Iran intends to develop nuclear weapons; one of his advisors had indicated the same sentiment one day prior. Part of the Turkish governmentâ€™s motivation is a desire not to jeopardize its nascent trade development opportunities, including energy, or its renewed intelligence exchange with Iran on the

PKK. Some AKP elements even admire Iranâ€™s efforts to obtain nuclear weapons. According to TGS, Turkey and Iran began sharing intelligence this summer on the PKK, holding regular meetings at the border. As of September,

Iran had turned over 40 suspected PKK members or sympathizers. Turkey touts its support for the EU-3 dialogue and multilateral efforts through the

IAEA. Turkish officials stress to us the need to maintain dialogue and to identify a diplomatic solution. The tepid Turkish response to Iranian

President Ahmedinejadâ€™s initial statement about wiping Israel off the map have been followed equally weak statements against the re-start of Iranâ€™s uranium enrichment program. However, recent equivocation on whether or not

Turkey is planning for a visit by Ahmedinejad demonstrates that Turkey is trying to walk both sides of the line on Iran. Turkeyâ€™s tack toward Syria is much the same. They and others in the government regularly urge US engagement and stress the need to deal directly with, and support Asad ) whom they see as reform minded - against the hardline Ba,athists in the regime who seek to undermine him.

DEFENSE INDUSTRY COOPERATION WEAK

---------------------------------

Â¶ 16. (SBU) Historically the strongest area of our bilateral relationship, security cooperation, is significantly declining. Under Turkeyâ€™s current policy, the emphasis is on Direct Commercial Sales at the expense of

Foreign Military Sales and American companies are having difficulty

competing. The last significant commercial tender won by a U.S. firm was the 2002 win by Boeing for an Air Early Warning and Control (AEW&C) system.

In early 2004, SSM (the Defense Industries Undersecretariat ) Turkey,s major procurement agency) cancelled three tenders (UAVs, Main Battle Tanks and attack helicopters) all of which had American companies in contention.

General Atomics (UAVs) and General Defense (tanks) have both pulled out of

Turkey.

Â¶ 17. (SBU) The revised ATAK Helicopter tender was issued in February 2005 and was the first to contain new standard (i.e., non-negotiable) terms and conditions (T&Cs). (Note: The first tender was issued in 1995 and won by

Bell Textron. SSM cancelled it over technology transfer issues. End Note.)

The three US firms that took the tender (Bell, Boeing, Sikorsky) found the new T&Cs so onerous that they were unable to justify participation.

Â¶ 18. (SBU) The GOT,s goal is to develop an indigenous defense industry that can supply a significant portion of the Turkish military,s requirements, and has outlined an aggressive timetable to do so. To meet that schedule, SSM recently began requiring companies to confirm at the time of bid submission the host governmentâ€™s willingness to allow transfer of the required technology. Although SSM understands the USG will not guarantee approval of technology transfer before a contract is signed,

SSM has refused to revise the tender to remove that requirement. MND and

SSM are requiring similar T&Cs on other tenders and American companies are frustrated. We have raised our concerns about the negative impact of the

SSM program on US participation in the Turkish defense market with FM Gul,

CHOD Ozkok, MND Gonul, the service chiefs and others. Across the board, the military pledged their preference for US equipment but professed an inability to influence the process.

AIRSPACE MANAGEMENT

-------------------

Â¶ 19. (SBU) We are currently working with the GOT on some airspace management issues in northern Iraq. Over a 60 day period this fall, the TGS noted 17 incidents where, they claim, CF aircraft flew very close to the

TU-IZ border. These incidents result in alerting of TU aircraft and other intensive actions, including scrambling F16s. After discussing this issue with TGS, as a short term solution we have coordinated to have the relevant information passed from CENTAF to the Turkish Air Force. We believe the long term solution is for the TGS/TUAF to use CENTRIX to obtain the daily

Air Tasking Order and determine if CF flights may approach the Turkish border. At present, the Turkish military can access CENTRIX through its

LNOs located with Coalition Forces, in Baghdad, Mosul, Kirkuk, and Tal

Afar; There is also a CENTRIX terminal at the ODC in Ankara. TGS has yet to agree to the expense (about $35,000) to have us install a CENTRIX terminal at TGS HQ, allowing them to have full access to CENTRIX right here in

Ankara.

WILSON




06ANKARA3352

2006-06-08

06:06

2011-01-18

10:10

SECRET//NOFORN

Embassy

Ankara

VZCZCXRO1712

OO RUEHBC RUEHDBU RUEHDE RUEHFL RUEHIHL RUEHKUK RUEHKW RUEHLA RUEHROV

DE RUEHAK #3352/01 1590652

ZNY SSSSS ZZH

O 080652Z JUN 06

FM AMEMBASSY ANKARA

TO RHMFISS/CDR USTRANSCOM SCOTT AFB IL


RUCNRAQ/IRAQ COLLECTIVE IMMEDIATE


RUEKJCS/DIA WASHDC IMMEDIATE

RUEHAK/USDAO ANKARA TU IMMEDIATE

RUEAIIA/CIA WASHDC IMMEDIATE

RUEKJCS/SECDEF WASHDC//USDP:PDUSDP/ISA:EUR/ISA:NESA// IMMEDIATE

RHEHAAA/NSC WASHDC IMMEDIATE

RUEUITH/ODC ANKARA TU IMMEDIATE

RUEKJCS/JOINT STAFF WASHDC//J-3/J-5// IMMEDIATE

RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK IMMEDIATE


RHMFISS/HQ USCENTCOM MACDILL AFB FL IMMEDIATE

RHMFISS/425ABS IZMIR TU//CC// IMMEDIATE

RHMFISS/39ABG INCIRLIK AB TU IMMEDIATE

RUEPGAB/MNF-I C2X BAGHDAD IZ IMMEDIATE

Cable dated:2006-06-08T06:52:00S E C R E T SECTION 01 OF 04 ANKARA

003352SIPDISSIPDISNOFORNE.O. 12958: DECL: 06/05/2026TAGS: MOPS PREL PARM TU

IZ IR AJ AF

Summary

-------

Â¶ 1. (C) We look forward to your visit. Turkey is a strong ally in the

Global War on Terrorism (GWOT), facilitating the distribution of critical

supplies and fuel to the coalition in Iraq and supporting the NATO Training

Mission (NTM-I) there; publicly calling on Iran to comply with its IAEA commitments; and pressuring Syria and Hamas to renounce their support for terrorism. Later this year Turkey will take over command of ISAF-Central

(with France and Italy) and open its first Provincial Reconstruction Team

(PRT) in Afghanistan. But there are challenges. Bilateral defense industry cooperation is on the decline. An enhanced Turkish security presence along the Iraqi border to combat an increase in PKK terrorist activity has raised concerns that Turkey might act unilaterally across the border into Iraq, which we have discouraged.

Â¶ 2. (S/NF) Turkey is a key player in a number of issues that come under your command, chiefly connected to OIF and the GWOT:

--58% of all supplies flowing into Iraq by air use the multi-directional cargo hub at Incirlik Air Base.

--25% of sustainment fuel for the coalition flows over the Turkey-Iraq border crossing at Habur Gate, as do many other key supplies for our troops downrange.

--We are now in informal discussion with the GOT to use Turkish roads and ports to retrograde excess equipment and material from Iraq. Retrograding equipment via Turkey would provide an additional LOC to CENTCOM, relieve congestion at Kuwait, and ensure a more secure route. You should urge the

Turkish General Staff (TGS) to continue to work with us on this issue.

--Turkey has signaled its interest in working with us on repairing

Nasosnaya Air Base in Azerbaijan; you should seek senior Turkish military confirmation and sell them on the concept.

--The Turkish military had allowed us to use Incirlik as a refueling stop for Operation FUNDAMENTAL JUSTICE detainee movement operations since 2002, but revoked this permission in February of this year. We understand OSD and

JCS have been discussing whether to approach Turkey to seek to reverse this decision. We recommend that you do not raise this issue with TGS pending clarification from Washington on what approach State/OSD/JCS/NSC wish to take. END SUMMARY.

Bilateral Relationship Improving

--------------------------------

Â¶ 3. (S) During her April 25 visit to Ankara, Secretary Rice and FM Gul announced our intention to set up a formal and regular senior-level strategic dialogue consultative mechanism. The goal was to signal progress toward restoring confidence and strengthening our ability to work together in ways helpful to our goals in the region and in Turkey itself. We are now negotiating the final touches of our â€œStrategic Partnershipâ€ document, which should be made public soon. We have restored bilateral dialogue through many senior level visits over the past ten months. We have shifted our dialogue on Iraq from one dominated by Turkish whining about the PKK and Kirkk to one of constructive collaboration politically and logistically in support of our efforts there.

A PARTNER IN GWOT

-----------------

ANKARA 00003352 002 OF 004

Iraq

-----

Â¶ 4. (SBU) Turkeyâ€™s agreement to allow the use of its territory as a logistical hub has been a crucial asset in our Iraq operations. Two-thirds of gasoline and diesel fuel shipments (3 million gallons per day) for the

Iraqi people and 25% of sustainment fuel for the coalition crosses into

Iraq through the Ground Line of Communication at Habur Border Gate. Since

Turkey approved the use of Incirlik Air Base as a cargo hub to support coalition operations in Iraq in May 2005, over 152 million pounds of equipment has been shipped to US troops. 58% of all equipment provided to our troops in Iraq by air pass through Incirlik. Six C-17 aircraft now deliver from Incirlik the amount of supplies it took 9-10 planes to deliver from Germany. Additionally four KC-135 tanker aircraft based there since

2003 have run 2800 refueling sorties, delivering 192 million pounds of fuel in support of Operation Enduring Freedom and Operation Iraqi Freedom.

Turkey has four personnel assigned to NTM-I in Iraq and, under this rubric, has trained 57 Iraqi military officers in Turkey. Iraqis have pledged to send officers to at least seven additional courses this year.

Retrograde

------------

Â¶ 5. (SBU) On behalf of CENTCOM, we are informally coordinating with TGS and the MFA with respect to gaining Government of Turkey approval to use

Turkish roadways and sea ports to retrograde excess equipment and material from Iraq. Retrograding equipment via Turkey provides an additional LOC to

CENTCOM, relieves congestion at Kuwait, and is a more secure route. On May

26, TGS informed us that TGS and MFA are supportive of the retrograde concept. They requested that formal notification be made via diplomatic channels since the Government of Turkey is the approval authority.

Additionally, they stated that our request to be exempt from customs fees, taxes and surcharges would require further discussion with Customs officials. The formal notification should occur soon. You should express your appreciation for TGSâ€™s initial support and ask for their continued support once the formal request is presented.

Afghanistan: Good New Story

---------------------------

Â¶ 6. (SBU) Turkey has twice successfully led the International Security

Assistance Force (ISAF) in Afghanistan, most recently from February to

August 2005. Later this year, it will take over joint command of ISAF-

Central in Kabul for a two-year period, and will open its first PRT in the neighboring province of Wardak. PM Erdogan visited Afghanistan in spring

2005 and subsequently increased Turkeyâ€™s pledged assistance ten-fold to

$100M. This will be allocated in $16M increments for five years to build

schools, hospitals, medical clinics and drinking water wells throughout the country. Four hospitals have already been constructed. The GOT provides counter-narcotics training in Turkey to Afghan security forces and will initiate such training in Afghanistan this year under the auspices of the

Wardak PRT. President Karzai demonstrated his gratitude for Turkeyâ€™s assistance by participating in a March counter-terrorism conference at

Turkeyâ€™s NATO Center of Excellence for the Defense Against Terrorism.

PKK

---

Â¶ 7. (S/NF) The PKK (Kurdistan Workers Party, which seeks to carve off the primarily Kurdish portion of eastern Turkey by force of arms) has intensified its terrorist campaign in Turkey: over 150 Turkish security forces have died so far in 2006, a dozen in the past two weeks alone. This violence has

ANKARA 00003352 003 OF 004 increased pressure on the GOT to take decisive measures to cope with the problem, including attacking PKK strongholds in northern Iraq, which the organization uses as a command, control, and logistics base to infiltrate

Turkey and carry out attacks. Turkey wants the new government in Iraq to take immediate, concrete steps to limit PKK freedom of action in the country. The PKKâ€™s isolated location, the long list of priorities facing the GOI, and the attitudes of Kurdish authorities in northern Iraq make this complicated.

Â¶ 8. (C) Secretary Rice told GOT leaders April 25 that the U.S. will reinvigorate trilateral (U.S.-Turkey-Iraq) discussions on the issue. While recognizing that the insurgency prevents coalition troops from engaging the

PKK in Iraq, the GOT remains frustrated at its inability, and U.S. unwillingness, to stop attacks by people coming from the other side of its border.

Â¶ 9. (S) If you are confronted with this issue, you can point to significant efforts the USG is undertaking to ameliorate the PKK threat:

--Sharing of sensitive intelligence on PKK activities within Turkey, which have led to successful Turkish COIN operations.

--MNF-I surveillance flights over PKK camps in northern Iraq, which have also had a salutary effect interms of psyops.

--An intelligence fusion cell which meets weekly in Ankara to pass information to the Turkish military on PKK activities.

--A new initiative to work with Turkey on building law enforcement cases against PKK operatives in Europe.

OTHER KEY ISSUES

----------------

Iran

----

Â¶ 10. (S) Secretary Rice personally informed Foreign Minister Gul May 31 of the U.S. initiative to join with the EU-3 in negotiations with Iranâ€™s representatives once Iran fully and verifiably suspends its enrichment and reprocessing activities. Deputy National Security Adviser Crouch followed up with discussions in Ankara June 4. Official and public reaction to this initiative has been uniformly positive. The GOT has publicly supported this move and called upon the Iranians to respond positively. Turkish officials have taken a tougher line on Iran since the U.S. Ambassador to the IAEA,

Greg Schulte, provided in-depth briefings and consulted with Turkey in

February. Gul has told visiting Congressional delegations that Iranâ€™s nuclear weapons aspirations are the single most important problem facing

Europe and the Middle East, and he has emphasized the need for a united and decisive international approach. Ankara has called on Tehran to cooperate with the IAEA, adopt full transparency on its nuclear programs, and resume negotiations with the EU-3, most recently in Erdogan - Ahmadinejad encounters in Baku and Bali and during an early May visit by Iranian

National Security Adviser Larijani.

An Opening on Nasosnaya?

------------------------

Â¶ 11. (C) As part of a continuing effort in the Caucasus, the U.S. and allies continue to promote collective assistance to Azerbaijan, Armenia and

Georgia. A recent proposal -- the upgrade of Nasosnaya Airfield located outside of Baku -- has not taken hold with our Turkish counterparts (at least not in Ankara). Over the past 2-3 years, the idea of upgrading the airfield has been briefed in several venues (the Caucasus Working Group and the South Caucasus Clearing House). Additionally, the idea of a joint venture among allies to

ANKARA 00003352 004 OF 004 perform the upgrade has been informally sent to the TGS J5 on several occasions. While the military has not responded to our entreaties in

Ankara, the Turkish DATT in Baku (a one-star general) recently told us that

Turkey is enthusiastic about working with us on Nasosnaya. A push at the senior levels within TGS might help break this proposal loose. Any interest you can promote during your visit would be beneficial.

Defense Industry Cooperation Declining

--------------------------------------

Â¶ 12. (SBU) Defense industry cooperation, once the strongest aspect of our military-to-military relationship, is in decline. No U.S. firm has won a direct commercial sale since Boeing was awarded a contract for an Airborne

Early Warning and Control (AEW&C) aircraft in 2002. In 2004, three tenders

(UAVs, Main Battle Tanks, and attack helicopters) were canceled. Two U.S. firms, Boeing and Bell, were interested in a second attack helicopter

tender, but declined to participate due to onerous liability and technology transfer requirements. (Several non-US firms did submit bids.) Sikorsky may choose not to participate in a tender for 54 utility helicopters for the

Turkish Armed Forces and Forestry Service for the same reason, and Raytheon may bow out of contention for an aircraft trainer tender. Both in Ankara and in Washington, U.S. firms and the USG have raised the technology transfer and liability concerns with Turkeyâ€™s Ministry of Defense and

Defense Industry Undersecretariat (SSM). Despite both Turkish military and government insistence that it wants US competition in these tenders, SSM has resisted making the necessary changes to the tenders to ensure it.

Visit Ankaraâ€™s Classified Web Site at http://www.state.sgov.gov/p/eur/ankara/

WILSON

Viewing cable 08MOSCOW3394,



08MOSCOW3394

2008-11-24

14:02

2011-01-18

10:10

CONFIDENTIAL

Embassy

Moscow

VZCZCXRO8243

PP RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR

DE RUEHMO #3394/01 3291444

ZNY CCCCC ZZH

P 241444Z NOV 08

FM AMEMBASSY MOSCOW



RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY


RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY

Cable dated:2008-11-24T14:44:00C O N F I D E N T I A L SECTION 01 OF 02

MOSCOW 003394SIPDISDEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT

EUR/CARC, SCA (GALLAGHER, SUMAR) DOE FOR HEGBURG, EKIMOFFE.O. 12958: DECL:

11/18/2018TAGS: EPET ENRG ECON PREL RS

-------

SUMMARY

-------

Â¶ 1. (C) At a November 20 meeting, BPâ€™s new Group VP for Russia and

Kazakhstan, David Peattie, told the Ambassador that BP is in Russia for the long-term. The troubled partnership in TNK-BP (ref A) is only a part of their involvement and he said BP would not be surprised to see the company split up and taken over by Gazprom and Rosneft within 2 years. BP is actively pursuing options with both companies for the future. In the interval, Peattie confirmed that BP has agreed to Denis Morozov, formerly with Norilsk Nickel, as the new CEO and said he expects Morozov may prove more independent than the AAR partners will like. He predicted Russian oil production will drop by between three and five percent as companies contract capital spending in light of oil prices and credit constraints.

With regard to CPC (refs B and C), Peattie said BP is holding up the expansion as a negotiating tactic but plans to exit CPC (and Kazakhstan) by selling its stake in two parts to KazMunaiGaz (KMG) and Lukoil. End summary.

--------------------------------

TNK-BP AND BPâ€™S FUTURE IN RUSSIA

--------------------------------

Â¶ 2. (C) Peattie told the Ambassador that BP plans to be in Russia â€œfor the next 50 yearsâ€ and is thinking of the long-run in terms of its investments. He said TNK-BP is a large and important part of BPâ€™s presence but might not be the main vehicle for BP going forward. In that regard, he noted that BP had invested $8 billion in TNK-BP but had already realized $9 billion in profits. Instead, he cited BPâ€™s growing ties with

Rosneft, in which it has a one percent stake, as the potential long-term foundation of BPâ€™s involvement in Russia. Peattie said to that end, BP was increasing its direct presence in Russia.

Â¶ 3. (C) Peattie said TNK-BP would still be important to BP in the near term and he thought that for the next 18 months or so, BPâ€™s interests would align with those of AAR, its partners in TNK-BP. â€œWe both want to see dividends and a more efficient company,â€ he said. He believes AAR, despite its short-term thinking, will be cooperative because the AAR partners are â€œdesperate for cash.â€ Peattie said BP had erred in not developing better ties with AAR and the Russian Government, and its new

Russia team would make that a priority.

Â¶ 4. (C) Peattie confirmed that BP has agreed to the choice of Denis

Morozov, the former head of Norilsk Nickel, as the new CEO of TNK-BP, saying BP was â€œcontentâ€ with the choice. XXXXXXXXXXXX Finally, he said

BP is also counting on a dozen new boards of TNK-BP subsidiaries to prevent further damage to company operations from decisions of the board of the parent company.

Â¶ 5. (C) Peattie said that over the medium-term, in two to three years, BP expects TNK-BP will be taken over by the Russian Government and split into separate oil and gas components that Rosneft and Gazprom will control respectively. BP expects to continue to play a role in developing the

underlying assets and is in continuous negotiations with both Russian companies on long-term partnerships.

----------

OIL PRICES

----------

Â¶ 6. (C) Peattie said that even at todayâ€™s lower oil prices, TNK-BP is

â€œmaking money,â€ though not on current exports, due

MOSCOW 00003394 002 OF 002 to fluctuating export taxes. He predicted that Russian oil production would decline between 3 and 5 percent in 2009, given the disincentives for upstream production, falling prices, and the credit crunch. He said BP foresees about a year and a half of relatively weak oil prices -- in the range of $50 to $70 per barrel -- followed by a return to $90-$100 per barrel oil as the world economy strengthens and the underlying supply and demand patterns reemerge. He explained that prices are likely to stabilize at $90 because that is the marginal cost of producing Canadian â€œheavy oilâ€ or oil sands, which would alleviate supply constraints.

---

CPC

---

Â¶ 7. (C) On pending expansion of the Caspian Pipeline Consortium (CPC) pipeline, in which BP is a partner, Peattie said BP is withholding its approval of the most recent expansion agreement (refs B and C) as a

â€œnegotiating tacticâ€ in its talks to sell out its share to KMG and

Lukoil. He explained that BP plans to be out of CPC and the sale to KMG of the share BP inherited from Amoco is almost complete. BP is trying to sell the share it inherited from Arco to Lukoil. Once complete, according to

Peattie, BP will be out of Kazakhstan altogether, and will focus on its investments in Russia and the BTC oil pipeline (from Azerbaijan to Turkey).

BP is also interested in Turkmen gas, but that is a longer term prospect.

BEYRLE

Viewing cable 04THEHAGUE4, 2003 INTERNATIONAL NARCOTICS CONTROL

STRATEGY REPORT



04THEHAGUE4

2004-01-02

14:02

2011-01-19

21:09

UNCLASSIFIED

Embassy The

Hague



SIPDIS

DEPT FOR INL, INL/T, EUR/ERA, EUR/UBI

DOJ FOR OIA, AFMLS, NDDS

TREASURY FOR FINCIN

FRANKFURT FOR CUSTOMS

USEU FOR WAGNER AND DOJ

DEA HQS FOR OFE/DANIELS AND CORLEY

ONDCP FOR AGRESTI

PASS USAID

E.O. 12958: N/A

TAGS: SNAR PREL PGOV KCRM NL

SUBJECT: 2003 INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT

(INCSR): THE NETHERLANDS - PART 1, DRUGS AND CHEMICAL CONTROL

REF: STATE 324347

----------

Â¶ I. Summary

----------

Â¶ 1. The Netherlands continues to be a significant transit point for drugs entering Europe (especially cocaine), an important producer and exporter of synthetic drugs

(particularly Ecstasy and amphetamines), and an important consumer of most illicit drugs. U.S. law enforcement information indicates that the Netherlands still is by far the most significant source country for Ecstasy in the U.S.

The current Dutch center-right coalition has made measurable progress in implementing the five-year strategy (2002-2006)

against production, trade and consumption of synthetic drugs announced in May 2001. For example, there has been a significant increase in Dutch seizures of Ecstasy pills from

3.6 million in 2001 to six million in 2002 (last year for statistics). In July 2003, the National Criminal

Investigation Department (Nationale Recherche) was set up with the key objective of enhancing the efficiency and effectiveness of criminal investigations and international joint efforts against narcotics trafficking. Operational cooperation between U.S. and Dutch law enforcement agencies is excellent, despite some differences in approach and tactics. Dutch popular attitudes toward soft drugs remain tolerant to the point of indifference. The Dutch government and public view domestic drug use as a public health issue first and a law enforcement issue second. End summary.

---------------------

II. Status of Country

---------------------

Â¶ 2. The central geographical position of the Netherlands, with its modern transportation and communications infrastructure, the world's busiest container port in

Rotterdam and one of Europe's busiest airports, makes the country an attractive operational area for international drug traffickers and money launderers. Production of amphetamines, Ecstasy and other synthetic drugs, and marijuana is significant. The Netherlands also has a large chemical sector, making it a convenient location for criminals to obtain or produce precursor chemicals used to manufacture illicit drugs.

-------------------------------------------

III. Country actions against drugs in 2003

-------------------------------------------

------------------

Policy Initiatives

------------------

Â¶ 3. Major Dutch government policy initiatives in 2003 include:

New Government Stricter on Drugs

--------------------------------

Â¶ 4. The current Dutch center-right coalition government, formed in May 2003, announced a tougher approach to the production of and trafficking in hard drugs, Ecstasy in particular. The coalition accord of May 16, 2003, outlining the government's intentions for the next four years, stated that airlines will be made responsible for carrying out controls so that drug smugglers can no longer make use of their flights. If airlines fail to do so, sanctions will be imposed, including withdrawal of landing rights. It also announced that the heroin distribution program, under which heroin is prescribed under strict medical guidance to serious drug addicts, for whom all other treatment options have failed, will be continued at the current level, meaning that the program will not be expanded for the time being, as had been advocated. In addition, the new Cabinet announced consultations with local authorities about closure of soft drug coffeeshops near schools and in border regions.

Justice Minister Donner is also investigating the possibility of banning foreigners from coffeeshops, in order to fight drug tourism.

Â¶ 5. In the summer of 2003, the national criminal investigation department (Nationale Recherche or NR) became operational. The new department combines the current five core police teams, the national criminal investigation team, the Unit Synthetic Drugs (USD), the Trafficking in People

Unit, and the five Ecstasy teams. The NR, which is part of the National Police Services (KLPD) and which comes under the authority of the National Public Prosecutors' Office, gives top priority to international cooperation in the fight against organized crime, in particular the production of and

trafficking in synthetic drugs.

Cocaine Couriers

----------------

Â¶ 6. Despite fierce political opposition, the Dutch Parliament approved Justice Minister Donner's plan to close down

Schiphol airport to cocaine smuggling from the Caribbean on

December 10, 2003. An estimated 20,000-40,000 kilos of cocaine, destined primarily for the European market, are smuggled annually through Schiphol (Dutch cocaine use is estimated at 4,000-8,000 kilos annually - in 2001 and 2002, more than 3,500 drug couriers were arrested and some 10,000 kilos of cocaine seized at the airport). Donner hopes to achieve 100% interdiction of the drugs coming into Schiphol on targeted high-risk flights from the Netherlands

Antilles, Aruba and Suriname. He told the Second Chamber of

Parliament on December 3, 2003, that, as a result of the 100% controls of passengers, luggage, freight and aircraft, the number of drug couriers is expected to rise significantly, fearing inadequate law enforcement capacity to handle the number of arrests. According to Donner, this justifies a temporary adjustment in prosecution policy - a certain category of drug couriers will not be prosecuted. He explained that criteria would be drawn up, which will not be made public in the interest of criminal procedures. However, couriers failing to meet these criteria will be prosecuted.

(Unconfirmed reports suggested that only smugglers caught with 3 kilos or more are prosecuted.) Donner stated that summoning drug couriers in court at a later date would not be a solution, because this would also put a heavy burden on the

Dutch judiciary. He did pledge the Chamber an early assessment of his proposals. Relevant data of drug couriers will be made available to airlines, which will be responsible for taking special measures against these persons, including an indefinite flight ban. Despite opposition within Donner's own Christian-Democratic Party (CDA), the Second Chamber adopted his proposals on December 10, 2003.

Â¶ 7. The plan went into effect on December 11, and, during the first five days, 120 couriers were arrested on flights from the Netherlands Antilles, of whom 31 were released without a summons after drugs were recovered. The remaining 89 cases are being investigated or prosecuted. In addition, 104 potential passengers were turned away by the airlines and 375 passengers did not turn up. About 120 kilos of drugs were seized. During routine checks on flights from Suriname, 22 couriers were arrested, one of whom carried 14.5 kilos of cocaine.

Ecstasy Offensive

-----------------

Â¶ 8. In July 2003, Justice Minister Donner published a progress report on the implementation of the five-year (2002-

2006) action plan against production, trade, and consumption of synthetic drugs. According to the report, six million

Ecstasy pills were seized in 2002 compared to 3.6 million in

2001, and the number of dismantled Ecstasy laboratories rose to 43 in 2002 from 35 in 2001. The increase in Ecstasy seizures was attributed to intensified controls at Schiphol airport by the special team of Dutch customs and the military police (more than one million pills seized there in 2002), the introduction of five special police Ecstasy teams (total manpower: 90), and increased staffing at the Fiscal

Intelligence and Investigation Service-Economic Control

Service (FIOD-ECD). The progress report shows that the measures announced in the action plan are well underway.

According to the 2002 annual report of the Unit Synthetic

Drugs (USD), the five XTC teams conducted 36 investigations in 2002 and arrested some 76 suspects.

Â¶ 9. The chemical precursor PPK is the principal precursor used by Dutch Ecstasy laboratories. It comes mainly by sea from China through Rotterdam port. Due to human rights concerns, the Dutch government shares only limited

information of an administrative nature with China. A

Memorandum of Understanding formalizing this information- sharing arrangement was submitted to the Chinese in October

Â¶ 2003. No response has yet been received. The MOU states that China will keep the Netherlands informed regarding the progress and results of investigations that have been instigated on the basis of this administrative information.

In addition to working directly with the Chinese, the

Netherlands is an active participant in the INCB/PRISM project's taskforce

Cannabis

--------

Â¶ 10. According to the fourth survey on coffeeshops in the

Netherlands, published in October 2003, there were 782 officially tolerated coffeeshops at the end of 2002, which is a 3 percent drop over 2001, principally in the four major cities. About 73 percent of Dutch municipalities do not tolerate any shops at all, according to the study. In early

2004, Justice Minister Donner, whose CDA party has advocated closing of coffeeshops, is expected to publish a Cannabis

Policy Paper, which should discourage cannabis use.

Â¶ 11. The 2002 National Drug Monitor shows that the number of recent (last-month) cannabis users in the Dutch population over the period 1997-2001 rose from some 326,000 to 408,000, or 3 percent of the Dutch population of 12 years and older

(of a total population of 16 million). The largest increase is reported among young people aged 20-24, while use among the 12-15 year-old age group remained limited and hardly changed from 1997. Life-time prevalence (ever-use) of cannabis among the population of 12 years and older rose from

15.6 percent in 1997 to 17 percent in 2001. The average age of recent cannabis users is 28 years.

Â¶ 12. On November 27, 2003, the Netherlands agreed on an EU framework decision on harmonized sentencing of drug

traffickers. Under the agreement, the maximum penalty for possessing a small quantity of cannabis will be raised from one month to one year imprisonment. The agreement, if ratified by Dutch parliament, would allow the Netherlands to maintain its coffeeshops.

Medicinal Cannabis

------------------

Â¶ 13. Since March 17, 2003, doctors are allowed to prescribe their patients medicinal cannabis. Two suitable government- controlled cannabis growers have been contracted, and, as of

September 2003, the drug can be bought from pharmacies. The

Health Ministry's Bureau for Medicinal Cannabis controls quality and organizes the distribution. According to the

Health Ministry, cannabis may have a favorable effect on seriously ill patients but the government recognizes the therapeutic effects of medicinal cannabis have not been proved and research continues.

Heroin Experiment

-----------------

Â¶ 14. The Cabinet decided in December 2003 not to expand the so-called heroin experiment, under which heroin is medically prescribed to a limited group of heroin users for whom all other forms of treatment have failed. The current capacity for 300 participating addicts will be continued with a Spring

2004 decision on a possible expansion.

Accomplishments

---------------

Â¶ 15. A major accomplishment was the establishment of the national criminal investigation department (Nationale

Recherche or NR) in July 2003. The NR with 800 employees will hopefully end the fragmented investigation capacity of the Dutch enforcement organization. In addition, considerable progress has been made in implementing the five- year strategy against synthetic drugs (see above). The government has also stepped up controls on chemical

precursors, sought an MOU on chemical precursors with the

Chinese, and taken additional measures to fight cocaine trafficking through Schiphol.

-----------------------

Law Enforcement Efforts

-----------------------

Â¶ 16. Overall the Health Ministry coordinates drug policy, while the Ministry of Justice is responsible for law enforcement. Matters relating to local government and the police are the responsibility of the Ministry of Interior. At the municipal level, policy is coordinated in tripartite consultations between the mayor, the chief public prosecutor and the police.

Â¶ 17. The Dutch Opium Act punishes possession, commercial distribution, production, import, and export of all illicit drugs. Drug use, however, is not an offense. The act distinguishes between hard drugs that have unacceptable risks (e.g. heroin, cocaine, Ecstasy), and soft drugs

(cannabis products). Trafficking in hard drugs is prosecuted vigorously and their dealers are subject to a prison sentence of 12 years. When this takes place on an organized scale, another one-third of the sentence is added

(16 years). Sales of small amounts (under five grams) of cannabis products are tolerated (i.e., not prosecuted, even though technically illegal) in coffeeshops operating under regulated conditions (no minors on premises, no alcohol sales, no hard drug sales, no advertising, and no public nuisance). One of the aims of this controversial policy is to separate the markets for soft and hard drugs so that soft drug users are less likely to come into contact with hard drugs. Another goal - we believe less successful - has been to separate revenue streams so that hard drug dealers do not use soft drug dealing as a source of capital.

Â¶ 18. Dutch police inter-regional core (IRT Kern) teams and

National Prosecutors give high priority to combating drug trafficking. DEA agents stationed with Embassy The Hague have close contacts with their counterparts in the

Netherlands. On a global scale, the DEA in The Hague have a close relationship with its foreign liaison counterparts on combating drug trafficking. Beginning in FY 2002, the Dutch assigned Dutch liaison agents to Miami, Florida and

Washington, D.C. to improve coordination with U.S. law enforcement agencies. During September 2003, the Dutch Unit

Synthetic Drugs held its first Syndec conference, attended by representatives from the United States, Colombia and the Far

East, and from throughout Europe. During April and July

2003, the Dutch hosted bilateral talks on law enforcement cooperation, extradition, and the United States judicial system with local prosecutors, judges and police and representatives from all the major U.S. law enforcement authorities, and representatives from the DoJ.

Â¶ 19. Coordination of foreign law enforcement information requests would benefit from greater centralization. The internationalization of the synthetic drug problem has led to increases in U.S. and other countries' requests for information from Dutch law enforcement. All foreign requests are sent to the regional intelligence department, previous called DIN (Dienst Internationale Netwerk). Cooperation regarding the turn around time for requests and obtaining teams to work U.S. cases has been excellent. Problems remain with the exchange of intelligence on major organizations, with or without a U.S. nexus. In addition, it is often difficult for foreign authorities to find a police region with clear-cut responsibility for handling a specific case because precursor chemicals have their origins outside of

Dutch territory and numerous separate production sites are scattered throughout the Netherlands. The formation of the

National Criminal Investigation Department (Nationale

Recherche, also known as the National Crime Squad) in

Driebergen (in July 2003) should eliminate the need for

foreign liaison officers to shop around to obtain a team to work a U.S. case. The new department's policies and procedures will not be implemented until January 2004. During

November 2003, a meeting was held between U.S. law enforcement officials and the Nationale Recherche/National

Crime Squad to ascertain any new procedures. It appears few procedures will change because foreign offices and liaison officers will still have to go through DIN. The Dutch officials also indicated they would try to work 200 cases a year, with only 5% to 10% dedicated to foreign requests, meaning they will only assist in approximately 20 cases for all the foreign offices having status in the Netherlands.

----------

Corruption

----------

Â¶ 20. The Dutch government is committed to fighting national and international corruption. It does not encourage or facilitate illicit production or distribution of narcotic or psychotropic drugs or other controlled substances, or the laundering of proceeds from illegal drug transactions. No senior official of the Dutch government engages in, encourages, or facilitates the illicit production or distribution of such drugs or substances, or the laundering of proceeds from illegal drug transactions. Press reports of low-level law enforcement corruption appear from time to time but the problem is not believed to be widespread. At year's end, the Royal Marechaussee (military police with responsibility for Schiphol Airport and border control generally) admitted it had been investigating credible allegations of drug trafficking and corruption involving ground service personnel, Dutch Customs and military police at Schiphol. In order to remove any conflict of interest, the investigation has been turned over to Ministry of Defense inspectors.

-----------------------

Agreements and Treaties

-----------------------

Â¶ 21. The Netherlands is party to the 1988 UN convention, the

1971 UN Convention on Psychotropic Substances, the 1961

Single Convention on Narcotic Drugs, and the 1972 Protocol amending the Single Convention. It has ratified the 1990

Strasbourg convention on money laundering and confiscation.

The U.S. and the Netherlands have agreements on extradition, mutual legal assistance, and asset sharing. The Netherlands has enacted legislation on money laundering and controls on chemical precursors. The Netherlands is a member of the UN

Commission on Narcotics Drugs and the major donors group of the UNDCP. It participates in the Financial Action Task

Force (FATF) and the Caribbean Action Task Force (CATF). The

Netherlands is a leading member of the Dublin Group and chairs its Central European regional group. It is member of the daily management of the Caribbean Customs Law Enforcement

Council (CCLEC). It is actively implementing the Schengen agreement, the Benelux agreement on extradition, and the

European convention on extradition and mutual assistance.

The Dutch also participate in the Pompidou group. Dutch police, justice and customs officials have close contacts with their colleagues in Belgium, France, Germany and the UK.

The Netherlands has police liaison officers in the U.S.,

Thailand, Pakistan, Venezuela, Colombia, France, the

Netherlands Antilles, Turkey, Poland and Spain. Europol is headquartered in The Hague and EUROJUST will also move from

Paris to The Hague.

--------------------------

Cultivation and Production

--------------------------

Â¶ 22. About 75 percent of the Dutch cannabis market is Dutch- grown marijuana (Nederwiet), although indoor cultivation of hemp is banned, even for agricultural purposes. Amsterdam

University researchers estimate that the Netherlands has at least 100,000 illegal home growers of hashish and marijuana,

with the number increasing. Together they produce more than

100,000 kilos of soft drugs and are the largest suppliers of coffeeshops, according to the study. The estimates are based on a significant rise in the number of lawsuits and police raids. Although the Dutch government has given top priority to the investigation and prosecution of large-scale commercial cultivation of Nederwiet, tolerated coffeeshops appear to create the demand for large-scale commercial cultivation.

Â¶ 23. The Netherlands remains one of the world's largest producers of synthetic drugs. In 2002, the USD registered a total of 740 seizures of synthetic drugs around the world, of which 205 (some 30 percent) took place in the Netherlands.

Of the remaining seizures registered in 35 other countries, some 70 percent could be related to Dutch criminal organizations. Of the 205 Dutch seizures, 141 involved synthetic drugs that were intended to be exported. The seizures of drugs around the world that could be related to the Netherlands involved some 24.6 million MDMA tablets and over 910 kilos of MDMA power. Of this total, the largest amount was seized in the Netherlands (6.1 million pills),

Belgium (more than 5 million pills), followed by Germany

(almost 3 million), the U.S. (2.5 million), France (2 million) and the UK (1.8 million). The USD reported lower amphetamine seizures in 2002 than in 2001, but the quantity of Dutch-related amphetamine seized in other countries went up. In 2002, the USD dismantled 43 production sites for synthetic drugs, of which 26 were situated in residential areas. Most production sites were MDMA laboratories.

According to the USD, the production of synthetic drugs in residential areas is an alarming development. The FIOD-ECD, which is primarily responsible for intercepting chemical precursors, seized some 318 liters and 9,255 kilos of PMK and

1,228 liters of BMK in 2002.

-----------------

Drug Flow/Transit

-----------------

Â¶ 24. The Dutch government has stepped up border controls to combat the flow of drugs. Confronted with an explosive growth in the number of drug couriers at Schiphol, the government announced in January 2002 a special counternarcotics offensive - the Schiphol Action Plan. Cocaine seizures at Schiphol airport rose from 3,341 kilos in 2001 to

6,233 kilos in 2002. This did not stop the cocaine flow, so the government initiated in December 2003 steps to interdict

100% of the cocaine coming in to Schiphol from certain

Caribbean flights (see paras 6-7). The government has also expanded the number of container scanners in the port of

Rotterdam and at Schiphol airport. Controls of highways and international trains connecting the Netherlands to neighboring countries were also intensified.

----------------

Money Laundering

----------------

Â¶ 25. The Netherlands participates in the financial action task force (FATF). Forty separate anti-money laundering measures recommended by FATF have been integrated in the financial sector. Additionally, legislation making money laundering a separate, stand-alone, offense became effective in 2002. See septel.

--------------

Asset Seizures

--------------

Â¶ 26. The Dutch have signed the Strasbourg Convention and have drawn up national legislation to enable courts to confiscate the proceeds of drug-related crime. The U.S. and the

Netherlands have an asset seizure agreement.

--------------------------------------------- -

Extradition and Mutual Legal Assistance Treaty

--------------------------------------------- -

Â¶ 27. The U.S. and the Netherlands have fully operational extradition and mutual legal assistance agreements. Some defense attorneys, however, have argued successfully to judges that U.S. judicial protections are inadequate, slowing the pace of extradition in cases involving Ecstasy dealers.

Using differences in our legal systems and misconceptions about the American criminal justice system, they criticize

(1) the U.S. plea bargaining system which they argue puts pressure on innocent suspects to confess; and (2) delays in repatriation to the Netherlands of previously extradited

Dutch citizens who were then convicted in the U.S. and are now seeking to serve their terms in the Netherlands.

----------------

Demand Reduction

----------------

Â¶ 28. The Netherlands has a wide variety of demand-reduction and harm-reduction programs, reaching about 80 percent of the country's 26,000-30,000 opiate addicts. The number of opiate addicts is low compared to other EU countries (2.6 per 1,000 inhabitants); the number has stabilized over the past few years, their average age has risen to 40, and the number of overdose deaths related to opiates has stabilized at between

30 and 50 per year. Needle supply and exchange programs have kept the incidence of HIV infection among intravenous drug users relatively low. Of the addicts known to the addiction care organizations, 75 percent regularly use methadone.

Â¶ 29. According to the 2002 National Drug Monitor, the out- patient treatment centers registered some 26,605 drug users seeking treatment for their addiction in 2000, compared to

26,333. The number of cannabis and opiate addicts seeking treatment has stabilized at 3,443 and almost 15,544, respectively. Statistics from drug treatment services show a sharp increase in the number of people seeking help for cocaine problems (representing an increase of 49 percent

between 1994 and 2000). Two out of three people seeking help for cocaine problems are crack cocaine users. The average age of drug clients was 39 years. Total costs of drug treatment programs are put at 100 million dollars.

Â¶ 30. Although more recent data about drug use are unavailable, drug experts have noted a significant drop in

Ecstasy use, while cocaine use appears to be going up.

Drug use among the general population of 12 years and older,

1997 and 2001 (life-time (ever) use and last-month use)

Life-time use Last-month use

1997 2001 1997 2001

Cannabis 15.6 17.0 2.5 3.0

Cocaine 2.1 2.9 0.2 0.4

Amphetamine 1.9 2.6 0.1 0.2

Ecstasy 1.9 2.9 0.3 0.5

Hallucinogens 1.8 1.3 0.0 0.0

-of which LSD 1.2 1.0 -- --

Mushrooms 1.6 2.6 0.1 0.1

Heroin 0.3 0.4 0.0 0.1

(Source: National Prevalence Survey, Center for Drug Research

(Cedro), University of Amsterdam)

----------

Prevention

----------

Â¶ 31. Drug prevention programs are organized through a network of local, regional and national institutions. Schools are targeted in efforts to discourage drug use, while national campaigns are conducted in the mass media to reach the broader public. The Netherlands requires school instruction on the dangers of alcohol and drugs as part of the health education curriculum. The Netherlands Institute of Mental

Health and Addiction (the Trimbos Institute) has developed a project in the field of alcohol and drugs in the context of

teaching healthy living in classrooms. About 75 percent of

Dutch secondary schools participate in the project. In

October 2002, the Health Ministry and the Trimbos Institute launched the new mass media campaign Drugs, Don't Kid

Yourself, providing drug information to parents, teachers and students. The 24-hour national Drug Info Line of the

Trimbos Institute has become very popular.

---------------------------

IV. U.S. Policy Initiatives

---------------------------

---------------------

Bilateral Cooperation

---------------------

Â¶ 32. Despite excellent operational cooperation between U.S. and Dutch law enforcement agencies, concern remains over the

Netherlands' role as the key source country for MDMA/Ecstasy entering the U.S. Embassy The Hague continues to make the fight against the Ecstasy threat one of its highest priorities. Although we agree on the goal, we differ over which law enforcement methodology will be most effective in achieving it. The Dutch continue to resist use of controlled deliveries and criminal infiltrants in their investigations of drug traffickers. They are also reluctant to admit the involvement of large, international drug organizations in the local drug trade and do not use their asset forfeiture rules often. The second bilateral law enforcement talks, held in

The Hague in March 2003, resulted in an Agreed Steps list of action to enhance law enforcement cooperation in fighting drug trafficking.

Â¶ 33. The U.S. and the Netherlands cooperate closely on law enforcement activities throughout the Kingdom of the

Netherlands. The USG is also working with the Kingdom to assist Aruba and the Netherlands Antilles in countering narcotics trafficking. The 10-year FOL agreement between the

U.S. and the Kingdom for the establishment of forward operating locations on Aruba and Curacao became effective in

October 2001.

Â¶ 34. In 1999, the Dutch Organization for Health Research and

Development (ZonMw) has a cooperation agreement with NIDA on joint addiction research. Since then, the two have organized various workshops and have financed joint research projects on addiction. The last bilateral workshop was held in the

Netherlands in September 2003.

--------------

The Road Ahead

--------------

Â¶ 35. We expect U.S.-Dutch bilateral law enforcement cooperation to intensify. The Dutch government's Ecstasy

Action Plan should further counter narcotics efforts. The

Dutch synthetic drug unit will also continue to make concrete progress. The establishment of a central police investigative body in the Spring of 2003 will certainly boost cooperation on international investigations, including

Ecstasy cases.

-------------

Â¶ V. Statistics

-------------

Â¶ 36. Drug Seizures 2001 2002

------------------ ---- ----

Heroin (kilos) 739 1,122

Cocaine (kilos) 8,389 7,968

Cannabis resin (kilos) 10,972 32,717

Herbal cannabis (kilos) 22,447 9,958

Ecstasy (tablets) 3,684,505 6,878,167

Amphetamine (kilos) 579 481

LSD (doses) 28,731 355

Source: Europol data

---------------

Chemical Control

----------------

Â¶ 37. (a) The Netherlands is a party to the 1988 UN Drug

Convention and 1990 European Union Regulations. Trade in precursors is governed by the 1995 Act to Prevent Abuse of

Chemical Substances (WVMC). The law seeks to prevent the disappearance of legal chemicals into the illegal circuit.

Violations of the law can lead to prison sentences (maximum of six years), fines (up to 50,000 dollars), or asset seizures. The Fiscal Information and Investigation Service

(FIOD) and the Economic Control Service (ECD) oversee implementation of the law.

Â¶ 38. The USD and the Public Prosecutor's Office have strengthened cooperation with countries playing an important role in Ecstasy production, in particular with countries exporting chemical precursors. The government has decided to provide the INCB as well as the exporting country (mostly

China) with administrative data about precursor seizures.

However, in view of the human rights situation, the

Netherlands will not enter into a mutual legal assistance treaty with China.

Â¶ 39. (b) The Dutch continue to work closely with the U.S. on precursor chemical controls and investigations. This cooperation includes formal and informal agreements on the exchange of intelligence.

Â¶ 40. (c) Yes, the Netherlands is a party to agreements on a method of maintaining records of transactions of an established list of precursor and essential chemicals.

Â¶ 41. (d) The Netherlands established such procedures in 1994.

Â¶ 42. (e) The Netherlands has efficient national chemical

control legislation in place which imposes record keeping and reporting requirements for listed chemicals.

Â¶ 43. (f) No, the Netherlands doesn't encourage illicit production of controlled substances or the laundering of proceeds from illegal drug transactions.

Â¶ 44. (g) No.

------------

Dublin Group

------------

Â¶ 45. The Netherlands is a member of the Dublin Group and chairs its Central European (Poland, Hungary, the Czech

Republic, Slovenia, Slovakia) regional Group.

Â¶ 46. The Netherlands is a member of the major donors group of the UNDCP.

Â¶ 47. The Netherlands does not have a fixed counternarcotics budget. The funds are disbursed through several distinct programs and organs of the government.

Russel

Viewing cable 10BERLIN81,



10BERLIN81

2010-01-21

11:11

2011-01-19

11:11

CONFIDENTIAL

Embassy

Berlin

VZCZCXRO3913

OO RUEHBC RUEHDBU RUEHFL RUEHKUK RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL

RUEHSR RUEHTRO

DE RUEHRL #0081/01 0211133

ZNY CCCCC ZZH

O 211133Z JAN 10

FM AMEMBASSY BERLIN




RUEHGG/UN SECURITY COUNCIL COLLECTIVE

RUEHII/VIENNA IAEA POSTS COLLECTIVE

Cable dated:2010-01-21T11:33:00C O N F I D E N T I A L SECTION 01 OF 03

BERLIN 000081SIPDISE.O. 12958: DECL: 01/22/2020TAGS: PGOV PREL KNNP IR GM

Â¶ 1. (C) SUMMARY. German MFA A/S equivalent for Non Proliferation and

Disarmament Gottwald told House Foreign Affairs Committee Staff Director

Richard Kessler that Germany was ready to support sanctions on Iran, especially ones which target the leadership and minimize impact on the general population. Germany would prefer to see action taken within the

UNSC, but is concerned about Chinese commitment. Iran Task Force Director

Krueger said Germany was looking at measures in sectors involving transportation (Air Iran and shipping), banking, Liquefied Natural Gas

(LNG) and Compressed Natural Gas (CNG), as well as exploring ways to target the IRGC leaders. NEA Iran/Maghreb DAS equivalent Ralph Tarraf said Germany was also exploring ways to bring Iranian Human Rights violations before the

UN offices in Geneva. Tarraf also advocated taking Turkish initiatives on

Iran seriously while not publicly endorsing them. Experts from XXXXXXXXXXXX advocated for a ban on weapons sales to Iran, covert sabotage of the

Iranian nuclear program, and focusing efforts to find a negotiated solution more directly in the office of the Supreme Leader. End Summary.

----------------------------------------

IMPORTANCE OF UNSCR; CONCERN ABOUT CHINA ----------------------------------

------

Â¶ 2. (C) Gottwald summarized the German position on Iran Sanctions emphasizing the importance of getting a new UNSCR passed sooner rather than later during a January 6 meeting. He noted it would be difficult, but important, to keep Russia and China on board. He said no one is enthusiastic about sanctions, but all agree that Iranian refusals to reach an agreement must carry a price. He quoted Chancellor Merkelâ€™s speech to

Congress in November and said Germany had â€œzero toleranceâ€ for a nuclear armed Iran and was ready to support sanctions. He expressed greater concern over the Chinese commitment to sanctions than Russian. Putting the current Iran discussion into a broader context Gottwald worried that Iran could become a spoiler in the upcoming NPT RevCon.

----------------------------------------

GOAL OF SANCTIONS: HIT LEADERS NOT PEOPLE ---------------------------------

--------

Â¶ 3. (C) When asked by Kessler what Germany would like to see in a UNSCR or

EU measures on Iran, Gottwald and MFA Deputy A/S equivalent for Trade and

Export Control Lingemann remained vague in their answers. Gottwald said the

EU could be counted on to take its guidance from the next UNSCR on Iran and enact measures to enforce and strengthen the UNSCR. In particular he expected the EU to take action to target specific leaders with visa bans and perhaps other measures. Gottwald said Germany would like to see measures have a direct effect on Iranian leaders, and to minimize the effect on the population. Gottwald called petrol sanctions a â€œmixed blessingâ€ noting that they give the government an excuse to cut subsidies which puts the burden onto the general population and money back in government budgets. Lingemann said denying access to certain exploration/extraction technology could be an effective tactic since it would more directly impact the governmentâ€™s pocketbook and ability to

â€œbuy friendsâ€ abroad. He stressed that we need measures that do not generate a commiseration effect from other countries. Lingemann noted that while a broad UNSCR was preferable, there were still some technological areas (such as CNG/LNG related technologies) in which U.S. and EU companies have a monopoly on the market and where Russian and Chinese companies canâ€™t compete should EU wide measures be needed. He also said that targeted measures that impact Iranâ€™s refining capabilities can be effective as they have an immediate impact on the governmentâ€™s income.

Â¶ 4. (C) Iran Task Force Director Krueger, in a separate meeting, specifically mentioned transportation (Iran Air and shipping), banking, and

LNG/CNG sectors as areas on which Germany was looking to focus UNSC or EU action. He said Germany was also interested in targeting the IRGC but was still wrestling with how to best do so. He noted that the U.S. had based its justification on the IRGCâ€™s terrorist associations with Hezballah, but since Hezballah is not recognized as a terrorist organization in Europe that wouldnâ€™t work. He said his colleagues were looking at possible action against the IRGC for violations of Human Rights and thought that might be more workable in the European context, but they were open to suggestions.

BERLIN 00000081 002 OF 003

------------------------------------------

EXPLORING WHAT TO DO ON HUMAN RIGHTS FRONT --------------------------------

----------

Â¶ 5. (C) NEA Iran/Magreb DAS equivalent Ralph Tarraf noted that Germany was looking at whether and how to bring the Iranian Human Rights violations before the UN offices in Geneva. He said it was important to make clear to the Iranian government that we are concerned about their human rights violations and that the concern is not purely a â€œWesternâ€ phenomena but rather a global one. He said February 15 is a key date as that is when the

Iran country review process will take place in Geneva. He added that

Germany is discussing listing the IRGC both under the non-proliferation regime and now also for its human rights violations. He noted that it was important to keep the two separate sanctions tracks separate and not to confuse the proliferation and human rights issues.

--------------------------------------------- ---

CAN ENGAGEMENT WORK? IS THERE A ROLE FOR TURKEY? --------------------------

------------------- ---

Â¶ 6. (C) On the issue of whether continued engagement with the Iranian government undermines the opposition, Gottwald stressed that it is important that engagement not be construed to â€œfavorâ€ Ahmadinejad, but rather we should continue, as we have, on a purely â€œlogicalâ€ basis. He said he was concerned that the current Iranian government may be incapable of coming to any conclusions, but that doesnâ€™t mean we should let up on our pressure. Tarraf said we face the â€œworst situation possibleâ€ with a weak regime that is not yet close to regime change. He suggested we focus on new forms of access to the regime which would allow for discrete talks to continue at a high-level. Gottwald added that he thought it was important to look for other mechanisms such as the TRR proposal which can serve as disincentives to continue down the nuclearization path.

Â¶ 7. (C) Tarraf said he saw increased Saudi/Iranian rivalry in the Gulf region and suggested the West avoid putting all its â€œeggs in one basketâ€ behind the Saudis. He suggested looking for other allies in the region who can be constructive such as Turkey. He admitted that Turkey had abstained in the IAEA and expressed reluctance on sanctions, but these positions also afforded them greater leverage with the Iranians. He suggested we consider taking Turkish initiatives seriously without publicly endorsing them. He agreed that to date Turkish promises - on Syria/Israel and Iran- have not yielded any results, but he advocated giving Turkey a quiet nod of approval to see if they can deliver.

-------------------------------------------

ARMS BAN, SABOTAGE, FOCUS ON SUPREME LEADER -------------------------------

------------

Â¶ 8. (C) XXXXXXXXXXXX argued that the only effective sanctions which could positively impact the regimeâ€™s security calculations on the nuclear dossier would be a ban on sales of conventional arms. Only such a move could shift the security calculation for the regime from the longer term goal of achieving nuclear capability to the shorter term goal of maintaining a conventional capability. He warned that ineffective sanctions could be worse than no sanctions, especially if they send more money to the

IRGCâ€™s pockets (through increasing necessity of procurement on the black market which is dominated by the IRGC.) In the interim XXXXXXXXXXXX recommended that a policy of covert sabotage (unexplained explosions, accidents, computer hacking etc) would be more effective than a military strike whose effects in the region could be devastating.

Â¶ 9. (C) XXXXXXXXXXXX offered some insights into the inner workings of the regime and postured that the TRR deal had failed because the Supreme Leader

(SL) hadnâ€™t committed himself to the deal 100 percent. He said any deal would have to have the full blessing of the SL and said that once negotiations in the SLâ€™s office (or with his closest confidants) began, success would be guaranteed since the SL - by definition- never fails. He

noted that the SL has his representatives at every level of government, but some have greater access to him than others. The three with greatest access, according to XXXXXXXXXXXX, at the moment are his son Mojtaba,

Ayatollah Golpaygani and Hejazi.

BERLIN 00000081 003 OF 003

Â¶ 10. (U) This cable has been cleared by StaffDel Kessler.

MURPHY

Viewing cable 05THEHAGUE2599, THE DUTCH MUSLIM COMMUNITY: A PRIMER



05THEHAGUE2599

2005-09-

27 08:08

2011-01-

20 21:09

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

The Hague



SIPDIS

SENSITIVE

E.O. 12958 N/A

TAGS: PREL PGOV PHUM PINR PTER SOCI SCUL KISL NL KPAO

SUBJECT: THE DUTCH MUSLIM COMMUNITY: A PRIMER


ACCORDINGLY.

Â¶ 1. (SBU) SUMMARY: The Muslim community in the Netherlands is the second largest in Europe as a percentage of total population (5.8 percent). It is also one of the least-well integrated and most alienated, and according to polls looks less favorably on the United States than Muslim communities

elsewhere in Europe. Muslims in the Netherlands are significantly poorer, less educated and more prone to arrest than native Dutch. Their status has become the country's most salient political issue and will be a key factor in upcoming local and national elections. This cable examines the Muslim community, discusses tensions between it and traditional Dutch society, and assesses some of the social and political consequences arising there from. END SUMMARY.

Â¶ I. THE COMMUNITY

----------------

Â¶ 2. (SBU) The Muslim community in the Netherlands numbers approximately 945,000. According to official GONL statistics, the majority are relatively recent immigrant

""guest workers"" and their descendants from Turkey (365,000) and Morocco (315,000). Other Muslim communities include

Iranians (29,000), Iraqis (44,000) and Somalis (22,000).

Unlike Turkish and Moroccan guest workers, most from these smaller communities came to Holland seeking political asylum.

RAPID GROWTH

------------

Â¶ 3. (SBU) Between 1970 and 1995, the number of Muslims living in the Netherlands rose from a few thousand to 630,000, or

4.1 percent of the population. Most were poor, often from rural areas of Turkey and Morocco. Chosen to work in factory jobs, they tended to be uneducated and often illiterate. Unlike many Muslim immigrants in Britain and

France, those who came to the Netherlands had no colonial connection or historic ties to their new homes, and did not speak the language. Assuming most would return to their country of origin, the Dutch made few attempts to incorporate them into society.

Â¶ 4. (SBU) Between 1995 and 2004, the number of Muslims rose to 945,000, or 5.8 percent of the population. Although fewer are immigrating for economic reasons today, the Muslim population continues to rise, largely because of high birthrates and the practice of Turkish and Moroccan immigrants marrying partners from their countries of origin.

According to a September 20, 2005 report on integration in the Netherlands compiled by the Dutch government, almost 90 percent of Turks and Moroccans marry spouses from their own communities; of those, 60 percent bring partners from their home countries.

Â¶ 5. (SBU) The Dutch define ""immigrants"" -- in Dutch,

""allochtonen"" -- to include actual immigrants and secondgeneration descendants. Immigrants currently comprise roughly 16 percent of the population; 5.8 percent of the population is Muslim.

URBAN CONCENTRATION

-------------------

Â¶ 6. (SBU) The largest concentrations of Muslims live in poor, segregated neighborhoods in Amsterdam, Rotterdam, The Hague and Utrecht. A recent study characterized these neighborhoods as deteriorating, with rampant social problems. According to the Amsterdam City Council only 51 percent of those living in Amsterdam are ""native"" Dutch, compared to 55 percent five years ago.

Â¶ 7. (SBU) The trend is similar in other big cities. The population of Rotterdam is 621,000, of which 189,000 or 30 percent are considered minorities. The Hague's population is 469,000, of which 35 percent or 166,000 are minority.

Utrecht's total population is 275,000, 24 percent of which are minority residents. The fact that Muslim minority populations are concentrated in cities has exacerbated tensions with native Dutch in these communities. What the

Dutch term ""white flight"" is a disturbing trend in major cities.

II. SOCIAL/POLITICAL ORGANIZATION

---------------------------------

Â¶ 8. (SBU) The Islamic community is served by an extensive network of mosques and cultural centers, the majority of which accommodate Turkish and Moroccan communities. Of the country's 400 mosques, more than 200 serve Turks, some 140 serve Moroccans, and roughly 50 serve Surinamese. Mosques and cultural centers fall under a national system of subsidies that underwrites cultural activities, so nearly all receive government funds. There is significant foreign influence: almost all imams are foreign-born and many mosques receive funds from Turkey and Saudi Arabia.

Â¶ 9. (SBU) Most mosques are not controversial, but there are exceptions. Dutch security services have at least five under intense surveillance, including Al Fourqaan in

Eindhoven, As-Soennah in The Hague and Al Tawheed in

Amsterdam. The government has recently taken contentious steps to limit the influence of such mosques, including proposing that foreign imams be barred from preaching.

Last summer Immigration and Integration Minister Rita

Verdonk declared three imams in Eindhoven personae non grata for allegedly recruiting members for extremist groups. The three have been ordered to leave the country. One has done so; the other two are appealing in court.

Â¶ 10. (SBU) Despite pressure from right-wing politicians, the government has refrained from closing ""radical"" mosques.

Many believe such a step would be perceived as a serious violation of Dutch religious tolerance. Also, during a recent meeting with emboffs, National Counter-Terrorism

Coordinator Tjibbe Joustra said there is a debate on the wisdom of expelling radical imams because doing so might

increase alienation and radicalization.

ISLAMIC SCHOOLS

---------------

Â¶ 11. (SBU) Under the Dutch education system, Muslim schools are eligible for government funding, as are Catholic and

Protestant schools. Holland has 47 Islamic schools, including two secondary schools, and there are applications to open at least six more. The mainstream press regularly publishes sensationalist articles that such schools blacken their windows during Christmas, expunge references to the

Holocaust from their texts, and so forth. A representative of the Islamic Schools Administrative Organization recently asserted that Muslims are demanding Islamic schools because of growing prejudice against the community, which ""feels that it is put offside in Dutch Society and associates less and less with available institutions."" Similarly, the

Turkish Embassy reports an increase in the number of Turkish teenagers returning to Turkey for school to escape what they view as growing anti-Muslim prejudice.

Â¶ 12. (SBU) Although many observers have expressed concern that Islamic schools perpetuate segregation and alienation, major political parties here are reluctant to cut funding since doing so would threaten funding for all religiouslyaffiliated institutions-- a mainstay of Dutch society.

Instead, schools with a high-percentage of non-native Dutch students receive supplemental subsidies to help students learn Dutch and to create a ""safe"" environment. Islamic schools must meet the same curriculum criteria as any statefunded school. Dutch classes are mandatory.

POLITICAL REPRESENTATION

------------------------

Â¶ 13. (SBU) There is no effective political representation of

the Dutch Muslim community on the national level. While nine of the Second Chamber's 150 members are Muslim, none speaks for a broader Muslim constituency, and none has sought to play such a role. In part, this reflects the

Dutch political system, which discourages constituency-based politics in favor of disciplined national parties. Party leaders usually select parliamentary candidates for their perceived electability and standing within the party, and frown on members developing separate ethnic or regional followings.

Â¶ 14. (SBU) On the local level, the situation is even more striking. In the three large cities where Muslims are most heavily concentrated, they are severely underrepresented.

Amsterdam has one Muslim alderman; The Hague and Rotterdam have none. (The Amsterdam alderman - Ahmed Aboutaleb - is the most popular politician among Dutch Muslims, according to a recent survey). Mayors and other senior officials in all three cities are non-Muslim. Despite large numbers of potential voters in these cities, voter turnout among

Muslims is low.

Â¶ 15. (SBU) Groups within the Netherlands have periodically floated the idea of starting a Dutch Islamic party. In a recent poll of 500 Muslims, almost half believed an Islamic political party was desirable, but most also said it would be difficult for such a party to bridge the gap between

Holland's disparate Muslim communities. The Contact Body for Muslims and Government is not a political party but as an advisory body to the government, claims to represent 80 percent of the Muslim community. It acts as a sort of public mouthpiece for the various Muslim communities and dialogues with the national government on social and political issues. The Dutch government does not keep records on the voting patterns of individual ethnic or religious groups in the Netherlands, so it is difficult to say which of the mainstream parties is most popular among

the Muslim community.

III. SOCIAL FRICTIONS

---------------------

Â¶ 16. (SBU) Since the fall of 2001 and especially since the

November 2004 killing of Theo van Gogh, resentment of

Muslims and Islamic culture is increasingly apparent. The

Dutch public is moving toward the political right in their response to Muslim issues, and their leaders are following suit. Populist politician Pim Fortuyn, who was murdered in

2002, received broad support for his characterization of

Islam as ""a backward culture."" Other politicians such as

Ayaan Hirsi Ali and Geert Wilders regularly issue provocative statements about Islam that stir outrage among

Muslims and pander to the prejudices of non-Muslims. While mainstream political leaders continue to preach integration rather than separation, nearly all have made tougher integration policies and cracking down on religious extremism part of their platform going into the next elections.

Â¶ 17. (SBU) The two main pollsters in the Netherlands recently wrote that ""fear of Islam and irritation about insufficient integration of immigrants play a dominant brain position in the heads of native Dutch. Whether we surveyed national security issues, religious statements or political preference, it appears again and again that negative sentiment towards immigrants and Muslims have the upper hand, and significantly influence behavior and opinion.""

Â¶ 18. (SBU) In January 2005 two-thirds of native Dutch polled said they feared a terrorist attack by Muslim fundamentalists. Asked about Muslims in general, roughly one-third expressed negative opinions. Four in ten object to Muslims bringing spouses from their home countries, arguing that such immigration hampers the integration of

Muslims in the Netherlands.

SEGREGATION AND DISCRIMINATION

------------------------------

Â¶ 19. (SBU) For its part, the Muslim community convincingly argues that ingrained segregation and discrimination are facts of life in the Netherlands. In a June 2005 report entitled ""Staying from Each Other's Turf"" the Dutch government's Social and Cultural Planning Bureau found that two-thirds of native Dutch have no contact with migrants outside work -- either because they do not live in their neighborhoods or because they deliberately avoid contact with them.

Â¶ 20. (SBU) Seventy percent of Turks, 60 percent of Moroccans, and 50 percent of Somalis have limited their social contacts to their own communities. The government planning bureau called it ""worrisome"" that Turks and Moroccans are increasingly withdrawing into their own communities and have less and less contact with ""white"" Dutch. The lack of contact between communities in turn reduces incentives for immigrants to learn Dutch and limits their ability to find jobs. Feelings of resentment are not exclusive among the lower and uneducated ethnic population, polls show that those with higher incomes and better educations who do come into regular contact with ""white"" Dutch also tend to have the most negative opinion of Dutch society, as they are more likely to experience direct discrimination on a regular basis both in the workplace and socially (e.g., at bars and clubs.)

Â¶ 21. (SBU) The education level of non-Western immigrants lags significantly behind native Dutch, even though it has risen noticeably in the past 15 years. In 2003, 15 percent of the non-western immigrants had completed higher education

(including both college and university), compared to 25

percent of native Dutch. Participation of non-western immigrant women is higher education rose more rapidly than men. Of the non-Western immigrants more than 25 percent completed only elementary school.

Â¶ 22. (SBU) A recent study found that among equally qualified native Dutch and Moroccan students from mid-level vocational training colleges, Moroccan students are 30 percent less likely to be invited for apprentice interviews than native

Dutch students.

IV. SOCIAL/POLITICAL CONSEQUENCES

---------------------------------

Â¶ 23. (SBU) Social statistics paint a grim picture: sixteen percent of the minority population is unemployed compared to

6 percent of the majority population; 25 percent receive welfare benefits versus 13 percent of the majority population and 29 percent live in poverty compared to 8 percent of native Dutch.

Â¶ 24. (SBU) Dutch society is only now coming to terms with the fact that many of the nearly one million Muslims in the

Netherlands have poorly integrated. Even before the van

Gogh murder, many Dutch privately expressed frustration that large segments of the Muslim and especially the Moroccan community have been less successful at integrating into

Dutch society than previous immigrant groups. This perception is supported by statistics; a recent INR poll, for example, found that nearly 80 percent of Dutch Muslims identified with their religion or ethnicity far more then the Netherlands -- the highest percentage in Europe. Ethnic minorities are also severely over represented in the crime figures. Younger members of first-generation non-Western ethnic minorities accounted for 35 percent of the prison population in 2004. Not only does the lack of integration lead to more criminal activity, it also helps perpetuate

stark social divides on issues such as the role of women, homosexual rights, and corporal punishment.

Â¶ 25. (SBU) Polls reveal that half of the native Dutch population and half of the Turks and Moroccans believe that a Western lifestyle is incompatible with a Muslim lifestyle.

Native Dutch are primarily concerned about the position of

Muslim women, who they believe enjoy too few freedoms.

Turks and Moroccans are mainly bothered by the perceived lack of respect for their cultures by native Dutch.

Â¶ 26. (SBU) There is growing support within the non-Muslim community that integration should be mandatory rather than voluntary. In this spirit, the Dutch are taking a number of steps to force Muslims to integrate, including obligatory language and integration courses for new immigrants.

Despite the fact that 90 percent of new immigrants complete these courses, only 40 percent achieve sufficient language level to find employment.

Â¶ 27. (SBU) The government has also tightened immigration requirements to limit the prevailing practice of Muslims bringing over partners from their home country. Labor and management organizations have also been brought into the discussion to improve the position of minorities on the labor market and enhance employment opportunities.

POLITICAL OUTLOOK:

-----------------

Â¶ 28. (SBU) All major parties recognize that ""integration"" will be a major issue in the March 2006 local elections and the May 2007 national vote. The government's approach to integration -- which balances outreach to the Muslim community with tougher immigration and anti-terrorism legislation -- enjoys wide-spread support in parliament, but has failed to resonate with the public at large. While it

is still early, there are indications that popular pressures may drive most parties to the right on Muslim-related issues during the election campaigns.

Â¶ 29. (SBU) Some politicians, such as Geert Wilders, advocate significantly stronger measures, including a temporary ban on immigration, deprivation of Dutch citizenship and expulsion of immigrants who commit serious crimes or fail to pass an integration exam. Less drastic, but also controversial, is the proposal by Labor party opposition leader Wouter Bos to link access to social benefits and government services for immigrants to progress made integrating into Dutch society; eligibility for such benefits would be phased-in gradually rather than provided on arrival as is currently the case.

Â¶ 30. (SBU) Toughening social and political attitudes towards

Muslims have not gone unnoticed by the Muslim community.

Approximately 3000 Dutch Turks returned to Turkey last year, many claiming that they felt they no longer had a future in

Holland (although improving economic prospects in Turkey no doubt also played a role.) This fall a more boisterous opposition came in the form of 6,000 protestors from Muslim organizations proclaiming, ""Enough is enough"" through the streets of Amsterdam. In the long term Moroccans and Turks may successfully integrate into Dutch society like the

Surinamese and Indonesians before them, but in the near term feelings of alienation and mistrust continue to deepen and fester.

Blakeman

Viewing cable 05THEHAGUE3381, READOUT OF DAS BRYZA'S DISCUSSIONS WITH

THE DUTCH



05THEHAGUE3381

2005-12-22

07:07

2011-01-20

21:09

CONFIDENTIAL

Embassy The

Hague

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SIPDIS

SIPDIS

E.O. 12958: DECL: 12/22/2015

TAGS: PREL PHUM PGOV SOCI KISL NL

SUBJECT: READOUT OF DAS BRYZA'S DISCUSSIONS WITH THE DUTCH

ON MUSLIM INTEGRATION AND RADICALIZATION



Â¶ C. THE HAGUE 3008

Â¶ D. THE HAGUE 3064

Classified By: Charge D'Affaires Chat Blakeman, reasons 1.4(b) and (d)

Â¶ 1. (C) SUMMARY. Deputy Assistant Secretary Matthew J. Bryza's recent visit to The Hague featured lively discussion on integration and counter-radicalization issues currently the focus of intense debate in the Netherlands. Counterparts from

Dutch Ministries and Dutch Parliament described the antecedents to the pervasive ethnic tension in the

Netherlands and defined challenges facing integration of the

Muslim community into traditional Dutch society. Dutch interlocutors shared DAS Bryza's conviction that the

Netherlands must take a leading role in both integrating

Dutch Muslim community members into mainstream Dutch society, while satisfying second- and third-generation immigrants' thirst for connection with their families' Islamic cultures.

Though some interlocutors conveyed skepticism that the Muslim community could integrate into the European model of society, all counterparts conveyed deep interest in continued dialogue with the United States in order to fight radicalization. END

SUMMARY.

Â¶ 2. (C) Deputy Assistant Secretary Matthew Bryza discussed integration and radicalization of Muslim communities in the

Netherlands with Dutch counterparts on December 13. A roundtable dialogue with interlocutors from the Ministries of

Foreign Affairs, Internal Affairs, and Justice and separate meetings with Dutch Parliamentarians yielded insight into the broad ongoing debate in the Netherlands surrounding efforts in Dutch public and private sectors to counter extremism and foster integration of Dutch Muslim communities.

THE DUTCH BEGIN TO EXAMINE WHAT'S UNDER THE CARPET

--------------------------------------------- -------

Â¶ 3. (C) Recent events have given impetus to Dutch interest in integration and radicalization issues. Peter Knoppe (Dutch

National Counter-Terrorism Board) said that public discussion on the topics became increasingly polemical after the 2002 assassination of Pim Fortuyn, a Dutch politician known for his anti-immigration position, and quite harsh after the murder last December of Dutch filmmaker Theo van Gogh by a

Muslim extremist. Saskia Tempelman (Policy Officer,

Integration Department, Ministry of Justice) explained that, as the Dutch scrutinize the cultural progenitors of the current imbroglio, they begin to realize that the problem is

exacerbated by ignorance -- a majority of native Dutch think all immigrants to the Netherlands are Muslim when in fact only 54% are -- and denial. According to Tempelman, a lot of things (about ethnic tension in the Netherlands) have been swept under the carpet. Knoppe pointed to a lack of opportunities for second- and third-generation Dutch Muslims and the increase in access to extremist Muslim messages via the internet as the primary origins of ethnic tension confronting contemporary Dutch society.

Â¶ 4. (C) Dutch counterparts expressed grave concerns that Dutch

Muslim communities are radicalizing at a faster rate than in

Turkey or Morocco. Knoppe said the Government of Morocco has expressed concern to the GONL that Dutch Moroccan communities are an extremist threat in Morocco. As discrimination against Muslims in the Netherlands intensifies, the backlash in the Muslim community correspondingly increases; Coskun

Coruz (Parliamentarian, Christian Democrats) lamented that even secular communities of Dutch Muslims are now showing signs of susceptibility to the lure of radicalization.

Fadime Orgu (Parliamentarian, Social Conservatives) pointed to what she saw as the hypocrisy of the GONL in promulgating separation of church and state on the one hand and subsidizing religious television and radio programming on the other, and argued that such religious programming exacerbated tensions between the native Dutch and Dutch

Muslim communities.

THE WAY FORWARD: INTEGRATING DUTCH MUSLIM LEADERSHIP

--------------------------------------------- -------

Â¶ 5. (C) Though heightened focus has fostered greater Dutch understanding of the integration and radicalization challenges they face, Dutch policy to address the problems is nascent. Tempelman acknowledged that that the murder of van

Gogh sped up the process leading to the incipience of Dutch domestic integration and radicalization policies. Olthof

explained that the Dutch have not yet coordinated counter-radicalization and recruitment strategies with the governments of Morocco or Egypt.

THE HAGUE 00003381 002 OF 002

Â¶ 6. (C) Dutch interlocutors shared DAS Bryza's assessment that the Netherlands faces a dual challenge of integrating the

Dutch Muslim community into mainstream society, while satisfying second- and third-generation immigrants' thirst for connection with their families' Islamic cultures.

Maintaining this balance is critical to countering both the indignation of discrimination and the spiritual alienation that allow radical messages espoused by internet imams to take root in Dutch Muslim youth. Counterparts agreed that an education program for Dutch Imams is essential to this strategy. Coruz indicated that the CMO, the umbrella organization which claims to represent 80% of Dutch Muslims, recently signed a gentlemen's agreement with the GONL to institutionalize a pedagogic process for Muslim theology students in the Netherlands that would feature an introductory period of a few years of general religious training followed by a few more years of focused training in

Islam, under the tutelage of moderate Muslim instructors.

Dutch Muslims of Turkish descent, however, refused to sign the agreement. Coruz explained that the Turkish Government's

Directorate of Religious Affairs (or Diyanet), which administers mosques and regulates the practice of Islam in

Turkey, seeks to (and succeeds in) exerting political influence over the Turkish-Dutch community, encouraging

Turkish-Dutch Muslims to retain cultural connections with

Turkey. Coruz and Orgu underscored the importance to integration efforts of convincing the Turkish-Dutch community that Dutch concepts of freedom of religion do not impinge on the contemporary Turkish secularist ideology and urged the

U.S. to assist Dutch integration efforts by encouraging the

Diyanet to soften its efforts to exert political influence over Turkish-Dutch Muslims. DAS Bryza suggested that

adapting the Turkish Diyanet's model of moderate Islam could be helpful to efforts to train moderate Dutch Imams. Though

Orgu thought the idea had merit, Tempelman indicated that the proposal faces a number of obstacles. Tempelman said the

Diyanet currently proscribes training of its Imams outside

Turkey and underscored that the Dutch do not want foreign governments exercising control over Dutch minorities.

IS THERE A PLACE FOR MUSLIMS AT THE DUTCH TABLE?

--------------------------------------------- ---

Â¶ 7. (C) Some Dutch counterparts intimated that endeavors to integrate Muslims into traditional Dutch society may be futile: Henk Jan Ormel (Parliamentarian, Christian Democrats)

-- the only native Dutch Parliamentarian with whom DAS

Bryza spoke -- confided that he believed the prospect of

Turkish EU membership was the foremost reason that the Dutch voted on October 3 against adopting the EU Constitution.

Ormel asserted that the roots of Europe are in Christianity, not Islam, adding, European history has in fact been defined against Islam. Though Marnix Krop (Director General for European Cooperation, MFA) indicated that since the

October 3 referendum a majority of Dutch have begun to favor

Turkish membership in the EU, Ormel doubted that there had been any genuine change in the Dutch electorate's minds other than a cooling of tempers on the subject.

Â¶ 8. (C) DAS Bryza reacted warmly to Dutch solicitations for

U.S. cooperation. He promised to share a paper he is currently writing after revising it pursuant to his consultations with Dutch interlocutors.

Â¶ 9. (U) DAS Bryza has cleared this cable.

BLAKEMAN

Viewing cable 10KABUL694, INTERIOR MINISTER ATMAR DISCUSSES POLICE

TRAINING;



10KABUL694

2010-02-25

05:05

2011-01-20

19:07

SECRET//NOFORN

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FM AMEMBASSY KABUL


INFO RUCNAFG/AFGHANISTAN COLLECTIVE




RHEHAAA/NSC WASHDC


RUEKJCS/JOINT STAFF WASHINGTON DC


S E C R E T SECTION 01 OF 02 KABUL 000694

NOFORN

SIPDIS

E.O. 12958: DECL: 02/25/2020

TAGS: PGOV PREL MARR MASS AF

SUBJECT: INTERIOR MINISTER ATMAR DISCUSSES POLICE TRAINING;

INSURGENT REINTEGRATION WITH AMBASSADOR HOLBROOKE

REF: KABUL 628

Classified By: AMBASSADOR KARL EIKENBERRY FOR REASONS 1.4 (b & d)

SUMMARY

Embassy

Kabul

-------

Â¶ 1. (C/NF) In a February 17 meeting, Interior Minister

Mohammed Hanif Atmar told Ambassador Holbrooke, Ambassador

Eikenberry, and General Caldwell that:

-- he wants to train 2,000-3,000 police officer candidates outside of Afghanistan, each year for the next five years.

Atmar is looking at Jordan, Turkey, and the UAE as possible training sites.

-- while GIRoA cannot take reintegrated insurgents into the

Army or Police, Atmar's plan for a local defense initiative

(septel) and public companies for infrastructure and agricultural development would meet reintegrees' economic and security needs.

-- Saudi intervention; the finalization of GIRoA's insurgent reintegration program; and the success of the Marjah operations would all move insurgent reintegration forward.

-- while Atmar favors 16 weeks of training for police (which would enable full literacy training) he believes NATO

Training Mission Afghanistan (NTM-A)'s plan for a condensed six week program as acceptable, providing the number of training hours remains the same. END SUMMARY

INTERNATIONAL TRAINING FOR AFGHAN POLICE

----------------------------------------

Â¶ 2. (C/NF) Noting that police growth is enormously constrained by a lack of trainers and training space,

Minister Atmar wants to send 2,000-3,000 Afghan police officer (as distinct from enlisted) trainees to Jordan,

Turkey, and the UAE for training each year for the next five years. Atmar's first choice is the International Police

Training Center in Jordan, which has room for 1,000 trainees

per year; facilities in Turkey and the UAE (Sharjah Police

Academy and an under-utilized UAE military facility 100kms from Abu Dhabi) could take another 1,000 trainees each.

Atmar estimates an annual cost of $3,000 to $4,000 per pupil per year (thus potential costs of $6 million to $12 million per year). Atmar wants Jordan to contribute by waiving the cost of the facility and the lodging; NATO/ISAF would pay for transportation, food, and training materials; and the cost of foreign trainers would be born by contributing nations.

Â¶ 3. (C/NF) The Minister sees several advantages to this approach: European nations would be more willing to send police trainers to Jordan than to Afghanistan; the prospect of a year's training abroad would draw young, educated

Afghans into the police officer corps; a generation of Afghan police officers trained overseas would help to break the

ANP's culture of corruption; Atmar would also send two Afghan assistants for each international trainer, after three years these assistants would themselves be fully qualified trainers. Ambassador Holbrooke said he had already raised the issue with Jordanian Foreign Minister Judeh, who was positive and promised to follow up. NTM-A Commanding General

LTG Caldwell told Atmar that UAE, through its Kabul Defense

Attach, had made a formal offer to explore sending police trainers to Afghanistan. Atmar asked Ambassador Holbrooke to engage the Arab countries on Afghanistan's behalf, claiming that they would be more responsive to an American approach.

Holbrooke agreed to do so, and asked Lt. General Caldwell to provide him with precise asks.

REINTEGRATION REQUIRES JOBS AND SECURITY

----------------------------------------

Â¶ 4. (C/NF) Minister Atmar said that hundreds of insurgents were approaching the government, and that a proper GIRoA response to them would have to address issues of justice and amnesty, political inclusion, economic and security needs.

Noting that we cannot take them into the police and the army, Atmar seeks to address the final two factors by creating a Local Defense Initiative (not yet approved by

President Karzai; see septel) and two large public sector

KABUL 00000694 002 OF 002 companies, focusing respectively on infrastructure and agricultural projects. Foreign aid in those sectors would be channeled through these public contractors, which would employ former insurgents (along with other Afghans) and provide them with limited job training (of a month or two) and a decent career. Atmar argued that microcredit won't work for insurgents; they must be employed in a controlled and well-managed manner. He estimated that the public sector companies could absorb 10,000 to 15,000 unemployed Afghans, including former insurgents who turned in their weapons, and former mujahideen disarmed through the Disarmament of

Illegally Armed Groups (DIAG) and Disarmament,

Demobilization, and Reintegration (DDR) programs.

Â¶ 5. (S/NF) Atmar cited several factors that would move insurgent reintegration forward: Saudi intervention; the finalization of GIRoA's reintegration program; and the effects of the Marjah operation. Citing the arrest of Mullah

Berader, Atmar said Pakistani help on two more arrests -- those of Mullah Mansoor of the Quetta Shura and Maulavi Kabir of Peshawar -- would further spur reintegration by showing

Taliban that they could not rely on a Pakistani safe-haven.

Atmar said contacts tell us that Berader was arrested because he was in favor of reconciliation. Noting that both the Chief of Army Staff, General Kayani, and ISI Director

Ahmed Suja Pasha were out of the country when Berader was arrested, Ambassador Holbrooke advised Atmar that we should be careful of drawing conclusions.

POLICE: QUALITY, QUANTITY, AND TRAINING LENGTH:

--------------------------------------------- --

Â¶ 6. (C/NF) Noting that police training and quality are on my mind, Atmar said he favored expanding police basic training to sixteen weeks (from eight) so it could include a full literacy element. Ambassador Holbrooke asked Atmar to comment on the apparent divergence of opinion between this position and NTM-A's plan to condense police training from eight to six weeks. Atmar noted that a six-week program with the same number of hours as the eight week (as in NTM-A's proposal) would be acceptable; indeed, it would be necessary if Afghanistan is to meet its goal of 109,000 police by

October 31, 2010. However, Atmar then proposed to square this circle by reducing attrition and increasing retention while the international community increased the number of trainers -- enabling Afghanistan to reach its growth goals while still providing a longer training course.

Â¶ 7. (C/NF) Ambassador Holbrooke wondered if compressing the basic training curriculum from eight weeks to six would have a negative impact on quality, and wondered if 109k was an achievable target by October 30, 2010. The Minister said that a six week course would not lessen the quality of the force; recruits would accept the longer days, he said. He argued that the police were on track to meet the 2010 growth goals, with roughly 92,000 police currently on duty, and another 6,000 de facto police present but not counted on the rolls. These over-Tashkil police, Atmar explained, are not paid by the internationally-funded Law and Order Trust Fund for Afghanistan (LOTFA), and thus are not counted by LOTFA as official police. However, they are paid by private donors and customers (through MoI) for guarding projects like the

Logar copper mine, Indian and Asian Development Bank road projects, and UN facilities. Atmar remarked that the shortages in the ANP ranks were most serious with officers and NCOs, but not as serious in patrolmens' ranks.

Â¶ 8. (U) S/SRAP has cleared this cable.

RICCIARDONE

Viewing cable 09BERLIN1434, MFA STATE MINISTER HOYER DEFENDS

WITHDRAWAL OF



09BERLIN1434

2009-11-12

17:05

2011-01-20

08:08

CONFIDENTIAL

Embassy

Berlin

VZCZCXRO6317

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FM AMEMBASSY BERLIN





RHEHNSC/NSC WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 001434

SIPDIS

E.O. 12958: DECL: 11/11/2019

TAGS: PREL MARR MOPS NATO MNUC PARM GM RU AF

SUBJECT: MFA STATE MINISTER HOYER DEFENDS WITHDRAWAL OF

TACTICAL NUKES, NEW CFE INITIATIVES

Classified By: AMBASSADOR PHILIP D. MURPHY. REASONS: 1.4 (B) AND (D).

Â¶ 1. (C) SUMMARY. MFA State Minister Werner Hoyer strongly

defended the new government's commitment to seek the withdrawal of all remaining nuclear weapons from Germany during a November 10 meeting with EUR A/S Phil Gordon and

Ambassador Murphy, arguing that there was not one credible scenario in which tactical nuclear weapons could be usefully deployed. He emphasized the seriousness of the commitment by noting that it would be one of the benchmarks by which the government would ultimately be judged. Hoyer said equivalent efforts should be made on conventional arms control and to that end, called for more creativity in bringing the

Russians back on board with CFE. Hoyer expected that Germany would increase its contributions to Afghanistan after the upcoming international conference, but said it was too soon to talk about numbers. He claimed the Dutch may take on new responsibilities in the north after withdrawing from Uruzgan.

Given the strong leftward shift of the Social Democratic

Party (SPD), Hoyer thought it was unlikely that former FM

Steinmeier would stay on much longer as parliamentary caucus chairman. END SUMMARY.

TACTICAL NUKES

Â¶ 2. (C) Gordon noted that up to now, FM Westerwelle had said all the right things about needing to go to NATO to address the proposal for the withdrawal of all remaining nuclear weapons from Germany. However, it was not clear whether

Germany had thought through all the broader ramifications of its proposal. Gordon noted that the withdrawal could lead some to conclude that the U.S. was un-committing from

Europe and further undermine confidence in Article 5 among newer NATO members. Withdrawal from Germany would also put other host nations in a politically difficult position, especially those like Turkey, who favored keeping the weapons. Once this becomes a public debate, no government may be able to withstand the pressure to have the weapons withdrawn.

Â¶ 3. (C) Hoyer responded that during the coalition negotiations, defenders of the status quo could not come up with one credible scenario in which tactical nuclear weapons could be usefully deployed. Therefore, he argued, the supposed deterrence of these weapons was meaningless. Hoyer insisted that he took Article 5 seriously, but thought there were better, more credible ways of providing the required deterrence. He admitted, however, that the Baltic air policing mission, for example, and other initiatives like it, had proven insufficient for the newer Allies. He acknowledged the large stockpile of Russian tactical nuclear weapons, calling them pure nonsense, but did not condition withdrawal of tactical nuclear weapons from Germany with reciprocal cuts by Russia. Hoyer said the commitment to seek the withdrawal of nuclear weapons was one of the top 10 to 15 benchmarks by which the new government would ultimately be measured. Therefore, its importance should not be underestimated.

CFE

Â¶ 4. (C) Hoyer thought it was important to balance nuclear arms control with continued efforts on the conventional side to avoid giving the impression that the build-up of conventional armaments was less important. He called for more creativity in finding a way out of the deadlock over the CFE

Treaty. Toward that end, the MFA favored new initiatives that would force the Russians to respond and not allow them to continue to blame NATO for the impasse. Gordon pointed out that even if one were to take the Georgia issue off the table, the continued Russian demand for abolishing flank limits is unacceptable to many Allies and probably could not pass muster in Congress.

EUROPEAN SECURITY TREATY AND OSCE SUMMIT

Â¶ 5. (C) Hoyer said that in addressing the Medvedev proposal,

it is was important to stick to current European security structures, noting that without the Helsinki Process, the previous night's celebration of the fall of the Berlin Wall would have never been possible. While open to possible reforms of the OSCE, Hoyer shared U.S. skepticism about the need for a new treaty. He also agreed that an OSCE Summit hosted by Kazakhstan was hard to justify, given Kazakhstan's human rights record and the lack of substance to discuss.

AFGHANISTAN

Â¶ 6. (C) Asked what the prospects were of Germany doing more in

BERLIN 00001434 002 OF 002

Afghanistan, Hoyer said he agreed with the U.S. approach that it was important to first define the objective and then figure out the strategy before deciding on resources. In this regard, Germany viewed the upcoming conference as key for establishing the necessary basis for the international community's continued engagement in Afghanistan. Hoyer said he expected that Germany would probably end up having to do some topping up in all fields, military as well as civilian, but it was too soon to talk about specific numbers yet. Based on a recent visit to the Netherlands, Hoyer was hopeful of getting the Dutch involved in the north of

Afghanistan. He said they felt bad about their upcoming exit from Uruzgan in the south and seemed eager to do something to compensate for that.

GRIM FUTURE FOR STEINMEIER

Â¶ 7. (C) Hoyer said that now that the Social Democrats are in opposition, they would forget extremely quickly what positions they used to support and move to the left. As a result, he thought it was unlikely that former FM Steinmeier

would survive very long as the new chair of the SPD parliamentary caucus. The new designated party chairman and secretary general have completely disassociated themselves from the old SPD leadership and its policies. Hoyer said that if the new leadership stayed on its current course,

Steinmeier, who was the SPD policy mastermind over the past

10 years, could only stay on by repudiating almost everything he had stood for.

MURPHY

Viewing cable 09BRASILIA1112, BRAZIL MORE SUPPORTIVE OF U.S. ARAB-ISRAELI

NEGOTIATIONS APPROACH BUT NO AID COMMITMENTS YET



09BRASILIA1112

2009-09-04

20:08

2011-01-21

00:12

CONFIDENTIAL

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RUEHJM/AMCONSUL JERUSALEM 0031





SIPDIS

Embassy

Brasilia

E.O. 12958: DECL: 09/04/2019

TAGS: PGOV PREL EFIN EAID KWBG OPDC IS

SUBJECT: BRAZIL MORE SUPPORTIVE OF U.S. ARAB-ISRAELI NEGOTIATIONS APPROACH

BUT NO AID COMMITMENTS YET

REF: A. SECSTATE 80039

Â¶ B. BRASILIA 391

Â¶ C. BRASILIA 322

Classified By: Charge D'Affaires Lisa Kubiske for reasons 1.4 (b) and ( d).

Â¶ 1. (C) Summary. The Brazilian Ministry of Foreign Affairs (MRE or

Itamaraty) has no immediate response to our request in ref A to provide $10 million in direct budget support to the Palestinian Authority (PA). The relevant MRE department heads were receptive to the idea of a further

Brazilian contribution but noted that the Brazilian Congress still has not approved the $10 million that Itamaraty promised the PA for Gaza reconstruction in March. MRE officials who have previously criticized the

U.S. approach to Arab-Israeli negotiations offered praise for our current strategy, especially increased discussions with Syria and pressure on

Israel to halt construction of settlements. Brasilia wants to raise its profile on Israel-Palestine issues generally, and intends to host separate visits from Israeli President Shimon Peres and Palestinian President

Mahmoud Abbas, both in November. September 4 newspaper reports also suggested that a long-planned visit by Iranian President Ahmadinejad might be scheduled for December. MRE also asked for our help in setting up a a meeting between between Special Envoy Mitchell and Brazil's top envoy on

Middle East issues, Ambassador Affonso Ouro Preto. End summary.

Enthusiastic but Non-Committal ------------------------------

Â¶ 2. (C) In a September 3 meeting with poloff at Itamaraty, Middle East division directors Claudio Nascimento (Israel-Palestine, Turkey, Syria) and

Roberto Abdalla (Iran, Iraq, Gulf States), discussed at length Arab-Israeli relations and their desire for Brasil to have a larger role -- but could not give an immediate answer to the question in reftel A. (They said that the Minister had received reftel letter in early August, but that their section had not become aware of it until recently.) While Nascimento in particular sounded enthusiastic about the concept of providing funding for the PA in advance of peace negotiations, they acknowledged that an earlier

$10 million promised for Gaza reconstruction (ref B) by Foreign Minister

Celso Amorim in advance of the March 31 Arab-South American summit still had not been authorized by Congress. No one in either division knew anything about the status of the $10 million in Congress. Later in the day, poloff called the Senate Foreign Affairs and National Defense Committee and learned from staff that the legislation still has not been assigned a lead sponsor ("relator") -- meaning that it would take weeks at a minimum before the funding could be approved and released.

Supportive of New Direction ---------------------------

Â¶ 3. (C) In contrast to previous meetings with the Embassy, in which

Itamaraty has generally criticized U.S. policy in the Middle East (refs B,

C), feedback for the overall U.S. approach to Israel-Palestine issues was quite positive. They specifically praised President Obama and Special

Advisor Mitchell for taking a different and hands-on approach. Nascimento, who has emphasized in previous meetings the importance of better U.S. relations with Syria as part of Arab-Israeli negotiations, noted the increased level of outreach to Damascus in recent months. MRE hoped to learn more about the specifics of our policy toward Syria. (Note: Brazil's

Arab community is largely of Christian Syrian and Lebanese origin. End

Note.) Nascimento also cited our emphasis on asking Israel to halt construction of settlements "as a really noticeable and positive change."

The directors also latched on to Hamas chief Khalad Meshal's statement last month that it could accept a Palestinian state based on 1967 borders as a hopeful sign for future talks.

Raising the Brazilian Profile -----------------------------

Â¶ 4. (C) While non-committal about PA funding, Nascimento mentioned ways in which Brazil is trying to raise its profile on Arab-Israeli issues. In addition to a projected visit by Peres on November 11, MRE is also in the process of organizing a visit by Abbas two weeks later. Ambassador Ouro

Preto, Brazil's top envoy to the Middle East, is attempting BRASILIA

00001112 002 OF 002 to meet with both men before the prospective visits.

The original idea was to meet with Peres and Abbas at a planned Moscow conference but, since Itamaraty is not sanguine about propects for that conference happening anytime soon, Ouro Preto plans to visit them in their respective offices. There are no plans on the immediate horizon for

President Lula to reschedule his trip to Israel-Palestine, which was canceled earlier this year for security reasons.

Â¶ 5. (C) Nascimento also requested assistance in setting up a meeting between Ambassador Ouro Preto and Special Envoy Mitchell. He said that DAS

Kelly's office had reached out to the Brazilian Embassy in Washington about setting up a meeting but that no further contact has been made recently.

Such a meeting could be held on the margins of the UN General Assembly in late September, he said. No specific subject matter for the meeting was mentioned.

Comment -------

Â¶ 6. (C) The guarded enthusiasm expressed by Itamaraty about the U.S. role in the Arab-Israeli peace process represents a welcome change of pace, but it will be difficult to convert this into immediate deliverables from the

GOB. The delay in approving the $10 million for the PA promised in March does not preclude additional Itamaraty commitments for additional budget assistance but the March commitment is already an extremely large contribution for Brazil and any new contribution will also have to be cleared by Congress. Brazil is determined to play a larger role, however, and additional contact with the GOB on this issue would be helpful both to inform and influence what is still a relatively unrefined policy toward the region and the Israel-Palestine peace process in particular. End Comment.

KUBISKE

Viewing cable 03THEHAGUE2480, NEW DUTCH FOREIGN MINISTER DESIGNATED -

BERNARD



03THEHAGUE2480

2003-09-30

14:02

2011-01-22

21:09

CONFIDENTIAL

Embassy The

Hague


C O N F I D E N T I A L THE HAGUE 002480

SIPDIS

E.O. 12958: DECL: 09/30/2013

TAGS: PREL PGOV PINR NL

SUBJECT: NEW DUTCH FOREIGN MINISTER DESIGNATED - BERNARD

BEN BOT

Classified By: Political Counselor Mary E. Daly reasons 1.5 (b & d)

Â¶ 1. (C) Summary: On September 30, Prime Minister Jan Peter

Balkenende asked retired career diplomat Bernard Bot to accept the post of Minister of Foreign Affairs beginning in early December, 2003. Bot declared himself most willing to accept the position. The intention is for de Hoop Scheffer to stay in office through the OSCE Ministerial December 1-2.

The primary reason for choosing Bot is the need for an accomplished technocrat to run the Dutch EU presidency. Bot most recently served as the Netherlands' permanent representative at the EU between 1992 and 2002. Prior to that, he was Dutch ambassador to Turkey and to NATO, as well

as Secretary General of the MFA. Privately, sources close to the Prime Minister told us that the Prime Minister insisted that foreign policy remain unchanged, especially regarding relations with the United States and Israel. Bot's interview with the Prime Minister this weekend was reportedly very long and designed to assess whether he was willing to carry out the current policy line. According to the PM's top political advisor, Balkenende was fully satisfied that Bot was strongly committed to the Atlantic partnership. The Prime Minister passed over candidates from the political class. While he would have liked CDA floor leader Maxime Verhagen in the job

(the men are extremely close personally and on policy), he could not spare him from parliament. Bot's resume follows.

Â¶ 2. (C) Dr. Bernard Rudolf Bot

Born November 21, 1937 in Batavia, Indonesia

Widower, three children

Education: St. Aloysius College, The Hague

Law studies, University of Leyden

Academy of International Law, The Hague,

Harvard Law School, Cambridge, Mass USA (LLM)

Doctorate in law (cum laude), University of Leyden

Career: Joined the diplomatic service of the Ministry of

Foreign Affairs October 22, 1963.

Postings: 1964 - 1970 - Brussels, Permanent Representation of the Netherlands to the European Communities

1970 - 1973 - Buenos Aires

1973 - 1976 - (East) Berlin

1976 - 1982 - Ministry of Foreign Affairs, The Hague

1982 - 1986 - Brussels, Deputy Permanent Representative of the Netherlands to NATO

1986 - 1989 - Ankara, Ambassador

1989 - 1992 - Secretary General, Ministry of Foreign Affairs,

The Hague

October 1, 1992 - Brussels, Permanent Representative of the

Netherlands to the European Union

January 1, 2003 - Partner, Praaning Meines Consultancy Group

Other Positions:

Chairman, Association of the Members of the Diplomatic

Service (1978 - 1982)

Member of the Board of Governors, Fondation Journalistes en

Europe

Member of the Supervisory Board, Hotel School The Hague

Chairman of the Advisory Board, Energy Charter Secretariat

Member of the Board of Trustees of the European Centre for

Work and Society

Member of the Board of Trustees of the University of Tilburg

Publications:

Non-recognition and Treaty Relations (1968), edited by

Sijhoff and Oceana

Articles on the Common Market, European Political co-operation, NATO and various other political matters

SOBEL

Viewing cable 03THEHAGUE2843, AMBASSADOR'S NOVEMBER 10 DINNER WITH

DUTCH PRIME



03THEHAGUE2843

2003-11-13

14:02

2011-01-22

21:09

CONFIDENTIAL

Embassy The

Hague



SIPDIS

E.O. 12958: DECL: 11/10/2013

TAGS: ECON IZ NL PGOV PREL

SUBJECT: AMBASSADOR'S NOVEMBER 10 DINNER WITH DUTCH PRIME

MINISTER BALKENENDE

Classified By: Classified By: DCM Daniel R. Russel: reasons 1.5 (B) (D)

Â¶ 1. (C) Summary: Ambassador Sobel hosted dinner for Dutch

Prime Minister Jan Peter Balkenende November 10. The PM's

Diplomatic Advisor Rob Swartbol and DCM also attended.

Balkenende promised that Dutch foreign policy would remain constant when Ben Bot became FM on Dec. 3, but cautioned that

EU Presidency preparations would consume increasing amounts of government attention. Balkenende restated his commitment to shoring up trans-Atlantic ties and expressed interest in working on US-EU border security and justice issues during the Dutch presidency. He described an agenda with a heavy

European focus, and was cautious on whether the Dutch could play a constructive role in fostering US-EU Article 98 agreements. The PM indicated he was also thinking about an outreach of some kind to Israel. Balkenende thanked the

Ambassador warmly for the reception by the President and other senior USG officials in Washington in September. End summary.

New Foreign Minister, Same Foreign Policy

------------------------------------------

Â¶ 2. (C) Balkenende said that Ben Bot, set to replace outgoing

FM de Hoop Scheffer on December 3, would maintain the government's priorities in foreign affairs: European integration, the trans-Atlantic relationship, and continuity in Middle East policy. Balkenende said Bot is indeed a

Europeanist, having spent the past ten years as Dutch

Ambassador to the EU, but will be strong in maintaining

trans-Atlantic ties and will maintain the existing division of labor with the State Secretary for European Affairs.

Balkenende cautioned that Bot would have his hands full in the first few months of his tenure. His first order of business is establishing himself with the Parliament and preparing for the EU Presidency. He also needs to invest in establishing his management of the Ministry and to travel abroad, including to Washington. Balkenende noted that he himself would travel to the US in March to receive an award at Princeton and planned to make a major speech on trans-Atlantic relations at that time.

Dutch '04 EU Presidency

------------------------

Â¶ 3. (C) Sobel asked what initiatives the Dutch could take during their presidency in support of the US-European relationship. The Justice Minister, who had recently met with DHS Secretary Ridge, had confirmed that Dutch would be working on Justice and Home Affairs (JHA) issues during their presidency and agreed that perhaps there could be progress on the US-EU track. Swartbol said that the GONL had not made decisions yet about any trans-Atlantic initiatives, but a

US-EU effort on border control and justice issues would fit the Dutch emphasis on internal and external security. He cautioned that the arrival of a new slate of EU Commissioners in November '04 would complicate and delay things. PM

Balkenende said that he and Irish PM Ahern had discussed the question of whether the Dutch would begin the process of designing a program to follow Tampere -- the JHA multiyear plan that would be completed and reviewed during the Irish

Presidency. In order to get anything done in the second half of '04, the Irish would have to do the preparatory work.

Balkenende said he would ask his people to look at the possibilities.

Â¶ 4. (C) The Ambassador urged the PM to stay engaged in the

trans-Atlantic partnership and show leadership in Europe.

Wrapping up on the EU Presidency, Balkenende said that the government is increasingly busy in its preparations, although he invited the Ambassador to contact him when there are important US issues. The cabinet now meets monthly to review

Presidency preparations, and the pace of those meetings will accelerate.

Balkenende listed the following Dutch priorities for the second semester of '04:

- - Enlargement - Bulgaria, Romania, and Turkey;

- - The new European Commission and Parliament;

- - Lisbon 2000 (economic), Tampere, and Common Security and

Foreign Policy (CSFP);

- - Deregulation in Europe; and

- - Promoting social values in Europe.

Other issues

--------------

Â¶ 5. (C) ICC: The Ambassador also raised the ICC, noting that the UN arrangements will again expire in June, risking a

US-EU confrontation. The US position will not change, so wouldn't it be better for the European Council Presidency to deal with this? Balkenende replied that it would be very hard to imagine the EU accepting Article 98 agreements with the US. The American perspective on the ICC is very different and will not change; Dutch political support for it is strong. Swartbol added that since the Netherlands is the host country, it is very difficult for the government to engage on this matter. Europe does not want conflict with the US over the ICC, but objects to pressure and publicizing

Â¶ A. 98 agreements by other countries. DCM responded that the

US was not seeking to undermine the ICC and that EU countries individually wanted to find a way out of the confrontation with the US over the ICC. The treaty itself provided the answer in Article 98 and we would welcome quiet Dutch efforts with its EU partners to break the stalemate.

Â¶ 6. (C) Economics: Sobel briefed the PM on plans for a high-level trade mission by Dutch companies to Silicon

Valley. Balkenende confirmed that he would address the group via video and expressed interest in meeting with the mission when it returned. He described the government's efforts to increase private R&D spending, eliminate barriers to foreign scientists coming to Dutch universities, and otherwise increase competitiveness in the short and the long term.

Â¶ 7. (C) Iraq: Balkenende asked if the Madrid Conference had been successful. Ambassador replied that it had been very positive and a number of countries had risen to the challenge at the last minute. DCM noted that there had been valuable consultations in and on the margins of the conference. The

Iraqi Planning Minister al Hafidh, who visited the

Netherlands in October, had just been named Minister of

Development and International Cooperation - was the GoNL planning to do more in helping to grow the Iraqi economy and build infrastructure? Sobel said that Dutch industry has been signaling its interest and was looking for leadership from the government. Balkenende replied that Economic Affairs

Minister Brinkhorst was the person who should be developing opportunities for Dutch companies and promised he would raise the issue.

Â¶ 8. (C) The Ambassador probed Dutch thinking on the Middle

East in the run-up to their EU Presidency. Balkenende said that any effort in the Middle East Peace Process would need to be carefully prepared and depended on whether the two parties were ready to negotiate seriously. Picking up the point previously made to the Dutch FM in Washington last

September by White House Senior Director Elliot Abrams, Sobel noted that anything that reduced Israel's isolation from the

EU would be beneficial. Swartbol later told the Ambassador that the GONL, if it decided to get involved, would think in terms of inviting PMs Sharon and Qurei (separately) to visit

Holland, probably sometime next year.

Comment

-------

Â¶ 9. (C) Balkenende remains staunchly supportive of the trans-Atlantic relationship and again demonstrated his accessibility to the Ambassador and willingness to entertain new ideas. The conversation revealed, however, the extent to which he and the GONL are increasingly consumed by the vortex of Europe, particularly in the run-up to the Dutch EU

Presidency in July '04. Dutch decision-making in the best of times is slow and diffused - and Balkenende is a consensus-builder in a coalition cabinet, not an assertive leader dominating the political scene. This means that although Balkenende's heart is in the right place, getting him, incoming FM Bot, and other senior GoNL officials to focus adequately and consistently on US equities will be a labor-intensive process -- although well worth the effort.

RUSSEL

Viewing cable 04THEHAGUE3166, NETHERLANDS/EU: FM BOT ON CHINA, TURKEY,



04THEHAGUE3166

2004-12-03

16:04

2011-01-22

21:09

CONFIDENTIAL

Embassy The

Hague



SIPDIS

E.O. 12958: DECL: 12/02/2014

TAGS: PREL MARR CH RS NL EUN

SUBJECT: NETHERLANDS/EU: FM BOT ON CHINA, TURKEY,

ENLARGEMENT, RUSSIA/UKRAINE, MIDDLE EAST, AND IRAN

Classified By: CLASSIFIED BY AMBASSADOR CLIFFORD M. SOBEL FOR REASONS 1

.4 (B AND D)

Â¶ 1. (C) SUMMARY: During a one and one half hour discussion with Ambassador Sobel on December 2, Dutch Foreign Minister

Bernard Bot laid out his priorities for the last few weeks of the Dutch EU presidency. Bot stated categorically that he will not lift the Chinese Arms Embargo, but predicted

(again) that Luxembourg would. He claimed that getting a yes on Turkey will be the most important legacy of the

Dutch presidency, but stressed that this will not happen unless Turkey signs the Ankara Customs Union Agreement protocol on Cyprus at the eleventh hour on December 17. He faulted the Commission for the lack of progress on Romanian and Croatian accession talks. With regard to Russia, Bot said Putin's debating skills during the U.S.-EU summit were impressive but worried that Russian great game thinking will continue to thwart closer U.S.-EU cooperation in Ukraine and other parts of the new neighborhood. The EU will remain engaged in Ukraine despite Russian pressure, but Bot expected a new election would likely produce the same

(fraudulent) results. Bot is proud that he was able to bring

Israelis and Palestinians together at the EUROMED conference and intends to stay engaged in the Middle East after the conclusion of the Dutch Presidency. Finally, Bot described the EU-Iran agreement as flawed, but better than nothing: half and egg is better than a shell. END SUMMARY.

CHINA ARMS EMBARGO: I WILL NOT LIFT

--------------------------------------

Â¶ 2. (C) Bot stated that the Chinese have stepped up the pressure to have the embargo lifted before the end of the

year. He said he recently told Chinese Foreign Minister Li on the phone that I will not lift the embargo. (Note:

This is the first time Bot has stated this categorically.)

Ambassador Sobel asked about the language on a positive signal we understood would be included in the EU-China summit statement on December 8; Bot acknowledged that the statement would include language indicating that the EU was working toward lifting the embargo but would not go further. Bot denied that the statement would include any conditions on lifting, but stressed that the EU would appeal for action on Human Rights and make clear that the toolbox and strengthened code of conduct must be in place before lift. (Grinning, Bot said he told Li to blame the

French if their refusal to make concessions on the toolbox prevented the lifting of the embargo.) According to Bot, Li said that the Chinese would ratify the International

Convention on Civil and Political Rights soon, but did not want to do it with a gun to their heads.

Â¶ 3. (C) Asked about the current dynamic within the EU, Bot said that the Baltics had recently become more active in expressing their concerns about lifting the embargo at this time, along with the Danes, Swedes, and Czechs. Bot predicted, however, that the embargo would almost certainly be lifted during the Luxembourg presidency, probably in May or June 2005, in response to pressure from China and France.

TURKEY: I WANT A YES

----------------------

Â¶ 4. (C) Bot told Ambassador Sobel that he is determined to get a yes for Turkey at the December 17 Council meeting, asserting that this is the most important thing he hopes to accomplish this year. He stated categorically that the

Council decision will use the October 6 Commission report language on open-ended negotiations: the Austrians, he

said, will not get what they want. On the other hand, Bot argued that Turkey must eventually agree to sign the protocol to the Ankara Agreement (effectively recognizing

Cyprus) -- which he expected them to do at the absolutely last minute on December 17 or early December 18 (after midnight) -- or there is no deal. Bot passed this message to Turkish FM Gul several times over the past few weeks, he said, but Gul so far remained adamant that Turkey would not sign. Shrugging, Bot said that if that remained the Turkish position there was nothing he could do as this was non-negotiable; if Turkey did sign, he added, then Cyprus would come under enormous pressure to drop all other additional demands.

Â¶ 5. (C) Bot asked for U.S. assistance in convincing Turkey to suspend military operations in the Aegean, at least through

December 17, as they were providing a pretext for Greece to agitate against Turkish accession. According to Bot, Turkish

PM Erdogan had told him recently that he could not stop the flights because he did not control the military -- an assertion Bot found disturbing. Asked by Ambassador Sobel about a possible date for starting negotiations with Turkey,

Bot said that it would almost certainly be late 2005; he noted that in public statements he sometimes added or early

2006 as a sop to the French, but did not believe it.

ROMANIA/CROATIA: BAD VIBES

---------------------------

Â¶ 6. (C) Bot expressed frustration with the slow progress on

Romania and Croation accession. Romania was not even close to accession, he said, largely because of its lack of progress on competition area; while Croatia's failure to hand over Gotovina to the ICTY was a serious problem. Bot said that he did not want the Dutch presidency to be remembered primarily for saying no to multiple candidates, and was

talking intensively with the Commission to find a way to move forward.

RUSSIA/UKRAINE: PUTIN WINS ON POINTS

-------------------------------------

Â¶ 7. (C) In response to a question from Ambassador Sobel, Bot denied that the lunch discussion on Ukraine during the recent

EU-Russia summit had been as contentious as reported by some.

Bot stressed that Putin had been polite but tough and very well prepared. Compared to his own Prime Minister, Bot continued, Putin came across as a strong debater who could win on points but still fail to convince his audience because his premises were all wrong. Putin had argued, for example, that the EU should stay out of Ukraine just as

Russia has, and suggested that Ukraine's ties to Russia meant it would never be a Western European state. With regard to next steps, Bot said that he had deliberately chosen to let Solana take the lead for the EU (despite pressure from the Poles to take a more active personal role) since the Commission was inherently less threatening to

Russia than the EU presidency. Bot expected that the

Ukrainian supreme court decision would lay the basis for either a re-run of the election or completely new elections, and speculated that the Russian line in the sand would be for the EU to recognize Yuschenko as a winner without one of these steps occurring first. In either case, however, Bot concluded glumly that the same forces that rigged the last election would probably do so again unless the West could come up with 25,000 monitors. While the EU had been relatively united so far, Bot doubted that consensus could be maintained over the long term if the cause appeared lost.

Â¶ 8. (C) With regard to the four common spaces, both sides agreed at the summit to set May 2005 as the target for concluding agreement, but Bot was skeptical that this would

be achieved, especially with regard to external relations.

Russia, he said, is still operating on the basis of 19th century Great Game thinking, while the EU is trying to be a good neighbor.

MIDDLE EAST: STAYING IN THE PICTURE

------------------------------------

Â¶ 9. (C) Bot confirmed that the Shaath-Shalom-Bot meeting on the margins of the November 29 EUROMED meetings had been very constructive. Bot had told both parties that the EU would refrain from discussing final status issues provided they made a real commitment to successful Palestinian elections and related near-term steps. (In response to a question from the Ambassador, Bot said that he had restrained Solana and some Arab delegations from seeking to restart a discussion on final status issues during the dinner by spelling out this agreement.) The mood of that meeting had helped set a positive tone for the dinner, which Bot contrasted favorably to the previous EUROMED dinner in which soup and plates flew. The EU is committed to providing funds, logistical support, and observers for the Palestinian elections but is also seeking support from countries in the region.

Â¶ 10. (C) Bot was eager to coordinate EU efforts with the U.S. and expressed frustration that more information on U.S. near-term planning was not available. He did not think he would be able to attend the December 11 Forum for the Future meeting in Rabat because he would be attending Prince

Bernhard's funeral, but stressed that he intended to remain engaged on the Middle East even after the end of the Dutch EU presidency. (Note: On December 3, Bot told the Ambassador he would like to attend the Forum for the Future and intended to ask the Prime Minister if he could be excused from the funeral, but stressed that the Prime Minister was unlikely to approve.) Both the Palestinians and Israelis, he said, appreciated the Netherlands' balanced approach (especially

when compared to some other European governments) and had asked him to stay involved. Bot said he had discussed this with his Luxembourg counterpart who also supported leaving much of this portfolio in Dutch hands. describing his commitment to

IRAN: HALF AN EGG BETTER THAN A SHELL

--------------------------------------

Â¶ 11. (C) Ambassador Sobel asked Bot if he thought the EU-3 agreement with Iran would hold; Bot replied in the affirmative. He readily acknowledged that the agreement was not perfect, but noted that China had made clear its intention to veto any critical resolution in the Security

Council, so that route was not practical. Citing a Dutch proverb, Bot argued that half an egg is better than a whole shell. The agreement would at least slow down the Iranians, he said, and could lead to a more significant IAEA monitoring regime in the future.

COMMENT:

-------

Â¶ 12. (C) Bot was confident and decisive throughout the meeting. Although still looking for consensus within the EU, he also appeared comfortable choosing -- when forced to make a choice -- a position in favor of the transatlantic agenda over the objections of EU partners, as in the case of China.

His irritation with France was palpable; at one point, Bot told the Ambassador in confidence that it would be a big mistake to reward Chirac's behavior with a presidential visit or other post-election gesture without guaranteed deliverables.

RUSSEL

Viewing cable 05THEHAGUE406, YOUR MEETING WITH DUTCH FOREIGN MINISTER

BOT



05THEHAGUE406

2005-02-11

11:11

2011-01-22

21:09

SECRET

Embassy The

Hague



SIPDIS

TO THE SECRETARY FROM AMBASSADOR SOBEL

E.O. 12958: DECL: 02/10/2025

TAGS: PREL NL EUN NATO

SUBJECT: YOUR MEETING WITH DUTCH FOREIGN MINISTER BOT

REF: THE HAGUE 3350 (2004)

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.4(B) and (D).

Madame Secretary:

Â¶ 1. (C) Foreign Minister Bot requested this meeting to discuss a wide range of U.S.-EU issues prior to the President's visit to Europe. A former Dutch permrep to the EU with a pro-European reputation, Bot's appreciation of the transatlantic relationship appears to have deepened and strengthened during the six months of the Dutch EU presidency. On several key issues -- e.g. Iraq, Ukraine,

China, Turkey -- Bot leveraged his understanding of European politics and institutions to advance a solidly transatlantic agenda. His candid assessments of internal European decision-making at critical moments also proved invaluable.

Bot very much wants to remain a player, and is seeking to stake out a clear role for the Dutch (and for himself) in the post-Presidency environment. Although we have had our recent

-- over the Dutch withdrawal from al-Muthanna, for example

-- this meeting provides an excellent opportunity to take advantage of Bot's credibility and experience to refine our message to Europe, while encouraging Bot to assume a more active leadership role in key areas.

IRAQ:

----

Â¶ 2. (C) Bot personally made Iraq a high priority during the

Dutch EU Presidency. He should continue to press the EU from within to assume greater responsibilities in Iraq, and to move quickly to establish a physical presence on the ground in particular. The decision -- which Bot fought in cabinet

-- to withdraw the Dutch bilateral military presence from al-Muthanna next month is unfortunately irreversible. The

Dutch were among the first, however, to commit personnel to the first phase of the NATO training mission and have indicated a willingness to provide up to 100 in later phases

-- with the caveat that they expect other partners to provide similar numbers. It would be useful to remind Bot that while we appreciate Dutch efforts to press allies to be more forthcoming, basing Dutch contributions on strict definitions of proportionality would be counterproductive.

Â¶ 3. (C) The Dutch have never ruled out additional missions in

Iraq, and Bot in particular may be receptive to ideas for how the Dutch could fill important niches For example, The

Dutch could be asked to consider expanding bilateral support to Iraqi institutions such as the Ministries of Foreign

Affairs (the Dutch are currently training one class of junior

Iraqi diplomats in the Hague) and Justice (the Dutch last year hosted a successful conference of Iraqi jurists in The

Hague) or to sponsor specific reconstruction and development

projects in the al-Muthanna area to take advantage of existing links to the local community.

CHINA ARMS EMBARGO:

------------------

Â¶ 4. (C) Bot started the Dutch presidency resigned to lifting the China Arms Embargo, but ended it determined to prevent a lift on his watch. He can continue to provide useful insights into how the issue is being handled within EU circles, and should be pushed to keep the EU focused on its commitment -- which the Dutch insisted on inserting into the

December 17 Council declaration -- not to increase sales to

China in quantity or quality. The Dutch have made clear that they will take their lead on this issue from the

British, and that they will not stand alone to prevent a lift, but they may be able to help us find and exploit potential cracks in the EU's consensus. Bot should also be left with no illusions about the likely consequences of a lift, including potential complications in U.S.-European defense trade.

CUBA:

----

Â¶ 5. (C) The Dutch continue to represent the EU Presidency in

Havana (since Luxembourg has no mission there) and have deep concerns about the human rights situation there. The Dutch have so far not been as active as the Czechs or Poles in pressing the EU to maintain contacts with dissidents as it improves relations with Havana; Bot could and should do more in this area. For example, he could instruct the Dutch

Embassy in Havana to respond positively to our request that

US representatives be invited to the monthly coordination meetings on human rights held by EU missions in Havana.

TURKEY/CYPRUS:

-------------

Â¶ 6. (C) As a former Ambassador to Turkey, and the man under whose watch the Turks finally got a date to begin accession talks, Bot has a personal interest in facilitating Turkey's bid to accede to the EU. The Dutch MFA plans to establish a regular bilateral forum for discussing EU accession issues with Turkey along the lines of their previous successful relationship with Poland; this relationship may prove useful in identifying and resolving problems ad October 3 approaches. The Dutch can also provide useful insights into

EU thinking regarding Cyprus, and are keenly aware that a failure to resolve the current impasse over Berlin-plus has serious implications for NATO.

ICC/SUDAN:

---------

Â¶ 7. (C) We will have little success convincing Bot to break from EU consensus to support an AU/UN tribunal on Darfur as long as the ICC remains an option in European eyes; as the host of the ICC, the Dutch are uniquely committed to seeing it succeed. We can, however, ask Bot to tone down the rhetoric and activities of Dutch representatives in New York,

Brussels, and elsewhere opposing alternatives to the ICC. As a pragmatist, Bot should understand that a public spat over this issue does nothing either to promote the transatlantic agenda or to bring the perpetrators to justice. The Dutch, and Bot personally, have been heavily involved in Darfur (the

Dutch, for example, paid over half of the EU's contribution to the AU mission) and do not want to jeopardize a potential resolution over technicalities.

AFGHANISTAN:

-----------

Â¶ 8. (S) In the debate over the al-Muthanna withdrawal, the

Dutch government cited commitments in Afghanistan -- including a possible deployment of special forces to OEF and heading up a new PRT in phase III -- as one reason for leaving Iraq. These commitments are substantial, useful, and appropriate, but you may want to set down a marker that they should not be used to justify seen as substitutes for contributions in Iraq -- both are high priorities. The Dutch have also recently expressed public interest in deploying the

Dutch battalion of the SRF to Afghanistan to support upcoming elections, but have balked at deploying the more substantial

Dutch NRF forces (approximately 4,000 troops.) NATO has not yet determined which force, if either, should be deployed for this mission, but Dutch efforts to predetermine the outcome are not helpful.

MIDDLE EAST:

-----------

Â¶ 9. (C) Last November, Bot was eager to transform his successful hosting of the EUROMED conference in the Hague into a a prominent role in the Middle East Peace Process. So far, however, he has been unable to carve out an appropriate role for himself or the Netherlands either within the EU or bilaterally. Bot correctly judges that there is broad public support (including from the main opposition parties in parliament) for increased engagement in the Middle East, but he will not insert himself into the process without being asked.

AFRICA:

------

Â¶ 10. (C) Already heavily involved in Africa -- the Dutch are the fourth largest donor of aid to the continent -- Bot is under constant pressure from the Dutch parliament (and Dutch development minister Agnes van Ardenne) to do more. The

Dutch uniquely include a major focus on peace and security in

their African development policy, and have expressed interest in greater coordination with the U.S., especially in the Horn and Great Lakes Regions. In fleshing out possible areas of increased cooperation in Africa, we should remain cognizant of the fact that African initiatives have sometimes been portrayed as alternatives to missions in Iraq or Afghanistan; we will need to make clear in any discussion where our top priorities lie.

BOTTOM LINE:

-----------

Â¶ 11. (C) Bot's experience and credibility make him a useful

European interlocutor and an effective advocate for the transatlantic agenda. During the Dutch presidency, he repeatedly demonstrated a talent for translating transatlantic objectives into the language of Europeanism, and for discreetly managing difficult issues (such as Turkey or China) to successful conclusions. It would be in our interest to find creative ways to harness his skills as a coalition builder and his newly-deepened transatlantic orientation in the post-presidency environment as well.

Â¶ 12. (C) One final point you may want to stress in your discussion is that the concept of proportionality creeping into many Dutch debates (on Iraq and Afghanistan, for example) is misguided. The value we place on our partnership is not based on whether or not the Dutch contribute their fair share to any given operation, but rather reflects the trust developed over a long history in which each side demonstrated its willingness to do whatever was needed to achieve shared objectives.

SOBEL

Viewing cable 09THEHAGUE596, NETHERLANDS: SCENESETTER FOR SPECIAL

ENVOY



09THEHAGUE596

2009-10-

02 16:04

2011-01-

22 17:05

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

VZCZCXRO0249

RR RUEHIK

DE RUEHTC #0596/01 2751600

ZNR UUUUU ZZH

R 021600Z OCT 09






SENSITIVE

SIPDIS

E.O. 12958: N/A

TAGS: ENRG EPET PREL NL

SUBJECT: NETHERLANDS: SCENESETTER FOR SPECIAL ENVOY

MORNINGSTAR,S VISIT TO THE HAGUE, OCTOBER 7-9, 2009

THE HAGUE 00000596 001.2 OF 004

Â¶ 1. (SBU) SUMMARY: Post warmly welcomes you to The Hague to convene the 2009 Regional Energy Officers Conference. During your stay, you will also meet the Foreign Minister, Economic

Affairs Minister, Royal Dutch Shell's Executive Director responsible for Russia/Central Asia, and address Dutch energy industry and policy leaders at the Netherlands' premier think tank. No high-level U.S. official has discussed energy security in the Netherlands (the world's fifth-largest

Embassy

The Hague

natural gas exporter) in several years. The Dutch fundamentally share our commitment to enhancing Europe's energy security through diverse sources and supply routes.

However, we would like the Dutch to take on a more prominent role within the EU to achieve these objectives and avoid backsliding into narrow commercial diplomacy. END SUMMARY.

---------------------

DUTCH ENERGY OVERVIEW

---------------------

Â¶ 2. (U) The Netherlands' energy position is unique within the

EU. It is the world's seventh largest gas producer and the

EU's largest net exporter of gas by a wide margin. The

Netherlands produces about 14 percent of the natural gas consumed in Europe and has observer status at the recently formed Gas Exporting Countries Forum. Since its discovery in

1959, the giant Groningen field has helped underwrite the

Dutch welfare state. (Note: Royal Dutch Shell and ExxonMobil are 50/50 partners in Nederlandse Aardolie Maatschappij

(NAM), the country's largest gas producer and 60 percent shareholder of the Groningen field; the Dutch state operator

EBN owns the remainder. End note.) The Dutch economy runs on natural gas -- it accounts for 45 percent of primary energy supply and 58 percent of electricity production.

Â¶ 3. (U) The Netherlands' gas reserves are forecast to run out by 2030, forcing the Dutch to rethink their energy policy.

To remain a regional energy player after its own resources are depleted, the Dutch government is patiently cultivating energy relationships with Russia, Algeria, Kazakhstan, Libya,

Qatar, and Angola as long-term supplier countries. The

Netherlands wants to develop as a natural gas roundabout -- a hub that gathers natural gas from various sources (North

Sea, LNG, Russia) and then distributes it via pipeline to continental Europe.

Â¶ 4. (U) The Dutch are also pursuing opportunities to develop gas storage reservoirs. The prevalence of depleted gas fields means the Netherlands has huge storage potential, either for natural gas or carbon dioxide (CCS). Abu Dhabi national energy company TAQA announced in December 2008 it would lead a consortium developing a USD 1 billion, 4.1 billion cubic meter gas storage facility in Bergermeer (in conjunction with Gazprom and EBN) to be operational by 2013.

The Dutch oppose EU regulations that would require each EU member state to have adequate gas storage capacity of its own. The Dutch want to provide storage service to others in the region -- for a price.

Â¶ 5. (SBU) The Port of Rotterdam is one of the world's major centers for crude oil imports, trading, refining, and petrochemical production. Key oil import sources include

Russia, Saudi Arabia, and Norway. Vitol, Trafigura, and

Shell operate there and export oil to Iran.

Â¶ 6. (U) The Dutch want Rotterdam to become an important destination for LNG as well. Dutch companies Vopak (liquid storage) and Gasunie (gas pipelines) are teaming up to build a 12 billion cubic meter (bcm) per year LNG terminal at the port, due for completion in 2011. TAQA is planning a sea-based LNG terminal near Rotterdam. On the other side of

Qsea-based LNG terminal near Rotterdam. On the other side of the country, energy company Essent (now owned by Germany's

RWE) is developing an LNG terminal with Vopak and Gasunie in

Eemshaven, near the German border.

Â¶ 7. (U) Despite the GONL's enthusiastic support for strict EU renewable energy targets, the country derives only 2.5 percent of its total energy supply from renewables, mostly biomass and wind. Grand plans and subsidy schemes abound for offshore wind parks in the North Sea, but these have not left the drawing board.

Â¶ 8. (U) The Netherlands has one 485 MW nuclear plant in

Borssele, co-owned by utilities Delta and Essent. Delta wants to build additional reactors on the same site, but nuclear energy is a political taboo, and the current government is reluctant to approve any expansion plans.

Â¶ 9. (U) The Netherlands embraced full ownership unbundling of its electricity and gas utility companies in order to attract new investment capital and increae competition. Local

THE HAGUE 00000596 002.2 OF 004 government authorities have retained ownership of regulated network businesses, but foreign energy giants RWE and

Vattenfall acquired the two largest Dutch energy supply and production companies -- Essent and Nuon, respectively -- in

Â¶ 2009. The Dutch government was frustrated when Germany and

France succeeded in watering down the EU's unbundling rules in favor of national champions.

-----------------------

GASUNIE AND NORD STREAM

-----------------------

Â¶ 10. (SBU) Dutch gas pipeline company Gasunie is 100 percent state-owned, unlike most other European gas infrastructure companies. The GONL maintains an arms-length relationship with Gasunie's management, expecting it to operate like a publicly traded company and earn a reasonable return of around 7 percent for the government, according to Finance

Minister Wouter Bos.

Â¶ 11. (SBU) Gasunie holds a 9 percent stake in Gazprom's Nord

Stream pipeline. This participation was announced during

Prime Minister Balkenende's November 2007 visit to Russia.

Gasunie CEO Marcel Kramer told post the GONL gave positive feedback to the deal as a way of retaining a significant role for the Netherlands in Europe's energy equation. To burnish Nord Stream's image, Gasunie has tried hard to

portray the project as ambitious but realistic; to characterize Gazprom as driven by commercial concerns, not political ones; and to leverage the Dutch reputation as transparent, trustworthy businesspeople.

Â¶ 12. (SBU) Gasunie has a 60 percent share in the Bacton

Balgzand Line (BBL), operational since 2006, which transports natural gas from the Netherlands to the UK (although it is bi-directional). Belgian gas transport company Fluxys and

German energy giant e.ON Ruhrgas each have 20 percent shares.

In exchange for Gasunie's share in Nord Stream, Gazprom received an option to buy a 9 percent stake in BBL. If

Gazprom exercises this option, the shares will come from

Gasunie, leaving it with a majority 51 percent. According to

Kramer, Gasunie had to explain to Gazprom that BBL meets EU rules, meaning the shareholders just own and operate the pipeline but cannot dictate who runs gas through it. Post has heard that BBL did not reverse flow (i.e., send gas from

UK to continental Europe) during the winter 2009

Russia/Ukraine gas crisis.

Â¶ 13. (U) Gasunie bought BEB Transport -- the gas transport division of a German Shell/Exxon joint venture -- in November

Â¶ 2007. BEB's pipelines tie into Gasunie's existing network, linking the Netherlands to northern Germany, Berlin, Denmark, and the landing points for Norwegian gas.

--------------------------------------------- ---------

MEETING FOREIGN MINISTER AND ECONOMIC AFFAIRS MINISTER

--------------------------------------------- ---------

Â¶ 14. (SBU) Foreign Minister Maxime Verhagen and Economic

Affairs Minister Maria van der Hoeven constitute an active tag team on energy diplomacy with producer countries as they pursue the Netherlands' vision of becoming a gas hub.

Verhagen, a career politician, and Van der Hoeven, an educator before embarking on politics, both belong to the

center-right Christian Democratic Appeal (CDA) party, the ruling coalition's largest. When you meet Van der Hoeven, she will have just returned from the Kazakhstan International

Oil and Gas Expo and a September 23-26 visit to the U.S. where she met with Energy Secretary Chu. A planned meeting with Commerce Secretary Locke did not happen. Her Ministry of Economic Affairs (MEA) spans energy, commerce, and trade.

Qof Economic Affairs (MEA) spans energy, commerce, and trade.

In the past year, she has visited Angola (March 2009 to lobby for future LNG shipments to Rotterdam), Algeria (January 2009 also for LNG supplies), Russia (December 2008 for broad energy investment), Qatar (October 2008 for LNG), and Saudi

Arabia (October 2008 for broad energy investment). Verhagen visited Qatar and Saudi Arabia (May 2009) and Algeria

(November 2008) to push for closer economic and energy cooperation as well as human rights.

Â¶ 15. (SBU) Under Van der Hoeven's lead, the Netherlands' overarching goals in the energy sector are similar to ours: maintain open markets, ensure diverse and secure supply sources, and develop new and clean alternatives to fossil fuels. As she said in a speech during her recent trip to

Washington, The way to improve energy supply security is to build and maintain good relations with energy suppliers ...

The solution is a variety of sources and suppliers ... to stimulate an energy mix for Europe that consists of the whole palette: fossil fuels, sustainable energy, and nuclear energy

THE HAGUE 00000596 003.2 OF 004 on a way to sustainable energy. The Dutch support the main points of EU strategic energy policy, especially interconnections. However, they are reluctant to be Europe's producer of last resort in the event of a gas crisis as they plan to draw down their reserves slowly, prolonging the buffer they enjoy by virtue of their domestic production.

Â¶ 16. (SBU) We expect Verhagen and Van der Hoeven to raise the following issues:

-- U.S.-EU Energy Council: The Netherlands will want to play an active role in the proposed UEEC and will be eager to hear the U.S. vision for this body.

-- Caspian Basin: The Ministers will be interested to discuss how the United States and the Netherlands can align our energy strategy in the region. They will also want to exchange views on the Caspian Development Corporation.

-- Energy Charter Treaty: Russia's decision to withdraw from the ECT caught the Dutch by surprise. They judge it to be a self-defeating move but will want to maintain other channels of EU-Russia dialogue on energy matters.

-- Turkey/Southern Corridor: Minister Verhagen will likely share the Dutch perspective on Nabucco and relations with

Turkey. (Note: Former Nabucco coordinator and Dutch

Foreign Minister Jozias van Aartsen is now Mayor of The

Hague. End Note.)

-- International Energy Forum: The Dutch have firm advocates of IEF's producer-consumer dialogue. (Note: IEF Secretary

General Noe van Hulst is a Dutch national and former DG for energy at MEA. End note.)

-- Russia: The Dutch acknowledge we have some differences concerning Russia (see below) and will want to discuss them.

-- Iran: The GONL and Shell (see below) are both concerned about proposed U.S. legislation to impose sanctions on companies selling refined products to Iran. They think this will only succeed in giving Chinese and Russian companies access to Iran's hydrocarbon resources at the expense of U.S. and European competitors.

Â¶ 17. (SBU) Commercial interests are always central to Dutch economic relations and nowhere is this more evident than with

Russia. For example, during President Medvedev's June 2009 visit to the Netherlands, he met with representatives from major Dutch companies including Shell, Phillips, and ING.

According to a well-placed MEA official, Prime Minister

Balkenende hit if off with Gazprom Chairman (and former

Russian PM) Viktor Zubkov during the visit and they agreed

that energy and gas cooperation remains central to their relationship. The two countries committed to increasing

Russian companies' investment in the Port of Rotterdam, and

Russia's Lukoil acquired a 45 percent stake in a Total refinery in south Holland. However, the Dutch are defensive about the clubby atmosphere of these twice-yearly high-level visits. GONL energy officials have told us bluntly in the past, Don't lecture us about Russia. They are especially sensitive to criticism about Nord Stream; MEA took offense at the September 2008 editorial written by the then U.S.

Ambassador to Sweden raising objections to the pipeline.

Despite close commercial relations with Russia, the GONL supports the so-called Gazprom clause and would likely try to block a Russian takeover of a Dutch utility without reciprocal market access.

-----

SHELL

-----

Â¶ 18. (SBU) As Forbes' number two global corporation (after

GE), Rotal Dutch Shell exerts strong influence on Dutch foreign economic policy. For example, Simon Smits (MFA's

Director for Economic Cooperation whom you will meet October

Q7) recently returned from a secondment to Shell's government relations group. Finance Minister Bos also held executive positions at Shell in the 1990s before turning to politics.

You will meet Matthias Bichsel, Shell's Executive Director responsible for Russia/Central Asia, on October 9. Large

Dutch dredging and energy infrastracture companies such as

Boskalis, Van Oord, and Fugro also enjoy substantial political influence.

Â¶ 19. (SBU) Shell tries to keep the U.S. government updated on the Persian LNG (PLNG) project. Shell is a minority partner in PLNG and has successfully delayed a final investment decision for several years. Shell wants to keep a foothold

THE HAGUE 00000596 004.2 OF 004 on the project and not let (yet another) lucrative, long-term

Iranian energy contract go to China, but knows it cannot move ahead on the project in the current climate. Shell would welcome another UNSC resolution that levels the playing field by imposing broader trade sanctions on Iran and forcing Chinese and Russian firms to comply, thereby reducing the IOCs' competitive disadvantage.

-----------

CLINGENDAEL

-----------

Â¶ 20. (U) Your participation in the Eurasian Energy Security roundtable with Minister van der Hoeven at the Clingendael

International Energy Program will send a positive signal about U.S. willingness to engage with European allies on this issue. The audience will include Dutch energy executives and policy makers eager to hear your remarks and ask you questions about U.S. international energy strategy.

LEVIN

Viewing cable 04THEHAGUE1833, DUTCH PM BALKENENDE ON CHINA, TURKEY,

AND THE



04THEHAGUE1833

2004-07-20

17:05

2011-01-25

19:07

SECRET

Embassy The

Hague



SIPDIS

E.O. 12958: DECL: 07/20/2014

TAGS: PREL CH TK IS NL

SUBJECT: DUTCH PM BALKENENDE ON CHINA, TURKEY, AND THE

MIDDLE EAST

Classified By: AMBASSADOR CLIFFORD SOBEL for Reasons 1/4 (B...

18933

2004-07-20

04THEHAGUE1833

Embassy The Hague

SECRET


SIPDIS

E.O. 12958: DECL: 07/20/2014

TAGS: PREL CH TK IS NL

SUBJECT: DUTCH PM BALKENENDE ON CHINA, TURKEY, AND THE

MIDDLE EAST

Classified By: AMBASSADOR CLIFFORD SOBEL for Reasons 1/4 (B) and (D).

Â¶ 1. (C) SUMMARY: Prime Minister Balkenende told Ambassador

Sobel on July 20 the EU has not yet reached consensus on lifting the China Arms Embargo before the December EU-China summit. While strong voices in the EU are pushing for a

quick (but not unconditional) lift, others now appear less convinced and a final decision has not yet been made. On

Turkey, Balkenende reiterated that a deal is a deal and the

EU's decision will depend on the European Commission's

October report, the drafting of which the Dutch are following closely. Ambassador Sobel urged the EU to maintain pressure on Arafat and the Palestinians to make needed reforms, and noted that the Forum for the Future proposed at the G-8 summit provided a good venue for EU-U.S. cooperation on the region. Ambassador Sobel also raised Sudan briefly and noted standing requests for additional security for the Embassy.

END SUMMARY.

Â¶ 2. (C) Ambassador Sobel met with Dutch Prime Minister Jan

Pieter Balkenende on July 20 to discuss the Dutch EU

Presidency and related issues prior to the Dutch cabinet going on vacation. Balkenende noted that he would be taking the traditional long Dutch vacation in August, but would remain in the Netherlands in case Presidency business required his involvement. During the nearly one-hour discussion, Balkenende and the Ambassador discussed the China

Arms Embargo, Turkish accession to the EU, and the Middle

East. Balkenende was accompanied by his chief foreign policy advisor, Rob Swartbol; POLCOUNS (notetaker) accompanied

Ambassador Sobel.

CHINA ARMS EMBARGO: MORE THAN ONE OPTION?

------------------------------------------

Â¶ 3. (C) Ambassador Sobel stressed that the China Arms Embargo was quickly rising to the top of the U.S.-EU agenda. Chinese backsliding on human rights over the past two years was deeply troubling, as was the continued Chinese threat to regional stability. Lifting the arms embargo before seeing real progress in these areas, he stressed, ran counter to the

Dutch step by step approach, would be counterproductive in terms of influencing Chinese behavior. The Chinese were

still refusing to allow the UN's special rapporteur on torture, van Boven, to visit despite having earlier agreed to do so, he noted. (Balkenende suggested that the Chinese might have problems with van Boven himself, rather than with his office, noting that the Spanish had also had problems with van Boven.) The Code of Conduct, he added, was not an adequate substitute for the embargo, and we strongly doubted the EU's ability to put stronger mechanisms in place. The

U.S. was looking to the Dutch, as EU president, to make sure that the U.S. was not surprised by developments in this area.

Â¶ 4. (S) In response, Balkenende said that the China Arms

Embargo was a sensitive and evolving issue within the EU. At one point, there seemed to be a strong consensus for a quick lift, he said, but now other tendencies could be emerging.

Even Chirac, Balkenende added, now was less adamant about lifting the embargo than in the past. (Balkenende noted that

Chirac had earlier tried at the last minute to insert language on lifting the embargo into a Council statement, but had backed down when challenged.) He stressed that all views would be taken into account before making a decision, and denied that the EU was prepared to lift the embargo without any conditions. China would have to take some steps (NFI) to merit a decision to lift, he stated. That said, the desire to strengthen EU-China ties in the near term was very strong within the EU. The arms embargo was one instrument the EU could use to influence the relationship, but not the only one.

Â¶ 5. (C) Ambassador Sobel reiterated the need for transparency and good communication as the issue developed. The Irish, he pointed out, had not worked actively as president to develop a consensus position, and the issue had naturally moved to the next presidency without a resolution. Swartbol intervened to note that while various tendencies did exist within the EU, the strongest tendency at this point was to

lift the embargo, possibly as early as the fall.

TURKEY: ONCE AGAIN, YES......BUT

--------------------------------

Â¶ 6. (C) Turning to Turkey, Ambassador Sobel took note of

Balkenende's recent positive public statements and asked where the issue currently stood. Balkendende observed that the exact wording of the European Commission's October report would be critical. The report, he predicted, would probably state neither that Turkey had met all the Copenhagen criteria fully, nor that it had failed to meet them; most likely, the report would be positive but identify work remaining to be done. In that case, he continued, the two realistic options for the EU were either: A) to set a date for accession negotiations, but make it conditional on achieving progress in remaining areas, or B) to ask Turkey to take certain specific steps with the clear understanding that a date would be set as soon as they are accomplished.

7 (C) Balkenende reiterated that the EU must not rewrite the rules to help or hinder Turkey's bid for accession -- a deal is a deal. Talk of offering the Turks a privileged partnership or other substitute (as the French and others, including Christian Democrats in the European Parliament, had hinted), he stressed, would not be acceptable. At the same time, Balkenende made clear that negotiations on accession would probably last for at several years, and that the Turks, in his view, understood this as well. The Turks' interests would be taken into account in the EU's decision, he said, but the decision must also be sustainable domestically throughout the EU. A big part of the EU's public relations work, therefore, would be to convince skeptical national parliaments and populations that agreeing to begin negotiations would not lead to a flood of Turkish immigrants or other undesirable outcomes. Balkenende predicted that

Chirac would ultimately side with Germany despite domestic

French opposition in order to preserve his relationship with

Schroeder.

Â¶ 8. (S) Balkenende made clear that U.S. sensitivities would be taken into account as the EU made its decision, and that the

USG position was well known. He urged the USG, however, not to give opponents to Turkish accession more fuel by making public statements that appeared provocative in the European context; for domestic reasons, Chirac and other European leaders would feel compelled to respond to US statements on the issue. Ambassador Sobel stressed that the USG would be following the issue closely and urged that we be kept informed. Swartbol noted that the Commission had just started the process of drafting its report. He strongly suggested that the Dutch (and he personally) would be able to follow and perhaps influence the drafting process, albeit behind the scenes.

MIDDLE EAST: KEEPING EU PRESSURE ON ARAFAT;

FORUM FOR THE FUTURE

--------------------------------------------- -

Â¶ 9. (C) Ambassador Sobel stressed that developments in the

Middle East made it imperative to keep pressure on Yasser

Arafat to reform. The situation is developing quickly, and the EU's special relationship with the Palestinians could a useful force for bringing about needed changes. On the

Broader Middle East/North Africa initiative, Ambassador Sobel highlighted the Forum for the Future announced at the G-8

Sea Island summit.

SUDAN AND SECURITY

------------------

Â¶ 10. (C) In closing, Ambassador briefly raised the crisis in

Sudan and urged the EU to free up funding quickly to support the AU peacekeeping force. He also noted that the Embassy

had requested additional security measures two years ago which it had not yet received. Balkenende promised to bring up the matter personally with the minister of interior.

RUSSEL

Viewing cable 08BERLIN1690, GERMANY: VISIT OF KUNAR AND WARDAK

GOVERNORS HELPS



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C O N F I D E N T I A L BERLIN 001690

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CONFIDENTIAL

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Berlin

E.O. 12958: DECL: 12/18/2018

TAGS: PREL PGOV MARR NATO EUN GM AF TU

SUBJECT: GERMANY: VISIT OF KUNAR AND WARDAK GOVERNORS HELPS

ADVANCE OUR AFGHANISTAN AGENDA

Classified By: POLITICAL M...

183990

2008-12-19

08BERLIN1690

Embassy Berlin

CONFIDENTIAL

C O N F I D E N T I A L BERLIN 00169

SIPDIS

E.O. 12958: DECL: 12/18/2018

TAGS: PREL PGOV MARR NATO EUN GM AF TU

SUBJECT: GERMANY: VISIT OF KUNAR AND WARDAK GOVERNORS HELPS

ADVANCE OUR AFGHANISTAN AGENDA

Classified By: POLITICAL MINISTER COUNSELOR JEFF RATHKE.

REASONS:

1.4 (B) AND (D).

Â¶ 1. (C) SUMMARY. During a December 18 visit to Berlin, the

governors of Kunar and Wardak provinces pressed for greater

German assistance with the training and equipping of the

Afghan Border Police (ABP) and the Afghan National Police

(ANP). In a surprise announcement, the Interior Ministry revealed that Germany planned to establish a new training academy for the ABP in Kabul that will train up to 500 border police officers at a time. While acknowledging ongoing security challenges, both governors strongly disputed claims that a majority of the country is controlled by the Taliban.

They argued that security trends are actually positive, and welcomed additional international troops to help prepare the ground for further advancements on development and governance. The governors also emphasized the need for the international community to focus its efforts at the district level and to eliminate discrepancies in development aid among provinces. The governors invited journalists during a press conference to come to Kunar and Wardak to see for themselves that the comprehensive approach is working. If Embassy Kabul were willing, and funding for a visit by a group of ten to twelve German journalists could be arranged, we would advocate taking them up on the offer. END SUMMARY.

THE PROGRAM

Â¶ 2. (SBU) Kunar Governor Sayed Fazlullah Wahidi and Wardak

Governor Halim Fedai visited Berlin December 18, courtesy of a PA program jointly sponsored by Embassy Kabul and USNATO, which took them first to Brussels and then to Paris. The two governors, together with their Embassy Kabul escorts, flew on to Munich after their stay in Berlin for a further two days of meetings and events before departing back to Afghanistan

(Munich program to be reported septel). The governors had a full program in Berlin, which included a roundtable with more than a dozen German parliamentarians and separate meetings with the state secretaries at the Ministry of Interior (MOI) and Foreign Office (MFA). The governors also participated in a press conference featuring leading journalists from print

and electronic media, whose questions focused on security, corruption and the state of development in Kunar and Wardak.

Coverage so far in print media has been skeptical, but overall positive. At the end of the day, the governors came to the Embassy for a wrap-up session with the Charge.

CONTROLLING THE BORDER WITH PAKISTAN

Â¶ 3. (C) In all the meetings, Kunar Governor Wahidi emphasized

Kunar's geographic position as an eastern province with a

240-kilometer border with Pakistan. He complained that his province only had 600 of the 3,000 Afghan Border Police (ABP) needed to properly control this border and he appealed to his

German interlocutors to provide greater assistance with the training and equipping of the ABP. MOI State Secretary

August Hanning agreed that having a fully functioning and effective border police force was decisive in achieving success in Afghanistan, and in a surprise announcement, revealed that Germany was planning to establish a ABP training academy in Kabul, in an old Russian building right next to the existing German-run Afghan National Police (ANP) academy.

Â¶ 4. (C) On the margins of the meeting, MOI officials indicated that the academy would focus its work on training higher-level police officers in the ABP and that the plan was to accommodate up to 500 students at time. They were not sure how long the course of instruction would last, indicating that this was still under consideration. They invited us to return in January to get a fuller picture of their plans for the academy.

Â¶ 5. (C) During the meeting with parliamentarians, Elke Hoff of the Free Democratic Party (FDP), who is a regular visitor to

Afghanistan, said that while Pakistan was ready to work with

Afghanistan in reinforcing and controlling their common border, Afghanistan's reluctance to accept the Durand Line

seemed to be hindering cooperation. Wahidi rejected the need for Afghanistan to formally recognize the Durand Line

(something he claimed that Afghanistan was simply not in a position to deal with at the current time) in order to enable effective control of the border with Pakistan. He argued that since many tribes straddle both sides of the border, border control could not, in any event, consist of erecting barriers and checkpoints that limited the legitimate travel of tribal members back and forth between Pakistan and

Afghanistan. Instead, he called for an increased and permanent presence of ABP on the border to deter, prevent and respond to the entry of insurgents from Pakistan.

EQUIPPING THE POLICE

Â¶ 6. (C) Wardak Governor Fedai also focused on the police in his remarks, stressing that the challenges went far beyond training. He noted that the Afghan National Police (ANP) lacked the necessary communication equipment to talk to each other, relying solely on personal cell phones, which frequently did not work at night. He said the Afghanistan

National Development Strategy (ANDS) called for the construction of nine police stations in Wardak, but these remained unfunded. He complained that the police throughout

Afghanistan lack uniforms, vehicles, fuel, accommodations, explosive ordnance disposal (EOD) equipment and the tools necessary to do forensic investigations. He agreed with

German parliamentarians who thought that police salaries had to be increased significantly to discourage corruption. But while he argued for a salary of $300 to 500 per month, Wahidi was more cautious, noting that police salaries were already on par with that of the Afghan National Army (ANA).

DISPUTING CLAIMS REGARDING SECURITY SITUATION

Â¶ 7. (C) Both governors disputed recent studies and reports that have concluded that more than 70 percent of the country

is controlled by the Taliban and other insurgent groups.

They claimed that all of the districts in their respective provinces were in the hands of the government, although

Wahidi acknowledged that parts of the mountainous border region of Kunar were not always under full control due to the lack of sufficient border police. He also made the point that the frequency of attacks alone do not indicate that the

Taliban is strong -- in fact, suicide bombings are clearly a tactic of the weak.

Â¶ 8. (C) The governors also criticized the media for giving the perception that the security situation in Wardak and other

RC-East provinces continued to worsen over the past year.

Fedai argued that while it was true that security had deteriorated in Wardak in 2006 and 2007, things had turned around in 2008. He noted that while four of Wardak's nine districts had temporarily fallen under Taliban control in

2007, this had not happened at all in 2008. There were no permanent bases for insurgents in Wardak. He also criticized the media for failing to distinguish between insurgent and criminal activities, claiming that some 70 percent of the security incidents in Wardak were criminally motivated and not ideological attacks against the government.

WHY MORE TROOPS ARE NEEDED

Â¶ 9. (SBU) At the press conference, the governors were asked why they were asking for the deployment of additional foreign troops if, in fact, the Taliban were getting weaker and the security situation was improving. The governors pointed out that the additional foreign troops were necessary to fill continuing security gaps until sufficient numbers of the ANA,

ANP, ABP and other Afghan National Security Forces (ANSF) were trained and equipped to do the job themselves. In response to a question about President-Elect Obama deciding to send additional U.S. troops to Afghanistan, Wahidi responded: He didn't decide to send them -- we asked for

them! Wahidi noted that these troops would help prepare the ground to enable further advances on development and governance.

Â¶ 10. (C) In the wrap-up session with the Charge, Afghan

Ambassador to Germany Zulfacar reported that new Afghan

Interior Minister Atmar had made the same point to his German counterpart the previous week during an introductory visit to

Berlin. Atmar had emphasized that there are currently not enough security forces to hold territory after it has been cleared, thereby allowing the Taliban to come back in and negate the beneficial effect of the military operations.

DISCREPANCIES IN DEVELOPMENT AID

Â¶ 11. (C) The governors highlighted the wide discrepancy in the distribution of development aid by PRT lead nations, as exemplified in their own two provinces. Wahidi noted that the U.S. had spent some $82 million for a wide variety of projects in Kunar in the past year. Fedai said that the

Turkish PRT in Wardak, by comparison, had only spent a total of $15 million on projects in the province over the past three years, out of a total of $100 million for the whole country. He said that other international actors like the

EU were needed to provide supplementary resources in provinces where the PRT was led by a relatively poorer country, like Turkey. MFA State Secretary Reinhard

Silberberg said more should be done to get rich Islamic countries like Saudi Arabia and the Gulf states, which are natural partners for Afghanistan, more involved in supporting the development effort. He noted that while Germany had pledged some $420 million over the next three years at the

Paris Conference this past summer, Saudi Arabia had committed just $20 million.

EMPHASIS ON DISTRICT LEVEL

Â¶ 12. (C) Both governors emphasized the need for the international community to focus its efforts at the district level in Afghanistan, noting that most Afghans do not live in

Kabul or a provincial capital, but rather in small rural villages across the country. They praised CSTC-A's Focused

District Development (FDD) police training and mentoring as an example of a program that correctly takes account of this reality. Both MFA State Secretary Silberberg and MOI State

Secretary Hanning confirmed that they found the case for the

FDD program to be compelling, which was why Germany planned to participate in FDD on a bilateral basis in selected northern districts beginning in January.

Â¶ 13. (C) Silberberg also conceded that the EU Police Mission

(EUPOL) -- which up until now has focused its work on the

Afghan Ministry of Interior in Kabul and on giving strategic advice on how to set up the ANP and other Afghan police forces -- should be reoriented to focus more attention on police training. He indicated that Germany was pressing

EUPOL in this direction. Green Party Defense Spokesman

Winfried Nachtwei told us after the parliamentary meeting with the governors that his judgment about the irrelevance of

EUPOL had been confirmed by the fact that neither Wahidi nor

Fedai knew anything about it and talked only about the success of FDD.

TAKING THE GOVERNORS UP ON THEIR INVITATION?

Â¶ 14. (SBU) The governors invited journalists during the press conference to come to Kunar and Wardak to see for themselves that the comprehensive approach is working. This presents obvious logistical challenges, but if Embassy Kabul were willing, and funding for a visit by a group of ten to twelve

German journalists could be arranged, we would advocate taking them up on the offer. While bringing Afghan officials to Brussels on a USNATO tour is certainly beneficial, we have found there is no replacement for sending German journalists to Afghanistan. It is relatively easy for journalists to

visit Mazar and Kunduz through trips sponsored by the German military, but we have seen the most effective coverage in

German media when reporters visit multiple provinces and PRTs outside the north.

SIDE BENEFIT: MENTORING OUR AFGHAN COLLEAGUES

Â¶ 15. (C) This is the third time within the past year that we have had Afghan governors stop in Berlin as part of a

USNATO/Embassy Kabul-sponsored tour to Brussels. In addition to giving us an excellent opportunity to advance our

Afghanistan agenda, both in private meetings with high-ranking German officials and through public diplomacy, these visits have also facilitated growing cooperation between Mission Germany and the Afghan Embassy here in

Berlin. With each succeeding visit, the Afghans take on more and more responsibility for planning the program and scheduling the appointments. We have successfully used these visits to mentor our Afghan counterparts on organizing VIP visits and making contacts in the German government and

Bundestag.

Koenig

Viewing cable 04THEHAGUE1919, NETHERLANDS/EU/TURKEY: MOVING IN THE

RIGHT



04THEHAGUE1919

2004-07-

30 15:03

2011-01-

26 17:05


Embassy

The Hague



SIPDIS

NOFORN

E.O. 12958: DECL: 07/28/2014

TAGS: PREL PGOV PHUM TK NL EUN

SUBJECT: NETHERLANDS/EU/TURKEY: MOVING IN THE RIGHT

DIRECTION

REF: USEU 3226

Classified By: A...

19303

2004-07-30

04THEHAGUE1919

Embassy The Hague


04USEUBRUSSELS3226


SIPDIS

NOFORN

E.O. 12958: DECL: 07/28/2014

TAGS: PREL PGOV PHUM TK NL EUN

SUBJECT: NETHERLANDS/EU/TURKEY: MOVING IN THE RIGHT

DIRECTION

REF: USEU 3226

Classified By: Amb. Clifford Sobel for reasons 1.4(B) AND (D).

Â¶ 1. (C/NF) SUMMARY: According to Dutch sources, the European

Council will most likely decide in December to open accession talks with Turkey, setting a fixed starting date contingent on Turkey's completion of specific concrete reforms. Senior

Dutch officials based in The Hague are playing an active role in guiding the drafting of the European Commission's October report. In this poker game, the Government of Cyprus remains one possible wild card. End Summary.

Â¶ 2. (C/NF) In recent discussions with Ambassador Sobel, Rob

Swartbol (PM Balkenende's senior foreign policy advisor) has given clear indications that the Dutch are seeking to guide the EU toward a positive (albeit conditional) decision to begin accession talks with Turkey. In separate discussions following EUR DAS Laura Kennedy's meetings in Brussels

(reftel), Poloff received similar signals from Pieter de

Gooijer, Dutch MFA rep for European Integration (please protect), and Hannie Pollmann-Zaal.

YES TO TURKEY...

------------------

Â¶ 3. (C/NF) On July 29, Swartbol told Ambassador Sobel that he believed the EU could set an October, 2005 date for opening accession talks with Turkey. He asserted that nearly all EU member states recognized that Turkey would receive a yes decision from the EU, although some still hoped to push the date for starting talks back one or two years; this, however, would be a mistake, he said. Swartbol predicted actual accession negotiations from 6 to 8 years plus two and suggested that -- contrary to usual practice -- the EU would probably try to address some of the toughest issues (like

immigration) early in the process rather than waiting until the end. Swartbol said that the EU would be careful not to talk about a 10-year process publicly in deference to Turkish sensitivities.

Â¶ 4. (C/NF) Swartbol revealed that the Turks had been consulted about the proposed conditions and timetable described above, but they had not yet agreed. Several EU members also remained unconvinced. EU Commissioner

Verheugen, he said, would go to Turkey in September to try to gain Turkish support for the EC report.

...WITH QUALIFICATIONS

----------------------

Â¶ 5. (C/NF) Swartbol and de Gooijer confirmed that most EU

Members assume the Commission will appraise Turkey's success with the Copenhagen Criteria as virtually, almost, or just about. It is impossible to imagine a no, de Gooijer said. The Dutch cannot imagine an unqualified yes, either, listing outstanding issues such as judges' behavior, concerns about torture, access of Kurds to Kurdish language education, free exercise of religion, and the role of the military.

Â¶ 6. (C/NF) The question remains what the Council will do with these areas of improvement. The Dutch anticipate the EU

Yes will come with one list of goals for Turkey to reach within six to eight months before starting negotiations and a second list of other items that could slow the process down if Turkey did not make progress toward achieving them.

Swartbol noted that the EU would ensure that negotiations would tackle the tough issues identified in the impact statement.

Â¶ 7. (C/NF) De Gooijer cautioned that Turkey should concentrate on the yes and the date parts of the recommendation and not be overly-concerned by the

blah-blah-blah that follows it where the Council may list must-do items for the Turks.

EU AND DUTCH POLITICS: MORE FOR THAN AGAINST

--------------------------------------------

Â¶ 8. (C/NF) Swartbol cited France, Austria, Denmark (where the

Prime Minister is the problem) and the Netherlands as still needing more work on the domestic front. While the Dutch, in the Presidency role, will strive for objectivity in public and eschew overt statements about what Dutch preferences or strategies, de Gooijer said to watch for Dutch signals. He recalled PM Balkenende's July 21 Strasbourg Parliament speech, where he rejected prejudice against Islam as a basis for opposing Turkey. De Gooijer allowed how he had written, championed, and insured inclusion of the following lines, which he proudly reported received warm applause that day:

We must not allow ourselves to be guided by fear, for example, of Islam. Raising barriers to any particular religion does not fit in with Europe's shared values. Our opposition should be directed not against religions but against people and groups misusing their religion to get their way by force.

Â¶ 9. (C/NF) Swartbol said that potential divisions within the

Dutch government had largely been resolved, thanks in part to

Verheugen's (quiet) briefing of the Dutch cabinet. De

Gooijer agreed that the Dutch government will ultimately support accession; Pollman was not so sure. Both feel that momentum toward Yes is lacking. Pollman alerted us that the constituents of some cabinet ministers could be tending negative, meaning the ministers would have to convince them otherwise or vote and anger the base. De Gooijer and Pollman predicted any opponents will eventually modify positions enough to be able to wag their fingers and say, We have serious problems with this and if it does not work out, well, we told you so.

THE TIMING OF THE WRITING OF THE REPORT

---------------------------------------

Â¶ 10. (C/NF) De Gooijer (please protect) confirmed that

Commission officers have been on the ground in Turkey in July surveying conditions across the full matrix of issues. The various arms of the Commission will complete individual parts of the report during August and give it to Verheugen, who will collate the parts and circulate a complete draft in early September. He will present a final draft to the full

Commission on October 6. The Commission will present it to the Council thereafter, by November.

Â¶ 11. (C/NF) Both Swartbol and de Gooijer said that the Dutch

(as President) and the Commission were trying to stay in sync on the report, meaning that the Dutch will have large influence over all aspects of it. De Gooijer added that the

Commission is loathe to get out in front of the Presidency on any issue, especially one like this. Swartbol, while cautioning that the Dutch did not hold the pen, was also confident that the report would not hold any surprises for the presidency. (Note: Ambassador Sobel stressed that it should not hold any surprises for us or Turkey either, and pressed Swartbol to ensure that the process was as transparent as possible.)

WILD CARD CYPRUS

----------------

Â¶ 12. (C/NF) Pollman suggested the EU might give the GoC, as an EU Member State, its due on the Cyprus trade and financial support issues while then expecting Papadopoulos to relent on

Turkey. However, EU partners do not really engage on Cyprus since only the UK has any real interest in the island, she said, adding, What does Cyprus have these days, besides the

Turkey card? And this means the EU has but little leverage

over Cyprus; Pollman hoped that powers outside the EU will pressure Popadopolous to support Turkish accession, using whatever psychological, political, or other means that might work.

COMMENT

-------

Â¶ 13. (C/NF) The Dutch governing elite want a Yes for

Turkey and they seem confident that they can bring the nation as well as the rest of the EU along. There is finesse at the top, as seen in de Gooijer's handling of the Islam question for PM Balkenende. There are many variables open and many forces at work, but the trends -- at least for now -- seem to be moving in the right direction.

SOBEL

Viewing cable 04THEHAGUE3178, EU/TURKEY: DUTCH ISSUE REV 2 DRAFT TEXT



04THEHAGUE3178

2004-12-06

19:07

2011-01-26

17:05

CONFIDENTIAL

Embassy The

Hague



SIPDIS

SOPHIA FOR BFREDEN FOR A/S JONES

E.O. 12958: DECL: 12/07/2014

TAGS: AORC PREL TU CY EUN

SUBJECT: EU/TURKEY: DUTCH ISSUE REV 2 DRAFT TEXT

REF: THE HAGUE 3140

Classi...

23677

2004-12-06

04THEHAGUE3178

Embassy The Hague

CONFIDENTIAL

04THEHAGUE3140


SIPDIS

SOPHIA FOR BFREDEN FOR A/S JONES

E.O. 12958: DECL: 12/07/2014

TAGS: AORC PREL TU CY EUN

SUBJECT: EU/TURKEY: DUTCH ISSUE REV 2 DRAFT TEXT

REF: THE HAGUE 3140

Classified By: DCM Daniel Russel for reasons 1.4 (b) and (d).

Â¶ 1. (C) Rob Swartbol (PM Balkenende's diplomatic advisor)

(STRICTLY PROTECT) told Ambassador Sobel late December 6 he was alarmed about efforts by France, Austria and Denmark to promote a third way/privileged partnership alternative for

Turkey. He said that the Dutch were working to get Germany and the UK together to counterbalance them. Balkenende may travel to the UK to meet PM Blair on Friday. He will meet

Erdogan in Brussels on Thursday night and plans to see

Schroeder and Chirac next week in capitals.

Â¶ 2. In a separate conversation with the DCM, Pieter de

Gooijer (MFA, European Integration) (STRICTLY PROTECT) said he believed the Turkey accession talks are still on track for a positive result December 17 although they need careful steering by the Dutch to keep them there. The Dutch had reassured the Turks that there was nothing to rumors of Dutch willingness to support movement toward a third way. The

Dutch will keep holding the line on accession talks leading to full membership, de Gooijer promised.

CYPRUS AND GREECE

Â¶ 3. Swartbol insisted the Turks needed to make a serious gesture on or before December 17 by agreeing to sign the

Ankara Protocol before the start of negotiations. The Dutch continued to work hard to prevent others packaging this as a pre-condition for Turkey. De Gooijer told the DCM that

Turkey has signaled very clearly they can live with the

Cyprus language as it now stands, that is, they tacitly agree to promise on December 17 that they will sign the protocol before the starting date. PM Balkenende flies to

Greece and Cyprus tonight to meet Karamanlis Tuesday morning and Papadopolous Tuesday afternoon. He intends to push hard against any threatened Cyprus veto. De Gooijer repeated that some Member States have been pushing for language about the

UN Cyprus Settlement. The Turks had adamantly opposed it, the GOC had not indicated how they feel and the Dutch continued to work hard to kill it. Finally, on Greece,

Swartbol told the Ambassador that the Dutch have resisted

Greece's push for stronger language on cross border issues.

(Note: the new draft text adds a reference to referral of

disputes to the ICJ in paragraph 20; see text below.)

PERMANENT SAFEGUARDS ON LABOR - PROBLEM OR CLEVER STRATEGY?

Â¶ 4. (C) Swartbol told Ambassador Sobel that Sweden, Finland and even the UK might be willing to accept permanent safeguard language stronger than Turkey would accept.

Swartbol seemed very concerned that these countries were taking such a problematic position. De Gooijer separately explained that the UK had not rejected safeguards outright.

He took this to mean the UK was taking a softer position on this issue to bring problem countries along and to help ensure Turkey gets an unqualified yes with a date. The

British reportedly think some flexibility on safeguards would make a difference in negotiations.

REDRAFTED COUNCIL CONCLUSIONS PRESENT NO NEW PROBLEMS

Â¶ 5. (C) De Gooijer shared the redrafted Council Conclusions that will be circulated to member states for the December 8

COREPER meeting (full text faxed to EUR/ERA). De Gooijer said he and the Dutch had been accused by the French and others of deliberately leaking the previous version to create favorable momentum for Turkey. On an optimistic note, he observed that only Austria, France, and Denmark came back with new language after the last COREPER, where the Dutch circulated original draft language for the Council decision.

He took this to mean the other 22 Member States could live with what they had seen, a positive sign for a positive result on December 17.

Â¶ 6. (C) At first glance, non-trivial changes include: para 17: new language re EU integration and absorption capacity; para 18: new language referring to specific Turkish

legislation, close monitoring by the commission, and a zero-tolerance policy on torture; para 20: new language on neighborly dispute resolution including reference to the ICJ; para 22: tic one: new language describing how the acquis chapters will be handled; tic five: revised language on qualified majority voting on the brake; and a new reference to the European Parliament

Â¶ 7. (SBU) BEGIN TEXT OF DRAFT CONCLUSIONS ON TURKEY:

Quote

Turkey

Â¶ 17. The European Council recalled its previous conclusions regarding Turkey, in which at a first stage it agreed that

Turkey was a candidate state destined to join the Union on the basis of the same criteria as applied to the other candidate states and, subsequently, concluded that, if it were to decide at its December 2004 meeting, on the basis of a report and recommendation from the Commission, that Turkey fulfills the Copenhagen political criteria, the European

Union will open accession negotiations with Turkey without delay. It also recalled its previous conclusions that the

Union,s capacity to absorb new members, while maintaining the momentum of European integration, is also an important consideration in the general interest of both the Union and the candidate countries.

Â¶ 18. The European Council welcomed the decisive progress made by Turkey in its far-reaching reform process and reiterated its determination to enable Turkey to join the

European community of values, confident that Turkey will sustain the process of reform to that end. Furthermore, it expects Turkey to actively pursue its efforts to bring into

force the six specific items of legislation identified by the

Commission. To ensure the irreversibility of the political reform process and its full implementation, notably with regard to fundamental freedoms and to full respect of human rights, that process will continue to be closely monitored by the Commission, which is invited to continue to report regularly on it to the Council, addressing all identified points of concern, including the implementation of the zero-tolerance policy relating to torture and ill-treatment.

Â¶ 19. The European Council welcomed Turkey,s (decision) to sign the protocol regarding the adaptation of the Ankara

Agreement, taking account of the accession of the ten new

Member States.

Â¶ 20. The European Council welcomed the improvement in

Turkey,s relations with its neighbours and Turkey,s unequivocal commitment to good neighbourly relations and its readiness to continue to work with Member States towards resolution of border disputes, in conformity with the principle of peaceful settlement of disputes in accordance with the United Nations Charter. In accordance with its previous conclusions, the European Council reviewed the situation relating to outstanding disputes; in this connection it reaffirmed its view that unresolved bilateral issues, which might have repercussions on the accession process, should if necessary be brought to the International

Court of Justice for settlement.

Â¶ 21. The European Council noted the resolution adopted by the European Parliament on (() December 2005.

(PM: decision, date, process)

Framework for negotiations

Â¶ 22. The European Council agreed that accession

negotiations with individual candidate states will be based on a framework for negotiations. Each framework, which will be established by the Council on a proposal by the

Commission, taking account of the experience of the fifth enlargement process, will address the following elements, according to own merits and specific situations and characteristics of each candidate state:

-- As in previous negotiations, the substance of the negotiations, which will be conducted in an Intergovernmental

Conference where decisions require unanimity, will be broken down into a number of chapters, each covering a specific policy area. The Council, acting by unanimity on a proposal by the Commission, will lay down benchmarks for the provisional closure and, where appropriate, for the opening of each chapter; depending on the chapter concerned, these benchmarks will refer to legislative alignment and a satisfactory track record of implementation of the acquis as well as obligations deriving from contractual relations with the European Union.

-- Long transition periods, derogations, specific arrangements or permanent safeguard clauses may be considered. The Commission will include these, as appropriate, in its proposals for each framework, for areas such as freedom of movement of persons, structural policies or agriculture. Furthermore, the decision-taking process regarding the eventual establishment of freedom of movement of persons should allow for a maximum role of individual

Member States. Transitional arrangements or safeguards should be reviewed regarding their impact on competition or the functioning of the internal market.

-- The financial aspects of accession of a candidate state must be allowed for in the applicable Financial Framework.

Hence, accession negotiations yet to be opened with candidates whose accession could have substantial financial

consequences requiring financial reform can only be concluded after the establishment of the Financial Framework for the period from 2014.

-- (PM: paragraph regarding goal and outcome of negotiations; ref. COM line: &open-ended process whose outcome cannot be guaranteed beforehand8)

-- In the case of a serious and persistent breach in a candidate state of the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law on which the Union is founded, the Commission will, at its own initiative or on the request of the Members

States, recommend the suspension of negotiations and propose the conditions for eventual resumption. The Council will decide by qualified majority on such a recommendation, after having heard the candidate state, whether to suspend the negotiations and on the conditions for their resumption. The

Member States will act in the IGC in accordance with the

Council decision, without prejudice to the general requirement for unanimity in the IGC. The European

Parliament will be informed.

-- Parallel to accession negotiations, the Union will engage with every candidate state in an intensive political and cultural dialogue. With the aim of enhancing mutual understanding by bringing people together, this inclusive dialogue also will involve civil society.

END QUOTE.

RUSSEL

Viewing cable 04THEHAGUE3333, TURKEY ACCESSION/EU: THE MYSTERIOUS CASE

OF THE



04THEHAGUE3333

2004-12-23

15:03

2011-01-26

17:05

CONFIDENTIAL

Embassy The

Hague



SIPDIS

E.O. 12958: DECL: 12/22/2014

TAGS: PREL NL TU CY EUN INRB

SUBJECT: TURKEY ACCESSION/EU: THE MYSTERIOUS CASE OF THE

MISSING DECLARATION

Classified By: Political Couns...

24576

2004-12-23

04THEHAGUE3333

Embassy The Hague

CONFIDENTIAL


SIPDIS

E.O. 12958: DECL: 12/22/2014

TAGS: PREL NL TU CY EUN INRB

SUBJECT: TURKEY ACCESSION/EU: THE MYSTERIOUS CASE OF THE

MISSING DECLARATION

Classified By: Political Counselor Andrew Schofer for reasons 1.4 (b) a nd (d).

Â¶ 1. SUMMARY: (C) According to Dutch diplomat Pieter de

Gooijer, the intense Dutch-led negotiations leading to the EU

Council's invitation to Turkey for accession talks were one for the history books. In a recent conversation with DCM and Poloff, he provided the inside story of the last hours of the talks in Brussels, which he witnessed first hand. De

Gooijer claimed three events were especially critical in bringing about a positive decision: President Chirac's seigniorial push to Cypriot President Papadopoulos; PM Blair fetching Turkish PM Erdogan back from his hotel before he could hold a fatal fatal press conference; and Dutch finessing of the Council Conclusions text that welcomed and quoted a Turkish declaration on the Ankara Agreement that never really existed. END SUMMARY

Â¶ 2. (C) Pieter de Gooijer (MFA European Integration director and main working negotiator for the Presidency) related the inside story of the final Turkey accession negotiations to

DCM and Poloff on the margins of a reception hosted by the

DCM on December 20. De Gooijer was at the center of Council negotiations with PM Balkenende and FM Bot, starting

Thursday, December 16. Looking back, de Gooijer said, PM

Balkenende was still angry on the following Monday about how the Turkish delegation treated him last week and how Erdogan behaved after the fact back home. De Gooijer, a veteran of

Turkish postings (as is FM Bot), said Balkenende had missed the back slapping and bear hugs that marked the elated

reactions of Bulgaria, Croatia and Romania. I had to remind him, as I had done all during the negotiations themselves, that the Turks came to this like a negotiation for a rug in the bazaar. If things had run in a straight line, they would have suspected they could have gotten a better deal. By the same token, he added, bazaar psychology dictated that PM

Erdogan appear dissatisfied with the result after the fact as well.

Â¶ 3. (C) At the beginning on Thursday, December 16, De

Gooijer said that the Netherlands Presidency delegation met the Turks around 4:30 pm, where the Dutch told them they had to do something on Cyprus. There was an immediate and negative Turkish reaction to signing anything, he recalled.

With this in mind and while the heads of state were sequestered at dinner, de Gooijer said he proposed that

Turkey could initial the protocol to the Ankara Agreement.

Initialing is not as final as signing, he had postulated.

It was a way for Turkey to acknowledge that this was where the Cyprus issue stood, that they could accept the text ad ref. Following this plan, the Dutch had circulated an

Annex to the Council Conclusions paragraph 19 (which referred to Turkey's signing the protocol of Ankara

Agreement) that acknowledged the initialing by the

Commission and Turkey of the Protocol. (Council document SN

220/04). Difficult talks between the Balkenende, FM Bot,

Erdogan and FM Gul ensued, with the Turks eventually rejecting initialing as too much like signing. They never appreciated the subtle, negotiator's distinction between the two, de Gooijer said.

Â¶ 4. (C) The Annex was withdrawn on Friday morning, December

Â¶ 17. The Dutch fell back to a proposal that Turkey could make a declaration of intent to sign the Protocol prior to the actual start of accession negotiations. The Secretariat published this as a revision to Council Decision paragraph 19

(Council Document SN 208/04). They got Turkish approval of

the concept in principal and then turned to sell it to

Cyprus. De Gooijer recalled a small meeting among President

Chirac, Chancellor Schroeder, PM Blair, Commission President

Barroso, and PM Balkenende with President Papadopoulos; the full Council was meeting in a nearby room. Both PM Blair and

Chancellor Schroeder had made clear their intent to leave

Brussels around 1:30 pm, due to pressing business elsewhere in Europe. With time slipping away for a deal, Papadopoulos balked at a mere declaration. Finally, de Gooijer recalled,

President Chirac said, Tassos, look. Tony, Gerhard and I all think this is a good solution. We have not much time. I know you will agree. Chirac reportedly then stood up and reached out for Papadopoulos, saying, Now let us go into the meeting. And with that, de Gooijer said, Chirac shepherded a slightly stunned Papadopoulos back to the Council meeting. That is how the EU works in the end, de Gooijer said, with the big countries ganging up on a small hold out.

Â¶ 5. (C) The Dutch still needed Turkey's formal acquiescence on the Declaration. De Gooijer said the Turks were quibbling over words down to individual letters in the

Conclusions text. Worse, they refused to make the formal declaration as foreseen in the text of Paragraph 19, which welcomed it and supposedly quoted from it. By this time,

Erdogan had apparently abandoned the negotiations and was heading back to the Conrad Hotel for an already scheduled 2 p.m. news conference. Balkenende called PM Blair, de Gooijer said, and asked him to help. Blair volunteered to get in his car and go after Erdogan; some time later, both men returned to the Council building for the final round.

Â¶ 6. (C) At this point, de Gooijer said he proposed that

Erdogan, Balkenende, and Barroso sign the page from the newly issued draft Conclusions on which the revised Paragraph 19 stood, as a way of acknowledging agreement to its contents and intent. I just tore the page from my book and drew

three lines at the bottom of it, de Gooijer recalled.

Erdogan refused to sign, as did Gul. De Gooijer said that he then pointed out that someone from the political level would have to accept Paragraph 19 in such a way that the rest of the Council, especially Cyprus, would be satisfied that

Turkey agreed to sign the Protocol before October 3.

Finally, Erdogan instructed his State Secretary to sign on behalf of Turkey; State Secretary Arzo Nicolai signed for the

Dutch, and Commissioner Rehn signed for the Commission; this paper was then copied and circulated to the Council, de

Gooijer said. With this, the men returned to the Council, where representatives of the other three candidate states joined the 25 EU Member States for a final session and the traditional family photograph.

Â¶ 7. (C) As an addendum, a Council staffer who was note-taking for the final session told USEU PolOff that things still remained tense even after the agreement was reached. In the final formal Council session, the EU-25, at the request of

Greece, had amended para 20 of the Conclusions (referring to resolution of border disputes) so that it referred to Member

States (plural) vice Member State. When the four candidates joined the 25 for champagne toasts, after

Romanian, Bulgarian and Croatian remarks about the historic decisions, Erdogan took the floor. He, too, noted the historic nature of the day, but then offered two substantive comments. First, he said Turkey understood para 20 to still be referring to one Member State in particular. And second, the GoT underlined that it did not view signing of the

Protocol to the Ankara Agreement as recognition of Cyprus.

(NOTE: USEU's source said Council discussion had already made clear the EU was not going to include such a point in the formal Conclusions, but the Dutch had agreed with the Turks that, if the topic came up, Balkenende in the closing press conference would note that the EU did not view the Protocol signing as being the same as recognition.). Cypriot

President Papadopoulos responded to Erdogan that the

Conclusions were already agreed among the EU-25 and could not be rewritten post-facto. Balkenende, who USEU's source described as growing visibly twitchy, stepped in to say that all could agree that today had seen a historic decision, and brought the discussion to a welcome close.

Â¶ 8. (C) As for Turkey's Declaration? It will forever be missing; historians will search in vain for a paper since there never was one, de Gooijer said with a grin. It was the intent that counted. Summing up, de Gooijer said, We all know what Turkey has to do, preferably sooner rather than later and certainly not as late as October 2 (the day before negotiations are supposed to start). And if the Turks come in and quibble over the Declaration and their intent as reflected in Paragraph 19? The EU would not start negotiations, de Gooijer concluded.

Â¶ 9. (U) This cable was coordinated with USEU.

SOBEL

Viewing cable 09STATE15113, REQUEST FOR INFORMATION:CRITICAL FOREIGN

DEPENDENCIES (CRITICAL INFRASTRUCTURE AND KEY RESOURCES LOCATED

ABROAD)



09STATE15113

2009-02-18

23:11

2011-01-26

00:12

SECRET//NOFORN

Secretary of

State

INFO LOG-00 MFA-00 EEB-00 AF-00 AGRE-00 AIT-00 AMAD-00

AOP-00 AEX-00 AS-00 A-00 ACQ-00 CIAE-00 CIP-00

COME-00 CCOE-00 CPR-00 INL-00 DNI-00 DIM-00 DODE-00

DOEE-00 WHA-00 PERC-00 DS-00 EAP-00 DHSE-00 EUR-00

FBIE-00 VCI-00 FSI-00 OBO-00 TEDE-00 INR-00 IO-00

CAC-00 MED-07 MFLO-00 MMP-00 MOFM-00 MOF-00 M-00

CDC-00 VCIE-00 NEA-00 DCP-00 NRC-00 NSAE-00 ISN-00

OES-00 OIG-00 NIMA-00 PM-00 P-00 ISNE-00 DOHS-00

FMPC-00 IRM-00 SSO-00 SS-00 MR-00 TRSE-00 CBP-00

EPAE-00 SCRS-00 PMB-00 DSCC-00 PRM-00 DRL-00 G-00

ALM-00 SCA-00 SAS-00 FA-00 PMA-00 SWCI-00 /007R

P 182318Z FEB 09

FM SECSTATE WASHDC

TO PAGE 02 STATE 015113 182333Z

ALL DIPLOMATIC POSTS COLLECTIVE PRIORITY

AMEMBASSY TRIPOLI PRIORITY


NOFORN, NOT FOR INTERNET DISTRIBUTION

E.O. 12958: DECL: 1/29/2019

TAG PTER, PGOV, ASEC, EFIN, ENRG, KCIP

SUBJECT: REQUEST FOR INFORMATION:CRITICAL FOREIGN DEPENDENCIES (CRITICAL

INFRASTRUCTURE AND KEY RESOURCES LOCATED ABROAD)

REF: STATE 6461 PLEASE PASS TO RSO, POLOFF, ECON, and MANAGEMENT (GSO and

IT). Classified by S/CT DAS, Susan F. Burk, Reason: 1/4 (B), (D), (E), and

(G)

Â¶ 1. (U//FOUO) This is an action request; see Para. 13.

Â¶ 2. (U//FOUO) Under the direction of the Department of Homeland Security

(DHS), the National Infrastructure Protection Plan (NIPP) was written to provide the unifying structure for the integration of critical infrastructure and key resources (CI/KR) protection into a single national program. The overarching goal of the NIPP is to build a safer, more secure, and more resilient America by enhancing protection of the nation's CI/KR to prevent, deter, neutralize or mitigate the effects of deliberate efforts by terrorists to destroy, incapacitate or exploit them; and to strengthen national preparedness, timely response, and rapid recovery in the event of an attack, natural disaster or other emergency.

Â¶ 3. (U//FOUO) In addition to a list of critical domestic CI/KR, the NIPP requires compilation and annual update of a comprehensive inventory of

CI/KR that are located outside U.S. borders and whose loss could critically impact the public health, economic security, and/or national and homeland security of the United States. DHS in collaboration with State developed the Critical Foreign Dependencies Initiative (CFDI)to identify these critical U.S. foreign dependencies -- foreign CI/KR that may affect systems

within the U.S. directly or indirectly. State is coordinating with DHS to develop the 2009 inventory, and the action request in Para. 13 represents the initial step in this process.

Â¶ 4. (U//FOUO) The NIPP does not define CI/KR. Homeland Security

Presidential Directive 7 (HSPD 7) references definitions in two separate statutes. In the USA Patriot Act of 2001 (42 U.S.C. 5195(e)) "critical infrastructure" is defined as systems and assets, whether physical or virtual, so vital to the United States the incapacitation or destruction of such systems and assets would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters. In the Homeland Security Act of 2002 (6

U.S.C. 101(9)) "key resources" are defined as publicly or privately controlled resources essential to the minimal operations of the economy and government.

Â¶ 5. (U//FOUO) The NIPP identifies 18 CI/KR sectors: agriculture and food; defense industrial base; energy; healthcare and public health; national monuments and icons; banking and finance; drinking water and water treatment systems; chemical; commercial facilities; dams; emergency services; commercial nuclear reactors, materials, and waste; information technology; communications; postal and shipping; transportation and systems; government facilities; and critical manufacturing. Obviously some of these sectors are more likely to have international components than other sectors.

Â¶ 6. (U//FOUO) Department is surveying posts for their input on critical infrastructure and key resources within their host country which, if destroyed, disrupted or exploited, would likely have an immediate and deleterious effect on the United States. We expect posts, after consultation among all sections and agencies, will in many instances immediately recognize whether such CI/KR exist in their host country. Posts are not/not being asked to consult with host governments with respect to this request.

Â¶ 7. (U//FOUO) Building upon the initial survey completed in 2008,

Department requests each post reassess and update information about infrastructure and resources in each host country whose loss could immediately affect the public health, economic security, and/or national and homeland security of the United States. This reassessment may include suggestions from posts for removing, modifying, or adding CI/KR to the list developed in 2008 (see the list of CI/KR identified in 2008 in Para. 15 below).

Â¶ 8. (U//FOUO) The following three categories should be considered when determining whether critical foreign dependencies exist in the host country: 1) direct physical linkages (e.g., pipelines, undersea telecommunications cables, and assets located in close enough proximity to the U.S. border their destruction could cause cross-border consequences, such as damage to dams and chemical facilities); 2) sole or predominantly foreign/host-country sourced goods and services (e.g., minerals or chemicals critical to U.S. industry, a critical finished product manufactured in one or only a small number of countries, or a telecom hub whose destruction might seriously disrupt global communications); and 3) critical supply chain nodes (e.g., the Strait of Hormuz and Panama Canal,

as well as any ports or shipping lanes in the host-country critical to the functioning of the global supply chain).

Â¶ 9. (U//FOUO) Although they are important issues, Department is not/not seeking information at this time on second-order effects (e.g., public morale and confidence, and interdependency effects that might cascade from a disruption).

Â¶ 10. (U//FOUO) Posts do not need to report government facilities overseas managed by State or war fighting facilities managed by other departments or agencies.

Â¶ 11. (U//FOUO) The following general information should be addressed when nominating elements for inclusion, removal, or modification: -- (U//FOUO)

Name and physical location of the asset, system, or supply chain node. --

(U//FOUO) Post's rationale for including, modifying, or removing an asset, system, or supply chain node. -- (U//FOUO) Any information Post has regarding conditions in country causing Post to believe the CI/KR is an active target or especially vulnerable due to natural circumstances. --

(U//FOUO) Any information Post has regarding CIP activities in country and who/what agency is responsible for those activities.

Â¶ 12. (U//FOUO) Questions can be directed to Sharri R. Clark in S/CT:

ClarkSR@state.sgov.gov; ClarkSR@state.gov; 202-647-1514. Alternatively, questions can be directed to S. Gail Robertson in S/CT:

RobertsonSG2@state.sgov.gov; RobertsonSG@state.gov, 202-647-3769.

Â¶ 13. (U//FOUO) ACTION REQUEST: Posts are requested to report by March 20,

2009 on CI/KR in their host country meeting the criteria outlined above and a brief explanation of why posts believes the asset meets the criteria. Due to the potential sensitivity of assets identified, posts are asked to consider the necessity of classifying their responses appropriately. Please note the list in its entirety is classified S/NF. If post determines there are no such CI/KR in its host country, a negative report is requested.

Please send replies to the attention of Sharri R. Clark in S/CT and use the subject line "CI/KR Response for S/CT".

Â¶ 14. (U//FOUO) Posts' assistance with providing input to the first list created in 2008 was invaluable, and Department appreciates Posts' continuing cooperation.

Â¶ 15. (S//NF) Following is the 2008 Critical Foreign Dependencies

Initiative (CFDI) list (CI/KR organized by region): [BEGIN TEXT OF LIST]

AFRICA

Congo (Kinshasa): Cobalt (Mine and Plant)

Gabon: Manganese - Battery grade, natural; battery grade, synthetic; chemical grade; ferro; metallurgical grade

Guinea: Bauxite (Mine)

South Africa: BAE Land System OMC, Benoni, South Africa Brown David

Gear Industries LTD, Benoni, South Africa Bushveld Complex

(chromite mine) Ferrochromium Manganese - Battery grade, natural; battery grade, synthetic; chemical grade; ferro; metallurgical grade Palladium Mine and Plant Platinum Mines Rhodium

EAST ASIA AND THE PACIFIC

Australia: Southern Cross undersea cable landing, Brookvale,

Australia Southern Cross undersea cable landing, Sydney, Australia

Manganese - Battery grade, natural; battery grade, synthetic; chemical grade; ferro; metallurgical grade Nickel Mines Maybe

Faulding Mulgrave

Victoria, Australia: Manufacturing facility for Midazolam injection. Mayne Pharma (fill/finish),

Melbourne,Australia: Sole suppliers of Crotalid Polyvalent

Antivenin (CroFab).

China: C2C Cable Network undersea cable landing, Chom Hom Kok, Hong

Kong C2C Cable Network undersea cable landing Shanghai, China China-

US undersea cable landing, Chongming, China China-US undersea cable landing Shantou, China EAC undersea cable landing Tseung Kwan O,

Hong Kong FLAG/REACH North Asia Loop undersea cable landing Tong

Fuk, Hong Kong Hydroelectric Dam Turbines and Generators Fluorspar

(Mine) Germanium Mine Graphite Mine Rare Earth Minerals/Elements

Tin Mine and Plant Tungsten - Mine and Plant Polypropylene Filter

Material for N-95 Masks Shanghai Port Guangzhou Port Hong Kong Port

Ningbo Port Tianjin Port

Fiji: Southern Cross undersea cable landing, Suva, Fiji

Indonesia: Tin Mine and Plant Straits of Malacca

Japan: C2C Cable Network undersea cable landing, Chikura, Japan C2C

Cable Network undersea cable landing, Shima, Japan China-US undersea cable, Okinawa, Japan EAC undersea cable landing Ajigaura,

Japan EAC undersea cable landing Shima, Japan FLAG/REACH North Asia

Loop undersea cable landing Wada, Japan FLAG/

REACH North Asia Loop undersea cable landing Wada, Japan Japan-US undersea cable landing, Maruyama, Japan Japan-US undersea cable landing Kitaibaraki, Japan KJCN undersea cable landing Fukuoka,

Japan KJCN undersea cable landing Kita-Kyushu, Japan Pacific

Crossing-1 (PC-1) undersea cable landing Ajigaura, Japan Pacific

Crossing-1 (PC-1) undersea cable landing Shima, Japan Tyco

Transpacific undersea cable landing, Toyohashi, Japan Tyco

Transpacific undersea cable landing Emi, Japan Hitachi,

Hydroelectric Dam Turbines and Generators Port of Chiba Port of

Kobe Port of Nagoya Port of Yokohama Iodine Mine Metal Fabrication

Machines Titanium Metal (Processed) Biken, Kanonji City, Japan

Hitachi Electrical Power Generators and Components Large AC

Generators above 40 MVA

Malaysia: Straits of Malacca

New Zealand: Southern Cross undersea cable landing, Whenuapai, New

Zealand Southern Cross undersea cable landing, Takapuna, New

Zealand

Philippines: C2C Cable Network undersea cable landing, Batangas,

Philippines EAC undersea cable landing Cavite, Philippines

Republic of Korea: C2C Cable Network undersea cable landing, Pusan,

Republic of Korea. EAC undersea cable landing Shindu-Ri, Republic of Korea FLAG/REACH North Asia Loop undersea cable landing Pusan,

Republic of Korea KJCN undersea cable landing Pusan, Republic of

Korea Hitachi Large Electric Power Transformers 230 - 500 kV Busan

Port

Singapore: C2C Cable Network undersea cable landing, Changi,

Singapore EAC undersea cable landing Changi North, Singapore Port of Singapore Straits of Malacca

Taiwan: C2C Cable Network undersea cable landing, Fangshan, Taiwan

C2C Cable Network undersea cable landing, Tanshui, Taiwan China-US undersea cable landing Fangshan, Taiwan EAC undersea cable landing

Pa Li, Taiwan FLAG/REACH North Asia Loop undersea cable landing

Toucheng, Taiwan Kaohsiung Port

EUROPE AND EURASIA

Europe (Unspecified): Metal Fabrication Machines: Small number of

Turkish companies (Durma, Baykal, Ermaksan)

Austria: Baxter AG,

Vienna, Austria: Immune Globulin Intravenous (IGIV) Octapharma

Pharmazeutika,

Vienna, Austria: Immune Globulin Intravenous (IGIV)

Azerbaijan: Sangachal Terminal Baku-Tbilisi-Ceyhan Pipeline

Belarus: Druzhba Oil Pipeline

Belgium: Germanium Mine Baxter SA,

Lessines, Belgium: Immune Globulin Intravenous (IGIV) Glaxo Smith

Kline,

Rixensart, Belgium: Acellular Pertussis Vaccine Component

GlaxoSmithKline Biologicals SA,

Wavre, Belgium: Acellular Pertussis Vaccine Component Port of

Antwerp

Denmark: TAT-14 undersea cable landing, Blaabjerg, Denmark Bavarian

Nordic (BN), Hejreskovvej,

Kvistgard, Denmark: Smallpox Vaccine Novo Nordisk Pharmaceuticals,

Inc.

Bagsvaerd, Denmark: Numerous formulations of insulin Novo Nordisk

Insulin Manufacturer: Global insulin supplies Statens Serum

Institut, Copenhagen, Denmark: DTaP (including D and T components) pediatric version

France: APOLLO undersea cable, Lannion, France FA-1 undersea cable,

Plerin, France TAT-14 underseacable landing St. Valery, France

Sanofi-Aventis Insulin Manufacturer: Global insulin supplies Foot and Mouth Disease Vaccine finishing Alstrom, Hydroelectric Dam

Turbines and Generators Alstrom Electrical Power

Generators and Components EMD Pharms Semoy, France: Cyanokit

Injection GlaxoSmithKline, Inc. Evreux, France: Influenza neurominidase inhibitor RELENZA (Zanamivir)

Diagast, Cedex, France: Olympus (impacts blood typing ability)

Genzyme Polyclonals SAS (bulk), Lyon, France: Thymoglobulin Sanofi

Pasteur SA, Lyon, France: Rabies virus vaccine

Georgia: Baku-Tbilisi-Ceyhan Pipeline

Germany: TAT-14 undersea cable landing, Nodren, Germany. Atlantic

Crossing-1 (AC-1) undersea cable landing Sylt, Germany BASF

Ludwigshafen: World\'s largest integrated chemical complex Siemens

Erlangen: Essentially irreplaceable production of key chemicals

Siemens, GE, Hydroelectric Dam Turbines and Generators Draeger

Safety AG & Co.,

Luebeck, Germany: Critical to gas detection capability Junghans

Fienwerktechnik

Schramberg, Germany: Critical to the production of mortars TDW-

Gasellschaft Wirksysteme,

Schroebenhausen, Germany: Critical to the production of the Patriot

Advanced Capability Lethality Enhancement Assembly Siemens, Large

Electric Power Transformers 230 - 500 kV Siemens, GE Electrical

Power Generators and Components Druzhba Oil Pipeline Sanofi Aventis

Frankfurt am

Main, Germany: Lantus Injection (insulin) Heyl Chemish- pharmazeutische Fabrik GmbH: Radiogardase (Prussian blue) Hameln

Pharmaceuticals,

Hameln, Germany: Pentetate Calcium Trisodium (Ca DTPA) and

Pentetate Zinc Trisodium (Zn DTPA) for contamination with plutonium, americium, and curium IDT Biologika GmbH, Dessau

Rossiau, Germany: BN Small Pox Vaccine. Biotest AG, Dreiech,

Germany: Supplier for TANGO (impacts automated blood typing ability)

CSL Behring GmbH, Marburg, Germany: Antihemophilic factor/von

Willebrand factor Novartis Vaccines and Diagnostics GmbH,

Marburg, Germany: Rabies virus vaccine Vetter Pharma Fertigung GmbH

& Co KG, Ravensburg, Germany (filling): Rho(D) IGIV Port of Hamburg

Ireland: Hibernia Atlantic undersea cable landing, Dublin Ireland

Genzyme Ireland Ltd. (filling), Waterford, Ireland: Thymoglobulin

Italy: Glaxo Smith Kline SpA (fill/finish), Parma, Italy: Digibind

(used to treat snake bites) Trans-Med gas pipeline

Netherlands: Atlantic Crossing-1 (AC-1) undersea cable landing

Beverwijk, Netherlands TAT-14 undersea cable landing, Katwijk,

Netherlands Rotterdam Port

Norway: Cobalt Nickel Mine

Poland: Druzhba Oil Pipeline

Russia: Novorossiysk Export Terminal Primorsk Export Terminal.

Nadym Gas Pipeline Junction: The most critical gas facility in the world Uranium Nickel Mine: Used in certain types of stainless steel and superalloys Palladium Mine and Plant Rhodium

Spain: Strait of Gibraltar Instituto Grifols, SA, Barcelona, Spain:

Immune Globulin Intravenous (IGIV) Maghreb-Europe (GME) gas pipeline, Algeria

Sweden: Recip AB Sweden: Thyrosafe (potassium iodine)

Switzerland: Hoffman-LaRoche, Inc. Basel, Switzerland: Tamiflu

(oseltamivir) Berna Biotech, Berne, Switzerland: Typhoid vaccine

CSL Behring AG, Berne, Switzerland: Immune Globulin Intravenous

(IGIV)

Turkey: Metal Fabrication Machines: Small number of Turkish companies (Durma, Baykal, Ermaksan) Bosporus Strait Baku-Tbilisi-

Ceyhan Pipeline

Ukraine: Manganese - Battery grade, natural; battery grade, synthetic; chemical grade; ferro; metallurgical grade

United Kingdom: Goonhilly Teleport, Goonhilly Downs, United Kingdom

Madley Teleport, Stone Street, Madley, United Kingdom Martelsham

Teleport, Ipswich, United Kingdom APOLLO undersea cable landing

Bude, Cornwall Station, United Kingdom Atlantic Crossing-1 (AC-1) undersea cable landing Whitesands Bay FA-1 undersea cable landing

Skewjack, Cornwall Station Hibernia Atlantic undersea cable landing, Southport, United Kingdom TAT-14 undersea cable landing

Bude, Cornwall Station, United Kingdom Tyco Transatlantic undersea cable landing, Highbridge, United Kingdom Tyco Transatlantic undersea cable landing, Pottington, United Kingdom. Yellow/Atlantic

Crossing-2 (AC-2) undersea cable landing

Bude, United Kingdom Foot and Mouth Disease Vaccine finishing BAE

Systems (Operations) Ltd., Presont, Lancashire, United Kingdom:

Critical to the F-35 Joint Strike Fighter BAE Systems Operations

Ltd., Southway, Plymouth Devon, United Kingdom: Critical to

extended range guided munitions BAE Systems RO

Defense, Chorley, United Kingdom: Critical to the Joint Standoff

Weapon (JSOW) AGM-154C (Unitary Variant) MacTaggart Scott,

Loanhead, Edinburgh, Lothian, Scotland, United Kingdom: Critical to the Ship Submersible Nuclear (SSN) NEAR/MIDDLE EAST

Djibouti: Bab al-Mendeb: Shipping lane is a critical supply chain node

Egypt: \'Ayn Sukhnah-SuMEd Receiving Import Terminal \'Sidi Kurayr-

SuMed Offloading Export Terminal Suez Canal

Iran: Strait of Hormuz Khark (Kharg) Island Sea Island Export

Terminal Khark Island T-Jetty

Iraq: Al-Basrah Oil Terminal

Israel: Rafael Ordnance Systems Division, Haifa, Israel: Critical to Sensor Fused Weapons (SFW), Wind Corrected Munitions Dispensers

(WCMD), Tail Kits, and batteries

Kuwait: Mina\' al Ahmadi Export Terminal

Morocco: Strait of Gibraltar Maghreb-Europe (GME) gas pipeline,

Morocco

Oman: Strait of Hormuz

Qatar: Ras Laffan Industrial Center: By 2012 Qatar will be the largest source of imported LNG to U.S.

Saudi Arabia: Abqaiq Processing Center: Largest crude oil processing and stabilization plant in the world Al Ju\'aymah Export

Terminal: Part of the Ras Tanura complex As Saffaniyah Processing

Center Qatif Pipeline Junction Ras at Tanaqib Processing Center Ras

Tanura Export Terminal Shaybah Central Gas-oil Separation Plant

Tunisia: Trans-Med Gas Pipeline

United Arab Emirates (UAE): Das Island Export Terminal Jabal Zannah

Export Terminal Strait of Hormuz

Yemen: Bab al-Mendeb: Shipping lane is a critical supply chain node

SOUTH AND CENTRAL ASIA

Kazakhstan: Ferrochromium Khromtau Complex, Kempersai, (Chromite

Mine)

India: Orissa (chromite mines) and Karnataka (chromite mines)

Generamedix Gujurat, India: Chemotherapy agents, including florouracil and methotrexate

WESTERN HEMISPHERE

Argentina: Foot and Mouth Disease Vaccine finishing

Bermuda: GlobeNet (formerly Bermuda US-1 (BUS-1) undersea cable landing Devonshire, Bermuda

Brazil: Americas-II undersea cable landing Fortaleza, Brazil

GlobeNet undersea cable landing Fortaleza, Brazil GlobeNet undersea cable landing Rio de Janeiro, Brazil Iron Ore from Rio Tinto Mine

Manganese - Battery grade, natural; battery grade, synthetic; chemical grade; ferro; metallurgical grade Niobium (Columbium),

Araxa, Minas Gerais State (mine) Ouvidor and Catalao I, Goias

State: Niobium

Chile: Iodine Mine

Canada: Hibernia Atlantic undersea cable landing Halifax , Nova

Scotia, Canada James Bay Power Project, Quebec: monumental hydroelectric power development Mica Dam,

British Columbia: Failure would impact the Columbia River Basin.

Hydro Quebec, Quebec: Critical irreplaceable source of power to portions of Northeast U. S. Robert Moses/Robert H. Saunders Power,

Ontario: Part of the St. Lawrence Power Project, between Barnhart

Island, New York, and Cornwall, Ontario Seven Mile Dam, British

Columbia: Concrete gravity dam between two other hydropower dams along the Pend d\'Oreille River Pickering Nuclear Power Plant,

Ontario, Canada Chalk River Nuclear Facility, Ontario: Largest supplier of medical radioisotopes in the world Hydrofluoric Acid

Production Facility, Allied Signal, Amherstburg, Ontario Enbridge

Pipeline Alliance Pipeline: Natural gas transmission from Canada

Maritime and Northeast Pipeline: Natural gas transmission from

Canada Transcanada Gas: Natural gas transmission from Canada

Alexandria Bay POE, Ontario: Northern border crossing Ambassador

Bridge POE, Ontario: Northern border crossing Blaine POE, British

Columbia: Northern border crossing Blaine Washington Rail Crossing,

British Columbia Blue Water Bridge POE, Ontario: Northern border crossing Champlain POE, Quebec: Northern border crossing CPR Tunnel

Rail Crossing, Ontario (Michigan Central Rail Crossing)

International Bridge Rail Crossing, Ontario International Railway

Bridge Rail Crossing Lewiston-Queenstown POE, Ontario: Northern border crossing Peace Bridge POE, Ontario: Northern border crossing

Pembina POE, Manitoba: Northern border crossing North Portal Rail

Crossing, Saskatchewan St. Claire Tunnel Rail Crossing, Ontario

Waneta Dam, British Columbia: Earthfill/concrete hydropower dam

Darlington Nuclear Power Plant, Ontario, Canada. E-ONE Moli Energy,

Maple Ridge, Canada: Critical to production of various military application electronics General Dynamics Land Systems - Canada,

London Ontario, Canada: Critical to the production of the

Stryker/USMC LAV Vehicle Integration Raytheon Systems Canada Ltd.

ELCAN Optical Technologies Division, Midland, Ontario, Canada:

Critical to the production of the AGM-130 Missile Thales Optronique

Canada, Inc., Montreal, Quebec: Critical optical systems for ground combat vehicles Germanium Mine Graphite Mine Iron Ore Mine Nickel

Mine Niobec Mine,

Quebec, Canada: Niobium Cangene, Winnipeg, Manitoba: Plasma Sanofi

Pasteur Ltd., Toronto, Canada: Polio virus vaccine GlaxoSmithKile

Biologicals, North America, Quebec, Canada: Pre-pandemic influenza vaccines

French Guiana: Americas-II undersea cable landing Cayenne, French

Guiana

Martinique: Americas-II undersea cable landing Le Lamentin,

Martinique

Mexico: FLAG/REACH North Asia Loop undersea cable landing Tijuana,

Mexico Pan-American Crossing (PAC) undersea cable landing Mazatlan,

Mexico Amistad International Dam: On the Rio Grande near Del Rio,

Texas and Ciudad Acuna, Coahuila, Mexico Anzalduas Dam: Diversion dam south of Mission, Texas, operated jointly by the U.S. and

Mexico for flood control Falcon International Dam: Upstream of

Roma, Texas and Miguel Aleman, Tamaulipas, Mexico Retamal Dam:

Diversion dam south of Weslaco, Texas, operated jointly by the U.S. and Mexico for flood control GE Hydroelectric Dam Turbines and

Generators: Main source for a large portion of larger components

Bridge of the Americas: Southern border crossing Brownsville POE:

Southern border crossing Calexico East POE: Southern border crossing Columbia Solidarity Bridge: Southern border crossing

Kansas City Southern de Mexico (KCSM) Rail Line, (Mexico) Nogales

POE: Southern border crossing Laredo Rail Crossing Eagle Pass Rail

Crossing Otay Mesa Crossing: Southern border crossing Pharr

International Bridge: Southern border crossing World Trade Bridge:

Southern border crossing Ysleta Zaragosa Bridge: Southern border crossing Hydrofluoric Acid Production Facility Graphite Mine GE

Electrical Power Generators and Components General Electric, Large

Electric Power Transformers 230 - 500 kV

Netherlands Antilles: Americas-II undersea cable landing

Willemstad, Netherlands Antilles.

Panama: FLAG/REACH North Asia Loop undersea cable landing Fort

Amador, Panama Panama Canal

Peru: Tin Mine and Plant

Trinidad and Tobago: Americas-II undersea cable landing Port of

Spain Atlantic LNG: Provides 70% of U.S. natural gas import needs

Venezuela: Americas-II undersea cable landing Camuri, Venezuela

GlobeNet undersea cable landing, Punta Gorda, Venezuela GlobeNet undersea cable landing Catia La Mar, Venezuela GlobeNet undersea cable landing Manonga, Venezuela [END TEXT OF LIST]

Â¶ 16. (U//FOUO) Minimize considered.

CLINTON

Viewing cable 09PARTO41305, Secretary Clinton's March 31, 2009 conversation



SECRET

US Delegation,

Secretary

09PARTO41305

2009-04-13

19:07

2011-01-27

12:12

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INFO RUEHC/SECSTATE WASHDC IMMEDIATE

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RUEHZG/NATO EU COLLECTIVE IMMEDIATE

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RUEHTV/AMEMBASSY TEL AVIV IMMEDIATE

S E C R E T PARTO 041305

SIPDIS

E.O. 12958: DECL: 3/31/2019

TAGS: OVIP PREL NL AF PHUM RU NATO

SUBJECT: Secretary Clinton's March 31, 2009 conversation with Dutch FM Verhagen

Classified by: Paul Wohlers, Deputy Executive Secretary,...

202072

2009-04-13

09PARTO41305

US Delegation, Secretary

SECRET

S E C R E T PARTO 041305

SIPDIS

E.O. 12958: DECL: 3/31/2019

TAGS: OVIP PREL NL AF PHUM RU NATO

SUBJECT: Secretary Clinton's March 31, 2009 conversation with Dutch FM Verhagen

Classified by: Paul Wohlers, Deputy Executive Secretary,

S/ES, Department of State. Reason 1.4(b,d).

Â¶ 1. (U) March 31, 2009; 9:00 a.m.; The Hague,

Netherlands.


U.S.

The Secretary

Deputy Secretary Lew

SRAP Holbrooke

A/S Fried

Ms. Abedin, Deputy Chief of Staff to the Secretary

Mr. Sullivan, Deputy Chief of Staff to the Secretary

Mr. Falls (Embassy Notetaker)

NETHERLANDS

FM Verhagen

Pieter de Gooijer, DG for Political Affairs

Robert de Groot, Deputy DG for Political Affairs

Peter Potman, Deputy for Western Hemisphere Affairs

Bart Rijs, Spokesperson

Marcel de Vink, Private Secretary (Chief of Staff)

Â¶ 3. (C) SUMMARY. In a cordial meeting, the Secretary and Dutch FM Verhagen reviewed Afghanistan policing and regional politics, NATO and Russia, Guantanamo and human rights, and the Middle East. Both agreed to help celebrate the NY 400 commemorating Henry Hudson's trip to the New World and founding of the first Dutch colony.

END SUMMARY.

-----------

AFGHANISTAN

-----------

Â¶ 4. (C) The two leaders met on the margins of the March

31 International Conference on Afghanistan, held in The

Hague. The Secretary and Verhagen exchanged compliments on the Dutch-hosted conference and the new U.S. strategy toward Afghanistan. The Secretary noted that our common goal is to build security for the Afghans. While prospects for the Afghan Army are good, the situation with the police is more challenging. The Secretary encouraged Verhagen to approach his European colleagues to win support for funding the Afghan police. Japan's offer to pay six months' of police salaries was generous, but the needs are significant. It is difficult to properly screen the applicants for security concerns, to provide an adequate salary, and to build the same morale level as within the Afghan army. Europe should be able to resolve any policy concerns over civil vs. military policing. The United States is willing to consider putting the police under the Afghan Army, which functions well, if necessary. SRAP Holbrooke added that

Italy seems to be the stumbling block on the police force.

Â¶ 5. (C) Verhagen responded that policing is a concern, and indeed worrisome. The Dutch intend to double their personnel contribution for police training and provide $40 million for salaries. Regarding Europe's contributions, some nations such as France find it difficult to use military and civilian police together.

That is not a problem for the Netherlands, but it is difficult for the Dutch MOD to use Gendarmes as trainers. EUPOL will likely announce soon that it is ready with 400 police trainers.

Â¶ 6. (C) The Secretary emphasized regional coordination -

- we don't want to impose our view -- as an essential element to the new U.S. strategy. The biggest challenge

is working with Pakistan. China, India, and Russia are engaged. Iran has signaled it may be willing to help on border issues due to concerns about narcotics trafficking.

Â¶ 7. (C) The Secretary thanked Verhagen again for the conference, noting, You are the best of Allies ...

Uruzgan is a model. She added that she understood

Dutch domestic political concerns, and that she hoped the Dutch public would continue to support a strong deployment in Afghanistan.

---------------

NATO AND RUSSIA

---------------

Â¶ 8. (C) The Secretary noted that France's participation in NATO had been resolved through close consultations with Turkey, and that Danish PM Rasmussen might do himself a favor and address Turkish concerns about his candidacy for NATO Secretary General in a similar manner. SRAP Holbrooke wondered whether NATO SYG De

Hoop Scheffer might be able to extend his tenure. The

Secretary noted that this was one possibility, if the

Turkish concerns persist.

Â¶ 9. (C) Verhagen was confident De Hoop Scheffer would stay on as needed. Given the public statement by PM

Erdogan against Rasmussen, however, it may be difficult to resolve Turkish concerns.

Â¶ 10. (C) The Secretary noted the President will encourage the Russians to pull back from Georgia.

Eastern European nations want to focus on Russia and

Russia's efforts to pressure them, and they are looking for reassurance from us ? understandably, based on their history and recent events in Georgia. We should not let

Russia intimidate Eastern Europe, and we should support their aspirations. For example, Ukraine is looking to develop its energy capacity. At the same time, the

United States wants to stand up the NATO-Russia

Council. Obviously, we should work with them on non- proliferation issues. NATO also needs to look to other issues, such as cyber security.

Â¶ 11. (C) Verhagen agreed and stated that as NATO reviews its strategic concept, it needs to go beyond Article 5 and look at regional and global threats. NATO should not focus solely on Russia but also on these broader issues. For the Dutch, Russia is not the threat it was. NATO should look to cyber security, energy security, and piracy, for example. Verhagen cautioned that the installation of missiles in Poland could be misinterpreted as evidence of a lack of faith by Poland in Article 5, in favor of a bilateral security relationship with the U.S. The Secretary responded that

President Yeltsin once had told President Clinton that he agreed the United States wasn't a threat, but little old ladies in St. Petersburg don't agree. In other words, mistrust was a political problem above all.

---------------------------

GUANTANAMO AND HUMAN RIGHTS

---------------------------

Â¶ 12. (C) The Secretary thanked FM Verhagen for the Dutch effort to frame a response to the legal issues surrounding Guantanamo and asked for FM Verhagen's further advice. She also thanked Verhagen for the Dutch effort to draft new text for the Durban review conference.

Â¶ 13. (S) Verhagen responded that, while the Netherlands would be very hesitant to take people [detainees], ... we want to assist. He noted that, due to the Schengen visa regime, EU members will have to consider jointly the implications of accepting detainees. Asked by A/S

Fried whether the EU may set the bar too high for a general EU-U.S. understanding, Verhagen said no. I'm difficult, but not frustrating your process.

Â¶ 14. (C) On a second track with Guantanamo, Verhagen said the Netherlands is supporting university discussions on the legal issues and has started a discussion on having the ICC respond to terrorist crimes. In addition, the Netherlands is willing to assist with detainee rehabilitation programs in Yemen.

-----------

MIDDLE EAST

-----------

Â¶ 15. (C) The Secretary urged Verhagen to stick with the

Quartet Principles for Hamas. She understood there was pressure to change policy, but now is not the time to open the door...now is the time to keep the pressure on. On Syria, she noted that it is worthwhile to have a more inclusive approach. On Israel, the United

States will press to end settlements.

Â¶ 16. (C) Verhagen said he fully agreed that the

Quartet Principles should apply to the new Palestine government. However, I am more and more isolated within the EU...I was the only one to raise the issue at a recent meeting. The mainstream says we provoked

Hamas. Verhagen said we need to apply the same human rights principles to both Israel and Palestine. Israel is getting blamed for violations, but not Palestinians.

DG De Gooijer noted that the situation within the EU was

upside down -- it appears the EU might ask the new

Israeli government to adhere to the Quartet principles.

CLINTON

Viewing cable 09THEHAGUE707, NETHERLANDS/ISRAEL: "DISMAYED"



09THEHAGUE707

2009-11-

20 15:03

2011-01-27

12:12


Embassy

The Hague

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NOFORN

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E.O. 12958: DECL: 11/19/2019

TAGS: PREL UNGA IS PINR KPAL NL EU

SUBJECT: NETHERLANDS/ISRAEL: "DISMAYED"



C....

235918

2009-11-20

09THEHAGUE707

Embassy The Hague


09SECSTATE118799|09THEHAGUE615|09THEHAGUE668


NOFORN

SIPDIS

E.O. 12958: DECL: 11/19/2019

TAGS: PREL UNGA IS PINR KPAL NL EU

SUBJECT: NETHERLANDS/ISRAEL: DISMAYED



Â¶ C. THE HAGUE 615

Classified By: PolEcon Counselor Andrew C. Mann for reasons 1.4(b,d)

Â¶ 1. (C/NF) SUMMARY: The Dutch will support EU consensus on the anti-Israel resolutions at UNGA, having negotiated a strong

Explanation of Vote (EOV) by the EU. FM Verhagen was dismayed by the latest Israel decision on settlements in

Gilo, and angered by the surprise announcement of new settlements in Gilo shortly after a visit and phone call with

Israeli FM Lieberman. FM Lieberman's visit on November 11 was a demonstration of how to irritate people and lose friends. In contrast with an earlier meeting of the two ministers, however, Lieberman seemed fully in charge. END

SUMMARY.

Â¶ 2. (C) ANTI-ISRAEL RESOLUTIONS AT UNGA: Post delivered reftel

A points to key MFA contacts on UN, human rights and Middle

East affairs. In a November 19 discussion with Dorine Wytema and David Zeverijn, senior policy officers in the Middle East department, Zeverijn indicated the Netherlands would support the EU consensus position on the anti-Israel resolutions.

This year's resolutions are significantly worse than last year's. However, the Dutch were satisfied that their firm position within the EU yielded a strong EOV with language addressing the Goldstone report, the blockade language, the rocket attacks and Israel's right to self defense. Within the EU, we found ourselves needing to pick our battles and therefore opted to support consensus, said Zeverijn.

(COMMENT: The Dutch have been criticized for their tough position on Serbian accession to the EU, among other issues, and may be seeking to take a more conciliatory approach within the EU. END COMMENT.) Zeverijn added that Dutch domestic politics, with some parties highly critical of

Israel, also made it difficult for Verhagen to buck EU consensus (reftel C). Finally, Zeverijn suggested it was best to avoid a repeat of the EU split that occurred during the Geneva debate over the Goldstone report.

Â¶ 3. (C/NF) REACTION TO NEW SETTLEMENTS: Wytema advised confidentially that FM Verhagen was angry about the Israeli decision to approve settlements in Gilo. Some of his anger stemmed from the fact that FM Lieberman did not reveal the settlement plan during a December 11 visit to The Hague or in a thank you call afterward. In public comments, Verhagen said he was dismayed by the new settlements. (NOTE:

Verhagen used the Dutch word onthutst, which one

commentator translated as flabbergasted, and onthutst probably sounds slightly stronger than dismayed to Dutch ears. However, Zeverijn indicated the FM's remarks matched the U.S. language indicating dismay. END NOTE.)

Â¶ 4. (C/NF) VISIT BY FM LIEBERMAN: Zeverijn described

Lieberman's visit as a demonstration of how to irritate people and lose friends. Wytema noted that Lieberman started first and spoke for 20 minutes without giving

Verhagen the opportunity for a back-and-forth dialogue.

Lieberman also had dinner with far-right Freedom Party leader

Gert Wilders during his visit. According to Wytema,

Lieberman made no movement on peace settlement issues, was pessimistic and cynical about every Palestinian, including

Abbas, and asserted the ball was in Palestine's court because the problem was not with us. Lieberman also expressed distrust of Turkey, suggesting the Turkey-Iran-Syria

Qdistrust of Turkey, suggesting the Turkey-Iran-Syria rapprochement is part of a plan to divide Iraq after the

Americans depart. Verhagen told Lieberman you need friends, and emphasized his friendship, but noted that the

Netherlands cannot go on defending Israel without helpful actions by the Israelis. Verhagen urged movement on the settlements issue, noting that the Netherlands viewed them as illegal and a violation of obligations under the roadmap. A good gesture, even a temporary moratorium, would help.

Verhagen also urged Lieberman to strengthen Abbas -- Israel's best partner. He asked Lieberman to lift border restrictions against the Palestinians to better address humanitarian concerns, while reaffirming Dutch support for anti-smuggling efforts. Finally, he urged further investigations of the Gaza conflict, noting that he would try to keep international resolutions in New York fair, but that Israel could help with more transparent efforts and more publicity with its investigations. Zeverijn concluded that the visit had one benefit -- it deflected criticism from the

Dutch parliament away from Verhagen and toward Lieberman.

Â¶ 5. (C) LIEBERMAN IN CHARGE: Wytema noted that Leiberman seemed fully in charge in the meeting, and that D/FM Ayalon

THE HAGUE 00000707 002 OF 002 and other staff did not speak. (NOTE: This contrasts with a previous meeting in Jerusalem, where Lieberman appeared frustrated and deferred to his staff. END NOTE.)

GALLAGHER

Viewing cable 10BAKU134, AZERBAIJANI PRESIDENT TO U/S BURNS: "YOU CAN'T




Appears in these articles: http://rusrep.ru/article/2010/11/29/aliev/

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FM AMEMBASSY BAKU


INFO RUCNCIS/CIS COLLECTIVE IMMEDIATE


RUEKDIA/DIA WASHDC IMMEDIATE




SIPDIS

E.O. 12958: DECL: 02/24/2020

TAGS: PREL PHUM MARR ETRD AJ AM RS IR TU

SUBJECT: AZERBAIJANI PRESIDENT TO U/S BURNS: "YOU CAN'T

BOIL TWO HEADS IN ONE POT"

Classified By: Charge Donald Lu, for reasons 1.4 (b,d).

Â¶ 1. (C) Summary: President Aliyev used this coarse street slang to describe the relationship between Russian President

Medvedev and PM Putin, but he might well have used the same idiom to describe his concerns about Turkey-Armenia reconciliation and the Nagorno-Karabakh (NK) Peace Process.

He told U/S Burns that the "Sword of Damocles" of the April

24 Armenian Remembrance Day is hanging over the NK Process, as well as the Turkey-Armenia normalization process. He suggested that it would be easier if the Turkey-Armenia normalization could be considered after April in order to allow more time for progress on NK. He also took the opportunity to press the USG to apply maximum pressure on

Yerevan to make concessions on NK. He stressed, "Now we are trying to be even more flexible."

Â¶ 2. (C) Summary Continued: On Iran, President Aliyev said he supported economic isolation and believed it could be effective if enforced by a broad coalition. He complained about Iranian security provocations. On a proposed battalion-sized Afghanistan contribution, Aliyev said that he would support sending a team to Georgia to observe the training being provided by EUCOM to Georgian troops headed for Afghanistan. On energy cooperation, President Aliyev said that if the Turks demonstrate "constructive behavior" this year that a gas transit deal can happen. Finally, on the jailed youth activists, though he made no firm commitments regarding their release, he said, "I think (a

pardon or amnesty) can be done. I had no intention to hurt anyone." End Summary.

Seeks Pressure on Yerevan to Resolve NK

---------------------------------------

Â¶ 3. (C) Under Secretary of State for Political Affairs Bill

Burns began his hour-long meeting with President Ilham Aliyev by stressing that he was sent with the simple message that

Washington wants to build our bilateral relations and create a stronger partnership. He then offered his condolences for the three Azeri soldiers killed on the Line of Contact on

February 18. Aliyev responded that such events show that there is no peace, no peace treaty and no peacekeepers enforcing the cease-fire. He worried more such incidents could happen. Burns commented that such incidents underscored the urgency of finding a political solution on

Nagorno-Karabakh.

Â¶ 4. (C) The balance of Aliyev,s comments sought to convey that he was ready to move forward in the Minsk Group Process, but that international pressure would be needed if Armenia was to move forward. He said that it is now time to find a final resolution, but Armenian President Sargsian wants to walk away from the process. "I told the co-chairs that

Armenia wants to delay as long as possible and escape at the end."" He said that Azerbaijan was prepared to do its part to propel the talks forward. "Now we will try to be even more flexible."

Â¶ 5. (C) Aliyev outlined several steps to persuade Armenia to agree to the Minsk Group Basic Principles:

-- the three co-chair countries should consolidate their efforts at a senior-level,

-- (C) the three co-chair countries should send a strong

message that the independence of NK is not under review, and

-- (C) if these new proposals are not accepted, there should be consequences in terms of international isolation, especially in the form of Russia,s curtailing some of its economic support for Armenia.

Â¶ 6. (C) Aliyev noted that at Sochi, President Sargsian had inserted a proposal for specifying a definite date for a referendum or plebiscite on NK final status. This, Aliyev argued, undermined the entire framework of the agreement, which is premised on an eventual referendum ) with no definite timeframe ) in exchange for legalizing "the illegally established regime in NK."" He also noted that

Armenia is vulnerable to isolation because it is dependent upon remittances from its diaspora, as well as imports of gas and electricity. "After 18 years of negotiation, we have tested all options. If this phase (of Minsk Group talks) ends, what is next?" the President asked aloud.

The Russian Role in NK and Russian Succession

BAKU 00000134 002 OF 004

---------------------------------------------

Â¶ 7. (C) In response to U/S Burns' question about the Russian role in the NK talks, Aliyev responded that he was convinced that Medvedev's efforts have been sincere. He said that

Medvedev has personally met with the Azerbaijani and Armenian presidents five times. Thus any failure to make progress on this issue will damage Medvedev's credibility. He said that at Sochi, Medvedev tried to persuade Sargsian to achieve a breakthrough. He added, however, that it was strange that with so much pressure from Moscow and Lavrov's visit to

Yeveran, the Armenians not only resisted progress, but

actually backtracked on previously-agreed items. In response to a question, Aliyev said that he believes that PM Putin has his own separate opinion about the desirability of an NK resolution. "I have no evidence, but I can feel this,"

Aliyev remarked.

Â¶ 8. (C) Aliyev said that he considers Medvedev "a modern, new-generation intellectual," surrounded by people whom he does not control. He said that he has personally witnessed

Medvedev taking decisions that then required further approval before they were implemented, referring specifically to a border demarcation agreement that he had agreed with Medvedev only to have it stymied by ""others,"" presumably in the prime ministerial office. He added, "Many high-ranking officials don't recognize (Medvedev) as a leader." He said that there are signs of a strong confrontation between the teams of the two men, although not yet between Putin and

Medvedev personally. "We have a saying in Azeri, 'Two heads cannot be boiled in one pot'" (crude street slang suggesting that two leaders are spoiling for a fight).

Strong Pushback on the Turkey-Armenia Normalization

--------------------------------------------- -------

Â¶ 9. (C) U/S Burns stressed that the U.S. believes that progress on the Turkey-Armenia protocols could create political space for Sargsian to be more flexible on NK. He continued that the reverse was also true, that a failure of the Turkey-Armenia process would almost certainly result in serious negative consequences for the NK process. Aliyev said that NK progress would require a minimum of five or six months. He suggested that the entire Turkey-Armenia protocol ratification process be delayed until after April 24. He said that the "Sword of Damocles" of Armenian Remembrance Day is hanging unhelpfully not only over the Turkey-Armenia process, but also now the NK progress. "If there were no deadline, maybe we could see how to combine our efforts (to

resolve NK)."

Â¶ 10. (C) Aliyev pushed back with his usual warnings about the negative effects of Turkey-Armenia protocol ratification without being proceeded by NK progress. He darkly predicted postponement of any NK settlement; no comprehensive regional security improvement; damage to Turkey-Azerbaijani relations; no real partnership between Turkey and Armenia; further isolation of Central Asia; the undermining of energy projects; and damage to Georgia, both in lost transit income, but also in its role as the sole land corridor between Russia and Armenia.

Relations with Iran Described as Tense and Unstable

--------------------------------------------- ------

Â¶ 11. (C) U/S Burns explained in detail the steps the U.S. had taken to initiate dialogue with Tehran and support the Tehran

Research Reactor initiative. He ended by noting that, given the rejection of these overtures, the U.S. would move forward with another UNSC resolution that included new sanctions targeting the Iranian Revolutionary Guard Corps. Aliyev responded that although the visible side of Azerbaijan's relations with Iran appears normal, the substance was very different. "I do not exclude that relations will be become more difficult," the President added.

Â¶ 12. (C) "(German Chancellor) Merkel was very firm with me on

Iran, trying to persuade me. I told her, 'No need,'" the

President recalled. He said that he was supportive of Iran's economic isolation and believed it could work if the international community worked together. He said that earlier sanctions observance had been spotty with many

European energy companies working in Iran. "Statoil supports

Iran more than it supports us!" he complained. He noted that

Russian President Medvedev once told him that Russia did not want the Americans to squeeze Iran, but also did not want a

nuclear Iran.

BAKU 00000134 003 OF 004

Â¶ 13. (C) Aliyev said that Iranian provocations in Azerbaijan were on the rise. He specifically cited not only the financing of radical Islamic groups and Hezbollah terrorists, but also:

-- the Iranian financing of violent Ashura ceremonies in

Nakhchivan,

-- the organization of demonstrations in front of the Azeri consulates in Tabriz and Istanbul,

-- a violent religious procession recently in Baku,

-- the use of the President's photo alongside the Star of

David on the Azeri-language Seher TV broadcast into

Azerbaijan, and

-- conflict in the Caspian.

Â¶ 14. (C) The President added that Azerbaijan will not reciprocate on the liberalization of the visa regime with

Iran. He also noted that Azerbaijan is planning to create a

TV channel in Persian that will broadcast into Iran. He said that he did not understand why the Supreme Religious Leader chose Ahmadinejad over former President Moussavi. He joked that perhaps it was too dangerous to have two ethnic Azeris at the head of the Iranian state. He said that the election fraud was outrageous, with Ahmadinejad winning in

Azeri-dominated Tabriz and Moussavi winning in Tehran, where it was harder to falsify the vote. He viewed the situation as very tense within Iran and believed it could erupt at any

time.

Supports Afghanistan Troop Contribution, with Conditions

--------------------------------------------- -----------

Â¶ 15. (C) U/S Burns asked for the President's support to continue our discussions about a battalion-sized contribution of troops to Afghanistan that would include a U.S. train and equip program. The President said that he is aware of this initiative and his foreign and defense ministries are working on it. He said that the fundamental problem is one of

""optics,"" claiming it was difficult for him politically if it looks like the Americans are only training Azeri troops to send them off to Afghanistan. He said that it would be easier if half of those trained would be sent to Afghanistan, while the second half would remain in Azerbaijan or be used for other purposes. U/S Burns noted that the President's suggestion would create problems involving the U.S. funding of the training. The Charge proposed that as an initial step, Ministry of Foreign Affairs and Defense Ministry staff observe the training of Georgian troops headed to Afghanistan by U.S. Marines. The President thought this was a good idea and instructed his aide to look at this suggestion.

Pardon or Amnesty of the Youth Activists "Can be Done"

--------------------------------------------- ---------

Â¶ 16. (C) U/S Burns said that one of the ways Azerbaijan could show leadership as a tolerant and secular country was in advancing democracy and human rights. He specifically asked that, following the appeal process of the two youth activists, the President find a way on humanitarian grounds to release the two men. Aliyev made no firm commitment, but responded, "I think this can be done. I had no intention to hurt anyone." When U/S Burns expressed the hope that the government could quietly take this step, the President said,

"Okay."

Russians are a Factor in Turkish Gas Transit

--------------------------------------------

Â¶ 17. (C) On energy cooperation, President Aliyev said that if the Turks demonstrate "constructive behavior" this year that a gas transit deal can happen. He was clear, however, that nothing would be signed before April 24. He also professed to be worried that active Turkish-Russian cooperation could be one of the impediments to progress. He confided that

Turkish Energy Minister Yildiz recently told the head the

Azerbaijani State Oil Company, "Why do you want to ruin our relations with Russia? Do you really need Nabucco?"

Â¶ 18. (C) The President continued that it is imperative for

Azerbaijan that formalities for the commencement of Shah

Deniz Phase II gas development begin this year. This project will bring $20 billion in much-needed investment to

Azerbaijan and potentially develop Azerbaijan into a major source of new gas, as much as 50 billion cubic meters.

BAKU 00000134 004 OF 004

Â¶ 19. (C) Unprompted by U/S Burns, Aliyev spelled out the reasons Azerbaijan decided to sell gas to Russia last year, noting that ""Moscow had asked" and offered a good price for gas that was surplus anyway. But the real reason, Aliyev confided, was that the sale illustrated to "our Turkish friends" that they will not be allowed to create a gas distribution hub. "Aliyev made clear his distaste for the

Erdogan government in Turkey, underscoring the "naivete" of their foreign policy and the failure of their initiatives, including the loss of support for Turkey among traditional international friends because of Ankara,s hostility to

Israel. He noted that in his view, there had never been any

merit to the notion of a "moderate Islamist" government in

Turkey, and that Erdogan,s insistence on promoting Hamas and

Gaza ) when other Arab countries were notably silent on these issues ) had brought Turkey no benefits.

Â¶ 20. (U) Lastly, U/S Burns asked for the President's assistance in resolving the long-standing difficulties in finalizing the lease for the new Embassy compound. The

President responded positively that he thought this could be done.

Â¶ 21. (U) U/S Burns was accompanied by EUR Deputy Assistant

Secretary Amb. Tina Kaidanow, NSC Director Bridget Brink, and

Charge. President Aliyev was joined by his Foreign Policy

Advisor Novruz Mammadov.

Â¶ 22. (U) This message has been cleared by U/S Burns.

LU

Viewing cable 05SAOPAULO872, BREAK-UP OF LEBANESE DRUG RING IN BRAZIL

REF: SAO PAULO 683



05SAOPAULO872

2005-07-22

11:11

2011-01-28

12:12

SECRET

Consulate Sao

Paulo


S E C R E T SECTION 01 OF 02 SAO PAULO 000872

SIPDIS

DEPT FOR WHA/BSC, DS, DS/DSS. DS/DSS/IP,DS/IP/WHA,

DH/IP/NEA, DS/IP/ITA, DS/CR/CIL, DS/IP/IPO, WHA/PD, INL

NSC FOR SUE CRONIN AND ZARATE

TREASURY FOR OFAC

E.O. 12958: DECL: 07/21/2015

TAGS: SNAR PTER ASEC PGOV ETTC EFIN SOCI BR

SUBJECT: BREAK-UP OF LEBANESE DRUG RING IN BRAZIL REF: SAO PAULO 683

Classified By: A/CG DAVID WOLFE FOR REASONS 1.4(D)

Â¶ 1. (S) SUMMARY: On June 17, 2005, the Brazilian Federal Police (DPF) broke up a Lebanese-organized drug ring based in Sao Paulo and operating in a number of cites in southern Brazil. 8Operation Tamara,8 (thedate fruit in

Portuguese,) involved coordinationwith the German federal police and U.S.

Drug Enforcement Administration,s (DEA) Regional Office atConsulate General

Sao Paulo (SPRO). Press repors on the operation specifically mentioned

DEA,s nvolvement in the operation, although no direct inolvement of DEA personnel from Consulate Sao Paulo has yet been made in the press. The press also reported that DPF stated that the drugs seized, some 65 kilos of cocaine worth USD 400,000, came from Paraguay and Bolivia and were destined for Europe and the Middle East. Press reports indicated that in addition to the drug seizures, one goal of the DPF was to identify members of Hezbollah living and operating in Brazil. Post is attempting to ascertain if any of the arrested Lebanese drug traffickers have connections with Hezbollah or any terrorist group.

END SUMMARY PRESS SPOTLIGHTS INTERNATIONAL CONNECTIONS AND COOPERATION ----

----------------------------------------- -------------

Â¶ 2. (SBU) On Friday, June 17, after eleven months of investigation,

Brazilian Federal Police arrested 17 members of a Lebanese-organized drug ring operating in Sao Paulo and southern Brazil. Extensive press reports on the operation highlighted the transnational scope of the drug ring as well as international law enforcement cooperation with the DPF investigating the group. The press reports indicated that authorities believe that the ring, which comprises five Lebanese families, typically sends approximately 120 kilos of cocaine per month from Brazil to Europe and launders the proceeds by purchasing real estate and expensive luxury automobiles in Brazil and

Lebanon. (Note: The reports differ on the quantity smuggled each month. End

Note) Authorities reportedly believe that the drugs enter Brazil from

Bolivia and Paraguay through the border city of Foz do Iguacu in the

Brazil-Paraguay-Argentina tri-border region and from Ponta Pora on the border of the southwestern state of Mato Grosso do Sul State and Paraguay.

Ring members reportedly transported the drugs to Sao Paulo, where they contracted Brazilian, Dutch, Canadian, Nigerian and South African couriers to smuggle the drugs to Frankfurt, Lisbon and locations in the Middle East, passing through the airports of Sao Paulo, Rio de Janeiro, Salvador, and

Recife. Press reports indicate that the authorities first became aware of the drug-smuggling operation in June 2004, when three Americans were arrested on drug charges in Istanbul, after disembarking from a flight from

Sao Paulo.

Â¶ 3. (U) Press reports indicate that the drug ring is believed to comprise several families of Lebanese descent who, having fled Lebanon during the

1980s, settled in Brazil, Germany and Switzerland. The press reports

describe the confiscation of documents written in Arabic and a large, framed picture of the leader of Hezbollah, Hassan Nasrallah, in one of the apartments of the ring members. The press indicated that USD 190,000 was found in the apartment of one of the ring members. 4. (U) Folha do Sao

Paulo, Brazil,s largest circulation daily, reported that in addition to dismantling the drug ring, the DPF,s objective is to identify members of

Hezbollah operating in Brazil. The same press article claims that Hezbollah has 140 members in Brazil. According to press statements, documents confiscated during Operation 8Tamara8 will be passed to international intelligence agencies for evaluation.

POST PERSPECTIVE ON THE OPERATION ---------------------------------

Â¶ 5. (S) DEA personnel working with DPF agents note that a possible

Hezbollah connection was not a focus during the course of the investigation. It should be noted that the GOB has consistently denied that any Hezbollah agents or agents of any other Middle Eastern terrorist organization operate in Brazil. Operational aspects of the case are being reported through DEA channels. Post DEA reports that the amount seized in the raid was closer to USD 300,000, not USD 190,000, as reported in the press.

Â¶ 6. (S) DEA began investigating the ring in cooperation with DPF after the three Americans were arrested in Istanbul, Turkey and one in Sao Paulo in

2004. In addition, two other Americans were arrested in Madrid and

Amsterdam in early 2004 with links to this ring. Currently, DEA authorities in Florida are conducting investigations on these Americans and the

Lebanese-Brazilian involved.

Â¶ 7. (S) COMMENT: DEA notes that one of the outstanding questions from this operation is the final destination for the profits of this lucrative cocaine trade. Past experience has been that Brazilian authorities lack effective tools to track the profits of illicit drug operations; coordination between financial officials and counter-narcotics agents has not been good. While DEA, DPF and German Federal Police were arresting members of the Brazilian drug ring in 8Operation Tamara,8 Ecuadorian authorities reportedly arrested seven operatives in a drug smuggling/Hezbollah ring in Quito, Ecuador in 8Operation Damascus.8 BBC On-

Line indicates that organizers of the Ecuadorian ring were sending seventy percent of profits to Hezbollah.

Â¶ 8. (S) Regional Security Office (RSO) Sao Paulo is coordinating with DEA to determine whether any of the documents obtained in these, or other recent arrests include U.S. passports or visas. RSO is investigating any possible repercussions against post or personnel from these recent arrests, or from the press reports identifying DEA,s participation in the investigation. Post is attempting to determine whether any of the arrested

Lebanese-Brazilians have connections to Hezbollah, or any other middleeastern terrorist network. So far we have not found any evidence of such a connection. End Comment.

WOLFE

Viewing cable 09STATE6423, C) IRANIAN OUTREACH TO LATIN AMERICA



2011-01-28

12:12

SECRET//NOFORN

Secretary of

State

09STATE6423

2009-01-23

21:09

R 232151Z JAN 09

FM SECSTATE WASHDC

TO IRAN COLLECTIVE

AMEMBASSY ASUNCION

AMEMBASSY BELMOPAN

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AMEMBASSY CARACAS

AMEMBASSY GEORGETOWN

AMEMBASSY GUATEMALA

AMEMBASSY LA PAZ

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AMCONSUL MONTERREY

USINT HAVANA


NOFORN

E.O. 12958: DECL: 01/23/2034

TAGS: PINR ETRD MARR PREL PTER SNAR AR BH BL BR CI CO CS

CU, DR, EC, ES, GT, HA, HO, MX, NU, PA, PE, PM, UY, VE

SUBJECT: (C) IRANIAN OUTREACH TO LATIN AMERICA

(C-AL8-02836)

Classified By: SUZANNE MCCORMICK, DIR., INR/I. REASON: 1.4(C).

Â¶ 1. (S/NF) WASHINGTON ANALYSTS ASSESS THAT TEHRAN IS

REACHING OUT TO LATIN AMERICAN COUNTRIES IN ORDER TO REDUCE

ITS DIPLOMATIC ISOLATION AND INCREASE TIES TO LEFTIST

COUNTRIES IN THE REGION THAT TEHRAN PERCEIVES MAY SHARE ITS

ANTI-US AGENDA. PRESIDENT AHMADI-NEJAD APPEARS TO BE THE

DRIVING FORCE BEHIND THIS POLICY, AND HE HAS RECEIVED

PERSONAL ASSISTANCE FROM VENEZUELAN PRESIDENT HUGO CHAVEZ.

IRAN'S TIES WITH VENEZUELA, WHICH INCLUDE MILITARY

COOPERATION, ARE THE CLOSEST AND MOST SIGNIFICANT. GIVEN THE

HIGH-PROFILE IRAN-VENEZUELA RELATIONSHIP, HIZBALLAH-LINKED

INDIVIDUALS PROBABLY SEE VENEZUELA AS A SAFEHAVEN WHERE THEY

CAN CONDUCT FUNDRAISING AND SUPPORT ACTIVITIES WITHOUT

INTERFERENCE. OTHER POPULIST GOVERNMENTS LIKE BOLIVIA,

ECUADOR, AND NICARAGUA HAVE ALSO SOUGHT TO CREATE CLOSER

POLITICAL AND ECONOMIC TIES WITH IRAN. IRAN HAS ESTABLISHED

CULTURAL CENTERS IN 16 COUNTRIES OF THE REGION AND HAS

EMBASSIES IN 10 COUNTRIES. AS TIME AND RESOURCES PERMIT AND

AS APPLICABLE TO POST, ANALYSTS AND SENIOR LEVEL POLICYMAKERS

WOULD GREATLY APPRECIATE ANY INFORMATION ON THE FOLLOWING

TOPICS/QUESTIONS THAT YOU COLLECT DURING THE COURSE OF YOUR

NORMAL MEETINGS/BUSINESS ACTIVITIES.

Â¶ A. (U) FOR IRAN WATCHERS AND THE IRAN REGIONAL PRESENCE

OFFICE (IRPO):

1) (S/NF) BEYOND IRAN'S OVERT POLICY TO INCREASE ITS

DIPLOMATIC AND ECONOMIC RELATIONS IN THE REGION, WE LACK

INFORMATION ON TEHRAN'S STRATEGIC INTENTIONS. WHAT DOES

TEHRAN SEE AS THE ULTIMATE GOAL OF IRAN'S OUTREACH TO LATIN

AMERICA? HOW HIGH A PRIORITY IS LATIN AMERICA FOR IRANIAN

FOREIGN POLICY? DOES TEHRAN ENVISION BECOMING A KEY REGIONAL

PLAYER IN LATIN AMERICA? WHERE DOES IRAN THINK IT IS IN TERMS

OF DEVELOPING RELATIONS WITH THE REGION? WHAT SPECIFIC

COUNTRIES, GROUPS, AND INDIVIDUALS DOES IRAN VIEW AS ENABLERS

IN THE REGION? WHICH COUNTRIES APPEAR TO BE THE FOCUS OF

IRANIAN EFFORTS TO MAKE POLITICAL, DIPLOMATIC, AND ECONOMIC

INROADS IN LATIN AMERICA, AND WHERE IS IT PLANNING TO EXPAND?

WHAT DOMESTIC, POLITICAL, ECONOMIC, OR SOCIAL ISSUES MIGHT

IMPACT ITS OUTREACH TO LATIN AMERICA?

2) (S/NF) WHO IN TEHRAN IS PUSHING IRAN'S OUTREACH TO LATIN

AMERICA? IF IT IS AHMADI-NEJAD, WHAT IS THE SUPREME LEADER'S

OPINION ON IRAN'S EFFORTS TO EXPAND ITS PRESENCE IN THE

REGION? WHO IN TEHRAN IS RESPONSIBLE FOR IMPLEMENTING IRAN'S

LATIN AMERICA POLICY--THE MFA, THE MOIS, THE IRGC? WHO WITHIN

THESE ORGANIZATIONS IS INVOLVED IN FORMING IRAN'S POLICY ON

LATIN AMERICA? HOW DO THESE ORGANIZATIONS COORDINATE THEIR

ACTIVITIES IN THE REGION?

3) (S/NF) DOES TEHRAN HAVE ANY INTENTION OF USING THE

REGION AS A STAGING GROUND FOR POTENTIAL TERRORIST ATTACKS,

EITHER DIRECTLY OR THROUGH SURROGATES? ARE ANY PERSONS

AFFILIATED WITH THE IRANIAN GOVERNMENT MAKING CONTINGENCY

PREPARATIONS TO CREATE NETWORKS FOR POTENTIAL TERRORIST

ACTIVITIES LATER? IF SO, WHAT SORT OF ACTIVITIES?

4) (S/NF) DO TEHRAN AND HIZBALLAH SHARE SIMILAR OBJECTIVES

IN THE REGION? IN WHAT WAYS DO THEY WORK

TOGETHER/INDEPENDENTLY? WHAT, IF ANY, ARE IRAN'S INTENTIONS

AND CAPABILITIES FOR STRENGTHENING HIZBALLAH OBJECTIVES IN

LATIN AMERICA?

Â¶ B. (U) FOR IRAN WATCHERS, IRPO AND LATIN AMERICAN POSTS:

1) (S/NF) WHAT IS THE EXTENT OF THE MOIS AND IRGC-QODS

FORCE PRESENCE AND RECRUITMENT IN THE REGION? WHAT HAPPENS TO

THE POTENTIAL RECRUITS AFTER THEIR TRAINING IN IRAN OR OTHER

MIDDLE EASTERN COUNTRIES? ARE IRANIAN OFFICIALS ATTEMPTING TO

ACCESS US TERRITORY OR US PRIVATE FIRMS VIA LATIN AMERICA? DO

THE IRANIAN CULTURAL CENTERS MAINTAIN CONTACT WITH THE

CONVERTS? DO IRANIAN DIPLOMATIC OR MILITARY (I.E. IRGC-QODS

FORCE) OFFICIALS IN THE REGION MAINTAIN ANY CONTACT WITH

CONVERTS? HOW DOES TEHRAN PROVIDE MONEY TO THE ICCS?

2) (S/NF) TO WHAT EXTENT ARE IRAN AND ITS LATIN AMERICAN

ALLIES COOPERATING AGAINST THE U.S.? IN WHAT WAYS HAS IRAN

BEEN SUCCESSFUL AT FOSTERING GREATER ANTI-AMERICANISM IN THE

REGION? WHAT KINDS OF COVERT IRANIAN ACTIVITY HAVE BEEN

IDENTIFIED IN THE REGION? TO WHAT EXTENT DO IRAN AND LATIN

AMERICA APPEAR TO SHARE INTELLIGENCE INFORMATION? HAS IRAN

PROVIDED INTELLIGENCE TRAINING WITHIN THE REGION?

3) (S/NF) IS IRAN SUPPORTING TERRORIST ACTIVITIES IN LATIN

AMERICA? IS IT RESPONSIBLE FOR SUPPORTING OR TRAINING ILLEGAL

ARMED GROUPS IN COLOMBIA OR ELSEWHERE? IS IRAN FACILITATING

LETHAL AID FOR ITS ALLIES OR WORKING TO ESTABLISH NEW

TERRORIST INFRASTRUCTURE IN THE REGION?

4) (S/NF) HOW IS IRAN CIRCUMVENTING ECONOMIC SANCTIONS

THROUGH ITS TIES IN THE REGION? WHAT KINDS OF COMMERCIAL AND

FINANCIAL RELATIONSHIPS ARE DEVELOPING BETWEEN IRAN AND THE

REGION? DO JOINT BUSINESS VENTURES WITH IRAN TURN A PROFIT?

WHICH COUNTRIES HAVE EXPANDED TRADE RELATIONSHIPS WITH IRAN?

ARE THESE TRADE AGREEMENTS FOCUSED ON SPECIFIC GOODS OR

SECTORS? IS THERE ANY INDICATION OF TRADE INCLUDING MATERIALS

OR TECHNOLOGY WHICH COULD BE USED FOR WEAPONS DEVELOPMENT BY

IRAN?

5) (S/NF) HOW SUCCESSFUL HAVE TEHRAN'S EFFORTS TO EXERT

INFLUENCE IN THE REGION THROUGH CULTURAL AND RELIGIOUS

PROSELYTIZATION BEEN? ARE THERE ANY INDICATIONS THAT THESE

EFFORTS HAVE EFFECTIVELY FOSTERED EXTREMISM IN LATIN AMERICA?

WHAT IS THE RELIGIOUS SHIA CONNECTION COUNTRY TO COUNTRY?

6) (S/NF) ARE THERE ANY INDICATIONS THAT IRANIANS ARE

TAKING ADVANTAGE OF ECUADOR'S JUNE 2008 DECISION TO LIFT VISA

REQUIREMENTS FOR ALL VISITORS TRAVELING TO ECUADOR FOR LESS

THAN 90 DAYS? WHAT STEPS ARE BOLIVIA OR OTHERS TAKING TO LIFT

THEIR VISA REQUIREMENTS FOR IRAN?

7) (S/NF) IS IRAN PERCEIVED AS A LEGITIMATE PARTNER IN

COUNTERNARCOTICS EFFORTS? DOES IRAN HAVE ANY PLANS TO EXTEND

COUNTERNARCOTICS COOPERATION WITH ANY COUNTRIES IN THE

REGION? HOW WILL THIS SORT OF OUTREACH PLAY INTO IRAN'S

RELATIONSHIPS WITH THE REST OF THE REGION, ESPECIALLY ITS KEY

ALLIES? WHAT ADVANTAGES, PERHAPS BEYOND ACTUAL EFFECTIVENESS

IN COUNTERING NARCOTICS TRAFFICKING, DO THESE COUNTRIES SEE

IN STRENGTHENING CONNECTIONS TO THE ISLAMIC REPUBLIC?

8) (S/NF) WHAT IS THE STATUS OF IRAN'S EXISTING MILITARY

AGREEMENTS WITH LATIN AMERICAN COUNTRIES? WHAT STATE-TO-STATE

MILITARY AGREEMENTS IS IRAN PURSUING IN LATIN AMERICA?

9) (S/NF) SPECIFICALLY, REGARDING IRAN'S RELATIONSHIP WITH

VENEZUELA, WHAT IS THE STATUS OF IRAN'S AGREEMENT WITH

VENEZUELA TO OVERHAUL VENEZUELAN F-5 AIRCRAFT ENGINES, IRAN'S

CONTRACT WITH VENEZUELA TO CONSTRUCT MUNITIONS PLANTS, AND

THE AGREEMENT WITH VENEZUELA TO PROCURE IRANIAN UNMANNED

AERIAL VEHICLES (UAVS) AND LIGHT IRANIAN AIRCRAFT? WHAT IS

VENEZUELA'S LEVEL OF SATISFACTION REGARDING THE QUALITY OF

MILITARY GOODS AND TRAINING IT HAS RECEIVED FROM IRAN? IS

THERE ANY INFORMATION INDICATING PDVSA PLANES ARE BEING USED

TO TRANSPORT ARMS FROM TEHRAN TO DAMASCUS AS REPORTED IN OPEN

SOURCES? IS THERE ANY ADDITIONAL INFORMATION ON THE

CARACAS-BOUND IRANIAN CARGO SEIZED BY TURKEY? WHO OR WHAT

ENTITY IN THE VENEZUELAN MILITARY OR CAVIM ORDERED IT AND FOR

WHAT PURPOSE? ARE TEHRAN AND CARACAS ACTIVELY PURSUING ANY

FORM OF NUCLEAR COOPERATION? AND IF SO, FOR WHAT PURPOSE?

WHAT IS THE NATURE OF WEEKLY CONVIASA FLIGHTS BETWEEN CARACAS

AND TEHRAN? DO WE HAVE ANY INFORMATION THAT THESE ARE BEING

USED FOR TERRORISM PURPOSES?

Â¶ C. (U) FOR LATIN AMERICAN POSTS:

1) (S/NF) WHAT DO LATIN AMERICAN COUNTRIES WANT FROM IRAN?

HOW ARE REGIONAL GOVERNMENTS, ESPECIALLY BUT NOT LIMITED TO

VENEZUELA, BOLIVIA, ECUADOR, AND NICARAGUA, CATERING TO

IRANIAN OVERTURES? TO WHAT EXTENT ARE LATIN AMERICAN LEADERS

CONCERNED ABOUT IRAN'S HISTORIC TIES TO TERRORISM AND THE

POTENTIAL IMPACT OF CLOSER TIES TO TEHRAN ON THEIR OWN

INTERNATIONAL STANDING?

2) (S/NF) WHAT IS THE RELATIONSHIP BETWEEN THE IRANIAN

DIPLOMATIC MISSIONS AND THE HOST GOVERNMENTS IN LATIN

AMERICA? WHAT SORT OF DIPLOMATIC COOPERATION DO LATIN

AMERICAN GOVERNMENTS ENVISION WITH IRAN? WHAT ARE THE

GOVERNMENTS' PERCEPTIONS AND DECISION-MAKING REGARDING GAINS

VS COSTS/RISKS OF INVOLVEMENT WITH IRANIAN OFFICIALS? WHAT

LIMITATIONS DO LATIN AMERICAN GOVERNMENTS PLACE ON

COOPERATION WITH IRAN? HOW MUCH DO REGIONAL, US, OR WORLD

REACTIONS FACTOR INTO LATIN AMERICAN POLICYMAKING TOWARDS

IRAN? HOW ARE DISAGREEMENTS WITHIN LATIN AMERICAN GOVERNMENTS

REGARDING INVOLVEMENT WITH IRAN HANDLED?

3) (S/NF) WHAT IS THE STATUS OF AGREEMENTS OR BUSINESS

VENTURES SIGNED BETWEEN IRANIAN ENTITIES AND LATIN AMERICAN

GOVERNMENTS OR PRIVATE FIRMS? WHAT SORT OF FINANCIAL AID OR

CASH TRANSFERS IS TEHRAN PROVIDING TO LATIN AMERICAN

GOVERNMENTS? HOW MUCH AID IS DELIVERED AS OPPOSED TO PROMISED?

4) (S/NF) TO WHAT EXTENT ARE HOST GOVERNMENTS WILLING TO

ASSIST THE U.S. AGAINST THE IRANIAN TARGET?

5) (C/NF) WHAT IS THE SIZE OF THE SHIA MUSLIM COMMUNITY?

WHICH ARE THE KNOWN HIZBALLAH "CLANS?"

6) (S/NF) WHAT ARE THE ACTIVITIES AT THE IRANIAN DIPLOMATIC

MISSIONS, NGOS, AND IRANIAN CULTURAL CENTERS IN LATIN AMERICA

AND HOW ARE THEY BEING USED TO EXPAND INFLUENCE? WHAT DO

LATIN AMERICAN CONVERTS TO SHIA ISLAM, OR OTHER STUDENTS OF

IRANIAN INDOCTRINATION, DO UPON RETURN TO THE REGION FROM

RELIGIOUS TRAINING IN IRAN? WHAT IS THE RELATIONSHIP BETWEEN

IRANIAN EMBASSIES AND CULTURAL CENTERS AND KNOWN HIZBALLAH

MEMBERS OR SUPPORTERS IN THE REGION?

7) (S/NF) IN ADDITION TO NATIONAL GOVERNMENTS, HAS IRAN

ESTABLISHED TIES WITH ANY NONGOVERNMENTAL GROUPS OR

INDIGENOUS PEOPLES? IF SO, WITH WHICH GROUPS/PEOPLES AND WHAT

IS THE CURRENT STATE OF IRAN'S RELATIONSHIPS WITH THESE

GROUPS/PEOPLES? HAS IRAN PROVIDED THESE GROUPS/PEOPLES WITH

MONEY OR OTHER SUPPORT? HAVE THE IRANIANS ESTABLISHED ANY

TIES WITH OTHER RADICAL OR TERRORIST GROUPS, LIKE THE FARC?

ARE IRANIAN OFFICIALS OR THEIR SURROGATES INVOLVED IN OTHER

ILLICIT ACTIVITIES, SUCH AS NARCOTRAFFICKING?

Â¶ 2. (U) PLEASE CITE C-AL8-02836 IN THE SUBJECT LINE OF

REPORTING IN RESPONSE TO THE ABOVE QUESTIONS.

CLINTON

Viewing cable 10CAIRO262, Tourism is the "driving force" in the Egyptian Economy



10CAIRO262

2010-02-08

13:01

2011-01-28

00:12

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

Cairo

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DEPT FOR NEA/ELA

E.O. 12958: N/A

TAGS: ECON EAID PREL EG

SUBJECT: Tourism is the "driving force" in the Egyptian Economy

REF: 09 CAIRO 2247

Â¶ 1. (SBU) Key Points:

--The Ministry of Tourism (MoT) projects a 5-7% increase in tourism revenues and arrivals for 2010 over last year.

--New growth opportunities are expected in Egypt's Mediterranean north shore area and MoT is overseeing plans to increase hotel capacity for the region.

-- MoT plans to pilot a zero emissions resort town in a bid to lure foreign tourists interested in environmental issues.

--Over the last two years, MoT has initiated comprehensive employee

training programs in order to build a managerial workforce for the tourism industry.

Â¶ 2. (U) On January 27, Econoff met with Senior Assistant Minister for Tourism Hisham Zaazou, a former tourism executive who serves as a key advisor to Minister Mohamed Zoheir Garana. He also oversees new initiatives such as "green tourism" and improved training programs.

Â¶ 3. (U) After a slight decline in 2009 attributed primarily to the global financial crisis, both tourism revenues and arrivals - two key industry benchmarks - are expected to increase on the order of

5-7%- for 2010 (Ref A). According to the Ministry of Tourism (MoT),

Egypt remains on track to reach its long-stated target of 14 million tourist visits annually by 2011 - a number set out in

President Mubarak's 2005 presidential campaign platform. Egypt's

"national tourism plan" targets an annual level of more than 25 million tourists by 2020.

--------------------

Growth Areas

--------------------

Â¶ 4. (SBU) Egypt's Red Sea coastal region should remain the country's most popular destination for foreign tourists but Zaazou advised that the MoT is looking to the country's Mediterranean north coast as a key location for new growth opportunities. The area stretching westward from the city of El Alamein (150 miles northwest of Cairo) to the summer resort town of Marsa Matrouh, comprises approximately 300 miles of coastline. MoT is working with real estate developers to triple the number of available hotel rooms in the area, from 7,000 to more than 22,000 in the next 5-10 years. The focus, Zaazou stated, will be on luring European

tourists - who make up more than 70% of Egypt's foreign tourist market. The government is currently upgrading four airports in the north shore area (Alexandria, Marsa Matrouh, El-Alamein, and Borg

El Arab) with an eye towards eventually allowing low-cost European airlines to service the area and bypass Cairo.

Â¶ 5. (SBU) This potential new growth is crucial to MoT's plan to generate new jobs in the tourism sector. Zaazou noted that for every 1 million new tourism visitors, Egypt generates 200,000 new jobs - listing hotels and tourism companies as the most obvious recipients but also pointing out the rise in demand for skilled tradesmen such as electricians, plumbers, and carpenters. He explained that government economic plans call for the creation of

600,000 new jobs annually. If growth continues as expected, tourism could provide one-third of new employment. "The tourism industry should be the main driving force for the economy," Zaazou said.

---------------------------------------------

Piloting Zero Emission Tourism

---------------------------------------------

Â¶ 6. (SBU) MoT plans to introduce what it labels "zero emission tourism" in highly visited tourist destinations, starting with the

Sinai city of Sharm el-Sheikh. Zaazou asserted that MoT will seek to lower carbon emission by 90% in Sharm el-Sheikh by 2020 by improving water conservation and sanitary systems, increasing dependency on renewable energy sources, and upgrading the city's public transportation system. By 2030, MoT predicts that Sharm el-Sheikh will become a zero emissions resort area. Zaazou explained Egypt is seeking an advantage over its Mediterranean neighbors (notably Turkey) and a future emphasis towards "green

environment tourism" may provide that edge. If MoT is successful with the Sharm el-Sheikh project, Zaazou indicated that Egypt will expand the program to other areas along the Red Sea coastal area but did not identify any specific locations.

-----------------------------------------

Employee Training is Pivotal

-----------------------------------------

Â¶ 7. (SBU) In the last two years, MoT has begun comprehensive training for current tourism employees as well as youth seeking employment in the industry. Led by the Ministry-controlled Higher

Council for Tourism, the program has initially targeted popular resort areas along the Red Sea Coastal area and will train rank and file employees as well as middle and senior managers - primarily for private Egyptian hotels. MoT is not working with foreign hotels since they maintain their own training programs. Zaazou said the goal is to build an Egyptian managerial class that currently lacks sufficient numbers. Zaazou also couched the need for training as a "social impact force." Egypt has problems with people holding "radical Islamist views," he confided. Employee training problems present the opportunity to moderate these views, noting that "exposure to new ideas and education" will allow for improved social interactions between Egyptians and foreigners. (Note:

According to press accounts, Minister Garana reaffirmed this training commitment at a World Tourism Organization meeting in

Spain on February 1, 2010 where he pledged to upgrade national employee training programs. End Note)

Â¶ 8. (SBU) Comment: MoT's projections for tourism arrivals, revenues, and job creation appear overly optimistic given the difficulties

faced by the global tourism market. The intense pace of infrastructure development - especially in the country's north shore - is a major concern if tourism visits do not increase according to MoT's stated 2020 goal. However, the key element in

Zaazou's overview of MoT's plans is a newfound commitment to training, a surprising yet welcome development. Contacts in nearly all of the government's ministries repeatedly discuss Egypt's desperate need for a skilled managerial class. If MoT is to meet its ambitious targets, it is critical that it develops a well-trained tourism workforce to convince the foreign tourist market to regularly return to Egypt.

SCOBEY

Viewing cable 10BERLIN194, BRITISH FOREIGN OFFICE DEFENCE CHIEF DISCUSSES



10BERLIN194 2010-02-19 11:11 2011-01-28 00:12 SECRET Embassy Berlin

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TAG KCFE, PARM, PREL, NATO, NPT, CD, UK, GM

SUBJECT: BRITISH FOREIGN OFFICE DEFENCE CHIEF DISCUSSES

EUROPEAN SECURITY, NPT REVCON

Classified By: Political M/C George Glass for reasons 1.4 (b/d)

Â¶ 1. (S) Summary. On the margins of the Munich Security

Conference, February 6, UK Foreign Office Director General

for Defense and Intelligence Mariot Leslie told U/S Tauscher

that the allies should negotiate with Russia a new follow-on

agreement to the Conventional Forces in Europe Treaty.

Leslie also suggested that Egypt might abandon its

controversial NPT Revcon Middle East resolution language if

it were guaranteed a conference on the subject some time

after the May 2010 Review Conference. To satisfy Moscow's

desire for greater inclusion, this conference could be held

in Russia. Leslie also noted that she was fighting pressure

to abandon stalled FMCT discussions in the Conference on

Disarmament and take up negotiations elsewhere. End Summary.

------

Russia

------

Â¶ 2. (S) Briefing on her recent visit to Moscow, Leslie said

Russian officials had cited their desire for missile defense

provisions as the main stumbling block in signing the

post-START agreement with the U.S. The open question, she

said, was whether progressives in the Russian government

could out-maneuver the military on this sticking point.

Leslie also underscored her concerns about the proliferation

of missile technology in the Middle East and stressed the

need to turn the page on previous disputes with Russia over

this issue. According to Leslie, Russian FM Lavrov had

agreed with her.

Â¶ 3. (S) Leslie underscored her belief that the Russians had

"lost out" during CFE and A/CFE negotiations and that the

allies should be open to a re-negotiation with Moscow on the

issue of conventional forces. However, she recognized that

there would likely be strong opposition from flank states

like Turkey and Norway -- particularly given the spill-over

effects into the issue of sub-strategic nuclear weapons.

Separately, Leslie said she had been surprised by the sudden

release of the new Russian Defense Strategy. While in

Moscow, she said Russian think tankers had discouraged her

from placing too much importance on the strategy. Instead,

Leslie was told to look at Russia's upcoming nuclear

declaratory posture for better insights into top-level

thinking.

--------------------

NPT Revcon and Egypt

--------------------

Â¶ 4. (S) Leslie shared U/S Tauscher's view that

presidential-level engagement could help move Egypt away from

it's controversial Middle East resolution language and,

thereby, avoid derailing the NPT Review Conference in May.

However, she doubted whether engagement alone would be

enough. Leslie stressed that Mubarak would also need a

high-visibility deliverable to take back to his public --

though this deliverable would not necessarily require much

substance. Specifically, she suggested that Egypt be

supported in its long-held goal to have an international

conference on the issue of nuclear security in the Middle

East. Since Moscow wanted to be seen as a player in this

issue, Leslie believed that holding such a conference in

Russia could kill two birds with one stone.

Â¶ 5. (S) Leslie said she had discussed this idea with South

African counterparts and had agreed with them that it could

work. U/S Tauscher stressed the need for assurances that

Egypt would stay in line during the NPT Review Conference.

In response, Leslie shared South African views that Egypt

would lose NAM support should Cairo be given support for a

conference and later still prove intransigent at the Revcon.

Moreover, Leslie suggested that Egypt might further be kept

in check by scheduling the conference after the NPT Revcon.

However, it would be important for other countries -- not the

U.S. or UK -- to push this idea forward. As additional ways

to move Egypt, Leslie suggested the possibility of a meeting

between the Egyptian FM and foreign ministers from the NPT

depositary states. She also raised the possibility of a

special reporteur -- though Leslie recognized that the French

BERLIN 00000194 002 OF 002

were opposed.

--------------

Treaty Updates

--------------

Â¶ 6. (S) Leslie said that she was increasingly under pressure

by British parliamentarians to cease stalled FMCT talks at

the Conference on Disarmament (CD) and move negotiations to

another venue. However, she continued to push back because

the CD offered exposure to a broad range of nations --

including nuclear states -- and because of the simple lack of

any alternative mechanism through which to discuss the issue.

Leslie believed that, in the future, such a move might be

necessary but that now was not the time. U/S Tauscher

underscored complaints from Islamabad that the U.S.-India

civilian nuclear agreement somehow short-changed Pakistan.

For her part, Leslie stressed the need to get Indians and

Pakistanis talking again -- even through back-channels.

Moreover, she said that it might be necessary to validate

Pakistani concerns, while still emphasizing to Islamabad that

these concerns are misplaced. Nevertheless, we must make

clear to Pakistani officials that they cannot hold FMCT

negotiations hostage as a result.

Â¶ 7. (S) Leslie was thrilled to hear that the proposed Defense

Trade Treaty between the U.S. and UK was again moving in

Washington. Meanwhile, in Moscow, Leslie said she had worked

to manage Russian expectations over U.S. ratification of the

CTBT. Specifically, she underscored mid-term elections in

the U.S. and the Obama Administration's packed agenda as

reasons why USG ratification was unlikely this year.

Â¶ 8. (U) This cable was cleared with U/S Tauscher.

Delawie

Viewing cable 08PARIS750, AUSTRALIA GROUP: PLENARY MEETING, PARIS, APRIL

14-18, 2008 REF: A. 07 MOSCOW 5535 B. 07 PARIS 2593 Classified By: ESTH/NP

COUNSELOR ROBERT W. DRY FOR REASONS 1.4 (B), (D), (E), and (H). --------------------

SUMMARY AND OVERVIEW --------------------




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ALSO PLS PASS ISN, INR, EUR, AND EAP

E.O. 12958: DECL: 04/16/2033

TAGS: PARM PREL ETTC AS FR RS CBW

SUBJECT: AUSTRALIA GROUP: PLENARY MEETING, PARIS, APRIL 14-18, 2008 REF: A.

07 MOSCOW 5535 B. 07 PARIS 2593 Classified By: ESTH/NP COUNSELOR ROBERT W.

DRY FOR REASONS 1.4 (B), (D), (E), and (H). -------------------- SUMMARY

AND OVERVIEW --------------------

Â¶ 1. (C) The Australia Group (AG) held its 2008 plenary in Paris from April

14-18. In addition to approving several updates to the AG's Guidelines and control lists, the Group discussed Russia's continued interest in membership. AG members continued to express concern about Russia's implementation of export controls and lack of transparency regarding its chemical and biological weapons (CBW) activities, and agreed an a potential on a technical outreach visit to discuss Russia's export control system.

The Group shared intelligence information through a day-long information exchange and enforcement officers shared best practices and case studies during an enforcement exchange meeting. The Group noted its continuing relevance to international nonproliferation norms and its support of the

Chemical Weapons Convention, Biological Weapons Convention and United

Nations Security Council Resolution 1540.

Â¶ 2. (SBU) After a year of collaboration, AG members hosted a technical experts meeting to discuss oligonucleotides and advances in synthetic biology that included a number of informational and policy presentations.

AG members adopted a list of indicators to assist suppliers in identifying suspicious orders of synthetic nucleic acid sequences and also decided to formally expand the scope of the expert group to keep AG members informed of technological advances in synthetic biology.

Â¶ 3. (C) The Group also made the following decisions: -- Amending the dualuse chemical and biological equipment control lists to address intangible transfers of technology and adopting a best practices guide for intangible transfers of technology. -- Amending the definition of highly pathogenic avian influenza to bring it line with the newest international standards. -

- Agreeing to add a section to the public AG website concerning AG membership criteria.

---------------------- APRIL 14 CONSULTATIONS ----------------------

Â¶ 4. (C) The U.S. Del met with the Australia delegation and AG chair Ian

Biggs on April 14 to discuss the plenary agenda and share views on expected outcomes. There was general U.S.-Australia agreement on the major issues to be covered during the week and both sides agreed that continued bilateral meetings prior to each plenary were beneficial to both countries.

-------------------------------- OLIGONUCLEOTIDES EXPERTS MEETING ---------

-----------------------

Â¶ 5. (SBU) The Chair presented his objectives for the meeting, which were to: expand the scope of the oligonucleotides discussion group to encompass synthetic biology, approve a checklist for suspicious orders, and look at discussion items for the intersessional period. The Chair summarized comments expressed by Australia Group members, including a strong preference for a short checklist, concerns that technology could not support the screening of oligonucleotide orders, and broad support for expanding the discussion group's scope.

Â¶ 6. (SBU) Proposal to Change the Oligonucleotide Group's Title: Korea asked the Chair about the state of the oligonucleotides discussion. The

Chair responded that the AG members decided last June that export controls were not appropriate for oligonucleotides and that the group should instead develop a checklist for suspicious international orders of oligonucleotides. During the intersessional period, members did not express an intent to pursue export controls for synthetic biology. New Zealand endorsed the proposal to change the group's name, suggesting that a broader focus on synthetic biology would enable the group to better address advances in the field.

7.(SBU) Suspicious Orders Checklist: The European Commission (EC) raised the issue of whether it was the mission of the AG to control synthetic biology. The Chair clarified that the proposed oligonucleotides checklist was developed out of the awareness raising guidelines for general biotechnology providers that were developing in 1990. The EC was not convinced and restated a concern that the checklist could be difficult to implement. Korea expressed concerns that controlling oligos could hamper academic, medical, and biodefense research, but noted that it currently uses a number of checklists in association with its export control system and did not forsee problems implementing an oligos checklist. The

Netherlands shared the view that export control of oligos is not appropriate at this time, but encouraged continued discussion on the extension of the discussion group's scope. The U.S., UK, Canada, and

Germany supported this view and stressed the AG's role as a leader in chemical and biological industry outreach and risk reduction.

8.(SBU) Australia asked whether the group should reorder items on the list based on their priority and suggested changing the title to read

'Guidelines For Screening Suspicious Orders' and broadening the scope to include synthetic nucleotide sequences of any length. The UK supported this suggestion and proposed to use the term 'identifying' instead of screening.

The Netherlands noted that list is somewhat duplicative with the AG's current awareness raising guidelines, but observed that the synthetic biology industry includes new entities that have not been traditional targets of AG outreach. Japan suggested that the guidelines should allow a maximum amount of national discretion for implementation. The UK responded with the 'illustrative list of indicators' to address Japan's point. The

Chair stated that his aim was to make a one page list of guidelines with relevant examples, but allowed that the list could be shortened or reordered to better fit national outreach programs. The U.S. expressed support for this approach. New Zealand expressed support for the checklist and stressed that customers and suppliers in the synthetic biology industry could be academic or commercial. The EC expressed reservation with the checklist's note that suppliers 'should' report all suspicious orders of oligonucleotides to relevant authorities because it has a mandatory element. The EC suggested that orders should only be considered suspicious if the requestor exhibits multiple checklist characteristics. Canada offered that the checklist note could be revised to read that suppliers are

'encouraged' to report suspicious orders to address the European

Commission's concern.

Â¶ 9. (SBU) Overview of Advances in Synthetic Biology: The U.S. Defense

Department provided a presentation on recent advances in synthetic biology.

The presentation included discussion of DNA synthesis technology and genetic determinants of virulence and identified technology trends of interest to the AG. A representative from Denmark's National Center for

Biological Defense provided an overview of advances in DNA sequence screening. The presentation described available tools for sequence screening and their use by commercial providers of synthetic nucleic acids.

The presentation included two topics for discussion by the AG, including whether it would be beneficial for the AG to develop and endorse software for the screening of synthetic nucleic acid orders and when a synthetic nucleic acid becomes a 'genetic element' under the AG's biological agent control list. Australia expressed concern that the concept of a multifactorial genetic basis of virulence would lesson the effectiveness of screening measures. A representative from the UK's Defence Science and

Technology Laboratory provided a presentation on Royal Society initiatives on synthetic biology, the objectives of which are to promote the exchange of information on synthetic biology, identify policy gaps, and stimulate policy activities. After the presentation, Canada suggested that it would be useful to define the concept of synthetic biology in the context of the

AG. The Netherlands reported that in 2007 at the Biological and Toxin

Weapons Convention review conference, States Parties began examining Codes of Conduct for synthetic biology as a confidence building measure. The

Netherlands also noted domestic efforts to stimulate codes of conduct in their synthetic biology industry. This information is available at

(http://www.knaw.nl/biosecurity). The U.S. discussed the outcome of a

National Science Advisory Board for Biosecurity study on synthetic biology, including a recommendation for establishing a screening program for domestic orders of gene-length nucleic acid sequences. The U.S. offered to share outcomes of domestic policy discussions as they become available.

Australia thanked the U.S. and Netherlands for their comments and discussed

its own efforts to promote workplace codes that include awareness of international obligations, national laws and regulations, and dual-use characteristics.

10.(SBU) Consideration of Possible AG Responses to these Advances: The

Chair gave his sense that AG members preferred awareness raising measures over export controls and the Australian delegation stressed the need for keeping the AG's options open in a rapidly changing scientific field, including controls on nucleic acid synthesizers in the future. The U.S. encouraged further discussion of Denmark's question regarding the applicability of the AG's genetic element controls to synthetic biology and emphasized need to define technology that could be used for screening sequences. The Netherlands supported the U.S. statement and emphasized that the AG should continue examining controls on equipment associated with synthetic biology, though such controls may not be appropriate at this time. The UK suggested applying end-user controls when appropriate.

11.(U) Next Steps: The U.S. suggested exchanging information over the coming year on domestic regulatory initiatives and the self-governance activities of commercial and academic entities. There was a sense among AG members that another experts meeting should be held on the margins of the next plenary session.

----------------- PLENARY SESSION I -----------------

12.(U) Chair's Introduction: The first plenary session of the 2008 plenary session was convened by Australia Group Chair Ian Biggs on April 16. Biggs thanked France and the Organisation for Economic Cooperation and

Development for accommodating the plenary and identified Russian and Kazakh interest in membership, expanding outreach and representation in Asia, agreeing to guidelines on suspicious orders of synthetic polynucleotides, analysis of chemical and biological weapons trends, law enforcement topics, and consideration of several policy proposals as key issues for this year's meeting. He also noted that the AG continues to be a global leader on export controls and emphasized the Group's cooperative, progressive and like-minded manner.

14.(SBU) Opening Statements: Slovenia delivered an opening statement as president of the European Union thanking Australia for its continued leadership of the AG and emphasized the EU's firm belief that the AG continues to prevent the proliferation of chemical and biological weapons.

The EU believes also the AG's criteria-based export control measures do not hamper international trade and are consistent with State Parties' obligations under the Chemical Weapons Convention and Biological Weapons

Conventions. Slovenia also noted that harmonization with AG guidelines is a requirement for EU accession and was pleased to see states petitioning for

EU membership (Croatia and Turkey) represented among AG members. Slovenia stressed the need to balance the benefits of expanding AG membership with the efficiency costs of expansion and welcomed additional outreach to

Russia. Ukraine provided opening remarks that emphasized the GOU's commitment to all international nonproliferation and arms control measures and mentioned recent outreach activities on export controls, biosecurity and ethics in the field of genetic engineering. The U.S. opening statement stressed the AG's role in setting international standards, international outreach and assisting capacity building and praised the AG's ongoing

discussions of synthetic biology and proliferation risks. Canada gave an open statement stressing the value of AG as an information sharing forum and underlined the AG's role as in the context of the Proliferation

Security Initiative and United Nations Security Council Resolution (UNSCR)

1540.

15.(SBU) Australia Group and International Conventions: The Netherlands presented on the first week of the Chemical Weapons Convention (CWC) Second

Review Conference, noting strong progress on universality and dwindling criticism for the AG among States Parties. The Netherlands also expressed doubts that chemical weapons (CW) possessor-states would meet their destruction obligations by 2012. The UK presented on the December 14, 2007

Meeting of States Parties of the Biological Weapons Convention (BWC), including efforts to encourage national implementation, strengthen export controls, and establish an international support unit facilitate BWC activities.

16.(S) Membership: -- The AG chair reviewed the previous AG chair's (John

Sullivan) report on his outreach visit to Moscow on November 20, 2007 (Ref

A) and recalled that there was no consensus to have an informal session on the margins of the 2008 plenary in which Russia could make its case for membership. Switzerland, Norway, France, Canada and the U.S. stated that

Russia continues to be important to global nonproliferation efforts, but expressed concerns that Russia would have to be more transparent regarding its current and past CBW activities and has not implemented some AG controls. France suggested that the AG chair conduct technical outreach visit to Moscow to raise Russian export control standards and engage in the areas of brokering and intangible transfers of technology. This proposal was the agreed way forward. -- The AG chair reported that Kazakhstan made an informal expression of interest in AG membership in August 2007 and on the margins of the Moscow outreach visit in November 2007. The AG chair welcome Kazakh interest and went over the application procedure and criteria for AG membership, but Kazakhstan did not indicate when it might submit a formal expression of interest. Korea and Canada noted the importance of Central Asia as a transshipment pathway and cited recent

Kazakh efforts to improve compliance with the CWC, BWC and nonproliferation norms. Both countries, however, stated that it was premature to discuss AG membership.

Â¶ 17. (U) Outreach: The AG chair summarized his outreach activities undertaken with non-members, noting specific requests for assistance made by Jordan, Serbia, and Thailand. The AG chair encouraged AG members to contact these states directly if they could provide any assistance and report on their efforts at the next Plenary. The AG chair noted that he was unable to go ahead with planned outreach trips to China and Taiwan, but stated that he would certainly attempt to do so this year. The U.S.,

Croatia, EC, Germany, Japan and Australia presented on outreach activities to non-members. Bulgaria and Hungary announced a suspension of their joint

Balkans Regional Action Plan to eliminate duplication with other outreach programs in the Balkans. The United Kingdom, Japan, Germany and the

Netherlands encouraged AG members and the chair to plan outreach activities with Brazil, Mexico, Israel, Serbia, and South Africa.

---------------------- IMPLEMENTATION MEETING ----------------------

Â¶ 18. (C) Chemical Issues: -- The plenary did not agree to adopt the

Canadian-UK proposal for controlling ceramic-coated valves

(AG/Mar08/CL/CDN/5 and AG/Mar08/CL/GB/32). The U.S. and Australia expressed interest in discussing the technical specifications and application end-use issues raised by the Canadian proposal intersessionally.

-- The plenary did not agree to adopt the UK proposal for adding 'sensors' to the current control for toxic gas monitoring systems

(AG/Mar08/CL/GB/31). Finland suggested using the phrase 'specially-designed components' as a broader alternative. The AG members could not reach consensus on this suggestion and the AG chair suggested that members consider it intersessionally.

-- The plenary did not agree to adopt the Finnish proposal for controlling related software used in dual-use chemical and biological equipment

(AG/Mar08/CL/Fin/4). Finland and the Netherlands suggested that AG members could address the issue by revising the AG Guidelines to include software in the list of items covered by current controls. Australia, the U.S. and

Canada were concerned that the Finnish proposal would control publiclyavailable chemical signature databases. The AG chair suggested that AG members consider the proposal intersessionally and provide comments to

Finland.

Â¶ 19. (C) Biological Issues:

-- Spain withdrew their proposal to develop a sensitive biological agents list (AG/Mar07/CL/E/1) from consideration at the implementation meeting

(Ref B).

-- The plenary agreed to adopt the German proposal to revise the related technology portions of the dual-use chemical and biological equipment control lists to include

(AG/Mar08/CL/D/4.Rev1). (Ref B) intangible technology transfers

-- The plenary did not agree to adopt the joint U.S.-UK proposal to revise the cross (tangential) flow filtration entry in the dual-use biological equipment control list to address new technology trends (AG/Apr08/CL/USA/15 and AG/Apr08/CL/GB/33). Several questions were raised during discussions and AG members agreed to discuss this proposal intersessionally to modify the proposal for presentation at the 2009 plenary.

-- The plenary agreed to adopt a modified version of the U.S. proposal to revise the definition of Highly Pathogenic Avian Influenza (HPAI) on the animal pathogens control list. Canada, New Zealand, and Switzerland expressed support for the U.S. proposal (AG/Mar08/CL/USA/14.Rev1). During discussion on the margin, AG members proposed amending AG Guidelines to allow AG members to use the internationally accepted definitions, such as the World Animal Health Organization or the regulatory definition adopted by the European Union.

Â¶ 20. (SBU) Further Enhancement of Implementation Measures: The U.S. presented a discussion paper on potential clarifications for the dual-use chemical equipment control list and suggested that the issues raised by the paper be included intersessional discussions of the Canadian-UK ceramiccoated valves proposal. The U.S. presentations on export control gap analysis and the proliferation risks posed by resellers of used biological equipment were withdrawn, but copies of the presentations were distributed to AG members. New Zealand announced that their catch-all legislation has been passed by parliament and the regulations will come into effect in

October 2008.

Â¶ 21. (SBU) Report on the Oligonucleotide Technical Experts Meeting: The chair of the experts working group gave a report to the implementation chair outlining the results of the year long collaboration of the group, including requesting approval to change the name of the group to the

'Synthetic Biology Working Group' and the adoption of the 'Illustrative

List of Indicators to Identify Suspicious Orders of Synthetic Nucleic Acid

Sequences.' Both proposals were approved by the working group and these recommendations were forwarded to the plenary for formal adoption. It was agreed to continue the working group.

---------------------------- INFORMATION EXCHANGE MEETING -----------------

-----------

Â¶ 22. (C) 30 presentations were made by 12 AG members on chemical and biological programs of concern, trends and developments in CBW proliferation, terrorism and other non-state issues and prospective members. The U.S. Del made ten presentations. Details of the exchange are provided septel.

--------------------------- ENFORCEMENT EXPERTS MEETING -------------------

--------

Â¶ 23. (SBU) The enforcement exchange provided a valuable opportunity to share experiences, discuss methods of outreach to industry, reduce noncompliance, and strengthen export controls within the AG member countries.

The 2008 Enforcement Exchange highlighted advancing capabilities in computer-based export control systems which provide interface between licensing and enforcement. Outreach to industry and awareness raising of export control laws was also a re-occurring theme of the meeting.

Â¶ 24. (U) Enforcement Manual: There were no changes or modifications to the manual submitted for approval to the AG Enforcement Delegates. The United

Kingdom will be coordinating a comprehensive update of the Enforcement

Manual with assistance from the United States. The update will include modifications in the order of topics, some topical and chapter additions as well as condensing of the manual. The manual is expected to be published by

September 2008.

Â¶ 25. (SBU) U.S. Presentation: The Immigration and Customs Enforcement

(ICE) delegate delivered a presentation that outlined ICE legal authorities

and the international scope and reach of ICE investigations. The presentation highlighted the capabilities of ICE Attaches who work with their international law enforcement partners to enforce the export laws of the United States. The presentation also included a briefing on Project

Shield America, the ICE outreach to industry. This presentation explained the goals of Project Shield America which are to seek cooperation and assistance from high technology manufacturers and the export community, to increase corporate and public awareness of the importance of export laws and controls, and to build an ongoing relationship between ICE agents and the manufacturers.

Â¶ 26. (SBU) Other Presentations:

-- The Netherlands gave a brief presentation focused on the challenges posed by trade in second hand laboratory equipment and was a timely reminder to members of the challenges that are posed by enforcing export controls on such items and the importance of industry outreach programs targeting exporters of this equipment. The Netherlands also showed a DVD that demonstrated the functions of an Organization for the Prohibition of

Chemical Weapons (OPCW) Inspection Challenge during an exercise that was conducted in the Netherlands.

-- Croatia, a new AG member, provided an overview of Croatian Customs and briefed two cases where they were able to detect and seize two separate chemical shipments being transshipped through Croatia.

-- Italy provided a presentation that described the Italian Customs webbased application for requesting export licenses for dual-use commodities.

This presentation provided a walk-through of the information that is required to complete the application process.

-- Japan provided a presentation that outlined their Internal Compliance

Program, which is administered by the Ministry of Economy, Trade and

Industry (METI). Outreach to industry has raised the awareness of industry to the importance of export controls and to familiarize industry with export laws and regulations. Japan reports that this has resulted in 80% of the goods that are subject to export control laws are exported by companies who have registered with METI and who have an active internal compliance program in place. Japan also described their progress on the controls of sensitive technologies in Intangible Technology Transfers. METI has established a program to conduct outreach programs to Research Institutes,

Universities, and private enterprises. METI encountered a lack of awareness of controls and sensitivity of technology being developed by these entities, and are conducting education and training to explain the export laws and regulations and to stress that the academic institutions and private enterprises are responsible for Japan,s national security and safety.

-- The New Zealand Customs Service provided an outline of their recent implementation of new Customs Tarriff Codes for companies importing CWC chemicals into New Zealand. The New Zealand delegate provided specific examples of special challenges met (such as improper classification on import documents) and described how they were resolved.

-- Cyprus's Department of Customs and Excise reported on their export control policy. This included a description of the functions of various government agencies who share responsibility for export control. The presentation also outlined the role of the Cyprus Department of Customs and

Excise, the legal framework, licensing, enforcement. Cyprus has established the Anti Smuggling Enforcement Team to establish customs inspections, detection, and surveillance activities to effectively control cargo transiting the Limassol Port to prevent its use for smuggling and terrorist activities.

-- The Republic of Korea delivered a presentation explaining their export control system. This included a brief history of the implementation of their export control laws and an in-depth explanation of their licensing system and processes involved. The presentation also outlined outreach strategies to promote compliance to include workshops and management courses. The Korean internet-based license application, named Yestrade, allows exporters to apply for licenses and track the progress of the application process. Through the implementation of this system, and a robust outreach program, a dramatic increase in export license applications has been realized.

-- Germany provided a brief presentation on their automated risk management system. The system is a computer-based system that allows customs officers to search key information to determine if the commodity, exporter or enduser elicits an automated risk warning. A risk warning will guide the officer to conduct further inspection or to contact the Customs

Criminological Office.

-- France provided an in-depth assessment and awareness raising of the possible uses of biocides and phytopharmaceutical chemicals. These chemicals are used in the pesticide and fertilizer industry. The briefing included a history of the use of these compounds, and their potential for use in terrorism. France emphasized their outreach program and highlighted a French company who has implemented internal monitoring mechanisms to prevent any theft or diversion of these chemicals.

------------------ PLENARY SESSION II ------------------

Â¶ 27. (SBU) Plenary Reports: AG members approved the summary reports submitted by the implementation, information exchange, and enforcement chairs. The UK suggested that AG members hold an technical experts meeting before the 2009 plenary to review the proposals deferred to intersessional discussion. The Netherlands offered to host such a meeting, suggested that

AG members only send two-person delegations and further suggested to hold the meeting around an OPCW activity to limit the travel burden. 28. (SBU)

Strengthening and Maintaining the Australia Group: -- During the 2007 plenary, AG members adopted a decision that intangible technology transfer was covered by the AG Guidelines (Ref B). Germany circulated a best practices guide to aid national implementation of intangible technology transfer measures (AG/Mar08/ExC/D/33) that focused on outreach, selfauditing and sanctions. The proposal incorporated most comments provided by

AG members during the 2007-08 intersessional period. AG members agreed to

adopt the best practices guide though Japan and New Zealand emphasized that the guide would be non-binding.

-- The AG chair presented the results of his national implementation survey and stated that another survey will be circulated prior to the 2009 plenary.

-- The UK informally proposed circulating a brief questionnaire for the chemical and biological industry leaders in AG member countries during the interssional period. Using the information gathered, the UK will recommend a suitable event with industry, possibly to coincide with the AG's 25th anniversary.

-- The chair recalled a letter sent to the chair from the Chair of the

UNSCR 1540 Committee requesting information from AG members on steps taken, or planned to be taken, to implement UNSCR 1540 requirements. The U.S. gave a presentation on efforts by the Organization for Security and Cooperation in Europe to draft a best practices guide for UNSCR 1540 implementation.

The -- AG members did not agree with the AG chair's proposal to withdraw 14 classified documents (including one U.S. document) from the Volume of Basic

Documents, reclassify the volume to 'AG-In-Confidence' and post it on the

AG Information System (AGIS) website (AG/Mar08/Inf/Chair/47). The AG chair stated that the 2008 volume will be distributed on CD-ROM and that AG members should notify the chair of any further sensitive documents that should be removed. -- AG members agreed to a modified proposal to add a membership section to the public AG website (AG/Mar08/Inf/Chair/48.Rev1).

Japan and the Netherlands expressed concern that the membership information will be interpreted as the only criteria for AG membership. -- The AG chair noted Ireland's recent contribution to the voluntary fund

(AG/Feb08/VolCon/IRL/4) and circulated reports on 2007-2008 AG trust fund expenditures (AG/Apr08/VolCon/Chair/9). The AG chair also thanked the U.S. and Los Alamos National Laboratory for hosting the AGIS website.

------------- PRESS RELEASE -------------

Â¶ 29. (U) The AG approved the following press release: Media Release 2008

Australia Group Plenary Representatives of 40 countries and the European

Commission have this week concluded the annual plenary meeting of the

Australia Group. The Australia Group is a cooperative and voluntary body dedicated to the adoption, implementation and enforcement of cutting-edge measures to counter the spread of technologies and materials that could assist states of concern and terrorist groups in obtaining or developing chemical and biological weapons. The plenary was co-hosted by the French

Government and took place in April 14-18, 2008 in Paris. In the 2008 plenary, Australia Group members shared information on proliferation attempts by states of concern and non-state actors. The Group discussed the detection of such attempts and counter measures, including enhancement and coordination of licensing and customs controls. In recognition of rapid international developments in the field of synthetic biology, Australia

Group members agreed to form a synthetic biology advisory body as a means of ensuring the Group is kept abreast of, and can respond quickly and appropriately to, technological developments in this area. Several changes were proposed to the Group's chemical and biological control lists, and were adopted or referred for further consideration as appropriate. The

Australia Group continued to enhance cooperative measures to deal with

Intangible Technology Transfers (ITT), an area of increasing priority in the defence against the proliferation of chemical and biological weapons capabilities. Group members exchanged information on national measures for screening visa application as a means of countering ITT of concern. While no new members were admitted to the Group in 2008, interest in membership from several countries received appropriate attention, and further engagement with these countries was approved by the plenary. The Australia

Group continues to ensure that its control lists keep pace with technological and industry developments. As a result, the Group's control lists continue to be an international benchmark for best practice controls on chemical and biological agents and equipment, and are increasingly used as a guide for international action in this area including in the support and application of relevant UN Security Council resolutions. Australia

Group members continue to ensure that nonproliferation export controls do not hinder legitimate trade and technical cooperation in the chemical biological sectors. International acceptance of the Australia Group controls and practices are in part a result of the Group's extensive outreach to non-members and other international bodies. The Australia Group plenary reviewed its outreach efforts and priorities, and agreed to continue an active outreach program in 2008-09. Informative and cooperative outreach to domestic industry and academic sectors was emphasized as a continuing priority for Australia Group members. Further information on the

Australia Group is available at www.australiagroup.net.

------------- LOOKING AHEAD -------------

Â¶ 30. (S) The U.S. Del should take following actions over the coming year:

-- Solicit comments from AG members on the U.S. proposal concerning crossflow filtration equipment. -- Provide comments to AG members on Finland's proposal concerning software related to dual-use chemical and biological equipment. -- Consult with the UK, Canada and Australia concerning the chemical equipment issues raised by the U.S. at the plenary. -- Suggest the

AG chair solicit questions from AG members regarding CBW proliferation for discussion during the next plenary's Information Exchange. -- Suggest the

AG chair raise the issue of AG-controlled dual-use chemical equipment transfers to Iran during his next outreach visit to Beijing. ISN/CB should consider preparing cleared language to support the AG chair's visit. -- An information exchange presentation describing the Mantis special advisory opinion program and lessons learned from the process. -- An enforcement presentation on resellers of controlled dual-use equipment over the

Internet and through online auction houses.

--------------- U.S. DELEGATION ---------------

Â¶ 31. (SBU) The U.S. Delegation: Robert Mikulak, Department of State, Head of Delegation Mark Hartell, Department of State, Deputy Head of Delegation

Andrew Souza, Department of State Zack Bernstein, Department of State Chris

Malow, Department of State Diane Maender, Department of State Dustin Eward,

Department of Defense JoAnn Kohlbrand, Department of Defense Dawn Jones,

Department of Defense Beth Scott, Department of Commerce David Manglos,

Department of Homeland Security PEKALA Please visit Paris' Classified

Website at: XXXXXXXXXXXX fm

PEKALA

Viewing cable 08TRIPOLI829, AL-QADHAFI: TO RUSSIA, WITH LOVE?



08TRIPOLI829

2008-10-17

14:02

2011-02-01

21:09

CONFIDENTIAL

Embassy

Tripoli

Appears in these articles: http://www.telegraph.co.uk/news/wikileaks-files/libya-wikileaks/

VZCZCXRO8755

OO RUEHTRO

DE RUEHTRO #0829/01 2911446

ZNY CCCCC ZZH

O R 171446Z OCT 08

FM AMEMBASSY TRIPOLI


INFO RUEHMO/AMEMBASSY MOSCOW 0074

RUEHKV/AMEMBASSY KYIV 0011

RUEHSK/AMEMBASSY MINSK 0001








RUEHCV/AMEMBASSY CARACAS 0003


C O N F I D E N T I A L SECTION 01 OF 02 TRIPOLI 000829

SIPDIS

DEPT FOR NEA/MAG

E.O. 12958: DECL: 10/17/2018

TAGS: PREL MARR MASS LY BO RS UP VZ

SUBJECT: AL-QADHAFI: TO RUSSIA, WITH LOVE?

REF: A) TRIPOLI 340, B) TRIPOLI 297, C) TRIPOLI 321, D) IIR 6 915 000 609

TRIPOLI 00000829 001.2 OF 002 CLASSIFIED BY: John T. Godfrey, CDA, U.S.

Embassy Tripoli, Dept of State. REASON: 1.4 (b), (d) 1. (C) Summary:

Russian diplomats in Tripoli said Libyan leader Muammar al-Qadhafi planned to travel to Moscow October 31-November 2 to reciprocate the visit of then-

President Vladimir Putin to Tripoli earlier this year. Al-Qadhafi will be preceded by his son, Muatassim al-Qadhafi (Libya's National Security

Adviser), who plans to arrive as early as October 25 to meet with officials at the Federal Security Bureau and the Ministry for Emergency Situations.

The visit would come on the heels of a recent port call in Tripoli by

Russian naval vessels. Al-Qadhafi reportedly considers his relationship with Putin to be good, and Libya seems eager to at least give the appearance of cultivating closer ties with Moscow, possibly to counterbalance recent agreements with Italy and the U.S. on colonial compensation and terrorism-related legal claims, respectively. A successful visit to

Russia could prompt closer military-to-military cooperation and equipment sales, something Russian diplomats here say they've been advocating for some time. End Summary. LIBYA HEADS INTO THE COLD 2. (C) Poloff met with

Russian Emboff Evgeny Kozlov October 16 to discuss the recent visit to

Tripoli of Russian warships. Kozlov volunteered that he was involved in finalizing arrangements for an upcoming October 31-November 2 visit to

Russia by Libyan leader Muammar al-Qadhafi. It is expected that militarymilitary cooperation and sales of Russian military equipment to Libya will feature prominently in al-Qadhafi's visit. (Note: Per refs B-C, Russian DCM

Anatoly Martinov told us in April in advance of Putin's visit that Russia hoped a joint Russian-Libyan military cooperation council established in the late 1990's would yield increased sales to Libya of Russian military equipment. End note.) Kozlov said al-Qadhafi had hoped that Putin would attend his Revolution Day speech on August 31 in Benghazi and help inaugurate the Russian Railroad Company's work on a multi-billion dollar contract to construct a 554-kilometer rail spur between Benghazi and Sirte, which was negotiated during Putin's visit in April (ref A). Al-Qadhafi had also arranged a joint meeting with Italian PM Berlusconi and Bolivian

President Morales - both attended the Revolution Day celebration - and was disappointed that Putin had not joined them. Describing the atmosphere between al-Qadhafi and Putin during the latter's visit to Tripoli on April

16 as "very friendly", Kozlov said Libya seemed eager to deepen its

"productive coordination efforts" with Russia. 3. (C) According to Kozlov,

Muatassim al-Qadhafi, son of Muammar al-Qadhafi and National Security

Adviser, will travel to Russia ahead of his father to meet with senior officials at Russia's Federal Security Bureau and Ministry of Emergency

Situations. (Note: Muatassim and another al-Qadhafi son, Khamis al-Qadhafi, have undertaken military studies in Moscow. Khamis al-Qadhafi spent 14 months in a combined Russian staff college course especially designed for him and obtained a PhD in military sciences in 2007. End note.) Kozlov did not yet know whether External Security Organization chief Musa Kusa would accompany Muatassim. He noted that nearly 200 Libyan protocol and

MFA officials, together with another 100 military and security personnel, were en route to Moscow to advance the visit. Russian officials believed al-Qadhafi planned to stop in Minsk and Kiev on his way back to Tripoli from Moscow. THE BEAR VISITS THE SHORES OF TRIPOLI 4. (C) Al-Qadhafi's visit would follow the October 11-13 port call of Russian warships to the shores of Tripoli (ref D). The nuclear-powered missile cruiser Peter the

Great, together with the frigate Intrepid and anti-submarine destroyer

Admiral Chabanenko and support vessels, were in and around Tripoli harbor.

(Note: Tripoli's relatively shallow port prevented the Peter the Great from

docking in the harbor. End note.) According to Kozlov, at least seven senior Libyan naval officers, including the commander of the Tripoli naval base, toured the vessels. Defense attaches accredited to Tripoli did not have an opportunity to tour the vessels, but children from the Russian

Embassy-sponsored school did. In an apparent nod to tensions between

Moscow and Kiev, Ukrainian children at the school stayed in class while their Russian, Belarussian and Central Asian classmates enjoyed their field trip. Kozlov said TRIPOLI 00000829 002.2 OF 002 the flotilla would stop in Turkey and Syria before heading to Venezuela for joint Russian-

Venezuelan naval maneuvers scheduled for late November. Media reports indcate that the Intrepid will proceed separately to waters off Somalia.

5. (C) Comment: Kozlov touted the ship visit and al-Qadhafi's upcoming trip as signs that Russian-Libyan ties continue to grow. Saif al-Islam al-

Qadhafi made several statements to the press supporting Russia's actions at the height of the Georgia crisis in August, and Libyan PM al-Mahmoudi reportedly told the Kremlin that Libya would support Russia in the UNSC; however, it is difficult to assess the extent of Libya's commitment to deeper ties with Moscow. Having just concluded agreements with Italy and the U.S. to resolve issues of longstanding concern - colonial compensation and terrorism-related legal claims, respectively - al-Qadhafi may be seeking to balance engagement with Western powers by reminding us and others that he still has other options for military-to-military cooperation and other engagement. On a lighter note, Kozlov told us Libyan protocol had not yet raised whether and where it might pitch al-Qadhafi's tent - his preferred mode of lodging while on the road - in Moscow during the chilly fall season. End Comment.GODFREY

Viewing cable 08TRIPOLI912, LIBYA COMMERCIAL ROUND-UP FOR OCTOBER 2008

OIL AND GAS 1. (U) A New Oil Discovery by Sirte Oil Company: On October 7, Sirte

Oil, a state-owned company, announced a new oil discovery in the well A1-NC216A in the Ghadames Basin. The well is located approximately 310 km southwest of Tripoli.

The initial production testing established an oil rate of 1,725 barrels per day, and a gas rate of 0.25 million standard cubic feet per day. This well represents the company's first discovery in the block. [noc.com.ly, 10/7/2008] 2. (U) Russian-British Firm TNK-BP

Seeks to Develop Major Libyan Oil Field: After a conflict between the oil company's

Russian and British shareholders was settled, TNK-BP received the right to compete with BP in international projects. TNK-BP is negotiating to develop Libya's Sarir field, one of the largest oilfields in Libya located about 500 kilometers east of Tripoli in the

Sirte Basin. TNK-BP is ready to sell $1bn-$2bn to obtain the status of operator of

Libya's Sarir project. The Russian-British oil producer is now in talks with Libya's

National Oil Corporation (NOC) regarding the development of the Sarir field. In

September, a delegation of TNK-BP top executives visited the country to hold cooperation talks. However, investment in the Libyan oil project, which may total between $1bn and $7bn, has yet to be approved by TNK-BP's new CEO.

[oilandgaseuroasia.com, 10/21/2008] 3. (U) WesternGeco Wins Libyan Seismic Deal:

WesternGeco, part of oil field services giant Schlumberger, has won a contract from

Russia's Gazprom to gather 3D seismic data on its Ghadames Basin acreage in Libya.

WesternGeco says the survey will start in November, with data to be processed in its new processing center in Tripoli. Gazprom was awarded offshore Area 19 in the

Libyan third oil and gas exploration licensing round last year. [MEED, 10/22/2008] 4.

(U) Fourth Forum and Exhibition of Oil and Gas Technologies: The forum and exhibition took place in Tripoli from October 20 to 23. The event was sponsored by the

NOC and organized by the Libyan Oil Institute. 120 international companies operating in the oil and gas industry from 20 countries as well as Libyan oil companies participated in the event. The exhibition aims to contribute to the communication

between the parties of the oil and gas industry, and their counterparts in the international oil and gas industry, and to get an access to the latest techniques and methods in exploration, production, maintenance, marketing, and consuming.

[noc.com.ly, 10/22/2008] 5. (U) Foster Wheeler confirms Libyan Refinery Deal: The U.S. company Foster Wheeler has been awarded a project management and consultancy contract for the development of a $4 billion, 200,000 barrel a day refinery in Zwara, western Libya. Foster Wheeler says the Zwara refinery is expected to be completed by

2014; producing gasoline, jet fuel and diesel. The client is Zwara Oil Refining Company

(Zorco), a project company in which Libya's state-run Tamoil Africa Holdings has the equity. Foster Wheeler says its contract includes the refinery configuration, the selection of the licensors and the front-end engineering and design (FEED) phase, including preparation of a cost estimate. The firm will also prepare the tender documents for the engineering, procurement and construction (EPC) phase, assist

Zorco in selecting the EPC contractor and act as project management consultant during construction. The refinery, located near the Tunisian border, will boost the country's refinery capacity to nearly 600,000 barrels a day. [MEED, 10/30/2008]

CONSTRUCTION 6. (U) Al Maabar Plans $11.5 billion Investments: Abu Dhabi-based Al

Maabar International Investments has lined up overseas investments worth $11.5 billion over 10 years. The investments will be in real estate projects in Morocco, Libya,

Tunisia, Qatar, Belarus and Jordan. The projects in Libya and Morocco are to be immediately funded. The rest of the projects are long-term; they are now either under initial master plan or are going into detail design. [gulfnews.com, 10/5/2008] 7. (U) Hill

Signs $42 million Libya University Project: U.S. company Hill International has signed a $42 million contract to provide construction supervision services at a university expansion project in Tripoli. The 21-month contract from the Libyan Organization for the Development of Administrative Centers is part of a $2 billion expansion of Al Fateh

University, Libya's largest institute of higher education. Under a 2007 agreement, Hill already provides project management services for the expansion, which will add 17.9 million square feet of space to 39 buildings. [njbiz.com, 10/12/2008] 8. (U) Libyan Iron

Steel Company Signed a Contract to Establish a New Factory for Iron Bars Industry:

Libyan Iron Steel Company (LISCO) signed a contract to establish a new factory for iron bars with a production capacity of 800,000 tons a year and at a cost of $240 million. After completion of the project, the total production will reach 1.8 million tons against 500 tons a year in 2007. LISCO has signed contracts with specialized Italian companies to get this project executed. The project is expected to be finished in about

30 months. [MEsteel.com, 10/19/2008] 9. (U) ESDF, Asamer Launch First Concrete

Plant: Libyan Cement Manufacturing Joint Venture Company (JLCC), a joint venture between the Economic Social Development Fund (ESDF) and the Austrian Asamer

Group Company, launched the first concrete plant in Tajura. The Tajura concrete plant is the company's second big project launched in Libya. The first one was the cement plant in Benghazi with a minimal capacity of three million tones of cement. [Tripoli

Post, 10/19/2008] 10. (U) Turkey's Floating Fair Carries Machinery and Construction

Industry to North Africa: Floating Fair Bluexpo's journey included four important trade centers of North Africa; Alexandria in Egypt, Tripoli in Libya, Tunis in Tunisia, and

Algiers in Algeria. About 3,500 sector professionals visited the fair located in two ferries; the exhibition involved 150 businesspeople from Turkey who came to Libya under the umbrella of the Turkish Contractors Association. Bluexpo North Africa

Construction project aims to provide business opportunities to Turkish companies supplying service and materials in infrastructure and building industries, which have an investment priority in the North African countries. [adg.com, 10/20/2008]

REGIONAL ISSUES 11. (U) More Cooperation in Electricity: Egypt and Libya agreed on boosting joint cooperation in electricity production. The agreement was reached at a meeting between Egypt's Holding Company for Electrifying Egypt and a visiting delegation of the Libyan electricity authority. The two sides reached an agreement on

Libya's contribution in implementing a power generation plant in southern Giza area at

a total capacity expected to reach 1,300 megawatts. The plant will start operation in

2012. It was also agreed that Libya will contribute to other electricity projects in Egypt.

[ANSAmed, 10/1/2008] 12. (U) U.S. Opens Trade Office in Libya: on October 5, the

American Commercial Service Office was opened in Tripoli to take part in promotion of the economic cooperation among the different Libyan and American institutions.

Libyan officials and businessmen from both countries attended the office's opening.

The American Assistant Secretary of Commerce underlined the importance of this office to strengthen economic and commercial ties between both countries, clarifying that the office is a good move to boost cooperation and bilateral commercial exchange. The Under Secretary of the General People's Committee for Economy,

Trade and Investment said that this office will be a means to provide the institutions and companies with sufficient information about commercial and economic laws and legislations applied in both countries; provide the commercial information required by the American companies that have the desire to execute projects in Great Jamahiriya; and to provide the American investors with information about the Libyan markets and their needs. [ljbc.com, 10/7/2008] 13. (U) Libya Maritime Exhibition and Conference:

The Libya Maritime Exhibition and Conference (LIMEX 2008) was held at the naval base in Tripoli from October 13 to 15. It showcased the latest maritime technology by bringing together key industry, government and defense personnel from Libya and

Overseas. [ljbc, 10/16/2008] 14. (U) Finance Ministers and Central Banks Governors to

Discuss Global Financial Crisis on African Economy: The African Development Bank called on African Union finance ministers and governors of Central Banks to meet

November 12, to discuss repercussions of the global financial crisis on African economy. The conference aims at taking a unified stance amongst African Union member states in confronting the global financial crisis, the bank said in a statement issued in Tunis. The statement also said the African Development Bank and the

African Union Commission affirm that Africa's voice would be heard during discussions on the reform of the World Bank and the International Monetary Fund following the financial collapse of the capitalist system. [ljbc, 10/26/2008] IT 15. (U)

Libyans Take to the Mobile Web: BuzzCity, which provides global wireless communities and consumer services, has published the Global Mobile Advertising

Index, which shows the growing use of the mobile Internet and the ensuing advertiser interest. BuzzCity reports continued growth in Indonesia, which remains in top position despite network irregularities, as well as significant growth in Kenya, USA and Bangladesh. BuzzCity also reports record growth for demand of its service in

Libya, which it says will surprise both the global mobile community and digital advertising industries. Only six months ago Libya was in 93rd position. BuzzCity says the growth is likely to be directly linked with changes in mobile operator business models, offering affordable and understandable mobile data packages.

[mobilemarketingmagazine.co.uk, 10/14/2008] INVESTMENT 16. (U) Libyan Investment

Projects Increase: Resources in the Board of Encouraging Investment mentioned that the size of investment increased from $200 million in 2003 to $2.157 billion in the first half of year 2008. The increase is varied in the size of investment from one year to another and the year 2007 recorded the highest development average. It created ten thousand opportunities of jobs to the national elements. The projects were increased by a value of $1.5 billion in comparison to $720 million in 2007. The number of investment projects that entered the operations in the first half of this year provided

2,267 opportunities of employment for Libyans. [libyaninvestment.com, 10/22/2008] 17.

(U) Libya Eyes European, U.S. Equities: The Libyan Investment Authority is looking to invest $65 billion in European and U.S. equities to diversify its portfolio after recent market declines. "We want to diversify, number one in Europe, number two in the

United States, and then in emerging market economies," said Farhat Bin Guidara,

Governor of the Central Bank of Libya and a member of the board of the state's investment authority. "We are going more towards pharmaceuticals, telecoms, utilities and food manufacturing," he told reporters on the sidelines of a conference in Cairo.

[Reuters, 10/24/2008] BANKING 18. (U) Libya Buys 4.23% Stake in UniCredit: The

Central Bank of Libya, the Libyan Investment Authority and the Libyan Foreign Bank acquired a combined 4.23% stake in Italian bank UniCredit SpA (UCG.MI). According to

UniCredit's spokesman, the acquisition by Libyan interests is "friendly." The stake initially held by Libyan interests in the Italian bank was 0.87%, the UniCredit spokesman said, with the rest being purchased over the last few days. UniCredit shares have had hardly any relief from selling and have lost 30% since the bank announced its funding plans on October 5. Italian Premier Silvio Berlusconi said he is concerned sovereign wealth funds from oil-producing countries could launch a hostile takeover for Italian companies, given their low valuations after the recent sharp fall in the stock markets. [libyaninvestment.com, 10/19/2008] 19. (U) Egypt's Naeem Wins

Approval to Open in Libya: Naeem Holding, Egypt's second-largest publicly traded investment bank, said on Sunday it had won approval to open a representative office in Libya. The bank did not say when it would open the office in a statement on the stock exchange website. A company spokesman said he could not immediately give further details. Naeem, which operates in Saudi Arabia, Egypt and the United Arab

Emirates, said in May it planned to reduce the proportion of its revenue from Egypt to between 35 percent and 40 percent from 70 percent within two years. [Reuters,

10/27/2008] AUTOMOTIVE INDUSTRY 20. (U) Zhongxing Auto to Export 5,000 Pick-ups to Libya: Hebei Zhongxing Automobile Co., Ltd., an expert of pick-up trucks and SUVs in North China, clinched an agreement with Libya on October 20, 2008 on exporting

5,000 pick-ups. The Hebei-based carmaker exported 4,000 cars to the North African country in 2003 and those products used by government organs and social organizations won excellent public praise in the country for the company, laying a strong foundation for the big order this time. The order of 5,000 pick-ups accounts for

40%-50% of the market demand for 10,000-12,000 such cars in Libya this year. The company expects to sell 35,000 to 40,000 cars this year, with a yearly increase of 15% to 20%. [tmcnet.com, 10/23/2008] LABOR 21. (U) Libya to Recruit Large Number of

Bangladeshi Laborers: Libya signed a Memorandum of Understanding (MoU) with

Bangladesh to recruit a large number of workers as Tripoli launched a $130 billion infrastructure development program that will require over one million foreign workers.

The MoU was signed by the Bangladesh Foreign Adviser, Iftekhar Ahmed Chowdhury and the Libyan Labor Minister Maa'touq Mohammed Maa'touq. Under the five-year development program, Libya will construct 300,000 housing units, 27 university complexes, over 10,000 kilometer roads and maintain 24,000 kilometer roads.

Presently, some 25,000 Bangladeshi are employed in Libya. The Libyan minister did not give the exact number of Bangladeshi workers they will recruit but said they issued 6,000 visas for Bangladeshi workers last month. [thedailystar.com, 10/31/2008]

STEVENS



08TRIPOLI912

2008-11-25

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Tripoli


R 251104Z NOV 08



INFO DEPT OF COMMERCE WASHINGTON DC

DEPT OF ENERGY WASHINGTON DC

AMEMBASSY TUNIS

AMEMBASSY CAIRO

AMEMBASSY RABAT

AMEMBASSY VALLETTA

AMEMBASSY ALGIERS

AMEMBASSY TRIPOLI

UNCLAS TRIPOLI 000912

DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON; ENERGY FOR GINA ERIKSON; CAIRO

FOR CLARENCE (ALEX) SEVERENS

E.O. 12958: N/A

TAGS: EINV EIND ECON EMIN ENRG EPET ETRD PGOV LY

SUBJECT: LIBYA COMMERCIAL ROUND-UP FOR OCTOBER 2008 OIL AND GAS 1. (U) A

New Oil Discovery by Sirte Oil Company: On October 7, Sirte Oil, a stateowned company, announced a new oil discovery in the well A1-NC216A in the

Ghadames Basin. The well is located approximately 310 km southwest of

Tripoli. The initial production testing established an oil rate of 1,725 barrels per day, and a gas rate of 0.25 million standard cubic feet per day. This well represents the company's first discovery in the block.

[noc.com.ly, 10/7/2008] 2. (U) Russian-British Firm TNK-BP Seeks to

Develop Major Libyan Oil Field: After a conflict between the oil company's

Russian and British shareholders was settled, TNK-BP received the right to compete with BP in international projects. TNK-BP is negotiating to develop

Libya's Sarir field, one of the largest oilfields in Libya located about

500 kilometers east of Tripoli in the Sirte Basin. TNK-BP is ready to sell

$1bn-$2bn to obtain the status of operator of Libya's Sarir project. The

Russian-British oil producer is now in talks with Libya's National Oil

Corporation (NOC) regarding the development of the Sarir field. In

September, a delegation of TNK-BP top executives visited the country to hold cooperation talks. However, investment in the Libyan oil project, which may total between $1bn and $7bn, has yet to be approved by TNK-BP's new CEO. [oilandgaseuroasia.com, 10/21/2008] 3. (U) WesternGeco Wins

Libyan Seismic Deal: WesternGeco, part of oil field services giant

Schlumberger, has won a contract from Russia's Gazprom to gather 3D seismic data on its Ghadames Basin acreage in Libya. WesternGeco says the survey will start in November, with data to be processed in its new processing center in Tripoli. Gazprom was awarded offshore Area 19 in the Libyan third oil and gas exploration licensing round last year. [MEED, 10/22/2008] 4.

(U) Fourth Forum and Exhibition of Oil and Gas Technologies: The forum and exhibition took place in Tripoli from October 20 to 23. The event was sponsored by the NOC and organized by the Libyan Oil Institute. 120 international companies operating in the oil and gas industry from 20

countries as well as Libyan oil companies participated in the event. The exhibition aims to contribute to the communication between the parties of the oil and gas industry, and their counterparts in the international oil and gas industry, and to get an access to the latest techniques and methods in exploration, production, maintenance, marketing, and consuming.

[noc.com.ly, 10/22/2008] 5. (U) Foster Wheeler confirms Libyan Refinery

Deal: The U.S. company Foster Wheeler has been awarded a project management and consultancy contract for the development of a $4 billion, 200,000 barrel a day refinery in Zwara, western Libya. Foster Wheeler says the

Zwara refinery is expected to be completed by 2014; producing gasoline, jet fuel and diesel. The client is Zwara Oil Refining Company (Zorco), a project company in which Libya's state-run Tamoil Africa Holdings has the equity. Foster Wheeler says its contract includes the refinery configuration, the selection of the licensors and the front-end engineering and design (FEED) phase, including preparation of a cost estimate. The firm will also prepare the tender documents for the engineering, procurement and construction (EPC) phase, assist Zorco in selecting the EPC contractor and act as project management consultant during construction. The refinery, located near the Tunisian border, will boost the country's refinery capacity to nearly 600,000 barrels a day. [MEED, 10/30/2008] CONSTRUCTION

6. (U) Al Maabar Plans $11.5 billion Investments: Abu Dhabi-based Al Maabar

International Investments has lined up overseas investments worth $11.5 billion over 10 years. The investments will be in real estate projects in

Morocco, Libya, Tunisia, Qatar, Belarus and Jordan. The projects in Libya and Morocco are to be immediately funded. The rest of the projects are long-term; they are now either under initial master plan or are going into detail design. [gulfnews.com, 10/5/2008] 7. (U) Hill Signs $42 million

Libya University Project: U.S. company Hill International has signed a $42 million contract to provide construction supervision services at a university expansion project in Tripoli. The 21-month contract from the

Libyan Organization for the Development of Administrative Centers is part of a $2 billion expansion of Al Fateh University, Libya's largest institute of higher education. Under a 2007 agreement, Hill already provides project management services for the expansion, which will add 17.9 million square feet of space to 39 buildings. [njbiz.com, 10/12/2008] 8. (U) Libyan Iron

Steel Company Signed a Contract to Establish a New Factory for Iron Bars

Industry: Libyan Iron Steel Company (LISCO) signed a contract to establish a new factory for iron bars with a production capacity of 800,000 tons a year and at a cost of $240 million. After completion of the project, the total production will reach 1.8 million tons against 500 tons a year in

2007. LISCO has signed contracts with specialized Italian companies to get this project executed. The project is expected to be finished in about 30 months. [MEsteel.com, 10/19/2008] 9. (U) ESDF, Asamer Launch First

Concrete Plant: Libyan Cement Manufacturing Joint Venture Company (JLCC), a joint venture between the Economic Social Development Fund (ESDF) and the

Austrian Asamer Group Company, launched the first concrete plant in Tajura.

The Tajura concrete plant is the company's second big project launched in

Libya. The first one was the cement plant in Benghazi with a minimal capacity of three million tones of cement. [Tripoli Post, 10/19/2008] 10.

(U) Turkey's Floating Fair Carries Machinery and Construction Industry to

North Africa: Floating Fair Bluexpo's journey included four important trade centers of North Africa; Alexandria in Egypt, Tripoli in Libya, Tunis in

Tunisia, and Algiers in Algeria. About 3,500 sector professionals visited the fair located in two ferries; the exhibition involved 150 businesspeople from Turkey who came to Libya under the umbrella of the Turkish Contractors

Association. Bluexpo North Africa Construction project aims to provide business opportunities to Turkish companies supplying service and materials in infrastructure and building industries, which have an investment priority in the North African countries. [adg.com, 10/20/2008] REGIONAL

ISSUES 11. (U) More Cooperation in Electricity: Egypt and Libya agreed on boosting joint cooperation in electricity production. The agreement was

reached at a meeting between Egypt's Holding Company for Electrifying Egypt and a visiting delegation of the Libyan electricity authority. The two sides reached an agreement on Libya's contribution in implementing a power generation plant in southern Giza area at a total capacity expected to reach 1,300 megawatts. The plant will start operation in 2012. It was also agreed that Libya will contribute to other electricity projects in Egypt.

[ANSAmed, 10/1/2008] 12. (U) U.S. Opens Trade Office in Libya: on October

5, the American Commercial Service Office was opened in Tripoli to take part in promotion of the economic cooperation among the different Libyan and American institutions. Libyan officials and businessmen from both countries attended the office's opening. The American Assistant Secretary of Commerce underlined the importance of this office to strengthen economic and commercial ties between both countries, clarifying that the office is a good move to boost cooperation and bilateral commercial exchange. The Under

Secretary of the General People's Committee for Economy, Trade and

Investment said that this office will be a means to provide the institutions and companies with sufficient information about commercial and economic laws and legislations applied in both countries; provide the commercial information required by the American companies that have the desire to execute projects in Great Jamahiriya; and to provide the American investors with information about the Libyan markets and their needs.

[ljbc.com, 10/7/2008] 13. (U) Libya Maritime Exhibition and Conference:

The Libya Maritime Exhibition and Conference (LIMEX 2008) was held at the naval base in Tripoli from October 13 to 15. It showcased the latest maritime technology by bringing together key industry, government and defense personnel from Libya and Overseas. [ljbc, 10/16/2008] 14. (U)

Finance Ministers and Central Banks Governors to Discuss Global Financial

Crisis on African Economy: The African Development Bank called on African

Union finance ministers and governors of Central Banks to meet November 12, to discuss repercussions of the global financial crisis on African economy.

The conference aims at taking a unified stance amongst African Union member states in confronting the global financial crisis, the bank said in a statement issued in Tunis. The statement also said the African Development

Bank and the African Union Commission affirm that Africa's voice would be heard during discussions on the reform of the World Bank and the

International Monetary Fund following the financial collapse of the capitalist system. [ljbc, 10/26/2008] IT 15. (U) Libyans Take to the

Mobile Web: BuzzCity, which provides global wireless communities and consumer services, has published the Global Mobile Advertising Index, which shows the growing use of the mobile Internet and the ensuing advertiser interest. BuzzCity reports continued growth in Indonesia, which remains in top position despite network irregularities, as well as significant growth in Kenya, USA and Bangladesh. BuzzCity also reports record growth for demand of its service in Libya, which it says will surprise both the global mobile community and digital advertising industries. Only six months ago

Libya was in 93rd position. BuzzCity says the growth is likely to be directly linked with changes in mobile operator business models, offering affordable and understandable mobile data packages.

[mobilemarketingmagazine.co.uk, 10/14/2008] INVESTMENT 16. (U) Libyan

Investment Projects Increase: Resources in the Board of Encouraging

Investment mentioned that the size of investment increased from $200 million in 2003 to $2.157 billion in the first half of year 2008. The increase is varied in the size of investment from one year to another and the year 2007 recorded the highest development average. It created ten thousand opportunities of jobs to the national elements. The projects were increased by a value of $1.5 billion in comparison to $720 million in 2007.

The number of investment projects that entered the operations in the first half of this year provided 2,267 opportunities of employment for Libyans.

[libyaninvestment.com, 10/22/2008] 17. (U) Libya Eyes European, U.S.

Equities: The Libyan Investment Authority is looking to invest $65 billion in European and U.S. equities to diversify its portfolio after recent

market declines. "We want to diversify, number one in Europe, number two in the United States, and then in emerging market economies," said Farhat Bin

Guidara, Governor of the Central Bank of Libya and a member of the board of the state's investment authority. "We are going more towards pharmaceuticals, telecoms, utilities and food manufacturing," he told reporters on the sidelines of a conference in Cairo. [Reuters, 10/24/2008]

BANKING 18. (U) Libya Buys 4.23% Stake in UniCredit: The Central Bank of

Libya, the Libyan Investment Authority and the Libyan Foreign Bank acquired a combined 4.23% stake in Italian bank UniCredit SpA (UCG.MI). According to

UniCredit's spokesman, the acquisition by Libyan interests is "friendly."

The stake initially held by Libyan interests in the Italian bank was 0.87%, the UniCredit spokesman said, with the rest being purchased over the last few days. UniCredit shares have had hardly any relief from selling and have lost 30% since the bank announced its funding plans on October 5. Italian

Premier Silvio Berlusconi said he is concerned sovereign wealth funds from oil-producing countries could launch a hostile takeover for Italian companies, given their low valuations after the recent sharp fall in the stock markets. [libyaninvestment.com, 10/19/2008] 19. (U) Egypt's Naeem

Wins Approval to Open in Libya: Naeem Holding, Egypt's second-largest publicly traded investment bank, said on Sunday it had won approval to open a representative office in Libya. The bank did not say when it would open the office in a statement on the stock exchange website. A company spokesman said he could not immediately give further details. Naeem, which operates in Saudi Arabia, Egypt and the United Arab Emirates, said in May it planned to reduce the proportion of its revenue from Egypt to between 35 percent and 40 percent from 70 percent within two years. [Reuters,

10/27/2008] AUTOMOTIVE INDUSTRY 20. (U) Zhongxing Auto to Export 5,000

Pick-ups to Libya: Hebei Zhongxing Automobile Co., Ltd., an expert of pickup trucks and SUVs in North China, clinched an agreement with Libya on

October 20, 2008 on exporting 5,000 pick-ups. The Hebei-based carmaker exported 4,000 cars to the North African country in 2003 and those products used by government organs and social organizations won excellent public praise in the country for the company, laying a strong foundation for the big order this time. The order of 5,000 pick-ups accounts for 40%-50% of the market demand for 10,000-12,000 such cars in Libya this year. The company expects to sell 35,000 to 40,000 cars this year, with a yearly increase of 15% to 20%. [tmcnet.com, 10/23/2008] LABOR 21. (U) Libya to

Recruit Large Number of Bangladeshi Laborers: Libya signed a Memorandum of

Understanding (MoU) with Bangladesh to recruit a large number of workers as

Tripoli launched a $130 billion infrastructure development program that will require over one million foreign workers. The MoU was signed by the

Bangladesh Foreign Adviser, Iftekhar Ahmed Chowdhury and the Libyan Labor

Minister Maa'touq Mohammed Maa'touq. Under the five-year development program, Libya will construct 300,000 housing units, 27 university complexes, over 10,000 kilometer roads and maintain 24,000 kilometer roads.

Presently, some 25,000 Bangladeshi are employed in Libya. The Libyan minister did not give the exact number of Bangladeshi workers they will recruit but said they issued 6,000 visas for Bangladeshi workers last month. [thedailystar.com, 10/31/2008] STEVENS

Viewing cable 09TRIPOLI151,



09TRIPOLI151

2009-02-16

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INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

RHMFISS/DEPT OF ENERGY WASHINGTON DC





RUEHVT/AMEMBASSY VALLETTA 0378

RUEHCL/AMCONSUL CASABLANCA 0016





UNCLAS SECTION 01 OF 06 TRIPOLI 000151

SIPDIS

STATE FOR NEA/MAG,

COMMERCE FOR NATE MASON,

ENERGY FOR GINA ERIKSON,

STATE PASS USTR (BURKHEAD) AND USAID (MCCLOUD)

USDOC FOR ITA/MAC/ONE (NATHAN MASON), ADVOCACY CTR (REITZA), AND

CLDP (TEJTEL AND MCMANUS) CASABLANCA FOR FCS (ORTIZ) AMMAN FOR ESTH HUB

(BHALLA) CAIRO FOR FINANCIAL ATTACHE (SEVERENS) LONDON AND PARIS FOR NEA

WATCHER E.O. 12958: N/A TAGS: ECON EFIN ETRD EINV EIND EPET ENRG PGOV LY

Â¶ 1. (U) State-Owned Zwara Oil Refinery Company Has Appointed HSBC as

Financial Adviser: Zwara Oil Refinery Company (Zorco) plans to develop a

200,000 barrels-a-day crude oil refinery. The development of the refinery will be tender on a build-own-operate basis. The refinery is the first major government sponsored project in the country to seek commercial finance. Earlier in 2008 bankers pulled out of talks on financing the project and Nigeria's Africa Finance Corporation and Citadel Capital of

Egypt both decided against investing in the plant. The project is estimated to cost about $4 billion U.S. dollars and should be completed in

2014.[MEED, 12/4/2008]

Â¶ 2. (U) Chinese CNPC to Bid for Verenex Asset in Libya: China National

Petroleum Corporation (CNPC) is bidding for Canadian energy firm Verenex

Energy in a transaction valued at as much as $300 million; adding a successful bid would broaden CNPC's assets in Africa. Indonesia's state oil firm, Pertamina, had announced its interest to participate in the Libyan oil area of the Canadian energy company Verenex. [Reuters, 12/15/2008]

Â¶ 3. (U) AGOCO Announces Oil Discovery: The National Oil Corporation (NOC) announced that the state-owned oil company Arabian Gulf Oil Company (AGOCO) made an oil discovery in the Ghadames Basin. The well is located approximately 500 kilometers south of Tripoli. The initial production testing established an oil rate of 5,000 barrels per day, and a gas rate of

150 million standard cubic feet per day. [HYPERLINK

"http://en.noclibya.com.ly/ "http://en.noclibya.com.ly , 12/16/2008]

Â¶ 4. (U) Hess Discovers Oil in Libya Sirte Offshore: In Libya, well A1-

54/01, which is located 38 miles offshore in the Sirte Basin, was drilled to a depth of 11,077 feet in 2,807 feet of water. The well encountered a gross hydrocarbon section of approximately 500 feet at various intervals.

Hess holds a 12.4 percent share and the NOC holds the remaining 87.6 percent. [rigzone.com, 12/17/2008]

Â¶ 5. (U) Turkish Petroleum Overseas Company Pre-Qualifies More than Ten

Companies to Provide Drilling Services: A prequalification notice had been issued, and the companies in the running, all based in Libya, now have until the end of January to make their bid quotations. The tender is for

1,500 horsepower drilling rig services in the Murzuq basin. The project comprises two firm and five optional wild cat wells to be drilled within the range of 9,000-11,000 feet. [MEED, 12/30/2008]

Â¶ 6. (U) Libya Orders to Cut Production by 270,000 Barrels per Day:

Effective Jan 1, Libya ordered oil companies operating in Libya to cut production by 270,000 barrels per day, which is more than Libya is requested to do under OPEC agreement to slash the cartel's production by

2.2 billion barrels per day. [JANA, 12/30/2008]

Â¶ 7. (U) Five Firms Are Expected to Bid for an Onshore Drilling Contract:

Total Exploration & Production Libya, a subsidiary of France's Total expects to formally begin the tender process in early January.

Prequalification entries were accepted until early December, and around five firms were left in the running after that process ended. The contract is for the provision of onshore drilling rig services and the testing of

two exploration onshore wells with possible options in the west of Libya.

The proposed land rig would have a maximum drilling depth of approximately

21,000 feet. The well spud is planned for the third quarter of 2009. [MEED,

12/31/2008] TRIPOLI 00000151 002 OF 006

Â¶ 8. (U) Libya Gains $5.4 Billion Dollars from Altering Oil Deals: The NOC reported earnings of $5.4 billion U.S. dollars in additional oil revenues from changes to contracts with foreign companies ENI, Petro-Canada and two consortiums led respectively by U.S. Occidental and Spain's Repsol last year. The changes of deals yielded $2.4 billion U.S. dollars extra earnings during the first nine months of 2008. The companies also accepted to pay a total of $3 billion U.S. dollars as up-front payments. NOC said negotiations were underway with other companies to reach similar changes which would boost oil earnings further. [HYPERLINK

"http://en.noclibya.com.ly/ "http://en.noclibya.com.ly , 1/18/2009]

Â¶ 9. (U) New Oil and Gas Discovery by Australian Woodside: NOC announced that an exploratory well drilled by Woodside in the Ghadames Basin, 900 kilometers South of Tripoli, produced oil and gas when tested. The well,

F1-NC210, is the fourth discovery drilled by Woodside Energy in the contract area NC210, awarded by the NOC in May 2003. Under the contract,

Woodside has a 37 percent production share and the NOC has 63 percent.

[Libyaonline.com, 1/15/2009]

Â¶ 10. (U) Canadian Verenex Confirms Oil and Gas Discovery in Libya:

Canadian company Verenex has made its tenth oil discovery in Libya's western region of Ghadames since drilling began in September 2006. So far,

Verenex has drilled four appraisal wells, and fourteen exploratory wells.

The last four wells drilled are yet to be tested. Verenex, Indonesia's

Medco Energi and Libyan National Oil Corporation (NOC) signed a 30-year production-sharing agreement in 2005, where the two foreign companies will take 13.7 percent of production and the NOC 86.3 percent. [Tripoli Post,

1/18/2009]

Â¶ 11. (U) Shell Awards Seismic Contract: The UK/Dutch Shell Group has awarded a seismic contract to BGP, the geophysical division of Chinese oil company China National Petroleum Corporation (CNPC), for a survey on the gas exploration block 89N in the onshore Sirte Basin. It is considered a difficult area to work in due to the potential risk from landmines. Shell won blocks 1 and 3 in contract area 89 in the Sirte Basin in Libya's first gas exploration licensing round in 2007. [MEED 1/20/08]

Â¶ 12. (U) Mitsubishi, Libya University to Jointly Study Green Energy: On

January 28, the two parties signed a memorandum of understanding to begin joint research and development of reusable energy sources. Under the agreement, the Japanese trading company will support research into reusable energy by Libya's largest university, supplying test materials and sending specialists to the university from 2009 to 2011. The first initiative between the two will involve field-tests of solar power generation systems at the university. The plan is for the university to accumulate technology and expertise, and then cultivate leaders for the new industry. [AsiaPulse,

1/26/2009] CONSTRUCTION

Â¶ 13. (U) South Korea's Hanil Wins a $902.5 Billion Work Order in Libya:

South Korean builder Hanil Engineering and Construction said that it had secured an order worth $902.5 billion from Libya. Hanil said in a regulatory filing that Libya's Organization for the Development of

Administrative Centers placed the order to build houses and infrastructure in Libya. [Reuters, 12/22/08]

Â¶ 14. (U) Indian Company Simplex Projects Ltd Gets Construction Contract in

Libya: The contract is to develop a housing project in Libya, which comprises the construction of 2,000 houses, a public building, and roads, drainage and sewage systems; the project is scheduled to be completed in 36 months. This is the TRIPOLI 00000151 003 OF 006 first overseas project for the Indian company. [Reuters, 1/13/2009]

Â¶ 15. (U) Indian Company Wins $267 million U.S. Contract in Libya: The

Libyan Housing and Infrastructure Board awarded a $267 million U.S. dollars contract to the Indian construction and engineering firm Punj Lloyd Ltd.

The 40-month project involves the engineering, procurement, construction and commissioning of infrastructure networks including water mains, sewerage tunnels, and roads in the Souk Al-Juma area, in Tripoli. In early

January Punj Lloyd was awarded a similar contract worth $214 million U.S. dollars in a joint venture with the Public Works Company Tripoli (PWCT).

The four-year project involves upgrading the infrastructure in the Arada area of Tripoli. [The Tripoli Post, 1/18/2009]

Â¶ 16. (U) China Railway Wins $805 million dollars contract in Libya: The contract worth $805 million dollars is to build a 172 kilometer railway that will connect Tripoli with the Libya-Tunisia border. The construction of the line is expected to take around 54 months. The deal follows a $2.6 billion dollar contract, signed last year to build two other rail lines, a

352 kilometer railway along Libya's Mediterranean coast, and an 800 kilometer line in the south. The coastal railroad is slated for completion in four years, and the southern line is expected to be completed in three years. [libyaninvestment.com, 1/23/2009] FOREIGN TRADE

Â¶ 17. (U) Italy-Libya Trade Tops 14 Billion Euros in 2008 First Eight

Months: While Libya tries to enter into Eni's capital, trade relations with

Italy continue to grow, with import-exports in the first eight months of the year exceeding 14 billion Euros and confirming the North African country as Italy's top trading partner in the Mediterranean. The figures emerge from a study made by the Milan Chamber of Commerce into the latest figures for import-export between Italy and 13 Mediterranean basin countries (Morocco, Algeria, Tunisia, Libya, Egypt, Malta, Turkey, Cyprus,

Lebanon, Syria, Israel, the Palestinian Territories, Jordan). In January-

August imports from Libya grew by 40% compared with the first eight months of 2007, exceeding 12.4 billion Euros. Exports grew by 57%, exceeding 1.7 billion Euros. The figure makes Libya the fifth largest market for Italy in the Mediterranean. [ANSAmed, 12/09/08] REGIONAL ISSUES

Â¶ 18. (U) Libya to Take Half Million Bangladeshi Workers: Secretary of

Manpower Training and Employment, Maa'touk Mohammad Maa'touk, said that

Libya would take half a million Bangladeshi skilled, semi-skilled and general workers for different projects soon. Maa'touk stressed that the

Embassy of Bangladesh should verify the issues of job, salary, housing and

fringe benefits of every worker before they could come to Libya from

Bangladesh. [www.nation.ittefaq.com, 12/13/2008]

Â¶ 19. (U) Oman, Libya Sign $500 Million JV Deal: The Sultanate of Oman and

Libya have signed a $500 million deal to establish a joint investment company to be based in Tripoli. The company will invest in real estate, tourism, industrial, services and energy projects and will also set up joint stock companies to undertake different projects, according to a joint statement. The State General Reserve Fund will represent Oman in the Oman-

Libya Investment Holding Company. [Khaleej Times, 12/14/2008]

Â¶ 20. (U) Global Grain Rush Under Way as Rich Nations Snap up Farmland

Overseas: Under a proposed agreement with Kiev, Libya would lease 247,000 acres of Ukraine's rich black land to grow wheat. The harvest would then be shipped back to Libya, giving TRIPOLI 00000151 004 OF 006 the desert nation a more secure supply of food in the face of predictions about higher food prices and potential shortages in decades to come. Ukraine, in turn, would get access to Libyan oil fields, helping free it from dependence on

Russia for its energy needs. [Chicago Tribune, 12/14/2008]

Â¶ 21. (U) Irrigation, Key for Africa's Food Security: On December 15, a conference on Water for Agriculture and Energy in Africa: The Challenges of

Climate Change opened. It was organized by FAO together with the Libyan

Government and in collaboration with stakeholders including the African

Union, the African Ministers' Council on Water Development, the African

Development Bank and the Economic Commission for Africa. The conference aims at setting the scene for moving from talk to action on a $65 billion,

20-year program for irrigation and hydroenergy investments required in each country. [African Press Organization (APO), 12/15/08]

Â¶ 22. (U) Trade Exchange between Libya and Tunisia Reached 2.2 Billion

Libyan Dinars during 2008: The trade exchange exceeded the specified value by 10%; the Secretary of the Libyan General People's Committee said that this value is expected to hit 2.5 billion by the end of 2008. The secretary mentioned that one of the most important of these projects is laying a strategic gas pipeline that will connect Libya with Tunisia; this project will be executed by a Libyan-Tunisian Joint committee starting in 2009.

Currently, there are teams working in the areas of education, trade, and investment to boost bilateral integration between the countries. [JANA,

12/27/08]

Â¶ 23. (U) Libya to Invest in Oil Refinery in Egypt: Libya will invest in an oil refinery and a number of construction projects in Egypt under a deal signed in December 2008, during a visit to Tripoli by Egyptian President

Hosni Mubarak. Aside from the refinery, Libya will also build service stations as well as an industrial and residential complex in Egypt. The two countries are also working towards establishing a free exchange zone on their border. The number of Libyan companies working in Egypt reached 236 companies, and Egyptian investment companies are currently working in

Libya. Volume of trade exchange between the two countries is expected to increase to two billion dollars. [Tripoli Post, 1/1/2009] INVESTMENT

Â¶ 24. (U) Libyan Fund in Talks over Kaupthing Unit-Luxembourg: Talks have taken place over the possible sale of the Luxembourg arm of troubled

Icelandic bank Kaupthing to a Libyan sovereign fund. Budget and Treasury

Minister Luc Frieden, said there had been discussions with several possible buyers which have to be concluded by year's-end. The Libyan Investment

Authority fund had emerged as the front-runner to buy Kaupthing Luxembourg.

Other suitors that have been cited to have shown interest in picking up the

Kaupthing's Belgian customers include online bank Keytrade Bank, a subsidiary of France's Credit Agricole and German bank Landesbank Nord.

[Reuters, 12/10/2008]

Â¶ 25. (U) Libya Emerges from Sanctions with Investment: The Libyan

Investment Authority (LIA) is set to complete Libya's first UK commercial property transaction since the suspension of economic sanctions at the end of the 1990s. Part of the LIA has agreed to buy a large office building in the City of London for about #120 million UK pounds from German fund manager IVG. The 172,000 square feet former Lloyds' City headquarters at 14

Cornhill will be sold for a yield of about 6 per cent. DTZ and Knight Frank are advising IVG. None of the parties involved would comment on the sale.

[Financial Times, 12/12/2008]

Â¶ 26. (U) Libya to List Ten Companies on Libyan Stock Market: Libya plans to sell shares in more state-owned companies as the TRIPOLI 00000151 005

OF 006 government seeks to boost the economy and develop the bourse set up last year. The state-run Economic and Social Development Fund aims to offer foreign investors about 15 percent of 10 companies. Libya's Al-

Jomhuria Bank is among the 10 companies that may be sold on the stock market following further sales of shares in Al Wahda Bank and Al Sahara

Bank, both of which are already traded on the exchange. Arab Bank, Jordan's largest publicly traded bank, bought a 19 percent stake in Libya's Wahda

Bank in February for 210 million euros. BNP Paribas SA, France's biggest bank, purchased 19 percent of Libya's state-owned Sahara Bank for 145 million euros on Oct. 4. [Bloomberg, 12/17/2008] IT

Â¶ 27. (U) STS PayONE Voucher powers Bank of Commerce and Development in

Libya: STS, MENA's leading enterprise ePayment solutions provider and system integrator, furnished Bank of Commerce and Development in Libya with an enterprise-level platform for the management and distribution of its electronic voucher service at several point-of-sale terminals located throughout the Libyan retail outlets. Bank of Commerce and Development will be able to support multiple service delivery channels including dial-up,

GSM, ATMS, IVR and SMS. It provides management and dispensing capabilities for the GSM prepaid airtime, with the ability to add more services and access channels to achieve higher customer satisfaction and fulfill expansion goals. [menafn.com, 12/1/2008]

Â¶ 28. (U) UNESCO Reinforces Capacities of Public Administrations through the Use of Free Software: The Arab Federation of Technical Education, the

UNESCO Office in Rabat, and ISESCO, in cooperation with the Libyan Ministry of the Labor and Training, organized a workshop at the Higher Institute of

Computer Technology in Tripoli, Libya. The workshop aimed to reinforce capacities of public administrations through Free and Open Source Software

(FOSS). During the three-day workshop, experts from the Maghreb countries presented best practices in using FOSS in their respective countries. This enabled participants to reinforce the capacities of universities in the

field of technical education through the use of FOSS, and to develop tools in order to make public services more transparent. [UNESCO, 12/19/2008]

Â¶ 29. (U) Libya Introduces WiMAX Mobile Service: Libya Telecom and

Technology (LTT) launched on January 22, the WiMAX mobile service in Libya.

In the first phase, LTT aims to provide the WiMAX mobile service to 300,000 subscribers in the country. LTT worked along with Alcatel, ZTE, and Huawei companies for the realization of the project. The WiMAX service is currently available in eighteen Libyan cities. [libyaonline.com,

01/25/2009]

TRANSPORTATION

Â¶ 30. (U) Libya Buys Six Oil Tankers for $400 Million Dollars: Libya's national maritime transport company announced on Wednesday the purchase of six oil tankers valued at a total of 400 million dollars. The contracts were signed with Korean naval construction group Samsung Heavy Industries and Japanese constructor Sasebo Heavy Industries. Four tankers will be built by Samsung and the other two by Sasebo. The tankers will have a total capacity of 700,000 tons, or the equivalent of five million barrels of crude. Headed by Hannibal al-Qadhafi, the company exercises a near-monopoly in the transport of Libyan oil. Its fleet currently comprises 18 tankers with a total capacity of 11.8 million barrels. [AFP, 12/24/08]

Â¶ 31. (U) Libya Bans Swiss Flights: Libya has banned Switzerland's national carrier, Swiss International Air Lines, from flying to Tripoli. This is the latest twist in ongoing diplomatic row TRIPOLI 00000151 006 OF 006 between the two countries after the arrest of Muammar al-Qadhafi's son,

Hannibal. Switzerland's national carrier had three weekly flights from

Zurich to Tripoli until mid-July when the Libyan authorities reduced them to one, citing "technical reasons." Swiss Air Lines spokeswoman says the company received a letter saying it had to stop its last remaining flight due to technical reasons. [www.voa.com, 12/25/08]

Â¶ 32. (U) U.S. Shipping Carrier Nordana Introduces New Service in Libya:

Beginning in February, Nordana will include the Port of Misurata to its services in Libyan ports. The Port of Misurata will be called on all sailings to Libya with a frequency of 17 to 18 days. Since trade relations reopened between the U.S. and Libya in 2004, Nordana has been operating regular roll on / roll off vessels and breakbulk services from the U.S. into Libya. Nordana also serves the Libyan ports of Benghazi, Marsa El

Brega, and Tripoli. [breakbulk.com, 1/12/2009] LAW

Â¶ 33. (U) Libyan Tax Authority Director Calls on Foreign Companies to Abide by Law: The Director of the Libyan Tax Authority, Mr. Al Bueshi Maa'toug Al

Alafi, has called on both local and foreign companies operating in Libya to help his organization by abiding by the law and paying their taxes regularly. Mr. Bueshi advised foreign companies operating in Libya to strictly implement public laws and make sure that they are hiring competent financial managers and good lawyers who would advise them on legal matters accordingly. Mr. Bueshi made the call during a symposium on reforming the

Tax System held in Tripoli. [Tripoli Post, 12/11/08] BANKING

Â¶ 34. (U) Libyan Bank Named among the Best Emerging Market Banks in Africa

2008: Global Finance magazine has named Wahda Bank of Libya among the "Best

Emerging Market Banks in Africa 2008". Global Finance editors with input from industry analysts, corporate executives and banking consultants selects the best emerging market bank based on growth in assets, profitability, strategic relationships, customer service, competitive pricing, and innovative products within the region. Wahda Bank ranked number 90 among 100 banks in Africa, but for it to be among the best emerging market banks in Africa remains an important sign that the banking system in Libya is advancing after many years of total stagnation. [Tripoli

Post, 12/13/08]

CRETZ

Viewing cable 09ANKARA1084, TURKEY-IRAN BORDER: A TALE OF TWO CUSTOMS

POSTS



09ANKARA1084

2009-07-29

04:04

2011-02-01

21:09

VZCZCXRO8805

RR RUEHBC RUEHDE RUEHDIR RUEHKUK RUEHTRO

DE RUEHAK #1084/01 2100405

ZNY SSSSS ZZH

R 290405Z JUL 09

FM AMEMBASSY ANKARA




RHEHAAA/NSC WASHDC

RUEAIIA/CIA WASHDC

RHEFDIA/DIA WASHDC

S E C R E T SECTION 01 OF 03 ANKARA 001084

SIPDIS

NOFORN

E.O. 12958: DECL: 07/28/2029

SECRET//NOFORN

Embassy

Ankara

TAGS: ECON PINS PTER EAID IR TU

SUBJECT: TURKEY-IRAN BORDER: A TALE OF TWO CUSTOMS POSTS

REF: A. 08 ANKARA 1837

Â¶ B. 08 ISTANBUL 540

Classified By: A/DCM Daniel O,Grady for reason 1.4(d).

1.(S/NF) This information is being sent in cable format at the request of a visiting analyst. The report had previously been disseminated via email.

2.(S/NF) Summary: Econoffs recently traveled to Van to do research on potential development projects in eastern Turkey. In addition to the meetings held with local government officials (reported Ref A), we visited the two border checkpoints with Iran: Gurbulak and Kapikoy. We held discussions on capabilities and needs with officials at both facilities, and were given a tour of the Gurbulak facility. The conditions at the two border posts varied starkly; Gurbulak had more modern conveniences and scanning equipment, while Kapikoy had no scanning equipment at all, and even the living arrangements seemed to be substandard. End summary.

Gurbulak --------

3.(S/NF) Gurbulak is the main Customs points for traffic from Iran to

Turkey, and lies in the shadow of Mt. Ararat on Turkey's northeastern border. We approached the Gurbulak checkpoint from Dogubeyazit along the only road in the region leading to Iran. Approximately 1 km from the checkpoint, there were trucks lined up waiting to be checked. Car traffic was allowed to ride in the oncoming lanes to cut in front of the trucks.

About 500 yards before the checkpoint, a Jandarma soldier stopped us and asked for identification, then waved us through to the Customs station. The

Customs checkpoint security station did not ask for any identification and told us that we could proceed after we told them that we were there to see

"someone" and were not going to Iran. While approaching the border, we saw numerous people coming to and from Iran, in addition to trucks and cars transiting the border. The director of the border crossing, Hasan Demirci, assembled high level officers from all offices of the facility including customs enforcement, police, and customs valuation departments. None of the other officials were identified during the meeting and the subsequent tour by name - they were identified by title only. Demirci told us that he was the only one authorized to talk to the embassy, and that he only brought in the other officers because he was new to the post. As a result, he was reluctant to identify anyone else by name.

4.(S/NF) The officials discussed the facility's needs at length. They said that they do not need additional physical infrastructure at the checkpoint, as the entire post was recently rebuilt, but that they do need more scanning equipment. Demirci said that 3000 people and 400-500 trucks cross the checkpoint daily. Numerous travelers also enter Turkey from Iran in private cars and buses, which Demirci said are primarily going to Syria.

While the checkpoint has a large x-ray to scan incoming vehicles, they do not have an airport-style x-ray to scan the baggage of people crossing the border on foot. Demirci said that baggage searches are now done by hand, reducing the effectiveness of the search. He admitted that, in general, only people who "act suspiciously" are fully searched, with the majority simply being waved through.

5.(S/NF) The facility has serious problems with its power supply. Even during our brief visit to the facility there were numerous power outages.

According to the Chief of Customs Enforcement, the power is frequently out for up to 12 hours at a time, and the facility's backup generators only supply the housing facilities. In the winter, this problem is exacerbated by local residents stealing power from the grid. When the power goes out, the facility's scanning and camera equipment go out as well, meaning that traffic is passing unscanned for hours at a time. While we were at the border station, the camera system for taking photos of license plates was also broken, although the Chief of Enforcement said that a new one was expected soon.

6.(S/NF) All vehicles entering and leaving Turkey pass through radiation scanners. The scanners, which are made by the Turkish Atomic Energy

Commission (TAEK), are centrally monitored in Ankara. The deputy chief of enforcement stated that they have no control over this system, although there is an alarm should a substance be detected. As the vehicles pass through the gate, a customs officer manually inserts the vehicle's information into the customs computer system. ANKARA 00001084 002 OF 003

After passing through this area, the trucks then pass through a decontamination shower into an inspection area. The chief of enforcement said that 80 per cent of the vehicles are put through the vehicle x-ray.

The x-ray itself is located in a large metal structure, with a smaller structure next to it where the computers and technicians are located. The day that we were at the facility, the x-ray was not scanning vehicles because technicians were installing software to scan for inorganic and organic material. When the x-ray is operational, the images of the vehicles are indefinitely stored in the system along with copies of its paperwork.

The x-ray software identifies suspicious areas in vehicles and flags it for the operator, who alerts enforcement. If a suspect vehicle is identified, it is then moved to the nearby enforcement building. The building consists of two vehicle bays that can accommodate semi trucks and buses. There are mechanic pits below the bays and a machine to remove tires from rims.

Inspection is done by hand in this area, targeted by the x-ray results. If contraband is found, the driver is taken for an interview with a lawyer on site and put in a holding cell in the inspection area for transfer to the nearest court in Dogubeyazit.

7.(S/NF) Requested equipment: During the meeting with Demirci and the subsequent tour, the enforcement chief asked us for help procuring multiple pieces of equipment, including: optical passport readers, the previously mentioned baggage x-ray, carbon dioxide detectors, ion scanners for drugs, chemical kits for drugs, an explosive swab test machine, and a videoscope for searching vehicles in the inspection bay. (Note: The requests made by these local officials were clearly not coordinated with the central government and do not constitute a formal request from the Government of

Turkey. Any request would have to be coordinated by the MFA, and we have not received requests from the MFA for such equipment to date.

Kapikoy -------

8.(S/NF) Kapikoy is located due east from Van on the Iranian border in what could charitably be described as "the middle of nowhere." It is the only train crossing from Iran for both goods and people. There are 4 passenger trains a week and numerous freight trains. The customs checkpoint is not physically located on the border, but is 1-2 km inside Turkey at the

Kapikoy rail station. On the border itself, there is a small free trade zone and a Jandarma base. Trains are brought into Turkey by an Iranian locomotive, which drops the cars off at the checkpoint and leaves them for a Turkish locomotive from Van. Upon arrival in Van, the train is loaded on a train ferry and shipped across the lake to Tatvan. From there it could go in several directions, to include other destinations in Turkey or Syria.

9.(S/NF) There are 11 customs officers led by Soner Kucuk, the chief of the customs office. Kucuk said that 5 of his officers were new to the customs service and were often in training, meaning that his effective strength is actually much less than 11 people. Kucuk also said that he has no electronic scanning equipment of any kind at the checkpoint, and all searches for contraband are conducted by hand and with two dogs. As at

Gurbulak, people are allowed to pass unless they do something to arouse the suspicion of the customs officer. The officers generally only check the passenger compartments due to time constraints.

10.(S/NF) Morale appeared to be very low at the checkpoint because of the backwater nature of the post. They are fully dependent on Turkish Railways for all maintenance services, and as at Gurbulak the power systems are very spotty. The customs officers have two official vehicles at the checkpoint, but one was inoperable, and there was no fuel for the other. Kucuk said that he and his officers normally have to walk the 2 km to the free trade zone to get food and other necessities. This further reduces the number of available inspectors, as someone is almost always on the road. It appeared to us that the Kucuk and his officers were more focused on their own safety than on screening the passage of goods - the checkpoint was out of view from the Jandarma base and Kucuk was concerned that they could easily come under PKK attack from the hills that surround the outpost. After security, they focus primarily on counternarcotics, with only cursory attention paid to countering other forms of smuggling. When asked about smuggling in the railcars, as opposed to an individual trying to smuggle things in his baggage or on his person, Kucuk expressed surprise and asked why anyone would smuggle things in railcars. Also, he ANKARA 00001084 003 OF 003 continued, the lack of heavy lift equipment and manpower made checking the railcars for smuggled goods nearly impossible.

11.(S/NF) When asked about their needs, Kucuk said he needed everything, describing the post's living conditions (including food) as substandard. He plaintively asked us to remind Ankara that Kapikoy exists, noting that the fax informing him of our arrival was the first he had received in weeks.

Also, the lack of trained manpower and scanning equipment hamper his ability to carry out his job, so any type of improvement in that regard would be helpful.

Comment -------

12.(S/NF) The two customs posts we visited provided starkly different views of life on the Turco-Iranian border - while Gurbulak had some problems, the facilities are spotless and gleaming, and its needs are mostly in the realm of advanced scanning capabilities (assuming the power is working). Visiting

Kapikoy, on the other hand, is like traveling back in time to an Ottoman border crossing, lacking any of the tools necessary to carry out modern customs work. In both posts, however, there is a sense that when operational capabilities are not running optimally (either because the power is out or because the capacity never existed in the first place), the border is left open to anyone who is not overtly suspicious. Visit Ankara's

Classified Web Site at xxxxxxxxxxxx JEFFREY

0 07/29/2009 10808 ECON,PINS,PTER,EAID,IR,TU TURKEY-IRAN BORDER: A TALE OF

TWO CUSTOMS POSTS

Econoffs recently traveled to Van to do research on potential development projects in eastern Turkey. In addition to the meetings held with local government officials (reported Ref A), we visited the two border checkpoints with Iran: Gurbulak and Kapikoy. We held discussions on capabilities and needs with officials at both facilities, and were given a tour of the Gurbulak facility. The conditions at the two border posts varied starkly; Gurbulak had more modern conveniences and scanning equipment, while Kapikoy had no scanning equipment at all, and even the living arrangements seemed to be substandard.

Viewing cable 07MADRID1021, SCENESETTER FOR SECRETARY RICE'S JUNE 1 VISIT

TO



07MADRID1021

2007-05-25

11:11

2011-02-02

21:09

CONFIDENTIAL

VZCZCXRO6681


DE RUEHMD #1021/01 1451127

ZNY CCCCC ZZH

P 251127Z MAY 07

FM AMEMBASSY MADRID




Embassy

Madrid

SIPDIS

SIPDIS

TO THE SECRETARY FROM AMBASSADOR EDUARDO AGUIRRE; ALSO FOR

EUR DAN FRIED, E-ES, KEN MERTEN, EUR/WE

E.O. 12958: DECL: 06/30/2016

TAGS: OTRA PREL SP

SUBJECT: SCENESETTER FOR SECRETARY RICE'S JUNE 1 VISIT TO

MADRID

Classified By: Ambassador Eduardo Aguirre for reasons 1.4 b & d.

Summary

Â¶ 1. (C) Dear Secretary Rice: I welcome you to Spain on behalf of our 367 American and Spanish colleagues serving the United

States at Mission Spain. Your visit is a milestone in our work, together with you, to overcome the differences over

Iraq with the Spanish government and convince them that further strengthening cooperation coincides with Spain,s national interest. At the same time, your visit can serve as a catalyst to encourage Spain to become an even more active

)- but responsible -- member of a Transatlantic partnership, marked by cooperative efforts on our shared values, including counter-terrorism and promoting democracy, freedom and human rights throughout the world. This means that you will need to speak frankly to the Spanish government about Cuba, despite their desire to avoid the issue. The issue need not be the central one in a rich agenda on a wide variety of fronts in which we work closely with Spain; however, Cuba must be an element of your discussions on democracy, and

Spain,s own special responsibility as a democracy leader that has successfully undergone the transition from dictatorship to thriving democracy. Your discussions will also include Kosovo, Afghanistan, Spain,s OSCE Chairmanship,

Russia, Iran, Iraq, Latin America and the Middle East.

Moratinos will raise a thorny child-custody case involving a

Spanish woman currently jailed for contempt of court in New

Jersey. Your interview with the Spanish press will provide an opportunity to reach out to the Spanish people and underscore the significant value of our alliance and convey our views on issues on which we differ. We see this visit as a great opportunity to advance our relations with Spain, and the Spanish government shares this view. END SUMMARY

Â¶ 2. (C) The Spanish government has long awaited your first visit as Secretary of State and views it as a sign of the importance of strong U.S.-Spain relations. They will use your visit to counter criticism that the Zapatero government has shattered the transatlantic relationship. Per the Spain strategy you approved two years ago, we have sought to move this government away from visceral and reflexive anti-U.S. policies and sentiments, carving out areas in which

Zapatero,s government can offer support for the President,s broad global agenda. We have made clear to the Zapatero government that the price of our willingness to publicly promote good bilateral relations is real contributions on world issues. While we have made some positive headway, the

Zapatero government has not hesitated on occasion to pursue an agenda counter to our own when deemed in the Socialist party,s domestic political interest. Your visit should encourage Spain to be an even more active member of a transatlantic partnership that works cooperatively in pursuit of shared values on freedom, democracy, human rights and development.

What is Working

Â¶ 3. (C) On the positive side over the past two years, Spain contributed $22 million to the Basrah Children,s Hospital and offered a further $28 million in new money at the recent

Iraq Compact meeting. The Zapatero government established a

robust presence in Afghanistan that includes allowing the

Spanish military to lead a PRT and co-lead a Forward Support

Base in Western Afghanistan. Spain has contributed some 150 million Euros in Afghan reconstruction funds. Spain also has

1100 troops deployed along the Lebanon-Syria-Israel border as part of UNIFIL. The government allowed a sale of military aircraft to Venezuela to die. They support Turkey,s membership in the EU and have said that they will not pose problems on Missile Defense. We have superb two-way cooperation on counter-terrorism, counternarcotics, non-proliferation and military issues. This includes the use of two vital bases in southern Spain near the Straits of

Gibraltar, where we maintain over 2000 personnel that serve as major logistical hubs for the flow of troops and materiel into the Iraq and Afghanistan theaters. The GOS also very much appreciates US coordination with Spain on Western

Sahara, since Spain sees near-by North Africa as vital to its national security interests.

Â¶ 4. (C) In addition, our economic relationship with Spain is strong and mutually beneficial. The Spanish economy has boomed in the last decade as a result of structural reforms,

EU aid, and membership in the Euro zone. The commercial relationship is dominated by a very strong U.S. direct investment presence, although two-way trade remains a relatively minor percentage of each country,s exports and imports. Many of the U.S. Fortune 100 firms are present and

MADRID 00001021 002 OF 005 doing well. The American Chamber of Commerce estimates that about five percent of Spain,s annual GDP comes from U.S. investment. In recent years, U.S. portfolio investors have bought significant shares in major Spanish firms. Spanish firms have rediscovered America and are now investing in the

United States, especially in the banking and renewable energy

sectors, and Spanish construction companies have also won important contracts in the U.S.

Â¶ 5. (C) Spain cooperates closely with the United States in the fight against terrorism finance, co-chairing the Financial

Action Task Force with us. Following intensive intervention by the USG and private industry, the Spanish government is giving increased attention to intellectual property rights issues. Other areas where we work closely with the Spanish include NASA,s Deep Space Network, and close partnerships in port security programs such as Megaports and the Container

Security Initiative.

What Still Needs Work

Â¶ 6. (C) However, our challenge has been to channel the efforts of a unpredictable Spanish Foreign Minister who portrays himself as a self-styled &bridge8 between the U.S. and difficult world players--such as Syria, Cuba, Iran and some

Palestinian elements. Additionally, President Zapatero plays to a largely leftist, pacifist support base, and uses foreign policy to win domestic political points rather than giving attention to core foreign policy priorities or embracing broader strategic goals.

Â¶ 7. (C) This has lent an erratic &zig-zag8 quality to the bilateral relationship. Moratinos, recent visit to Cuba highlighted the difficulty of maintaining a smooth and stable pattern as did his earlier outreach to Syria and Iran.

Zapatero,s reversal of his Defense Minister,s commitment to deploy 150 troops to staff the ISAF XI headquarters reflects

PSOE,s increasing sensitivity to Spanish public concerns about growing dangers in Afghanistan during this highly charged political season here ) with local/regional elections May 27 and national elections by March 2008.

Kosovo independence is a sensitive issue for the GOS, which maintains troops in KFOR, because of concern about the impact

of such an evolution on Spain,s own complex federal vs. regional struggle. For this reason, a UNSC Resolution explicitly authorizing independence will be essential for

Spain to maintain its troops there.

Proposed policy agenda

Â¶ 8. (C) We want to challenge the Zapatero government to do better in the U.S.-Spain relationship as a result of your visit. In your meetings with King Juan Carlos, Zapatero and

Moratinos, we suggest you frame our goals with Spain over the following months along several interrelated themes that make clear the need to act responsibly in NATO, Latin America and the Middle East in order to be seen as a reliable partner.

We suggest the following themes:

--Spain should work more closely in coordination with us in

Europe and around the world on the freedom or democracy agenda. Spain has achieved a remarkable transformation since the end of dictatorship 30 years ago. It is one of the leading democracies in Europe and has the 8th largest economy in the world. Spain is now an active player in Europe, Latin

America and the Middle East, including Iran. But Spain needs to act in concert with the EU, NATO and the U.S. on key issues. There is too much at stake for Spanish freelancing, as in the Middle East, Cuba and Russia. The transatlantic community needs Spain,s support on Kosovo, Missile Defense,

NATO transformation, and Iran. The price of leadership and respect, which Spain seems to desire, is the willingness to devote the resources, assume responsibility, share burdens and act jointly with other powers. We welcome Spain,s commitment to stay the course in the pivotal struggle in

Afghanistan. We know it is a delicate political issue in this electoral season but it is the right thing to do and a responsible policy. Spain,s OSCE chairmanship is important on all of these issues and we want to ensure close consultations so that Russian attempts to weaken key OSCE

functions are curtailed.

--Spain needs to help in countering anti-Americanism by publicly emphasizing cooperation. The U.S. and Spain cooperate on a myriad of issues that matter to the Spanish people, including the fight against terrorism and international organized crime, Middle East, North Africa, human rights and support for democracy. We urge the Spanish government to work with us to allay anti-American sentiments

MADRID 00001021 003 OF 005 in Spain, not just cooperate with us behind the scenes.

Spain,s changing population and proximity to North Africa make it a prime target of Islamic extremism regardless of its relationship with the U.S. It is essential that we emphasize our shared values of democracy, human rights, freedom and opportunity for immigrants. Furthermore, during this difficult election period, we do not want our bilateral relations to become a casualty of the political crossfire. We understand electoral politics, but not at our expense.

--Spain should capitalize on its role as a democratic leader.

The U.S. welcomes Spain,s contributions on Afghanistan and

Iraq, defense ties and counter-terrorism; these form the basis of our good bilateral relations. Spain,s success in the transition from dictatorship to thriving democracy makes it a worldwide leader in the areas of democracy-building and institution-building. Spain should deploy that expertise more actively in concert with our shared goals. Our respect for Spain,s exemplary democratic transition makes it all the more perplexing and disconcerting that Spain has embarked upon a policy of outreach to the Raul Castro regime, validating his succession with no clear message about the need for democratic transition. Nevertheless, we want to continue working with Spain in support of human rights and

market-based economic policies in Latin America, including

Cuba, and we urge Spain,s leadership to act in more positive ways and to demonstrate publicly Spain,s own values.

Â¶ 9. (C) We believe that folding our concerns about recent

Spanish foreign policy moves into a broader, positive agenda can help advance our goals as we navigate the waters of a very difficult and volatile political season in Spain.

The Political Environment

Â¶ 10. (C) You arrive just after the May 27 regional and local elections. Current polls show that the results will likely provide momentum for both Zapatero,s Socialist Party and

Mariano Rajoy,s Popular Party going into national elections by March 2008. In the regional elections, the Socialists could gain seats and join in coalition governments in three current PP regions. With Socialist victories in several regions last year, Zapatero could have a strong base of support going into the national elections. However, the PP is expected to strengthen its support in its traditional regional strongholds. On the national level, while support for Zapatero has diminished since its peak after the March

2004 elections, Rajoy has not been able to capitalize and his ratings remain low and are falling.

Assessment of Zapatero

Â¶ 11. (C) Though polls show Zapatero,s support down from the high just following the March 2004 elections and considerable concern about his ETA policies, he stands a good chance of surviving national elections in early 2008, albeit with some of his support drifting to smaller, leftist parties in the

Parliament.

Â¶ 12. (C) Zapatero focuses almost exclusively on domestic policy; his foreign policy instincts are governed by the

exigencies of their domestic political impact. With a largely left of center, pacifist public which is strongly opposed to the Iraq war, the Aznar government and Bush Administration policies, Zapatero loses nothing by taking the U.S. to task on key issues. However, Zapatero now recognizes that the

Spanish public believes that Spain,s leaders must maintain good relations with the U.S. After his first volatile year in office, he has sought to improve the tenor and substance of U.S.-Spain relations while still maintaining the politically acceptable policy of offering criticism of U.S. policies as part of the role of what he calls a &loyal ally.8 We suggest you encourage Zapatero to continue to view a positive agenda with the U.S. as a necessary element of his political strategy and emphasize that the U.S. will not keep silent when his government pursues policies that run counter to our shared values and interests.

Rajoy as PP leader

Â¶ 13. (C) Your meeting with PP leader Mariano Rajoy will be interpreted in Spain as a symbol of continued U.S. ties with a partner that supports U.S. foreign policy goals. However, we need to make clear to Rajoy that the U.S. will continue to work with the current government as long as it is in power because of our major long-term interests in Spain, including in the war on terrorism and in Afghanistan. The Spanish media will scrutinize the length of your meeting with Rajoy in comparison with your session with Zapatero for signs of

MADRID 00001021 004 OF 005 any political signals we are trying to send.

Â¶ 14. (C) Recent polls indicate that Rajoy thus far has not been able to galvanize support for his candidacy for Spain,s

Presidency, despite some very meaty issues that could be

developed to the PP,s advantage. One of the most crucial of these controversial issues is Zapatero,s policy toward the

Basque terrorist group ETA, which the PP viscerally opposes and which has driven hundreds of thousands of protesters into the streets. The PP points to the December 30 attack at the

Madrid airport which killed two Ecuadorian citizens as proof that ETA will not renounce violence. The PP remains strong in its traditional strongholds, however, and the ETA issue has become increasingly worrisome to a number of Spaniards.

However, recent polls show that Rajoy himself has not galvanized support for his candidacy for Spain,s Presidency.

If PP turns out a large number of voters for the regional and local elections, Rajoy nonetheless will come to your meeting buoyed with the hope of a strong challenge to

Zapatero in the national elections. Bitterness over the March

11 terrorist attacks and the Aznar government,s handling of the issue, however, remains a liability for Rajoy, and

Spanish politics at the national level are bitter and divided.

Role of the King

Â¶ 15. (C) Your meeting with King Juan Carlos will demonstrate

U.S. respect for the Spanish state and its people. Though prohibited from playing a direct role in foreign policy, Juan

Carlos has helped behind the scenes. For example, he helped smooth relations with the U.S. after tensions in the months following the 2004 Spanish elections. In November of that year, President and Mrs. Bush invited the King and Queen for a pre-Thanksgiving lunch at Crawford, which was widely interpreted here as a sign of respect for the Spanish state.

Juan Carlos is well versed on foreign policy issues and will welcome your review of the key issues you plan to discuss with Zapatero and Moratinos. He should also hear our strong concerns on issues like Cuba and Syria. On a personal note, you might congratulate the King on the birth of Crown Prince

Felipe,s second daughter, Sofia, born on April 29, 2007.

Dealing with Moratinos

Â¶ 16. (C) We no longer hear last year,s rumors of Moratinos, imminent departure from his post as Foreign Minister and he seems entrenched in his position. He seeks a role on the world stage andtries to capitalize on his old ties in the

Middle East, as well as Spain,s presence in Lebanon and

Afghanistan, to play a role on Israel-Palestinian issues,

Lebanon, Syria and Iran. We have sought to find ways to keep

Moratinos in contact with senior USG officials on a range of issues as a means to help channel his efforts. Spain,s chairmanship of the OSCE puts Moratinos in the unusual position of having a voice and interest in core transatlantic issues related to Central and Eastern Europe, Russia and the

Caucasus. Moratinos, penchant for trying to &mediate8 needs to be tamed as Russia issues come to the fore; we have already seen evidence of Spain,s willingness to try to excuse or mitigate Russia,s recent threats to cut off CFE.

Moratinos has denied that his comments that he supports

Missile Defense discussion in the OSCE, but Russian Embassy contacts have told us that Moratinos supports the idea.

Â¶ 17. (C) Moratinos' recent trip to Cuba is one of the most prominent of Moratinos, miscalculations with the U.S. In addition to private protestations, I published an op-ed in

Spain,s leftist daily newspaper El Pais, laying out U.S. goals for democracy in Cuba. He has pushed the Human Rights dialogue promised during his visit so that it could take place just before your visit to Madrid. Moratinos will argue this justifies his Cuba policy. However, your visit should make clear to Moratinos the harm his trip has done to this effort, an objective he and Zapatero continually claim they share with us. Moratinos wants your brief bilateral before the working luncheon to be kept to a small group, where he wants to corral the issues of Cuba, Kosovo and Afghanistan

(his proposal for an international neighbors conference).

These are the three issues he deems most sensitive from the

Spanish side. In your working luncheon, issues will including

US-Spain bilateral relations (including excellent counter-terrorism, defense, non-proliferation cooperation);

Transatlantic issues, including Spain,s Chairmanship of the

OSCE, Russia and Moscow,s proposals for OSCE to discuss

Missile Defense, to Russia (Missile Defense); and finally,

Latin America, Iran, Iraq, Lebanon and the Middle East peace process. Iran will be in the Spanish news during your visit; while you are here, Larijani may be meeting with Solana at a

MADRID 00001021 005 OF 005 location organized by the Spanish. Moratinos will also want to discuss the way forward on Western Sahara, and he is pleased at our cooperation in security the latest MINURSO resolution calling for direct talks between Morocco and the

Polisario.

Â¶ 18. (C) Two important bilateral issues fall in the judicial area. Moratinos has said he will raise with you the child custody involving Spanish citizen Maria Jos Carrascosa who is currently jailed for contempt of court in Bergen County,

New Jersey for failure to return her child to the US as required by a New Jersey court decision. During this political season in Madrid, the case has become a cause celebre, with pictures of Carrascosa ) viewed as a mother separated from her child - in handcuffs entering the New

Jersey prison. The GOS agrees that this is a case for the courts and both governments agree that mediation of the dispute is the appropriate response. However, Moratinos for political reasons has to show the government is doing something about the case. On our side, you should note continued USG concern about the court case against the three

US servicemen charged with alleged &war crimes8 in the case of the death of Spanish TV camerman Jose Couse in the

Palestine Hotel in Baghdad in 2003. The GOS has been helpful behind the scenes in getting the case appealed by the Spanish

Prosecutor. The case now moves to the appeals tribunal of the National Court, which will rule on the substance of the charges. We want continued vigilance and cooperation by the

GOS until the case is dropped.

Â¶ 19. (C) Moratinos holds you in very high regard and values the contacts that he has had with you. Your efforts and those of other senior USG officials, along with mine, to help guide Moratinos on key issues such as handling Russia in the

OSCE and on the full range of Middle East issues, can prove effective. The more outreach the better, as we try to play to his desire to have a role on major issues while helping to direct some of these efforts toward policies that work to support US global objectives.

Â¶ 20. (U) You may want to congratulate Moratinos on the upcoming celebration of the 50th anniversary of the

Commission for Cultural, Educational and Scientific Exchange between the United States and Spain (the Fulbright

Commission) and express how you look forward to hearing more about the events planned to take place in Washington to commemorate this major milestone. The Spanish Fulbright

Commission, the second largest in Europe, is a truly binational organization with the majority of funding provided by the Spanish central government, as well as regional autonomous communities and private sector entities.

Â¶ 21. (C) In all, you will find a rich agenda with Spain, which your visit can advance substantially. Again, welcome to

Madrid. We are looking forward to your visit on June 1.

AGUIRRE

Viewing cable 07LONDON4328, C/NF) UK SHARES U.S. GOALS ON IRAN; WE SHOULD

RE-FOCUS UK DOMESTIC EFFORTS AND INCREASE COORDINATION REF: A. STATE

156409 B. STATE 157039 LONDON 00004328 001.2 OF 006



07LONDON4328

2007-11-

21 16:04

2011-02-02

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SIPDIS NOFORN SIPDIS STATE FOR NEA/IR, EEB A/S SULLIVAN, ISN/RA:RNEPHEW,

EUR/WE TREASURY FOR ABBY SULLIVAN COLLEEN EDDY, MOLLY MILLERWISE E.O.

12958: DECL: 11/21/2017

TAGS: PREL MNUC EFIN PTER KTFN IR UK

SUBJECT: (C/NF) UK SHARES U.S. GOALS ON IRAN; WE SHOULD RE-FOCUS UK

DOMESTIC EFFORTS AND INCREASE COORDINATION REF: A. STATE 156409 B. STATE

157039 LONDON 00004328 001.2 OF 006

Classified By: PolMinCouns Maura Connelly; reason 1.4 (b, d)

1.(C/NF) Summary: Prime Minister Brown and Foreign Secretary Miliband are increasing pressure on Iran by SIPDIS pressing aggressively for tough new

EU measures (to be considered in an EU meeting November 28), strengthening its public rhetoric, and using financial oversight to quietly scrutinize

Iranian banks operating in the UK. The British government is developing a list of all their options ) multilateral to domestic, regulatory to bully pulpit - and told Economic and Energy Bureau Assistant Secretary Sullivan that by mentioning Bank Melli in a recent speech, Brown and Miliband are seeking to get Melli named as part of the next UN Security Council

Resolution. They believe the EU and UN processes will be the quickest and most effective tools, so are focusing efforts there and in internal regulatory squeezes. U.S. and UK analysis and goals on stopping Iran's nuclear proliferation are in sync, so we suggest Washington take advantage of the UK's current review process and actively consult UK officials, while suggesting to them a few achievable goals ) i.e., announcing domestic nonproliferation legislation, publicly canceling their already frozen export credit program - as ways to ratchet up the pressure on Tehran. The upcoming

November 30 visit of Treasury Under Secretary Levey would be a great opportunity to work with our leading ally on Iran policy, and refocus some of their efforts. End Summary.

2.(U) Below is an update of the UK's efforts on various Iran-related issues, and suggestions for ways the USG can engage where appropriate:

(C/NF)

Push for UK Non-Proliferation Legislation ---------------------------------

------------ ----

3.(C/NF) The UK currently lacks legal authority to freeze assets based on proliferation activities alone. We have asked them whether they plan to propose legislation similar to what they have for terrorist activity, and have been told by HMT and FCO that it is under consideration, but would take a long time to pass through Parliament. The lengthy process, the UK says, is the reason for fully pursuing an EU remedy. We propose Washington supply key points from U.S. non-proliferation legislation and press the UK for a commitment to begin the process. Even if the legislative cycle is slow, its public announcement will send a strong message ) to Iran and to the UK's EU partners. We note, however, that UK courts require a mental

element in determining whether a person or entity is involved in terrorist activities ) and this presumably would carry over to non-proliferation legislation. To freeze a bank's assets on terrorism grounds, the bank must

1) be actively involved in the effort to get money to the terrorist entity;

2) be aware of what was happening, but chose to turn a blind eye to it; or

3) should reasonably have known that the money was diverted to a terrorist activity. We should urge the UK to broadly interpret the third category in deciding whether to freeze assets. (C/NF)

UK Vocal on EU/FATF Measures ------------------------------------

4.(C/NF) HM Treasury (HMT) Director for International Finance Mark Bowman told EEB A/S Sullivan on November 13 that the UK has a proposal in to the

EU Member States to designate LONDON 00004328 002.2 OF 006 Bank Melli at their next meeting on November 28. HMT puts the prospects of EU passage at

50-50, but hopes this will lead to UN action against Melli. HMT is less optimistic that the case against Bank Saderat will rise to the evidentiary level needed in either the UK or other EU Member States, despite PM Brown's desire to see Saderat designated. Any further intelligence addressing

Saderat's knowledge of terrorist finance activity would be greatly appreciated by several UK agencies.

5.(C/NF) Bowman also told Sullivan he wanted the Financial Action Task

Force (FATF) to take a more strategic and political approach, and was very pleased with the direction FATF took under UK leadership to publicly single out Iran as a bad actor on financial transactions. On October 12, the UK released a statement of public support for FATF's announcement on Iran. The

UK piece warned of the higher risks of money laundering and terrorist financing in Iran's financial system. If Iran does not respond to the FATF statement, the UK will push to raise this at the next IMF/World Bank meetings. (C/NF)

Increased Bank Scrutiny: FSA; Bank Mellat, XXXXXXXXXXXX--------------------

-------- -------------------------------------------

6.(C/NF) The UK is quietly and effectively pressuring the Iranian regime by putting Iranian banks through their banking regulator's (Financial Services

Authority ) FSA) strict scrutiny of "fit and proper" standing. The FSA is also studying whether it can legally use classified intelligence in its fit and proper reviews. The UK claims it cannot go public with its efforts against the banks without risking political backlash for singling out one country's commercial assets over another's The UK is trying to boost

London's position as the international financial center through a principles-based regulatory system. Our challenge will be to keep HMG focused on using all its financial tools ) such as intense regulatory oversight ) while maintaining political ) and more importantly business - support. The FSA's move follows Treasury A/S O'Brien's urging in September and is a major policy shift for a government that wants to do the right thing on Iran without betraying its principles-based banking and open investment policy. We should congratulate HMG for taking this move, and press it to continue to use all its tools ) public and private.

7.(C/NF) In response to our proliferation-related demarche (Ref A) FCO Iran

Multilateral Team Leader Will Gelling told Embassy Iran Watcher (Poloff) on

November 16, that HMG has no legal domestic UK authority to freeze

XXXXXXXXXXXX assets on proliferation grounds, but would press the EU to designate Bank Mellat. Gelling said HMG is already pursuing administrative/regulatory steps on Mellat, including stepping up the pace of FSA inspections of Mellat and other banks and pressing Mellat to be on the alert for proliferation-linked transactions. Gelling said HMG could freeze Mellat assets under current legal authority only if USG could provide sufficient evidence linking the bank to terrorist, vice solely proliferation, activities. FSA is also monitoring Iranian bank assets in

London to see whether there is asset flight from Melli and Saderat, and has found no movement yet.

8.(C) A/S Sullivan pressed HMT and FCO for a concerted effort to get Asian banks and firms on board with this issue. HMT and Foreign Office officials were open to Sullivan's LONDON 00004328 003.2 OF 006 suggestion of a joint approach (possibly with Paris, Tokyo and Dubai) to get Chinese and

Malaysian banks to stop doing business with Iran, and will include this as part of the list of options for PM Brown to consider. We believe U/S Levey should seek a firm commitment to do this, and present the British government with draft talking points. (C/NF)

IAEA report: UK shares USG view, plans joint E3 approach ------------------

------------ ---------------------------------

Â¶ 9. (C/NF) On the IAEA's latest report on Iran's lack of progress, Poloff explained USG views per ref B to FCO; Gelling, for whom Poloff had previewed USG views on November 15, confirmed UK views are in full conformity with USG's, and equally pessimistic. Gelling noted the UK would

- along with France and Germany - jointly demarche the IAEA along exactly the same lines, and that the E3 together would press other IAEA governments to also make strong statements at the BOG, as outlined ref B. The UK government told us it had "hoped that Iran would finally, after stalling for many years, come clean about its past nuclear activities. But the IAEA is still unable to state its confidence in the answer Iran has given." The

UK urges Iran to implement the Additional Protocol immediately. (C)

UK Banks: Clear No More Sterling for Iran Banks ---------------------------

------------------ -------

Â¶ 10. (C) UK banks are beginning to limit certain services in the UK for

Iranian banks due to the exercise by HMG of "considerable moral suasion."

As of November 30, according to Gelling's deputy Chris Gotch, no UKchartered bank will offer sterling clearing services to any Iranian bank.

Iranian banks will still be able to hold accounts as private businesses at

UK-chartered banks in the UK but will not be able to clear sterling transactions. Iranian banks will still be able to clear sterling in the UK through UK branches of foreign banks (i.e., banks chartered outside the UK

) mainly in Russia and Turkey, according to HMT). UK banks began this new practice within the last month, with HSBC the last UK bank to do so.

Iranian banks are beginning to move UK funds into Euros, and will have direct access to the Euro clearing system. Both FCO and HMT officials agreed, however, that Iranian banking (i.e, Saderat) via UK branches of

foreign banks would be unaffected. Gelling also agreed the move by itself would not affect entities who were in effect acting for Iranian banks.

11.(C) Bank Sepah, meanwhile, is winding down, according to HMT. It is functioning at a minimum level and has reduced its staff by over one-half, going into "hibernation mode" following its UNSCR designation. (C)

The Value of Threatening Oil and Gas Sanctions ----------------------------

----------------- ------

Â¶ 12. (C) Foreign Secretary Miliband's thinking on the threat of oil and gas sanctions revolves around medium and long-term ideas to squeeze the

Iranian hydrocarbon sector of foreign investment and expertise, according to Gelling. The oil and gas reference in the Prime Minister's Annual

Foreign Affairs speech on November 12 had been aimed primarily at Iranian oil and gas investment; the UK's first efforts to line up support for squeezing Iran on oil and gas would be aimed at Germany, France, Italy and

Spain. Gelling pointed to liquefied natural gas as an especially vulnerable, longer-term, "pinch LONDON 00004328 004.2 OF 006 point," since

Iran has so few of the applicable technologies or infrastructure despite large gas endowments. Gelling said that for now, although there is no immediate way to organize oil and gas sanctions to create any short-term practical effect on Iran, HMG would continue actively and publicly to invoke the specter of action on oil and gas as a way to increase political pressure on Iran. (C/NF)

Iran Attacks PM Brown's Speech --------------------------------------

13.(C/NF) Gelling noted that after the November 13 Brown speech, Iran's

Ambassador Movahedian called on FCO Iran Director Antony Phillipson to complain. Reportedly, Movahedian, a figure whom FCO regards as an ineffective and ponderous trusty of Ahmedinejad, said the Prime Minister's speech had the effect of "poisoning the atmosphere" between the UK and

Iran, "rather than building an atmosphere for dialogue." (C)

Miliband Keen to Press Iran Hard Now --------------------------------------

---

Â¶ 14. (C) Gelling explained that, though the idea to press the hydrocarbons sector is a serious one, HMG believes the short-term impact on Iranian behavior is achievable primarily via financial sanctions, of which he argued multilateral ones are most effective. Gelling argued western governments have key leverage based on Tehran's badly wanting to avoid losing access to Western capital markets, the availability of China and other capital markets notwithstanding.

Â¶ 15. (C) Gelling said the hydrocarbon issue is part of "an important rhetorical shift" by HMG, in which he said USG can expect to see sustained, notably "harsher" UK rhetoric on Iran, beginning now and continuing into

2008. Gelling said Foreign Secretary Miliband's internal guidance to HMG officials is becoming "extremely aggressive," and that he has been

"impatient" at the deliberate pace at which the EU has moved on Iran sanctions; Gelling and Gotch said Miliband wants to push for "tough, rapid" financial action against Iran within the EU across a range of measures, including banking, export credits and investment facilities, all during

2007. Gelling included on the UK's own national action list a likely scaling down of the UK's investment facilitation services in Tehran. (C)

No New Export Credits --------------------------

Â¶ 16. (C) The British press reported recently on an on-going UK export credit program in Iran, however, FCO tells us those reports are inaccurate and that HMG has not extended new export credit for British investment in

Iran since September 26, 2006; during UK fiscal year 2006-2007 (which ran from April 6, 2006 to April 5, 2007) there had been a total of 5 million pounds ($10 million) in new cover approved for Iran business - all prior to

September 26, 2006. Gelling told Poloff there has been no new UK cover for

Iran during the current fiscal year and that the Export Credit Guarantee

Department (ECGD) is "not processing new applications." Gelling said there had been no public announcement of this "HMG decision" to end credit cover, to avoid prejudicing existing investments, but that there might be such an announcement in the future; he gave no hint on timeframe. Gelling said current UK credit exposure on Iran is now about 275 million pounds (USD 550 million). HMT told A/S Sullivan that the EU could act on export credits, but would meet LONDON 00004328 005.2 OF 006 German and Italian resistance ) the former is worried about an Iranian default because it is heavily exposed in Iran. We recommend that the USG urge the UK to publicly cancel its export program. (C)

UNSCR: Better to Whack Them Quickly and Unanimously -----------------------

---- ----------------------------

Â¶ 17. (C) Revisiting a familiar theme, Gelling said HMG believes strongly, based in part on what he said are the views of UK Ambassador Sir Geoffrey

Adams in Tehran, that the timing and unanimity of the next UNSCR will be more important than its substance. He said the three elements in a UNSCR that can affect Iran are "timing (i.e., speed), toughness, and unanimity," but that achieving all three is unrealistic. Gelling said HMG will argue within the P5 plus 1 that getting some measure (acceptable to Russia) adopted unanimously and at the end of November will have a much stronger effect on the Iranian regime, following the build-up to the El Baradei and

Solana reports, than a measure with somewhat more substance adopted sometime in December or later. Gelling said FCO senior figures believe "the dynamics of whacking them publicly and unanimously now are far better - the perfect is the enemy of the good." In a separate meeting a source at the

International Institute of Strategic Studies, told us that a visiting PRC diplomat told him it is likely China would permit a third UNSC resolution, after its language has been weakened to a point acceptable to China.

Â¶ 18. (C/NF) As FCO officials often do, Gelling also emphasized the greater

"psychological and political" effect which multilateral sanctions have on

Tehran, especially given the UK's image among most Iranians of treachery, exploitation and deceit. He argued in this regard that the announcement in

Iran of national measures by "the original Great Satan," the UK, would have little impact on Iranians, as opposed to the effect of unified

international measures, which by their nature tend to place the regime at a moral disadvantage, which matters in Iranian politics.

Â¶ 19. (C/NF) COMMENT: UK officials at all levels want to move quickly and strongly to create fresh pressure against Iran. They emphasize both the practical and symbolic steps they believe are most quickly achievable, with a clear UK preference for multilateral measures, which they argue are ultimately more effective than unilateral ones. On any domestic measures we want the UK to adopt against Iran we must give specific examples, attempt to coordinate timelines, and factor in that the British government believes it is already leading a full court press within the EU at the politically most advantageous time. We should focus our requests to a few well-briefed domestic measures we want them to pursue. Presenting a laundry-list of requests would likely generate strong push-back from HMG reps (both because they believe they are doing all they can under their legal and financial systems and because they have far fewer resources to devote than the USG does). The British will also push for collective efforts to be focused on the EU and UN. We suggest Washington send us key points to preview with our

UK partners early the week of November 26, followed by a high-level phone call from NSA Hadley to his counterpart Simon McDonald in the Cabinet. U/S

Levey would then come on November 30 for focused consultations with FCO,

HMT and Cabinet. End comment.

Â¶ 20. (U) A/S Sullivan did not clear this message. Visit London's

Classified Website: LONDON 00004328 006.2 OF 006 XXXXXXXXXXXX

Tuttle

Viewing cable 08ANKARA1417, GOT STATUS UPDATE ON TRANSFER OF BOEING

747 TO IRAN BY ANKAIR: THE PLOT THICKENS REF: SECSTATE 84112



Embassy

Ankara

08ANKARA1417

2008-08-08

15:03

2011-02-02

21:09

VZCZCXYZ0000

OO RUEHWEB

DE RUEHAK #1417/01 2211531

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RUEHKP/AMCONSUL KARACHI IMMEDIATE 0081


RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE

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SIPDIS

EEB/ESC/TFS FOR CHERYL BRUNER, ISN/CPI, COMMERCE/OEE, EUR/SE, NEA/IR E.O.

12958: DECL: 08/07/2028

TAGS: EAIR ETRD ETTC IR PARM PK PREL TU UK

SUBJECT: GOT STATUS UPDATE ON TRANSFER OF BOEING 747 TO IRAN BY ANKAIR: THE

PLOT THICKENS REF: SECSTATE 84112

Classified By: Economic Counselor Dale Eppler for reasons 1.4 (b) and ( d).

1.(U) This is an action request. Please see para.

Â¶ 3.

2.(S) SUMMARY: On August 8, Econoffs met with Turkish MFA officials regarding the transfer of an Anka Air Boeing 747 to Iran and the potential transfer of two additional planes (reftel). According to information provided to the MFA by Yavuz Cizmeci, Anka Air CEO, the 747 was sold on May

20, 2008 before the issuance of the Temporary Denial Order (TDO) to Mr. Sam

David Mahjoobi, a UK citizen not named in the TDO. The sales agreement contained a provision that the plane not be resold to entities in a list of prohibited countries, including Iran. Mahjoobi requested that the plane be deregistered in Turkey for transfer to Pakistan and the certificate of deletion was issued by the Turkish DGCA for that purpose. On June 27, the plane departed Istanbul airport for Karachi, and made a "technical landing" at an airport in Iran, where it remains. Cizmeci has reportedly contacted both Mahjoobi and the Iranian authorities requesting that the plane be delivered to its intended destination in Pakistan. One of the two MD-80 aircraft discussed in reftel was sold to a UAE firm and is currently registered in Ukraine. The other aircraft remains parked at Istanbul airport and has no plans to be sold. END SUMMARY.

3.(S) ACTION REQUEST: The GOT is investigating the case and has asked for any information that we can provide, specifically about Mr. Mahjoobi, about the Galaxy Aviation Trade Company named in the original TDO, and about the terms of sale of the plane by US company AWAS to Anka Air. Turkish MFA also

asked for any information we could provide concerning whether the 747

(serial number 24134, Turkish tail number TC-AKZ) was ever registered or de-registered in Pakistan, and if so by whom.

4.(SBU) On August 9, Econoffs met at the MFA with Ersin Ercin, DDG of

Americas and Basat Ozturk, DDG for Maritime and Aviation Affairs. They stated that they had been investigating the case since the issuance of the original TDO and provided a status update of the results so far.

5.(S/ REL TO UK) According to MFA, Yavuz Cizmeci, the CEO of Ankair contacted them immediately upon receipt of the TDO to present his case to them and ask for assistance. He claimed that he had indeed received an offer for the plane from Galaxy Aviation Trading Company, but that the offer was too low and he rejected it. He had, however, already sold the

Boeing 747 to Mr. Sam David Mahjoobi, a UK citizen residing in the UK, on

May 20, 2008, some two weeks before the issuance of the TDO. According to the terms of that agreement, Mahjoobi was not allowed to resell the plane to entities in a list of prohibited countries, including Iran. Mahjoobi was described to the MFA as a reputable member of the UK aviation industry

(Comment: A quick search of the Internet revealed no information to support this claim. End comment.)

6.(S/REL to UK, PAKISTAN) Following the sale of the plane, Mr. Mahjoobi contacted the Turkish DGCA and provided the sale agreement, asking that the plane be deregistered in Turkey so that it could be transferred to

Pakistan, where it was to undergo maintenance and upgrades. The Certificate of Deletion was issued for transfer solely to Pakistan. On June 27, the plane left Istanbul Airport en route to Karachi, when it was forced to make a "technical landing" at an unspecified airport in Iran, where it remains and where its status is unclear. The MFA conceded the possibility that the plane might have been registered and de-registered in Pakistan and then reregistered in Iran.

7.(S/REL to UK, PAKISTAN) According to the MFA, Mr. Cizmeci has contacted both Mr. Mahjoobi and the Iranian authorities demanding that the plane be delivered to Pakistan in compliance with the sales agreement, with no response from either. He has reportedly called the plane,s continued presence in Iran "an act of piracy." The MFA officials were somewhat skeptical of this claim, but did note that if his story is true then it would be a breach of international law and that presumably both the UK and

Pakistan would have a legal right to sue Iran for release of the plane.

8.(S) With regard to the two MD-80s owned by Anka Air, DDG Ozturk reported that one plane (serial number 53184) was sold to a company in the UAE and has been re-registered in the Ukraine under tail number UR-BHJ. The other plane remains parked at Istanbul,s Ataturk Airport and Cizmeci claims he plans to resume using it once Anka Air,s suspended license is restored. He also disavowed any knowledge of XXXXXXXXXXXX and claims no business relationship with them.

9.(S) The MFA mentioned that they expect to receive from Cizmeci a copy of the sales agreement with Mahjoobi as well as the Certificate of Deletion for the 747, and offered to provide copies to us if permitted. They also

noted that the Director General of Civil Aviation would be returning from leave on Monday, August 11 and that a meeting was set for that same day to discuss the case with him. They requested that if we have additional questions to ask or information to provide relevant to that meeting that it be sent before Monday morning local time.

10.(S) Comment: The tale related by Cizmeci to the MFA is plausible but not necessarily credible. It is still a bit curious that he purchased the 747 in the first place - the MFA officials noted that Turkey does not have the infrastructure in place to support the plane in terms of trained personnel or experience. XXXXXXXXXXXX The MFA asked Cizmeci for details about the terms of sale from AWAS, but Mr. Cizmeci replied only that it was "at market prices." The GOT seems genuinely interested in getting to the bottom of this case - both DDGs Ercin and Ozturk expressed a desire to make an example of Ankair if necessary to prevent future problems of this nature, and neither seemed to completely buy Cizmeci,s story. They offered to provide updates as their own investigation proceeds, and asked that we share any information that we develop. End comment. Visit Ankara's

Classified Web Site at XXXXXXXXXXXX

WILSON

Viewing cable 08ANKARA1476, SECOND UPDATE ON TRANSFER OF BOEING 747 TO

IRAN BY ANKAIR REF: A. SECSTATE 84112 B. ANKARA 1417



Embassy

Ankara

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2008-08-15

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2011-02-02

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SIPDIS

EEB/ESC/TFS FOR CHERYL BRUNER, ISN/CPI, COMMERCE/OEE, EUR/SE, NEA/IR E.O.

12958: DECL: 08/15/2028

TAGS: EAIR ETRD ETTC IR PARM PK PREL TU UK

SUBJECT: SECOND UPDATE ON TRANSFER OF BOEING 747 TO IRAN BY ANKAIR REF: A.

SECSTATE 84112 B. ANKARA 1417

Classified By: Economic Counselor Dale Eppler for reasons 1.4(b) and (d ).

1.(U) This is an action request. Please see para. 7.

2.(S) This cable provides a second update on the status of the Boeing 747 transferred by Ankair to Iran Air discussed in reftels.

3.(S/REL TO UK, PAKISTAN) On August 13, Turkish MFA officials confirmed that the Boeing 747 was sold to Sam David Mahjoobi, who is listed in the

Certified Aircraft Sale and Purchase agreement as the Director of

Intelligent Aviation Services Limited, registration no. 6617221, incorporated in the UK, with registered offices at 5 Jupiter House,

Callaeva Park Aldermaston, Reading, Berkshire RG7 8NN.

4.(S) The MFA also confirmed that the MD-80 sold to an unnamed UAE company and now operating out of Ukraine was at some point &wet-leased8 to Fars Air

Qeshm Airlines. XXXXXXXXXXXX They also reiterated that the other MD-80 remains parked at Istanbul,s Ataturk Airport and that they have given orders for it to remain there.

5.(S) On August 14, MFA DDG for Aviation Basat Ozturk spoke with Econ

Counselor regarding the case. An Iranian delegation arrived on August 13 in advance of the Ahmedinejad visit, and it included civil aviation experts.

The Turkish Director General of Civil Aviation and the Transportation

Deputy Undersecretary in charge of aviation, the two highest ranking GOT civil aviation authorities, raised this case with the Iranians. They specifically asked: (1) Why did the plane land in Iran when it was on its way to Pakistan? (2) Why is it still in Iran? (3) That the Iranians release the plane and allow it to continue to Pakistan. The Iranians had no

immediate response and appeared not to know about the case. Ozturk also said that FM Babacan had been personally briefed about this case.

6.(S) Separately, Ozturk said that they had called Ankair owner Yavuz

Cizmeci and told him that he needed to find Sam David Mahjoobi and get him either to move the plane to Pakistan or face unstated sanctions.

7.(S/REL TO UK) Ozturk asked if we could provide additional information about Mahjoobi. He said that the registry information we provided, while very welcome, was from 2007 and should have been updated. Also, birthdate and nationality information would be extremely useful to them to be able to place Majhoobi on their watch list.

ACTION REQUEST: Post requests that the Department provide any available biographic information on Sam David Mahjoobi. Visit Ankara's Classified Web

Site at XXXXXXXXXXXX

SILLIMAN

Viewing cable 04THEHAGUE281,



04THEHAGUE281

2004-02-04

12:12

2011-02-02

15:03

CONFIDENTIAL

Embassy The

Hague



SIPDIS

FOR SECRETARY POWELL, NSA RICE, AND DEPSEC WOLFOWITZ FROM

AMB CLIFF SOBEL

E.O. 12958: DECL: 02/03/2014

TAGS: AF EU IZ NL PGOV PREL SNAR TU XA XF XH NATO

SUBJECT:...

13722

2004-02-04

04THEHAGUE281

Embassy The Hague

CONFIDENTIAL


SIPDIS

FOR SECRETARY POWELL, NSA RICE, AND DEPSEC WOLFOWITZ FROM

AMB CLIFF SOBEL

E.O. 12958: DECL: 02/03/2014

TAGS: AF EU IZ NL PGOV PREL SNAR TU XA XF XH NATO

SUBJECT: DUTCH FM BOT'S VISIT TO THE U.S.

Classified By: AMBASSADOR CLIFFORD SOBEL FOR REASONS 1.5 B AND D

Â¶ 1. (C) I just spoke with Ben Bot and found him well-prepared for his February 9 visit to Washington. He plans to ask how he personally can contribute to improved transatlantic relations. As he has said in press interviews, other European leaders are counting on him to help mend fences between the European Union and

Washington. That remark is a telling sign of his ambition and self-confidence. Upon taking office he immediately set out to improve Dutch relations with France and Germany, to challenge the most senior minister for dominance within the

Dutch cabinet, to charm parliamentarians, and to impress

MFA officials. He is talented and extremely clever at EU politics after eight years as the Dutch ambassador to the

EU. We should take up his professions of transatlantic leadership by asking for real support.

-----------------------------------

Gaining Bot's Support within the EU

-----------------------------------

Â¶ 2. (C) FM Bot could help gain EU cooperation on issues of critical importance to the U.S. We should ask for help on the following issues within the EU:

--Greater Middle East. We can tap Bot to help build support within the EU for this initiative. He has expressed interest in GME but will likely emphasize the need to reinvigorate the peace process as well.

--Turkey: Bot should be asked to show leadership on this issue within the EU. A former ambassador to Turkey, Bot already has altered the MFA course, making clear that he favors Turkey EU accession, if it meets the Copenhagen criteria. However, he has his work cut out for him domestically because two of the three parties in government are highly skeptical of Turkish membership: the Liberal

Party for financial reasons and some of his own Christian

Democrats for cultural ones. Bot said that Greek FM

Papandreou told him Turkey positive steps on Cyprus are worrying because now Greece risks looking like the spoiler. Bot also expressed concern about pressure he heard the U.S. is putting on new members regarding Turkey.

--NATO-EU: Bot should hear specific ways in which he can protect transatlantic equities. The Dutch are Berlin Plus purists and can be counted on to help prevent EU straying, assuming the UK stays on message. Bot told me that German

FM Fischer is eager to find concrete ways of restoring the situation. To be close to the U.S. is ssential, ischer said. Bot said the French professed a similar desire to find substantive issues for transatlantic cooperation, but that as conversations went longer with FM Villepin and

Giscard d staing, their criticisms of the U.S. grew.

--Counter-terrorism: Bot needs to know how important Dutch leadership was on container security and portal monitors and be asked to show leadership in next steps between the

EU and U.S. He needs to hear that we need Dutch help in developing better processes of communication and cooperation.

--Other Europe: Bot can be asked to help synchronize U.S. and EU policy on frozen conflicts, Georgia, and the Values

Gap with Russia. The Dutch term as OSCE chair was characterized by intensive dialogue with Russia, the

Caucasus and Central Asia.

--Africa/HIV: Bot can encourage others in the EU to more closely coordinate their programs on Africa and HIV, following the Dutch example. The Netherlands and the U.S. are coordinating their HIV assistance in several countries and the Dutch have made Africa a priority, especially Sudan and the Great Lakes region. They are an important player on the continent and the third largest donor.

Â¶ 3. (C) On all these issues, Bot could play a significant role. However, it is not yet clear the degree to which he is willing to stake out a position and lead the EU versus waiting to see which way the EU winds blow. His calculations might be based more tightly on his perception of Dutch national interests than on principle. Last week, despite massive parliamentary objections, he reversed Dutch opposition to lifting the China arms embargo. He explained his decision to me in classic terms: the Dutch risked being locked out of China for years if they tried to block the EU. Furthermore, he said, there is no point in the

Dutch taking stands that isolate it within the EU.

--------------------------------------------- ---------------

-------

Pushing Bot on bilateral issues: Iraq, Afghanistan, TIP,

Narcotics

--------------------------------------------- ---------------

--------

Â¶ 4. (C) The Dutch need to hear that they should do even more in Iraq and Afghanistan. The Dutch are actively

discussing whether they can offer special forces to OEF and

PRT leadership or whether to try to get away with less difficult tasks in Afghanistan. Bot cited the cabinet

January 31 decision to send Apache helicopters to

Afghanistan as nough for now. e should be thanked but given the message that the helos are not enough. Bot said

PRTs remain under consideration but that he needs to go step by step with parliament. PRTs are a poignant test of the Dutch conflict between wanting to be a player that takes on serious responsibility and fearing taking or causing casualties, a fear exacerbated by their experiences in Srebrenica. Many parliamentarians, including from the opposition, have visited Afghanistan and believe ISAF needs to expand and yet do not want Dutch troops deployed in unsafe areas. They will want to know what the extraction plan is and will feel most confident if under the protection of U.S. or UK forces.

Â¶ 5. (C) As for Iraq, Defense Minister Kamp already is suggesting publicly that Dutch troops need to stay beyond

July; Bot should hear Washington endorse this, as well as ask for more development and reconstruction assistance. Bot is more sympathetic than others in the Dutch government to increasing assistance to Iraq, but may try to hide behind budget woes. It is also useful to talk about NATO future role in Iraq. Bot and the Dutch perm rep have been cautious; we should push him.

Â¶ 6. (C) CT/Drugs/TIP: We should push him for further cooperation on counter-terrorism issues, and to more effectively address continuing problems regarding trafficking in people and narcotics.

-------

Comment

-------

Â¶ 7. (C) Ben Bot makes all the right professions of faith in the transatlantic relationship, but has not yet had to make a decision that risks angering larger EU partners. He cites his deceased American wife as one strong link to the

U.S. Transatlanticists who have known him throughout his career say that he is indeed a classic Dutchman who sees no conflict between being a committed Atlanticist and a committed European. His comments on Villepin also suggest he has no illusions about the French. However, he has been playing on the European stage, not the world stage for a decade, and in our early meetings, he occasionally made odd remarks to me about U.S. indifference to the EU. In giving him real work to do when he is in Washington, the goal is not only to advance U.S. objectives but also to get a clearer picture of how capable and courageous he is. It could be that he is the ideal man to run the Dutch EU presidency because he might be even better than de Hoop

Scheffer at jumping EU hurdles. We should take advantage of his energy and ambition to be a serious player, and we should gauge how much water he will be able to carry during the Dutch presidency. PM Balkenende has given him the lead; thus, U.S.-EU relations in the second half of 2004 depend largely on this man abilities and attitudes.

SOBEL

Viewing cable 07LONDON4045, EUR SENIOR ADVISOR PANDITH AND S/P ADVISOR

COHENâ€™S



07LONDON4045

2007-10-25

16:04

2011-02-03

21:09

CONFIDENTIAL

Embassy

London

Cable Text:

VZCZCLOI278

PP RUEHC RUEHZL

DE RUEHLO #4045/01 2981638

ZNY CCCCC ZZH

P 251638Z OCT 07

FM AMEMBASSY LONDON



Thursday, 25 October 2007, 16:38


SIPDIS

EO 12958 DECL: 10/17/2017

TAGS PGOV, PREL, KISL, PTER, SCUL, UK

SUBJECT: EUR SENIOR ADVISOR PANDITH AND S/P ADVISOR COHENâ€™S

VISIT TO THE UK, OCTOBER 9-14, 2007

REF: LONDON 4030

Classified By: DCM Richard LeBaron for reasons 1.4 b, d

Â¶ 1. (C) Summary. EUR Senior Advisor for Muslim Engagement Farah Pandith and S/P Member Jared Cohen met with a wide range of UK government leaders, community activists, think tanks, artists, and Muslim youth during their

October 9-14 visit to the UK. Government officials stressed that the UKâ€™s problem with extremists is a domestic as well as a foreign policy issue, since all recent successful and thwarted terrorist attacks were perpetrated by individuals from Muslim communities in the UK. Muslim youth from deprived areas expressed less concern with UK and U.S. foreign policy than with the chance to have their voices heard in British society, while those with more education focused on disagreements with UK foreign policy and the need to use the arts to address cultural tensions and reconciliation.

Bollywood actors and executives agreed to work with the USG to promote anti-extremist messages through third party actors and were excited about the idea of possibly partnering with Hollywood as well. Community activists discussed how they are working to empower their communities and help shape the debate against extremism in UK Muslim communities. One highlight of the visit was a day trip to Leicester, which Pandith said was arguably home to the most conservative Islamic population she had seen anywhere in Europe.

End summary.

Radicalization Efforts

------------------------------------

Â¶ 2. (C) HMG is currently working on an updated strategy, yet to be blessed by ministers, to update and improve its approach to stopping terrorists and extremists, FCO Engaging the Islamic World Group Head Barry Lowen and Arab

Reform Team Leader Alex Cole told Pandith and Cohen October 12. The new strategy includes the creation of the Research and Intelligence

Communications Unit (RICU), which falls under the joint auspices of the

FCO, the Home Office, and the Department for Communities and Local

Government (DCLG). Although still in the â€œembryonic stage,â€ Lowen said, the RICU would have three primary functions: 1) tracking and coordinating research and information on extremism in the UK Muslim Community; 2) alerting HMG to important events, such as an impending Osama Bin Laden speech, and preparing a unified government response; and 3) supporting nongovernment tools in battling extremists (For more on the RICU and HMGâ€™s counter-radicalization structure, see ref). One project currently underway is preparation of a paper on what language works best in public outreach,

Lowen said; for example, the advantage of using the word â€œmainstreamâ€ to define common values, as opposed to â€œthe West,â€ which can have negative connotations.

Â¶ 3. (C) Work on empowering moderate Muslim voices in the UK and overseas is divided into aid directly from HMG and facilitation of contacts between non-governmental actors, Cole said. Programs which HMG sponsors directly include: sponsoring Arabic language childrenâ€™s television programming in

Jordan to promote peace and tolerance; assisting visiting religious leaders and journalists from UK-based Muslim communities to meet the Archbishop of

Canterbury and other church leaders; and providing English language training to tutors at Al-Azhar University in Cairo through the British

Council. On the non-governmental side, HMG is also currently working to facilitate linkages between third party actors, Cole said. Pandith noted these efforts mirror current USG initiatives. She and Cohen described USG efforts at â€œseedingâ€ small initiatives overseas to see what works and what doesnâ€™t. Both sides agreed they would exchange ideas for promoting counter-radicalization efforts, both those directly and indirectly sponsored by governments.

Â¶ 4. (C) With the FCOâ€™s Policy Planning Middle East analyst Richard Shaw,

Cohen described current USG thinking on the linkage between public diplomacy, counter terrorism, and counter radicalization. Shaw said the

UKâ€™s overall approach is focused on how likely Muslims are to turn to violence. Unlike the U.S. September 11 attack, Shaw noted, all of the UK terrorist attacks and would-be attacks have been perpetrated by â€œhome grownâ€ terrorists. What is considered foreign policy for the USG is both domestic and foreign for the UK, he pointed out. Pandith, Cohen and Shaw discussed the importance of trying to work with youth through web-based technology and communications, since these are some of Al Qaidaâ€™s primary tools. They also discussed the limitations of traditional outreach methods, including government-supported exchange programs, which pay off handsomely for those who participate but reach a mere handful of people, many of whom are already inclined to anti-extremist sentiment. Foreign Secretary David

Miliband is focused on exactly these types of questions, Shaw said.

The Personal Journey of the UKâ€™s, First Muslim MP

--------------------------------------------- --------------

Â¶ 5. (C) On October 12, Pandith and Cohen met with newly-appointed

Department for International Development (DFID) Minister Shahid Malik. A

Labour MP since 2005, when he and fellow Labourite Saddiq Khan were the first Muslim MPs ever elected to the British Parliament, Malik is an active participant in the British Muslim dialogue. He told Pandith and Cohen his own personal story of alienation, saying that even though he grew up in the

UK he was so anti-British as a young man that he rooted for the other side in any sporting match in which an England team played. At the age of 27, however, he was appointed to the Commission for Race and Equality, and began to travel around the UK and listen to the stories of other Muslims.

This was a turning point in his life, he said, because he realized that many Muslims were finding ways to celebrate both their Muslim and their

British heritages simultaneously. In his public appearances, Malik said, he emphasizes that anger over UK or U.S. foreign policy is not a valid reason for extremism. By the same token, he said, it is important to separate out extremists from the vast majority of law-abiding Muslims. He praised Gordon

Brownâ€™s handling of the thwarted July car bombings in London, noting the

Brown had referred to the perpetrators as â€œcriminals,â€ without mentioning their religion.

Â¶ 6. (C) HMG needs to organize itself better on Muslim engagement, Malik admitted, and work to empower young people and make sure their voices are heard. A lot of important work is being done on education, where the

Mosques and Imams Board (MINAB) has been set up to evaluate the credentials of imams to ensure that Muslim youth are being taught by qualified teachers. Pandith suggested that the two governments work more closely together, wondering if Malik would be interested in working with other elected Muslim officials around Europe who were keen to engage youth, act as role models, and learn from each other. Malik was very keen to help make this happen; Pandith will follow up with him.

Â¶ 7. (C) Pandith also raised the critical need for a place in Europe where religiously curious youth could go to learn more about Islam and specificially learn about it as a Muslim in Europe. Finding a â€œcampusâ€ where students could go to learn about theology as well as religion, history, culture, and science was a necessary missing piece in Europe.

Malik agreed and said he would follow up with further thinking about this issue.

Female Muslim Role Models

-------------------------

Â¶ 8. (SBU) Pandith met Lady Sheikh, wife of Conservative Peer Lord Sheikh and herself a party activist, at her offices adjacent to Westminster Abbey on October 11. Sheikh said Muslim communities are economically the most deprived in Britain, and stressed the importance of educating and encouraging British Muslims to participate in democracy. She expressed an interest in receiving American female Muslim visitors whom she could introduce to young Muslim women to serve as role models. Pandith said the

USG engages in outreach of this kind and told Sheikh the Embassy would keep her request in mind when programming such exchanges.

Visit to Leicester

------------------

Â¶ 9. (SBU) On October 11, Pandith and Cohen traveled to Leicester, a large urban center about 70 minutes north of London with a substantial ethic minority population. Leicesterâ€™s Muslim population is 11 percent, well above the overall UK percentage of three percent. The visit was organized by Parvin Ali, founder and Chief of Executive of FATIMA Womenâ€™s Network, which aims to address Muslim womenâ€™s issues both locally and nationally.

Pandith and Cohen toured a number of Leicesterâ€™s commingled but distinct ethnic neighborhoods, including Highfields (lower income, predominantly ethnic Indian Gujarati, influenced religiously by the Wahhabi sect), Medway

(Bangladeshi), Evington (mainly Muslim, middle class), Stonygate

(progressive Jewish neighborhood with recent influx of more affluent

Muslims), and Oadby (more prosperous and outside the city center). With over 200 mosques and madrasses in Leicester, Ali noted, the city has for the first time put up Eid decorations on the streets in Muslim neighborhoods. Diwali decorations have been a tradition for some time, Ali said, and the Diwali celebrations in Leicester are said to be the largest in Europe, and possibly the largest outside of India.

Â¶ 10. (SBU) Leicesterâ€™s progressive Muslims may be politically

â€œquieterâ€ because of the comparatively huge orthodox presence, Ali said. The large numbers of Gujarati immigrants who came to the UK had originally settled in East Africa, and so brought with them a unique cultural memory of immigration strategies that had worked there. These immigrants knew and recognized the importance of immediately building up community institutions, leading to the proliferation of mosques and other community institutions. In addition, Leicesterâ€™s ethnic climate is unique academically - the University of Leicester attracts numerous students from outside the area, even internationally, due to its academic prestige.

DeMontFord University, by contrast, can then absorb more local populations, leading to a high level of ethnic diversity there.

Â¶ 11. (SBU) Members of the Leicestershire Constabularyâ€™s Community Safety

Bureau described to Pandith and Cohen how their main focus is neighborhood policing and anti-terrorism, including racially and religiously-related crime. These programs rely on non-police community actors, who advise, inform, and assist with police operations. The police force will inform key community members prior to a raid, so that once police action is taken, comprehensive information on the situation is made available immediately to the community, thus preventing rumors and a possible escalation of conflict. As a result, there has been a significant level of community engagement with law enforcement. Constabulary officials acknowledged that their success might be a useful information tool for others in the United

States or UK. Pandith expressed interest in passing information on their work to the Department of Homeland Security.

Â¶ 12. (SBU) Despite the many positive programs in Leicester, the isolation of some parts of the Muslim community was striking. During a discussion with religious and community leaders at an Ahmadiyya mosque, Yaqub Khan,

General Secretary of a local organization called the Pakistan Association, insisted that he had to teach young people in Urdu. When Pandith challenged him as to why he would use Urdu with children who were growing up with

English as their first language, Khan insisted that there were no good books on the Koran in English. At a local book store, texts in English seemed designed to segregate Muslims from their wider community, urging women to cover themselves and remain in their homes, playing up the differences between Islam and other religions, seeking to isolate Muslims from community, and feeding hate of Jews to the young. Some Leicester

Muslims seemed to have haphazardly thrown together different elements of

Islam, pairing an Arabian Gulf-style hijab with a Pakistani shalwar kameez, for example. Girls as young as four years old were completely covered.

Pandith commented afterward that this was the most conservative Islamic community she had seen anywhere in Europe.

Muslim Youth

------------

Â¶ 13. (SBU) Pandith and Cohen attended three events specifically aimed at hearing the concerns of Muslim youth in London. On October 9 they traveled to the East London neighborhood of Waltham Forest, a largely Muslim area that is plagued by urban problems including drugs, youth gangs, violence

(three young people were shot close to the meeting site that same evening), and a significant radical Muslim presence. There they met with young

Muslims, journalists, and community leaders, including the Mayor of Waltham

Forest and two Borough Councillors, under the auspices of the Active Change

Foundation (ACF), a recently-launched leadership training program targeted at Muslim youth in deprived areas of East London. The ACF had just finished recruiting its first class of young men and women to participate in the

ACFâ€™s inaugural leadership training course. During the meeting, the young people present repeated several times to Pandith and Cohen that they want the skills and the opportunities to be able to represent their views to the media and to decision makers. Although the journalists kept interjecting foreign policy issues such as Iraq and Israel/Palestine, the young people stressed that while those issues might be of some concern, the real issues in their lives are jobs, education, and empowerment. After a lively exchange, the ACF students presented a grant application for Embassy consideration, and both sides pledged that the link forged that evening would be maintained.

Â¶ 14. (SBU) In contrast, Cohen met October 9 with a small group of more privileged Muslim youth in Kensington, a wealthy London district. This meeting was held under the auspices of Kensington Borough Councillor

Mushtaq Lasharie, himself a British Muslim of Pakistani origin who is the first Muslim councillor for this predominantly non-Muslim area. The young people at this meeting, all with higher education, said they wanted to see reconciliation themes conveyed through the arts, especially music. Cohen urged them to turn their ideas into action.

Â¶ 15. (U) An Iftar sponsored by the Next Century Foundation and held in

Pandith and Cohenâ€™s honor October 10 drew such a large number of participants that the group was split in two. Participants included representatives of the Muslim Public Affairs Committee UK (MPAC), and the

Leeds and Bradford Diasporas, the UK Turkish community, and Muslim community leaders. Discussion centered on foreign policy issues including

Kashmir, Israel/Palestine, Afghanistan, Armenia/Turkey, and the spread of fundamentalist Islam. The wide variety of opinions expressed provided U.S. participants with a broad cross-section of the positions of the different

Muslim communities in Britain. Cohen noted a distinct difference between the focus of these young people -- all in their mid-20s with graduate degrees -- as opposed to the group of more impoverished youth in East

London, where discussions focused on integration and opportunity issues inside of Britain. This group focused entirely on foreign policy, and more specifically on U.S. foreign policy. Many of them had radical views, including that â€œAmerica had 9/11 coming to it.â€

Bollywood

---------

Â¶ 16. (SBU) On October 10, Pandith and Cohen met with a cross section of the South Asian community working in film to discuss the potential of working with the Indian film industry - â€œBollywoodâ€ - on delivering an anti-terrorism message. Participants included Director of Arts Versa Mohsin

Abbas, Channel 4 TV Head of Multicultural Programming Farouk Dhondi,

Producer Director Mahmood Jamal, Locations Manager Amjad Khan, and singer/actress Humeira Akhter, who has strong links with top Bollywood actors/actresses. A lively discussion produced a number of possible ideas, including developing ways to promote existing anti-terrorist films, and to develop funds for similar productions. Once such an anti-extremist genre is established, participants believed that major Bollywood figures would be willing to speak out on the issue. Humaira Akhtar has already gotten back to Pandith on possible stars in Bollywood interested in such a project.

Community Groups

----------------

Â¶ 17. (U) The National Muslim Communities Development Network (MCDM) arose from a series of meetings held by various UK Muslim communities, following the July 5, 2007 bombings in London. MCDM is now an independent structure intended to bring attention to the continuing work of existing organizations focused on countering extremism. It works to help develop and broaden emerging leadership within Muslim communities, bringing communities together through positive action and raising the standard of debate on

Islam in Britain today. In a meeting October 10, MCDM members including

Director Nadeem Kazmi, Muslim Media Networkâ€™s Munir Zamir, Waltham Forest

Community Cohesion Office Munir Zamir, Citibankâ€™s Nazish Zaid, Khayall

Theaterâ€™s Luqman Ali, Jangâ€™s Ali Murtaza Shah, and Art Versa Mohsin

Abbas, exchanged views with Pandith and Cohen about the challenge of promoting a more sophisticated and nuanced approach to the debate on Islam in British society. All parties committed to continue to explore ways to support MCDM programs, while the MCDM leaders agreed to facilitate U.S. mission efforts to reach out to the British Muslim community. These leaders agreed to stay in touch with Cohen and Pandith about their progress in creating a network of activists.

Media

-----

Â¶ 18. (SBU) Taking advantage of the wide range of Diaspora media available in London, Pandith spoke to a cross section of the UK-based Muslim media during her visit, including Jang Daily News, the oldest Pakistani-community newspaper in the UK with a European circulation of about 23,000 readers;

Emel Magazine, a high-end weekly glossy with a print run of 20,000: the

Muslim Weekly, whose website receives 34,000 hits a day; and Al Hayat, an influential Pan Arab daily with a world-wide circulation of 160,000.

Pandith stressed that the USG is interested in building a dialogue with

European Muslims from which both sides benefit: this gives the United

States a chance to dispel myths that its policies are anti-Islam, and

Muslims gain a better understanding of how U.S. foreign policy is shaped.

It also empowers Muslims to discuss their own religion directly, rather than allowing the media to interpret for them through soundbites and other filters. As this dialogue has improved, so has understanding, leading to cooperative efforts to develop and support grass roots movements that combat the destructive impulses of extremists. Drawing on her own experience as a Muslim American, Pandith sought to dispel some myths about

Muslims in America, noting that they are free to honor their religion as well as their ethnic and cultural backgrounds. The tension between allegiance to oneâ€™s country and to oneâ€™s faith is mostly absent for

American Muslims, she said, because America is a country of immigrants, many of whom emigrated seeking religious freedom. She was careful to point out that the history of immigration and integration in the United States has at times been painful, but stressed that as a country the United States has benefited greatly from the experiences of the Civil Rights Movement.

Â¶ 19. (U) EUR Senior Advisor Pandith and S/P Member Cohen have cleared this message.

Visit Londonâ€™s Classified http://www.state.sgov.gov/p/eur/london/index. cfm Tuttle

Website:

Viewing cable 07USNATO649, NORTH ATLANTIC COUNCIL READOUT - DECEMBER

19, 2007



07USNATO649

2007-12-20

18:06

2011-02-03

21:09


Mission

USNATO

VZCZCXRO6903

OO RUEHFL RUEHLA RUEHMRE RUEHROV RUEHSR

DE RUEHNO #0649/01 3541801

ZNY CCCCC ZZH

O 201801Z DEC 07

FM USMISSION USNATO




RUCNOSC/ORG FOR SECURITY CO OP IN EUR COLLECTIVE PRIORITY

RUEHDS/AMEMBASSY ADDIS ABABA PRIORITY 0212


RUEHTH/AMEMBASSY ATHENS PRIORITY 0165


RUEHRL/AMEMBASSY BERLIN PRIORITY 0663

RUEHBM/AMEMBASSY BUCHAREST PRIORITY 2421


RUEHCP/AMEMBASSY COPENHAGEN PRIORITY 0540



RUEHKH/AMEMBASSY KHARTOUM PRIORITY 0291

RUEHLI/AMEMBASSY LISBON PRIORITY 0444


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RUEHNY/AMEMBASSY OSLO PRIORITY 0603



RUEHPG/AMEMBASSY PRAGUE PRIORITY 4001


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RUEHTL/AMEMBASSY TALLINN PRIORITY 7030

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RUEHVL/AMEMBASSY VILNIUS PRIORITY 7259

RUEHWL/AMEMBASSY WELLINGTON PRIORITY 0078


C O N F I D E N T I A L SECTION 01 OF 07 USNATO 000649

SIPDIS

NOFORN

SIPDIS

E.O. 12958: DECL: 12/20/2017

TAGS: NATO PREL AF

SUBJECT: NORTH ATLANTIC COUNCIL READOUT - DECEMBER 19, 2007

REF: USNATO 646

Classified By: CDA Richard G. Olson for reasons 1.4 (b) and (d)

1.(C/NF) Summary from the NAC Meeting:

-- Afghanistan: The ISAF autumn 2007 Periodic Mission Review was provisionally approved. SHAPE reported that 70 percent of significant events in 2006-2007 were centered in only 10 percent of Afghanistan's districts. One billion dollars' worth of heroin was found in Musa Qala.

Denmark and the Czech Republic announced new financial contributions to the reconstruction and ANA support trust funds. Turkey opposed ISAF-EUPOL intheater cooperation, pending an overarching agreement between NATO and the

EU in Brussels.

-- Balkans: Three Kosovo-related documents were placed under silence until noon on December 20 (see reftel). The Secretary General reminded Allies of their pledge to be SIPDIS available for a meeting of the North Atlantic

Council during the NATO holiday, should events in Kosovo demand the need for one.

-- Darfur: The Secretary General (SYG) noted the receipt of a Note Verbale from the African Union, expressing appreciation to NATO for its support of the AU missions in Darfur and Somalia, as well as to the establishment of the African Standby Force (ASF). The AU Commission is also willing to discuss with NATO ways in which the Alliance could further support the ASF.

-- Iraq: The final approval of the Autumn 2007 NTM-I PMR passed silence

Friday, December 14.

-- Response to Terrorism: Noting that NATO's response to terrorism was an issue that would need to be addressed at the upcoming Bucharest Summit, the

SYG said he intended to draft a Chairman,s Report summarizing the progress

NATO had achieved from the International Staff's perspective.

-- Statements on Political Subjects: The Spanish PermRep remarked that one of Spain's most important accomplishments as OSCE CiO was establishing OSCE involvement and presence in Afghanistan.

-- AOB: Informal Defense Ministerial in Vilnius -) The Council approved the

SYG's outline schedule for February's informal NATO Defense Ministerial in

Vilnius. At its first meeting in January, the NAC will return to the issue of whether the working lunch meeting on NATO operations will be for ministers only.

-- NATO Response Force -) The NRF Interim Force Generation paper received

Military Committee approval.

-- Helicopters )- A draft decision sheet on measures to remedy the shortage of helicopters was put under a short silence procedure until mid-day

December 20. CMC Henault USNATO 00000649 002 OF 007 noted that military authorities were very supportive of the paper, but cautioned that the time scales on reports to Council were in his view "challenging."

-- Expanded Russian Naval Presence in the Mediterranean -) The planned deployment of the Russian Aircraft Carrier Kuznetsov to the Mediterranean in January 2008 could present new opportunities for NATO-Russia cooperation, as well as an opportunity for NATO to assess Russian naval capabilities and interoperability. END SUMMARY.

-----------

Afghanistan

-----------

2.(C/NF) Secretary General (SYG) de Hoop Scheffer asked for and received the North Atlantic Council's (NAC's) provisional approval of the autumn

2007 ISAF Periodic Mission Review, pending the concurrence of non-NATO contributing nations. (Note: The PMR was emailed to EUR/RPM.)

3.(C/NF) Chairman of the Military Committee (CMC) Henault informed the NAC that its June 2007 tasking to the Strategic Commands to refine (by the end of 2007) advice on possible long-term training support initiatives by NATO for the Afghan National Army )- such as institutional and advisory activities, branch schools, and an English language school )- could not be completed until February 2008. Henault said that the delay was the result of two documents the Strategic Commands needed to use as the basis of its work not having been finalized

-- CSTC-A's Command Plan Review and ISAF HQ's NATO supporting plan. Henault reminded the NAC that Allies had been unable to meet the February 2007 NACapproved short-term training initiatives, such as filling CSTC-A billets and completely filling Operational Mentor Liaison Team (OMLT) requirements.

4.(C/NF) SHAPE Deputy Chief of Staff for Operations MG Wright stated that the total number of pan-theater significant events was down 11 percent from the previous week, and that 65 percent of the events occurred in RC-South.

Of that 65 percent, 59 percent were initiated by ISAF and Afghan National

Security Forces (ANSF). He attributed the decrease to a reduced ISAF/ANSF op tempo. He reported that throughout 2006 and 2007, 70 percent of significant events occurred in 10 percent of Afghanistan,s districts. These districts were located overwhelmingly throughout the "Pashtun Belt" in the south and east of the country. MG Wright stated that the majority of events in the north were related to local power brokers and drug lords. On

Pakistan, he stated that ISAF's lines of communication through Pakistan remained open, and that Pakmil operations in the North West Frontier

Province and Federally Administered Tribal Areas were now shifting from a more active phase to a focus on establishing stability. The Tripartite

Commission is tentatively scheduled to meet at the four-star level at the end of USNATO 00000649 003 OF 007 December.

5.(C/NF) MG Wright stated that ISAF operations remain focused largely on the ring road and on Opposing Militant Force (OMF) concentrations in the south, particularly around Musa Qala. He noted the Portuguese Quick

Reaction Force company had redeployed from RC-South back to RC-Capital, after performing missions )- including combat patrols

-- in Zabul. He announced that the Japanese-funded work on the last remaining unpaved segment of the ring road, a 116-kilometer stretch between

Kandahar and Gereshk, had begun on December 3.

6.(C/NF) Reporting on the situation in Musa Qala, Wright said that 5,000 kilograms of heroin rock, with an estimated street value of USD one billion, had been seized, adding that there was also evidence that drug processing equipment had been evacuated from the area. In addition, he reported on the seizure of OMF weapons. He pointed to the performance of the Afghan army as a testament to what could be achieved through a well integrated and resourced OMLT plan and praised the Afghan-led (with ISAF backing) media effort as a model for future operations. At the same time, he said that the Afghans still needed assistance to develop their capacity in this field. According to Wright, SHAPE assessed that the bulk of OMF who fled Musa Qala went to Kandahar and Farah provinces. A Task Force Helmand

"stabilization team" was working in Musa Qala with Afghan national and local officials to coordinate activity along security, governance, and reconstruction lines and ensure an integrated, funded reconstruction and development plan. Asked by Romania about the presence of international organizations now in Musa Qala, MG Wright cited significant coordination and pre-coordination with UNAMA, the World Food Program, and UNHCR. On the other hand, he said that the establishment of a UN presence in the area would be a long-term endeavor. He said the Commander of RC-South had suggested to UNAMA that the WHO consider implementing its polio campaign in

Musa Qala now, taking advantage of the security.

7.(C/NF) Charge Olson asked MG Wright if funds from COMISAF's Post-

Operations Humanitarian Relief Fund (POHRF) had been used in Musa Qala. MG

Wright said they had not, explaining that the POHRF terms of reference only permit those funds to be used for humanitarian relief and the mitigation of negative effects of kinetic activity and not for the proactive types of activities needed to win over the local population following an operation.

He urged nations to consider how this problem could be fixed.

8.(C/NF) In other interventions, Denmark announced it was immediately implementing a USD 500,000 education initiative in Musa Qala to build and repair schools. Canadian PermRep McRae cited progress Canada,s police mentor teams were making in Zhari and Panjwai districts of Kandahar province, noting that this area had been in the front lines during

Operation MEDUSA in fall 2006. Noting the USD 20 million that Canada had contributed in 2007 and underscoring the USNATO 00000649 004 OF 007 importance of paying police salaries, he urged Allies to disburse planned payments, or find additional monies, for the UNDP's Law and Order Trust

Fund. The Czech PermRep announced a 38,000-euro donation to the POHRF (the

Czech,s third donation to the Fund), a 95,000-euro donation to the ANA equipment support transportation trust fund, and 19,000 euros for the

Physical Security and Stockpile Management Trust Fund that falls under the rubric of the NATO-Afghanistan Cooperation Program.

9.(C/NF) The Turkish PermRep, noting a report by SCR Everts that European

Union police training mission (EUPOL) officials had requested ISAF facilitation of their travel to PRTs and would seek to establish a formal coordination mechanism with ISAF in Kabul, reiterated a longstanding

Turkish position that any such cooperation occur only once an overarching framework agreement were reached between NATO and the EU in Brussels. He said that, until then, any PRT cooperation with EUPOL could only occur at the bilateral level, outside the scope of ISAF. The request by EUPOL should be treated accordingly and discussed at the NAC, he concluded.

-------

Balkans

-------

10.(C/NF) Reftel reports and requests guidance on three Kosovo-related documents which were discussed and put under silence until noon on December

20.

11.(C/NF) The CMC reported that the NATO Operational Reserve Force from

Germany recently completed its activities in Kosovo and will be back in

Germany by December 31. He noted that the UK will take over the Operational

Reserve Force from Italy and that a second Strategic Reserve Force, from

Italy, is now ready, which is the first time in recent memory there have been two such units on standby at the same time. He said the Italian battalion would conduct a full deployment exercise to Kosovo in January.

12.(C/NF) Czech PermRep Fule made an appeal that the issue of security always be kept separate from the issue of Kosovo's status. He underscored the importance of keeping non-NATO KFOR troop-contributing partners briefed on NATO,s decision-making. Portugal, Norway, Denmark and Greece repeated this call to brief partners and the SYG subsequently undertook to do so on

December 20. Several Allies, led by Spain, also stressed the importance of keeping Allied discussions and plans regarding Kosovo confidential.

13.(C/NF) The SYG observed that PermReps at the December 18 Coffee pledged their availability to give rapid NAC guidance at any time over the holiday period.

------

Darfur

------ USNATO 00000649 005 OF 007

14.(C/NF) The Secretary General noted the receipt of a Note Verbale from the African Union, expressing appreciation to NATO for its support of the

AU missions in Darfur and Somalia, as well as to the establishment of the

African Standby Force (ASF). (Note: The Note Verbale was distributed under cover of SG(2007)0899. In it, the AU also said that it looked forward to continued NATO support to the ASF, adding that specific areas for NATO

assistance could be identified in consultations between the AU Commission and NATO staff.)

----

Iraq

----

15.(C/NF) The SYG noted that the final approval of the Autumn 2007 NTM-I

PMR passed silence Friday, December 14.

---------------------

Response to Terrorism

---------------------

16.(C/NF) Noting that NATO's response to terrorism was an issue that would need to be addressed at the upcoming Bucharest Summit, the SYG proposed that he draft a Chairman's Report summarizing the progress NATO had achieved from the International Staff's perspective. He argued that the

Chairman's report would avoid the lengthy discussions required were the

Senior Political Committee be tasked with negotiating an agreed document.

He said that he would provide his draft report to PermReps so that they could provide feedback during one of their informal coffee or lunches. When

Greek PermRep Stamatopoulos protested against making comments in such an informal session, the SYG reminded him that PermReps use the informal meetings in this way on a regular basis. The SYG reaffirmed his intention to draft a Chairman's Report, pointing out that if Allies found his draft unacceptable they could propose an alternative way forward later.

--------------------------------

Statements on Political Subjects

--------------------------------

Â¶ 17. (C/NF) Noting that Spain's time as OSCE Chairman in Office (CiO) was coming to an end, Spanish PermRep Benavides said that one of Madrid's proudest achievements as CiO was establishing OSCE involvement in

Afghanistan. Benavides also said that Spain had been asked by Finland ) a non-NATO country and the next OSCE CiO ) to continue reporting OSCE matters to the Council.

---

AOB

---

Â¶ 18. (C/NF) Informal Defense Ministerial in Vilnius -) The Council approved the SYG's proposed outline schedule for February,s informal

meeting of NATO Defense Ministers in USNATO 00000649 006 OF 007 Vilnius

(see below). When the Secretary General expressed his preference for a

"ministers only" lunch, Turkish PermRep Ildem reminded him that Ankara was opposed to a "ministers only" format meeting and that this was a position held by several other Allies, as well. The SYG agreed to leave the matter unresolved for now, adding that the NAC would return to this issue during its first meeting in January. The SYG also warned that )- while he hoped it would not be necessary )- defense ministers might need to hold a short formal session to make key decisions in advance of the Bucharest Summit.

Draft Day 1 Schedule: Working lunch at 26 on NATO Operations. KFOR meeting

NATO-Ukraine Commission meeting Evening Social Event Draft Day 2 Schedule:

ISAF meeting Defense Transformation meeting at 26 NATO-Russia Council lunch

Â¶ 19. (C/NF) NATO Response Force )- The SYG informed the NAC that the NRF

Interim Force Generation paper was approved by the Military Committee and that he would now circulate it for final NAC approval. The paper detailed elements of a graduated NRF force option that will come into force with NRF

11 in July 2008.

Â¶ 20. (C/NF) Helicopters )- The SYG noted that a draft decision sheet had been circulated on measures to remedy the shortage of helicopters and that he hoped Allies could agree on the document. At the request of Germany, however, he agreed to put the document under a short silence procedure until mid-day December 20. CMC Henault noted that military authorities were very supportive of the paper. At the same time, Henault cautioned that the time scales on reports to Council were in his view "challenging."

Â¶ 21. (C/NF) Expanded Russian Naval Presence in the Mediterranean -) CMC

Henault briefed on the planned deployment of the Russian Aircraft Carrier

Kuznetsov to the Mediterranean in January 2008. He said that the Russians have said the deployment -) their first major maritime operation in the

Mediterranean since the end of the Soviet Union )- was to create a naval presence and secure Russian shipping interests in the Mediterranean.

Henault said that from the Military Committee's point of view, the deployment presents new opportunities for NATO-Russia cooperation, as well as an opportunity for NATO to assess Russian naval capabilities and interoperability. SHAPE has written to the Operations Chief, Russian

General Staff, proposing combined exercises with NATO's Standing Maritime

Group. Estonian PermRep Luik said he found the briefing useful, urging similar briefings on Russian military activities in the USNATO 00000649 007

OF 007 future.

Â¶ 22. (C/NF) Norwegian PermRep Traavik informed Allies the Kuznetsov had recently conducted maneuvers near Norwegian oil platforms, causing significant disruptions to the platforms' operations. Traavik said Oslo had raised the issue with Moscow in direct terms. 23. (C/NF) Earlier this year,

Russia deployed a single warship to NATO's Operation Active Endeavor in the

Mediterranean. OLSON..

Viewing cable 08LONDON2027, U.S. FIRMS WELCOME ENHANCED USG SUPPORT OF

UK NUCLEAR RENAISSANCE



08LONDON2027

2008-08-

04 16:04

2011-02-04

21:09

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

London

VZCZCXRO2866

PP RUEHED

DE RUEHLO #2027/01 2171617

ZNR UUUUU ZZH

P 041617Z AUG 08

FM AMEMBASSY LONDON


INFO RUEHMO/AMEMBASSY MOSCOW PRIORITY 2693


RUEHED/AMCONSUL EDINBURGH PRIORITY 0957


RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY

RUEANFA/NRC WASHDC PRIORITY


UNCLAS SECTION 01 OF 06 LONDON 002027

SENSITIVE

SIPDIS

USDOE FOR INTERNATIONAL

USNRC FOR SKIP YOUNG, CHARLOTTE ABRAMS

COMMERCE FOR JAMIE ESTRADA

STATE FOR FRANK MERMOUD

E.O. 12958: N/A

TAGS: ENRG TRGY IAEA UK

SUBJECT: U.S. FIRMS WELCOME ENHANCED USG SUPPORT OF UK NUCLEAR RENAISSANCE

Â¶ 1. (U) Summary: State Special Representative for Commercial Affairs Frank

Mermoud and Commerce DAS Jamie Estrada visited the UK July 17-18 to discuss upcoming events in the UK,s nuclear industry. HMG is aggressively moving forward with plans for new nuclear power plants. Government contacts

pointed to progress made on all necessary legislative fronts, including planning, regulation and waste management. However, both public and private sector meetings revealed uncertainty regarding the ability of the regulator, the Nuclear Inspections Inspectorate (NII), to perform the licensing of new reactor designs and perform regulatory oversight, given a lack of funds and qualified staff. Although both public and private sector seem enthusiastic about the market, twenty years of underinvestment in the sector has left it short of skills, which could constrain growth. U.S. firms operating in the civilian nuclear sector welcome more public USG support for the UK,s nuclear renaissance. End Summary.

Â¶ 2. (U) On July 17-18 State,s Special Representative for Commercial

Affairs Frank Mermoud and Department of Commerce Deputy Assistant Secretary for Manufacturing Jamie Estrada met with government officials and representatives from American companies that are active in the civilian nuclear sector in the UK. The purpose of the visit was to discuss new developments in the sector and to gauge interest in a potential business development mission this fall to highlight high-level USG support for the

UK,s nuclear renaissance.

Government Support from BERR, Downing St. ---------------------------------

--------

Â¶ 3. (U) Mark Higson, Head of the Nuclear Unit at the Department for

Business, Enterprise and Regulatory Reform (BERR), outlined the new Office of Nuclear Development to be formed within (BERR) to specifically focus on new nuclear reactors. He stated that BERR would like to see more than one new reactor design so that the new industry is not overly reliant on a single reactor model. Higson, stressed that the UK remains an open economy, and is serious about inward investment and new nuclear reactors. However, he added that BERR would like to see as much local sourcing as possible, the enhancement of local supply chains, and local wealth creation along with any investment. He also noted that the UK is interested in further regulatory cooperation, especially after the UK,s past experience with custom designed reactors. (Note: All but one of the UK,s current and elderly reactor fleet are an indigenous design called the AGR for Advanced

Gas-Cooled Reactor. Each reactor had a different design, denying the local industry economies of scale or shared technical experience with international counterparts.)

Â¶ 4. (U) Higson emphasized that HMG is trying to minimize regulatory risks by doing a Generic Design Assessment (GDA) for three reactor designs (the

Areva EPR, the Westinghouse AP-1000 and the GE ESBWR). He hopes that preapproval &in accordance with world-wide design8 will reduce risks for the utilities who will ultimately be paying for the construction. Higson suggested that since no public money will be available, the first reactors will likely be funded from the constructing utility,s balance sheet. (Note:

This suggests that the major international utilities will be the first movers as they have the strongest balance sheets. The biggest ones in the

UK are EDF of France and RWE and E.ON of Germany. End note.)

Â¶ 5. (U) Senior Downing St. Policy Advisor Geoffrey Norris went further, saying that EDF was the favorite to build the first new nuclear power station in the UK, likely using Areva technology (EPR, or European

Pressurized Reactor). Norris stressed that there was little political risk

in the development of new nuclear power, as the Conservatives would support its development. However, he did note that there are public credibility issues linked to the nuclear industry. (Note: The nuclear industry in the

UK has suffered severe credibility issues during its lifetime, most recently the publication of new reports raising the cost to the taxpayer of decommissioning the existing fleet of power plants from an estimated 146 to

166 billion USD at current exchange rates. LONDON 00002027 002 OF 006

End note.) Norris also noted that a clear carbon price will make nuclear even more attractive.

MP Jamie Reed Supports New Nuclear Build, Full Fuel Cycle -----------------

---------------------------- ------------ and USG Cooperation -------------

------

Â¶ 6. (SBU) MP Jamie Reed of Copeland, which houses the UK,s largest nuclear facility, Sellafield Sites, was open about the need for more private sector participation in crafting policies and recognizing opportunities. Reed believes that solid partnerships between business and government will lead to more open information sharing, which will help inform good policy. He also stated that moving quickly now will minimize policy risk; he does not want the industry to become domestically politicized. However, Reed admitted that the UK,s regulatory market is slow-moving, which is why the

Secretary of State for BERR John Hutton has been so keen to keep engaged with the nuclear industry players.

Â¶ 7. (SBU) Reed stated that taxpayer money will help to subsidize the nuclear industry in one way or another. He pointed to the fact that elements of insurance indemnity, skills training and development, waste disposal and the enlargement of the NII (Nuclear Installations

Inspectorate) all required public money. Furthermore, the opening of new national nuclear labs, modeled after the U.S. system, will cost taxpayer money. However, he also noted that clear carbon pricing will help the industry.

Â¶ 8. (SBU) Reed is strongly supports the UK having capability for the full fuel cycle, including fuel fabrication and domestic reprocessing. He noted that the French have the most sophisticated skills, as they have continually reprocessed fuel for their domestic industry. He also pointed out that the Russians have a renewed interest in the full fuel cycle as well. He sees reprocessing as a solution to security of supply issues, as well as a way to make the same amount of fuel last longer.

Â¶ 9. (U) Reed and Higson were both broadly supportive of increased international cooperation in the area of regulation, especially in the licensing of designs. Since the UK will only be evaluating available commercial designs, all will be reviewed by other national regulators. Both men would like to see more cooperation between these national regulators to reduce the time and resources necessary to safely license designs.

Nuclear Decommissioning Authority Welcomes Cooperation --------------------

------------------------- ---------

Â¶ 10. (U) Dr. Adrian Simper, Director of Strategy for the NDA (Nuclear

Decommissioning Authority) also noted that the UK is not equipped at this time to perform its necessary decommissioning work alone. He recognized the range of skills that U.S. companies can bring to the UK. (Note: All four of the teams that bid on the maintenance and operations (M&O) contract at

Sellafield had American companies as partners. End note.) He also pointed out that the NDA has been working with the East Tennessee Environmental

Business Association (ETEBA), which grew up around the Oak Ridge National

Labs, and would like to expand international contacts like these.

Â¶ 11. (U) Simper stressed that the NDA does have sites that are suitable for new nuclear stations, and said the NDA will be conducting more decommissioning work. He pointed out that two maintenance and operations contracts have been let, and that there may be more in the future, since the NDA controls seven sites. However, he did not expect the budget to increase in the next fiscal year from its current 6 billion USD. (Note:

U.S. engineering firm URS is involved in both NDA contracts. End note.)

Industry Sees Strong Public Acceptance ------------------------------------

--

Â¶ 12. (U) Keith Parker of the Nuclear Industry Association said that there would be no political issues, even after the next LONDON 00002027 003 OF

006 general election, which is scheduled for 2010 at the latest. He cited polls that indicated between 85-90% of Conservative back-benchers support new nuclear build. In total, well over 70% of all MP,s support new nuclear build, which represents a doubling of support over the past five years. The polls also show that over 50% of the public is in favor, although he admitted that &it depends on the questions you ask.8 He pointed out that the public shows anxiety over issues of waste management and safety, but is supportive of nuclear power for reasons of climate change and security of supply.

Â¶ 13. (U) Parker admitted that the reputation of the nuclear industry had been damaged in the UK because of the financial obligations that had been passed on to taxpayers. However, he felt that by getting the &facilitative measures8 right, such as reforming the planning, licensing and siting requirements, as well as ensuring a robust carbon price, the industry would be able to function without subsidy. He emphasized that &it would help if the low carbon benefits of nuclear were recognized and rewarded.8 Parker also noted that this measure would help to spur other renewable energy research, not just act as a hidden subsidy for the nuclear industry.

Â¶ 14. (U) Parker also stressed the interconnectedness of the underlying issues, especially waste management. He felt that it was crucial for the government to have a viable waste management strategy in place in order for the public to support new build. He admitted that waste management was the area most vulnerable to criticism from anti-nuclear groups, especially

Greenpeace. However, he noted that many other previously anti-nuclear NGO,s were becoming more positive because of climate change issues. Parker stated that a delay to the waste management solution would create a &domino effect,8 rippling through the entire system. He pointed out that if the

UK,s nuclear renaissance was delayed it would affect the local supply chain.

Â¶ 15. (U) Parker saw multiple areas for US-UK cooperation on civilian nuclear development. He suggested that a formal relationship between the

Nuclear Inspections Inspectorate (NII) and the U.S Nuclear Regulatory

Commission would help develop NII skills. He noted that although he also expects the utilities to finance the first round of nuclear power stations from their balance sheets, meaning financing the majority with their own cash and limited bank support, he expects financial institutions to assist with the next round, once the risks and rewards have become quantified.

However, Parker stressed that the local supply chain will need investment to upgrade production facilities.

U.S. Service Providers Enthusiastic About Opportunity, USG ----------------

----------------------------- ------------- Support -------

Â¶ 16. (SBU) Robert Mawson, the Business Development Director of the Nuclear

Business Group at engineering firm CH2M Hill pointed out the strength of the French commercial effort on behalf of Areva. He suggested that it would be helpful for U.S. companies to receive the same support internationally.

However, he noted that Areva had not yet lobbied heavily in India or China, which presented vast opportunities for U.S. companies involved in the civilian nuclear sector. He suggested that successful projects in the UK could act as a jumping off point for countries interested in increasing their global client base. Mawson pointed to potential projects in the UAE,

Lithuania and Turkey, all of whom have publicly expressed interested in new nuclear power stations.

Â¶ 17. (SBU) Mawson agreed that the NII would benefit from closer contacts with the NRC. He also mentioned the possibility of one of the senior-level staff from CH2M Hill being seconded to BERR to help with policy development. (Note: Mark Higson from BERR had mentioned this possibility as well, although he did not specifically name CH2M Hill. End note.) Mawson pointed out that it was important for the NII and BERR to send clear policy signals to the industry. With lead times of four to five years, Mawson was confident that LONDON 00002027 004 OF 006 the supply chain weaknesses can be properly addressed, given the proper incentives.

Â¶ 18. (U) Ian Thomas, Managing Director for Fluor,s UK operations also agreed that it would be helpful if the NRC cooperated more closely with the

NII. He noted that the NII was prepared to accept safety cases for the

Areva EPR from the French regulators, and that the NRC might help with the safety cases for the GE and Westinghouse designs that are undergoing the

GDA. (Note: All three designs that are undergoing the GDA are also being evaluated in various stages by the NRC. End note.)

Â¶ 19. (U) Thomas pointed out that Areva already has the majority of its necessary supply chain intact. However, he was confident that U.S. and UK manufacturing could cooperate to create a robust supply chain, but that industry would need assurances of future opportunity. He noted that the passage of the Planning and Energy bills currently being debated in

Parliament would provide some of these assurances. Thomas also emphasized that the decision was straight-forward for utilities, who need to meet

demand. Since gas and coal are currently cheaper, they need incentives, such as carbon pricing, to assist with financing and cost recovery.

Complaints About the Procurement Process at the EBRD ----------------------

----------------------- -------

Â¶ 20. (SBU) Mawson from CH2M Hill also took the opportunity to lodge a complaint about the current procurement practices at the European Bank for

Reconstruction and Development (EBRD). He noted that American firms are often locked out of bidding because they lack the necessary experience in

Europe, even if they have been performing the necessary work in the U.S. for longer than the required period. Mawson felt that this has unnecessarily disadvantaged US companies that have qualifications in decommissioning and clean up.

Westinghouse Sees Major Opportunities -------------------------------------

Â¶ 21. (U) David Powell, Westinghouse,s Regional Vice President for the UK, stated that the UK is one of their four top tier countries, or countries with the largest potential for the company, with the others being the US,

China and South Africa. (Note: This gives Westinghouse a presence on four continents. End note.) Westinghouse already has commitments to build eight of its new AP-1000 reactors, including four in the US and four in China.

Powell noted that Westinghouse was using a &localization approach8 for the

Chinese and Korean markets, involving licensing its technology to local companies and allowing them to provide everything except the nuclear island, the area where the nuclear reaction actually takes place.

Westinghouse aims to build four plants a year for the foreseeable future, although Powell admitted that Toshiba, Westinghouse,s parent company, would like to build more.

Â¶ 22. (SBU) Powell noted that altering the original design as little as possible is the key to a successful roll-out in the UK. Based on previous bad experience with customized designs for each site, he hoped that the NII would make only the most necessary changes this time. He mentioned that the

NII has few resources to execute the GDA. However, he also pointed out that

European utilities such as RWE and EON had helped to fund the cost of the

GDA, with a view that the AP-1000,s approval in the UK would expedite its approval throughout Europe. He speculated that RWE and EON were keen to keep a hand in the nuclear sector in advance of a potential policy change in Germany. He also noted that while utility companies had backed Areva,s reactor, none of them did so financially. Powell does not expect the GE

ESBWR (which stands for Economic Simplified Boiling Water Reactor) to be competitive in the first round of reactors built in the UK, as its design is still being finished.

Â¶ 23. (SBU) Powell emphasized Westinghouse,s model of &buy where you build,8 which would help the UK to revitalize its civilian nuclear supply chain. He noted that Westinghouse had LONDON 00002027 005 OF 006 been negotiating possible manufacturing partnerships with Rolls-Royce and BAE systems. Powell said that Westinghouse is interested in sites that belong to either British Energy or the Nuclear Decommissioning Authority, and that the smaller size of the AP-1000 reactor, at only 1100 mW compared with over

1600 mW for the EPR and over 1500 mW for the ESBWR, could fit more easily into smaller existing sites and use existing grid connections. He also mentioned that Westinghouse is in negotiations with Sheffield Forgemasters, a company that could potentially fill a large hole in the supply chain for large-scale forgings, currently only done by Japan Steel. Westinghouse has offered to back the necessary investment into a 15,000 ton press, and is negotiating a &reservation fee8 for future production. However, he characterized this as a &defensive8 investment, as Areva has shown interest in purchasing the company outright.

Â¶ 24. (U) Powell noted that Westinghouse is involved in fuel fabrication in the UK at the NDA,s Springfields site. Their contract expires in 2010, and has already been extended twice. He characterizes the relationship between

Westinghouse and the NDA as excellent. Westinghouse is interested in investing to expand the capacity of the plant. He believes that the expanded plant will not only help to feed the expanding UK market, but could also help feed new plants all over Europe. Powell mentioned that

Westinghouse currently supplies 30% of EDF,s nuclear fuel needs, partially through its plant in Sweden.

British Energy: Ready for the Renaissance, Possessing Rare ----------------

----------------------------- ------------- Skills ------

Â¶ 25. (U) Paul Spence, Head of Strategy and Business Development for

British Energy (BE) noted that the UK has a unique opportunity to take the lead in Europe in new nuclear technology. He estimates that the UK will need 10-15 gigawatts of new nuclear, which would create a robust supply chain ready to service the rest of Europe. Spence believes that building and operating the first fleet of new reactors in the UK, the most competitive, liberalized market in Europe, will give the utilities

&bragging rights8 when they seek to expand throughout Europe. (Note: This sentiment was echoed by a number of companies who see the UK as a proving ground for future European business. End Note.)

Â¶ 26. (U) Spence stressed that it was unclear what the future of British

Energy would be, and that the policy of the government was to let the market determine how much new nuclear power generation would be built.

However, he noted that there was enough enthusiasm from the utilities for new nuclear that more than one or two reactors would likely be built. He stated that with a need for more than 10 gigawatts, there would be more than enough scope for at least two reactor designs. Spence said that BE had a total of six sites that are currently viable for new nuclear build.

(Note: It has a further two in Scotland, but the devolved Scottish

Parliament is firmly against new nuclear generation. End note.)

Â¶ 27. (U) In terms of available skills, Spence said that BE was competing with the City of London for technical workers, and that BE,s workforce was ageing. However, looking toward the future, BE is spending more money to train new workers. He did worry that the &craft skills,8 such as electricians and welders, were in increasingly short supply, reflecting demand from the Olympic preparations, military shipyards, and the Middle

East and Asia.

Â¶ 28. (SBU) Spence outlined what he saw as the three biggest threats to the building of new nuclear reactors in the UK. He saw the top threat as the inability of the NII to complete the GDA. He stated that the NII needs help from the government in terms of more resources and from other national regulators. The next potential threat is the waste management issue. Spence believes that a credible solution needs to be in place for new waste, as well as the legacy waste, before the industry can proceed. The final major issue he identified LONDON 00002027 006 OF 006 was the planning process. Spence said that the proposed Planning Bill will be of some help, but that the industry still needs more predictability before proceeding with major investments. He said that more focus needs to be on local needs and issues, instead of determining national need for each new station, as was done in the past. Unlike the previous process, he sees making the same case for national need for each new station as a waste of precious time.

Â¶ 29. (SBU) Comment: There is ample opportunity for U.S. companies, both service and technology providers, to make aggressive inroads into the UK market. With both parties supportive of new nuclear, and the issues of climate change and security of supply looming large in the national conscience, the political situation is right. However, it remains to be seen how the consultation on deep geological disposal will proceed. It may be the last hurdle before the plans for new construction proceed. All of the companies asked for more muscular commercial diplomacy in the near future, in an effort to counteract the efforts of the French government in its support for Areva. Currently, American companies have an excellent reputation in the UK, with both Westinghouse and URS/Washington Group holding contracts with the NDA. All companies see the UK as a proving ground for future European work. With more countries considering new nuclear build, and some decommissioning old reactors, it is crucial that

U.S. firms get contracts in the UK.

Â¶ 30. (SBU) Westinghouse has an especially strong case to make in the UK.

With its policy of local purchasing and willingness to use the UK as a source for its expansion into Europe, it can offer more local job creation than vertically integrated Areva. Its possible partnerships with Rolls-

Royce and BAE Systems and the flexibility of its reactor design only strengthen its position. However, the recent announcement of a likely sale of British Energy to EDF could lock Westinghouse out of the best sites for development.

Â¶ 31. (U) Further cooperation between the NRC and the NII would be welcomed by all players. The NRC has room to play an impartial role, as all three of the designs undergoing the GDA are or have been reviewed by the NRC. Any official help from the USG would help counter the help offered to the NII by the French regulators, who have no experience with Westinghouse or GE designs. Visit London's Classified Website: XXXXXXXXXXXX LeBaron

Viewing cable 08LONDON2035, IMO: FLAG STATE IMPLEMENTATION SUB-

COMMITTEE -



08LONDON2035

2008-08-05

11:11

2011-02-04

21:09

UNCLASSIFIED

Embassy

London

VZCZCXYZ0010

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DE RUEHLO #2035/01 2181152

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FM AMEMBASSY LONDON


INFO RUWDQAC/COMDT COGARD WASHINGTON DC//CG-001/CG-ACO-I/CG-094//

RUWDQAC/COMDT COGARD WASHINGTON DC//CG-2/CG-5/CG-52/CG-521//

RUWDQAC/COMDT COGARD WASHINGTON DC//CG-522/CG-523/CG-534//

RUWDQAC/COMDT COGARD WASHINGTON DC//CG -541/CG-544/CG-545//

RUWDQAC/COMDT COGARD WASHINGTON DC//CG-543/CG-62/CG-7M//

UNCLAS LONDON 002035

SIPDIS

STATE PLEASE PASS TO DOJ, MARAD AND NTSB

E.O. 12958: N/A

TAGS: AORC EWWT PHSA UK TU JA

SUBJECT: IMO: FLAG STATE IMPLEMENTATION SUB-COMMITTEE -

REPORT OF THE 16TH SESSION, LONDON, 2 - 6 JUNE 2008.

Â¶ 1. SUMMARY: The International Maritime Organization (IMO) 16th Session of the Flag State Implementation Sub- Committee (FSI 16) met at IMO

Headquarters, London, UK. Mrs. Tatjana Krilic of Croatia chaired the meeting. The meeting was attended by eighty members, three associate members, one state not a member of the IMO, one United Nations specialized agency, eight intergovernmental organizations and seventeen nongovernmental organizations. FSI 16 agreed to:

-- The draft amendments to the Survey Guidelines under the Harmonized

System of Survey and Certification (HSSC) resolution A.997(25) and the identification of amendments to mandatory instruments that would affect the

HSSC and the status of their adoption or entry into force.

-- The text of the draft Maritime Safety Committee (MSC) circular on the meaning of "First Survey" to supersede MSC/Circ.1141 to be submitted to MSC

85 (November 26 - December 5, 2008) for approval

-- The text of the draft MSC circular on unified interpretation of the application of regulations governed by the building contract date, the keel laying date and the delivery date for the requirements of the Safety of

Life at Sea (SOLAS) and the Maritime Pollution Prevention (MARPOL)

Conventions to be submitted to Marine Environmental Protection Committee

MEPC 58 (October 6-10, 2008) and MSC 85 for approval.

-- The draft MSC/MEPC circular on blanking (sealing) of bilge discharge piping system in port.

-- FSC 16 prepared a draft amendment to MSC-MEPC.3/Circ.1 based on the revision of the IMO Damage Card. END SUMMARY

Decisions of other IMO Bodies -----------------------------

Â¶ 2. The Secretariat gave an overview of the Strategic Plan and High-Level

Action Plan of the Organization and its relationship to the FSI and other

IMO bodies. Specifically, how each IMO body must take the goals of the organization into account during the development and monitoring of their planned outputs.

Responsibilities of Governments and Measures to Encourage Flag State

Compliance -------------------------------------------

Â¶ 3. Meeting document 16/3/1, presented by the Secretariat, proposes that

IMO create a database of non-mandatory instruments implemented by Member

States. The USDEL intervened and expressed our concern that the Global

Integrated Shipping Information System (GISIS) module, as proposed, would create unnecessary expectations on Member States to provide details of implementing national legislation for non-mandatory instruments. Other

Member States agreed with our position and there was very limited support for the creation of this module. However, the Secretariat provided additional background on how this information would benefit developing states, and the S/C agreed to the creation and voluntary population of the

GISIS module. Significant discussions under this agenda item took place while the S/C reviewed various studies of Port State Control (PSC) data.

These studies attempted to show a connection between casualty and other performance indicators and substandard vessels. A Drafting Group was established to develop terms of reference for a comprehensive study to be completed by an outside, expert organization. The Secretariat had recommended the World Maritime University (WMU) as the expert organization.

However, the USDEL and others felt that restricting ourselves to the WMU was unwise and that a solicitation of other expert organizations may reduce the cost and identify parties with greater expertise in this area. This was agreed upon and FSI 17 will review the submitted proposals and decide which organization is best to carry out this work.

Mandatory Reports under MARPOL ------------------------------

Â¶ 4. FSI 16 noted that only 34 parties (including the United States) and one associate member had submitted the required reports for 2006, approximately a 25% compliance rate. The S/C agreed that the compliance rate was disappointing in spite of simplification of the reporting form and again urged members to fulfill their obligations. Member States were encouraged to comply with the annual reporting requirements for MARPOL

73/78, as outlined in MEPC/Circ.318.

Port Reception Facilities-Related Issues ----------------------------------

------

Â¶ 5. The coordinator of the correspondence group (Portugal) updated the S/C on the progress under its terms of reference. Specifically, four of the eight assigned tasks remain to be addressed. The S/C agreed that the correspondence group should continue and instructed it to report its work to FSI 17 for further consideration by the S/C. At the request of the

Secretariat and Chairperson, the USDEL agreed to serve as coordinator for the reestablished correspondence group. Portugal had previously asked to relinquish that role.

Casualty Statistics and Investigations ------------------------------------

--

Â¶ 6. The S/C considered the report of the Correspondence Group on Casualty

Analysis, confirmed the analyses of casualty reports, authorized their release, and approved the lessons learned for presentation to seafarers and posting on the IMO website. The S/C prepared a draft amendment to MSC-

MEPC.3/Circ.1 based on the revision of the IMO Damage Card by the 49th

Session of the Sub - Committee of Stability, Loadlines, and Fishing Vessel

Safety (SLF) and on the need for harmonization of terminologies for submission to MSC 85 and MEPC 58. In considering the issues involved in the fire on the roll on/roll off (ro-ro) cargo ship UND ADRIYATTIK, the S/C agreed that Turkey and Croatia should be commended for their efforts and for responding with a preliminary report very soon after the accident, and that the preliminary findings should be provided to the Fire Protection

(FP) and Ship Design and Equipment (DE) Sub- Committees. The S/C considered the investigation report on the catastrophic structural failure of the containership MSC NAPOLI, and recommended to the MSC that the accident report be referred to the Sub-Committee on Ship Design and Equipment and the Joint MEPC-MSC Working Group on the Human Element, national maritime administrations be invited to share the report's recommendations with their vessel owners and operators, and International Association of

Classification Societies (IACS) be requested to provide an update on its review of relevant standards. The S/C also noted the work by Incident

Command System (ICS) to develop a Code of Good Practice for the Container

Shipping Industry, and recommended that MSC consider further appropriate action when the Code is completed. The S/C noted the information provided on the recovery of the Vessel Data Recorder (VDR) from the sunken AL SALAM

BOCCACCIO '98, discussed the difficulties expressed by several delegations with the operation of VDRs, and invited members to provide additional information at the next session. The correspondence group on casualty analysis was reestablished.

Harmonization of Port State Control (PSC) ---------------------------------

-------

Â¶ 7. PSC Regional Memoranda of Understanding (MOUs) presented statistics regarding their activities in 2006 and 2007. The USDEL presented an oral report of our 2007 statistics. The S/C requested that all PSC MOUs and the

United States submit annual reports to FSI 17. In addition, discussed harmonized annual reports and referred the issue to the working group. FSI

15 established an intersessional correspondence group to further the work in PSC harmonization efforts. Unfortunately, the Polish chairmanship of the correspondence group - like the Russian chairmanship before it, did not move any issues forward, so very limited work was completed in this important area for more than two years. FSI 16 reestablished the correspondence group with Australia as coordinator, and we have submitted our contact information to participate. We are hopeful that significant progress will be made intersessionally. The United States made an intervention regarding our efforts to create the Caribbean Cargo Ship

Safety Code for non-SOLAS vessels showing that such regional efforts can be used for a harmonized approach to these types of vessels. The Secretariat has asked that these types of agreements or codes be submitted to the

Organization for recordkeeping purposes. Finally, there were significant discussions on the harmonization efforts of Member States for information coding systems (for data exchange) and examination procedures. Due to the limited time provided to the working group it was decided that these issues should be referred to the correspondence group.

Development of Guidelines on Port State Control ---------------------------

------------------ --

Â¶ 8. With respect to the 2004 Ballast Water Management (BWM) Convention,

USDEL suggested that it was premature to develop these guidelines in light of the significant substantive issues yet to be resolved, such as the guidelines for ballast water sampling (G2), the available time prior to prospective entry into force, and the large amount of other work assigned to the PSC working group. USDEL further suggested deferring further work on this item until FSI 17, but that a correspondence group might be a useful way to proceed. There was support for the USG statement, including from

ICS, which has played a very significant role in the development of the BWM

Convention implementation efforts. The S/C tasked the PSC correspondence group with advancing this item and reporting to FSI 17.

PSC Guidelines on seafarers' working hours --------------------------------

----------

Â¶ 9. No substantive discussion under this agenda item. FSI 16 briefly reviewed the submission on the outcome of Standards of Training,

Certification and Watchkeeping (STW) 39 and deferred further discussion of this matter until after MSC 85 had reviewed STW 39's comments. The

Secretariat also provided information on the upcoming International Labor

Organization (ILO) meeting on the development of Flag State and Port State

Guidelines for the implementation of the ILO's Maritime Labor Convention,

2006.

Comprehensive analysis of difficulties encountered in the implementation of

IMO instruments --------------------------------------------- -------

Â¶ 10. The Secretariat briefly discussed the issue of Self Assessment Forms

(SAFs), particularly those submitted to the IMO. The Secretariat encouraged

Member States to submit new or updated SAFs to the Organization. There was discussion on the removal of this agenda item from the work program due to the limited number of documents submitted in past years. However, the consensus was to retain the agenda item and use it to capture the issues identified by the auditors during the Voluntary Member State Audit Scheme

(VMSAS) audits.

Review of the Survey Guidelines under the HSSC Resolution A.997(23) -------

---------------------------

Â¶ 11. The coordinator of the correspondence group (France) updated the Sub-

Committee on the progress under its terms of reference. There are two ongoing tasks for the group, updating the non-mandatory guidance contained in the Harmonized System of Survey and Certification (HSSC) and updating the Code for the Implementation of IMO Mandatory Instruments (Resolution

A.996(25)). At the request of the MSC 83 and MSC 84, the correspondence group and the working group were tasked to consider a proposal by the

Bahamas and Cruise Line International Association (CLIA) to allow passenger/cruise ships to be drydocked out of the water only once every five years instead of twice every five years as recommended by the current

HSSC. The United States and Panama had sponsored a paper at last year's FSI meeting to formally establish guidance that passenger ships should come out of the water for examination at least twice in a five-year period, but not more than three years between and two drydockings. The United States/Panama proposal was accepted and is now part of the HSSC. The Bahamas and Cruise

Lines International Association (CLIA), having failed to gain majority support at FSI 16 and in the correspondence group, seek to reopen the discussion. The FSI Chairman postponed consideration of this issue to next year's FSI meeting pending an intermediate technical review by the Ship

Design and Equipment Sub-Committee on the matter. A proposal by the

Republic of Korea to require annual testing of the Automatic Identification

System (AIS) by a radio technician was not adopted. The working group accepted a list of technical amendments to the HSSC and to the list of IMO mandatory instruments that came into force over the course of the past year.

Consideration of IACS Unified Interpretations -----------------------------

----------------

Â¶ 12. This issue was addressed as part of the HSSC working group.

International Association of Classification Societies (IACS) submitted a paper that defined the first survey of a ship to be the survey conducted at the end of construction. This was significant because some new IMO regulations become effective at the first survey of a ship after the new requirements come into force. Some Flag Administrations and ship owners had contended that the first survey is the first annual survey that occurs after the ship is initially certificated vice the survey for issuance of the initial certificate. The United States supported the IACS proposal, which was adopted, as reflective of the true intent of the term "first survey."

Illegal, Unreported, and Unregulated (IUU) Fishing and Implementation of

Resolution A.925(22) --------------------------------------------- ----

Â¶ 13. The IMO Secretariat submitted one paper under this agenda item outlining its activities relating to IUU Fishing since the last FSI meeting. The Secretariat urged members to become contracting parties to the

1993 Torremolinos Protocol and the 1995 Standards of Training,

Certification & Watchkeeping - Fishing Vessels (STCW-F) Convention with hopes that this would reduce problems associated with safety and IUU

Fishing. The paper also provided information on past and future joint meetings between the IMO and the UN Food and Agriculture Organization

(FAO). The FAO spoke at length regarding its activities and how the IMO and its Member States have assisted in providing necessary expertise in an effort to reduce IUU Fishing. Some member States expressed their support for the work carried out by the IMO and FAO to combat IUU Fishing and promote a safe working environment aboard fishing vessels.

Review of the Code for the Implementation of Mandatory IMO Instruments ----

---------------------------------------

Â¶ 14. There were two substantive issues under this agenda item. First, review of the applicability of existing IMO instruments to floating production, storage and offloading facilities (FPSOs) and floating storage units (FSUs). And further, the need to create a separate set of guidelines or a code for these vessel types. The majority of the Member States felt that the existing instruments were sufficient and also recognized the sovereignty of Coastal States in defining their own requirements for such vessels operating in their waters. However, there were a small number of

Member States that voiced concern that they do not possess the necessary expertise within their maritime administrations to implement appropriate requirements, when acting as a Coastal State. As a result, the S/C requested interested Member States to make submissions to MSC 85 for review and action as appropriate. It was noted that the Oil Companies

International Marine Forum (OCIMF) will submit a meeting document to MSC 85 containing guidelines for use by Coastal States, owners and operators for the safe operation of these vessels. OCIMF has informally asked for U.S. support of this paper. The second substantive issue related to the development of Voluntary Member State Audit Scheme (VMSAS) audit summary reports. Due to the high priority of this task, a drafting group under U.S. chairmanship was established. The drafting group created the terms of reference for the intersessional correspondence group to move the issue forward. The United Kingdom will chair the correspondence group and the

United States will participate.

Work Program and Agenda for FSI 17 ---------------------------------

Â¶ 15. There was substantial debate over the work program and in particular with regard to the number and specific designation of working groups, drafting groups, and correspondence groups. Several open registry delegations repeated their familiar concerns that the S/C was establishing too many groups, given the rules of the organization. This has become a recurrent theme at IMO sessions of all levels. There was robust debate over reconciling the provisional agenda for FSI 17 with the actual work program for the S/C and its references to the high level action plan for the organization. Japan introduced its paper calling for development of a code governing demonstrations/campaigns against ships on the high seas.

Significant discussion occurred about this item on the margins, including at MSC 84, on how best to deal with this tasking from MSC 82. Ultimately,

Japan chose to introduce its paper with a recommendation to allow the

Safety of Navigation (NAV) Sub-Committee, which is designated as the coordinator, to consider the issue prior to FSI engaging in any substantive way. This recommendation was consistent with the USG position and was quickly agreed by the S/C as the appropriate course of action. The USDEL to

NAV 54 has been briefed on the issue and is prepared to suggest a statement or resolution from the organization as a more appropriate output than a code, as MSC has directed. If NAV adopts this approach, the USDEL for MSC

85 will need to be prepared accordingly, when the report from NAV 54 is considered.

Election of Chairman and Vice-Chairman for 2009 ---------------------------

------------------ --

Â¶ 16. The Sub-Committee reelected by acclamation Mrs. Tatjana Krilic of

Croatia as chairman and Captain Dwain Hutchinson of the Bahamas as vicechairman.

Other Business --------------

Â¶ 17. Secretariat staff briefly introduced various items related to the

IMO's Global Integrated Shipping Information SYSTEM (GISIS). In particular, they noted the use of their new functionality for online update of National

Points of Contact and the current status of usage for the Port Reception

Facility Database module. The United States supports the efforts of the IMO in the use of GISIS and its future developments. We are regular contributors to various modules of the system, and we are working closely with the IMO regarding the upload of our many reception facilities into their new database.

Next Session ------------

Â¶ 18. The chairman announced that FSI 17 is tentatively scheduled for 20-24

April 2009 at IMO Headquarters in London. FSI 16 agreed that the following working groups are expected to be established at FSI 17: casualty analysis,

review of the Survey Guidelines under the HSSC (resolution A.948(23)) and the Code for implementation of mandatory IMO instruments, and harmonization of PSC activities. Other major areas of consideration expected to be discussed during FSI 17 will include: Consolidated Audit Summary Reports;

PSC Guidelines for the 2004 BWM Convention; Port reception facilitiesrelated issues and comprehensive analysis of difficulties encountered in the implementation of IMO Instruments. LEBARON

Viewing cable 08LONDON2036, IMO: SUB-COMMITTEE ON SAFETY OF NAVIGATION,



08LONDON2036

2008-08-05

11:11

2011-02-04

21:09

UNCLASSIFIED

VZCZCXYZ0002

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FM AMEMBASSY LONDON


INFO RUWDQAC/COMDT COGARD WASHINGTON DC//CG-001/CG-ACO-I//

RUWDQAC/COMDT COGARD WASHINGTON DC//CG-094/CG-2/CG-5/CG-52//



RUWDQAC/COMDT COGARD WASHINGTON DC//CG-545/CG-543/CG-62/CG-7M//


SIPDIS

STATE PLEASE PASS TO DOD, DOJ, NOAA, FCC, AND MARAD

E.O. 12958: N/A

TAGS: AORC EWWT PHSA SENV UK KTIA

SUBJECT: IMO: SUB-COMMITTEE ON SAFETY OF NAVIGATION,

Embassy

London

REPORT OF THE 54TH SESSION, LONDON, JUNE 30 TO JULY 4, 2008

Â¶ 1. SUMMARY: The 54th session of the Sub-Committee (S/C) on Safety of

Navigation (NAV 54) was held from June 30 to July 4 2008, under the chairmanship of Mr. K. Polderman (Netherlands). The session was attended by

65 member governments, one associate member government, one IMO non-member, and 25 United Nations, intergovernmental and nongovernmental organizations.

The S/C unanimously elected Mr. J. M. Sollosi (United States) as the new chairman and elected Mr. Raja Datuk Malik (Malaysia) as the new vicechairman for 2009. All U.S. objectives were achieved. Major accomplishments of NAV 54 were: the Sub- Committee approved U.S. proposals to establish a seasonal Area To Be Avoided (ATBA) in the Great South Channel, amendments to the traffic separation scheme (TSS) in the approach to Boston and establishment of an ATBA and two No Anchoring Areas (NAAs) in the vicinity of a planned deepwater port; the Sub-Committee approved a draft strategy for e-navigation and a draft framework for implementing the strategy; the

Sub-Committee approved draft amendments to Safety of Life at Sea (SOLAS) regulation V/19 to establish type and tonnage of ships and entry into force dates for mandatory carriage of Electronic Chart Display and Information

Systems (ECDIS); the Sub-Committee prepared a draft Maritime Safety

Committee (MSC) resolution on the responsibilities of ships involved in protests on high seas; and approved draft amendments to SOLAS regulation

V/19 to reflect a new carriage requirement for a bridge navigational watch alarm system (BNWAS). END SUMMARY.

Routing of ships, ship reporting and related matters ----------------------

----------------------- ------

Â¶ 2. The Sub-Committee approved 14 new or amended ships' routing or reporting measures, including U.S. proposals to establish a seasonal Area

To Be Avoided (ATBA) in the Great South Channel off the Massachusetts coast, amendments to the Traffic Separation Scheme in the approach to

Boston and an ATBA and two No Anchoring Areas in the vicinity of the proposed Excelerate Northeast Gateway Energy Bridge. The S/C approved amendments to the existing ship reporting system for the Papahanaumokuakea

Marine National Monument to simplify the coordinates of the boundaries to facilitate use and compliance by mariners. MSC is invited to adopt these proposals. The S/C considered the issue of the increasing number of mandatory reporting systems and whether automatic identification system

(AIS) or long range identification and tracking (LRIT) could be used to satisfy the reporting requirements in such systems. The S/C agreed AIS and

LRIT could not in all instances take the place of manual reporting in ship reporting systems. For instance, when a mariner has to take affirmative action to report, manual reporting ensures that the person on the bridge is more alert and could be made aware of issues when entering the reporting area. Additionally, since the International Convention for the Safety of

Life at Sea (SOLAS) chapter V, regulation 11, required that a system be capable of interaction, and a ship reporting system might provide the mariner with valuable information when entering a reporting area. In considering the way forward on this issue, the S/C agreed that any review of mandatory ship reporting systems should be done in the context of SOLAS chapter V, regulation 11. The Sub- Committee also agreed that it was premature for the S/C to undertake a full-scale review of all mandatory reporting systems as AIS and LRIT were still under development.

Development of guidelines for Integrated Bridge Systems (IBS), including performance standards for bridge alert management -------------------------

-------------------- ----------

Â¶ 3. The Sub-Committee reviewed the outline of the draft IBS guidelines and agreed that due to the broader application of the guidelines it was appropriate to use the new title "guidelines for bridge equipment and systems, their arrangement and integration." The S/C further agreed to proceed with the development of two separate documents: Guidelines for

Bridge Equipment and Systems, their Arrangement and Integration; and

Performance Standards for Bridge Alert Management. The S/C finalized the draft Safety Navigation (SN)/Circular on guidelines for the application of the modular concept to performance standards. The S/C reestablished the intersessional Correspondence Group on IBS under the leadership of Germany, inviting it to finalize the guidelines and performance standards noted above and to continue liaison with the S/C on Ship Design and Equipment

(DE) to ensure consistent treatment of alerts, including alarms and indicators.

Amendments to the General Provisions on Ships' Routing --------------------

------------------------- ---------

Â¶ 4. The Sub-Committee prepared amendments to the General Provisions on

Ships' Routing (resolution A.572(14) as amended) to align them with the specifications for routing measures' boundary symbology and charting of archipelagic sea lanes adopted by the International Hydrographic

Organization (IHO). The S/C was invited to adopt the amendments, subject to confirmation by the Assembly.

Carriage requirements for a bridge navigational watch alarm system (BNWAS)

--------------------------------------------- --

Â¶ 5. After extended discussion, the Sub-Committee agreed to a carriage requirement for BNWAS provided it was not used as a device to support reduced manning or to offset fatigue and there would be a grandfather clause for ships already fitted with a similar device. The S/C agreed to a draft amendment to SOLAS regulation V/19 to reflect a new carriage requirement for a BNWAS with a view to adoption at MSC's eighty-sixth session.

Review of COLREGs regarding the right-of-way of vessels over pleasure craft

--------------------------------------------

Â¶ 6. The Sub-Committee considered Italy's proposals for the revision of the

International Regulations for Preventing Collisions at Sea (COLREGs) regarding the right-of-way of vessels over pleasure craft to reduce the risk of collision especially in areas with high density of pleasure craft and where it is difficult for large vessels to operate safely. Most delegations shared Italy's concern regarding the risk of collision.

However, a large majority was not in favor of amending the COLREGs at this stage and instead favored a local approach based on national regulations,

educational awareness campaigns and other practical measures aimed at recreational craft. As there was little support for the proposed amendments, the MSC was invited to delete the item from the S/C's work program, as the work on this item had been completed.

Code of conduct during demonstrations/campaigns against ships on high seas

--------------------------------------------- --

Â¶ 7. The USDEL, while strongly supporting the concerns regarding maritime safety and the safety of seafarers, did not support the development of a

Code, but instead advocated the development of a MSC resolution or circular on this issue. In the S/C discussion, there was little support for the development of a Code and overwhelming support for the development of a resolution or circular. A drafting group was sent out with the USDEL as chair, using a draft resolution prepared by Australia as the base text.

While there was robust discussion on many issues, there was only one issue upon which consensus could not be reached. This issue was whether the resolution should refer to, and provide an explanatory sentence on, international human rights instruments. The USDEL opposed the inclusion of this language because such instruments are not within the competency of

IMO. This language was left out of the resolution; however, it was noted in the draft report. A draft resolution was developed, preliminarily approved by the S/C, and forwarded to the Sub-Committee on Flag State Implementation

(FSI). After consideration by the FSI, it will come back to NAV 55 for finalization before going to the MSC for adoption.

Development of an e-navigation strategy -----------------------------------

----

Â¶ 8. The Sub-Committee considered the report of the correspondence group on e-navigation (a collection of electronic systems used to improve navigation between ships and shore facilities) and a Working Paper prepared by the S/C chairman. The S/C prepared a draft strategy for the development and implementation of e-navigation for approval by the MSC. The S/C developed a draft framework for the implementation of the e-navigation strategy along with a timeframe for implementation, for approval by the MSC. The S/C further agreed that, subject to the MSC's approval of the e-navigation strategy, it would be necessary to have a corresponding item on the S/C's work program to implement it. Accordingly, the Sub- Committee invited the

MSC to amend the title of this work program item to "Implementation of an e-navigation strategy," with four sessions to complete the work.

Development of carriage requirements for ECDIS ----------------------------

-----------------

Â¶ 9. After extended debate, a strong majority overcame the objections of the few who continued to argue that chart data and equipment were not universally available, among other discounted assertions. The Sub-Committee considered in detail the United Kingdom proposal and agreed on a draft text incorporating the various amendments with respect to ship size/type and the relevant time frames, with respect to the proposed mandatory carriage requirement for Electronic Chart Display and Information Systems (ECDIS) equipment. The S/C also agreed on an exemption for ships that would be

taken out of service within two years. The S/C agreed that the proposed new regulation should be incorporated into regulation V/19 as paragraphs

2.10 and 2.11. The S/C also agreed with the Australian proposal to finalize a draft SN/Circular on Guidance on transitioning from paper chart to ECDIS navigation, which would be of benefit whenever ships are first equipped with ECDIS, and the draft circular was forwarded to MSC for adoption.

Improved safety of pilot transfer arrangements ----------------------------

----------------- -

Â¶ 10. The Sub-Committee considered a document by International Maritime

Pilots' Association (IMPA) on improved safety of pilot transfer arrangements; the results of a 2007 Safety Campaign; and a document by

Brazil, United States and IMPA on a work program item proposal on improving the safety of pilot transfer arrangements. The S/C established a correspondence group to consider these documents and prepare draft text for proposed revisions to SOLAS regulation V/23 and resolution A.889(21). The

United States (Mr. Bill Cairns) will chair the correspondence group. In addition to preparing a report for NAV 55, the correspondence group will prepare an interim report for DE 52 in order to advance the matter.

Other business --------------

Â¶ 11. The Sub-Committee noted with interest the information provided by the

United States on the development of an International Product Specification for marine environmental protection data to be used in conjunction with

Electronic Navigational Charts (ENCs) and ongoing work on this issue. Use of these data would promote maritime safety and increase protection of the marine environment. The observer from IHO stated that, as reported by the

United States, the IHO had established a working group to develop a marine environment protection product specification to be used in conjunction with

ENCs, which would enhance voyage planning and mariners' ability to navigate safely, thus avoiding damaging the marine environment. The United Kingdom urged that, while developing such a standard, it should be ensured that any system introduced did not interfere with the core functionality of the electronic charting system for safe navigation by cluttering the chart display. LEBARON

Viewing cable 08LONDON2898, HORN OF AFRICA PIRACY - HMG SHARES

ADDITIONAL



08LONDON2898

2008-11-

19 15:03

2011-02-04

21:09


Embassy

London

VZCZCXRO4902

OO RUEHDE RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR RUEHTRO

DE RUEHLO #2898 3241537

ZNY CCCCC ZZH

O 191537Z NOV 08

FM AMEMBASSY LONDON



RUEHJI/AMCONSUL JEDDAH PRIORITY 0064


RUEKJCS/JCS WASHDC PRIORITY

RUCNSOM/SOMALIA COLLECTIVE PRIORITY

C O N F I D E N T I A L LONDON 002898

NOFORN

SIPDIS

STATE FOR EUR/RPM, EUR/WE, EUR/ERA, PM/ISO, AF/RSA

E.O. 12958: DECL: 11/18/2018

TAGS: EUN EWWT PHSA PTER PREL UK

SUBJECT: HORN OF AFRICA PIRACY - HMG SHARES ADDITIONAL

INFORMATION ON OPERATION ATALANTA; EU LIKELY TO REQUEST KENYAN PROSECUTION

OF CAPTURED PIRATES REF: BRUSSELS 1745

Classified By: Political Minister Counselor Greg Berry for reasons 1.4 (b) and (d).

Â¶ 1. (C/NF) FCO Deputy Head Security Policy Chris Holtby (strictly protect) confirmed that HMG is satisfied with the progress in establishment of Operational Headquarters (OHQ) in Northwood UK, and afloat Force

Headquarters (FHQ) for the EU counter-piracy mission "Atalanta." Holtby admitted that Greece had not been the UK's first choice for head of FHQ, but partitioning the year long mandate into three periods, with Spain and

Holland in charge for the final two thirds of the operation, would ensure mission integrity and continuity. The current schedule calls for the operational plan to be presented to EU Member States on November 25th, followed by mission launch on December 8th. Holtby noted that this deployment will allow for an overlap with NATO operations in the waters off the Horn, which are scheduled to terminate on December 20. Thus far the UK is satisfied with NATO/EU cooperation and coordination in the run-up to

Atalanta.

Â¶ 2. (C/NF) Holtby provided the following from the November 17/18 force generation conference: the goal is to have available six frigates plus maritime patrol aircraft (MPA) throughout the mission. thus far; Greece - one frigate for 12 months; France - one frigate for 12 months plus MPA;

Belgium - one frigate for third three month period; Sweden - two Corvettes plus support for 12 months; Germany - one frigate for 12 months; Spain - one frigate for second three month period plus MPA during the third period;

UK - one frigate for the first and third three month periods; Holland - one frigate during the third three month period. According to Holtby, Ukraine,

Turkey and South Africa are non-EU states that have expressed interest in contributing, offers the EU will consider at a later date.

3 (C/NF) On the question of how to handle captured pirates, the UK will build upon the one-time agreement of the Kenyan government to prosecute eight suspects apprehended recently by the British Navy. According to

Holtby, this is a plan of action acceptable to most EU member states. He added that an EU-wide MOU would likely utilize language similar to that in a diplomatic note (scanned copy sent to AF/RSA) HMG transmitted to the

Republic of Kenya requesting that it "receive and prosecute prisoners taken in anti-piracy operations by the British Armed Forces" and that

"international standards on human rights will be applied, including that those prisoners handed over to the Government of Kenya would not be subjected to the death penalty."

Â¶ 4. (C/NF) To sweeten the deal for the Kenyans, the UK may participate in a program with the EU to provide technical or material support to the

Kenyan judiciary, however nothing has been confirmed in that regard, according to FCO Kenya Desk Officer Sheena Lavery. She added that the EU is also negotiating with Djibouti to accept captured pirates for prosecution. Visit London's Classified Website: XXXXXXXXXXXX

TUTTLE

Viewing cable 08LONDON3186, IRAQ PETROLEUM CONFERENCE 2008: DIALOGUE,



Embassy

London

08LONDON3186

2008-12-

19 17:05

2011-02-04

21:09

VZCZCXRO1087

RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK

DE RUEHLO #3186/01 3541727

ZNR UUUUU ZZH

R 191727Z DEC 08

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

FM AMEMBASSY LONDON


INFO RUCNRAQ/IRAQ COLLECTIVE


SENSITIVE

SIPDIS

E.O. 12958: N/A

TAGS: EPET EINV ECON IZ UK

SUBJECT: IRAQ PETROLEUM CONFERENCE 2008: DIALOGUE,

CAUTIOUS OPTIMISM ON OPPORTUNITIES IN IRAQ'S OIL SECTOR

Â¶ 1. (SBU) Summary. Iraq Petroleum 2008, held in London December 1-2,

2009, was a good opportunity for Iraqi officials, representatives from international companies, and participants from other governments to discuss the current situation in Iraq's petroleum sector, focusing particularly on investment opportunities. Presenters included a number of veterans of

Iraq's oil sector, as well as outside experts from the petroleum industry and elsewhere. The speakers covered the strategic outlook for Iraq's petroleum sector, upstream and downstream investment prospects, the role of the international oil companies (IOCs) in Iraq's development, and the political, financial, and legal aspects of the petroleum sector. All speakers and participants agreed that IOC involvement is vital to building up Iraq's oil and gas sectors, and there was broad consensus that the GOI needs to find the right balance of state control and IOC risk/reward in future contracts to maximize the potential of Iraq's resources. The recent precipitous drop in world oil prices added urgency to calls for developing

Iraq's petroleum sector. There was wide agreement that the time is right for progress on national hydrocarbons legislation and development of the oil and gas sectors, while acknowledging the difficulty of the tasks ahead.

End summary.

Iraq's Petroleum Sector: Present and Future ------------------------------

--------------

Â¶ 2. (U) Many speakers noted that Iraq's petroleum sector is significantly underdeveloped, due largely to years of neglect and mismanagement through three wars and the sanctions period, as well as the departure of many qualified technocrats in 2003. Similarly, many mentioned declining production in the South as a significant impediment to Iraq's economic growth. Often in the same breath, however, many speakers pointed to the enormous potential of Iraq's petroleum sector, pointing to its 115 billion barrels of proven crude oil reserves - more according to Iraqi estimates - and 1.5 trillion cubic feet of natural gas reserves. One speaker said,

"The market will take anything Iraq can produce." Another speaker observed that Iraq is uniquely placed as potentially the largest incremental crude oil producer in the world and should exploit that to the country's benefit.

Advisor to the Prime Minister and former Oil Minister Thamir Ghadbhan and

others pointed to the need for a national energy strategy, which would help

Iraq comprehensively and rationally deal with its substantial resources.

The GOI continues to tout six million barrels per day (MBPD) as the 10-year crude oil production target.

Â¶ 3. (U) The upstream and downstream development and investment opportunities in Iraq are significant, conference participants agreed. Not only are there opportunities for currently-producing oil and gas fields, some of which are super giants, but there is also significant exploration potential throughout Iraq. Speakers pointed to the recently-begun tender process for some of Iraq's oil and gas fields, as well as plans to offer more fields and exploration blocks in future tenders. Mustafa al-Jarrah of the Iraqi Ministry of Industry and Minerals noted that there are significant opportunities in petrochemicals too. Many noted, however, that the keys for additional development and investment are the legal and regulatory framework that the GOI chooses to implement, as well as the structure of the contracts offered by the GOI.

Iraq and the IOCs -----------------

Â¶ 4. (U) Much of the conference focused, in particular, on how much IOC and national oil company (NOC) involvement is needed in Iraq. Speakers and participants outlined the long history between Iraq and the IOCs, from prenationalization to post-2003 technical assistance, making it explicitly clear that Iraq's oil and gas resources belong to Iraq, and that Iraqis have no desire to be controlled by outsiders. That said, there was unanimous agreement that the IOCs offer technical expertise, technological advances, and financial resources that the Iraqis simply don't have in their domestic petroleum sector. Falah al-Khawaja, a former Director

General at the State company for Oil Projects, argued that the global petroleum sector is very different now than it was in the 1970s, and that

Iraq can now deal with major IOCs and NOCs from a position of strength. As such, the GOI needs to figure out the extent of its engagement with the

IOCs, and how to present that engagement to the Iraqi people to avoid the impression that Iraq's oil sector is run by outsiders. Kjetil Tonstand of

Statoil-Hydro argued that Iraq must determine how it will attract the right

IOCs to develop Iraq's petroleum sector. Dr. Abdul Hadi al-Hassani, Vice

Chairman of Parliament's Oil and Gas Committee, was a particularly strong advocate for greater leadership - LONDON 00003186 002 OF 003 particularly from the Iraqi Council of Representatives - in soliciting popular support, as well as an improved banking system, and more domestic and international transparency in the oil and gas sectors.

Â¶ 5. (U) Many of the IOC representatives expressed some indifference toward the conference, believing that it covered already well-trod ground.

They were also unimpressed by the then-upcoming December 5-7 Energy Expo in

Baghdad. There continues to be frustration among IOC representatives about how the GOI is handling its oil and gas contracts. IOC representatives argue that the contract structure brings a lot of risk with relatively little upside, and it remains to be seen how closely the GOI will hew to the announced schedule of the first contracting round.

Bring Back INOC ---------------

Â¶ 6. (U) Many speakers and participants lamented the current structure of

Iraq's petroleum industry, which they see as too political and centrallycontrolled by the Oil Ministry. One solution that received nearly unanimous backing was the reconstitution and increased role of the Iraqi

National Oil Company (INOC). Many Iraqis in attendance spoke highly of

INOC and its history of managing Iraq's oil sector, pointing to the nearly four mbpd in production reached at the end of the 1970s. The repeated argument was that INOC would mange the petroleum sector better than the Oil

Ministry, and that the operating companies should come under INOC's umbrella. Dr. al-Hassani argued that the GOI must fund INOC properly to bring it to parity with IOCs. Fadhil Chalabi, former acting Secretary-

General of OPEC and now with the Centre for Global Energy Studies, cautioned that INOC must remain apolitical and be run on a commercial basis, akin to other commercial state-owned oil companies like Statoil-

Hydro or Petrobras.

The (Unpopular) Heads of Agreement with Shell -----------------------------

----------------

Â¶ 7. (U) Participants express nearly unanimous concern about the recentlysigned Heads of Agreement (HoA) on southern gas between the GOI and Royal

Dutch Shell. Though the Iraqis present were content with the joint venture arrangement, others cited problems including a lack of transparency; the fact that HoA precludes the GOI from talking to other IOCs about gas in the coming year, thereby creating a monopoly; the HoA's review of export options when domestic concerns were a priority; and the fact that the HoA dictates that the joint venture must sell Iraqi gas domestically at international market rates.

Political, Financial, and Legal Ramifications -----------------------------

----------------

Â¶ 8. (U) While noting the many political obstacles to the development of

Iraq's petroleum sector, many of the Iraqis present indicated that the current political and economic situation may produce the right incentives for compromise on necessary hydrocarbons legislation. There was a great deal of optimism among many at the conference for Oil Minister

Shahristani's late November visit to Erbil to discuss adding Kurdistan

Regional Government (KRG)-produced crude oil to the Iraq-Turkey export pipeline. While many called the visit a breakthrough, Ghadbhan noted that the nature of the KRG's contracts and revenue sharing had not yet been discussed. Additionally, former Oil Minister Ibrahim Bahr al-Uloum was one of many who noted that there is currently a positive environment for agreement on hydrocarbon legislation. Some, including Dr. Al-Hassani, even mentioned passing a hydrocarbons framework law by spring 2009.

Â¶ 9. (U) Given the recent precipitous drop in world oil prices, many speakers noted the significant shift in the GOI's fiscal outlook. The GOI is likely to run a real deficit of USD 15-25 billion in 2009, and will have difficulty funding necessary capital investment projects beyond 2009, if oil prices remain around current levels, participants agreed. Dr. Colin

Rowat of the University of Birmingham argued that this presents the GOI with an opportunity to assess current and capital expenditures based on rate of return, rather than simply providing money when it is requested, as

was its general practice during the oil price boom. Ghadbhan noted that declining government revenue has only added on the pressure on the Oil

Ministry to increase production.

Â¶ 10. (U) As many speakers reiterated, the Oil Ministry's efforts to increase production take place amidst legal and regulatory ambiguity over who controls the development, management, and revenues of Iraq's petroleum sector. All LONDON 00003186 003 OF 003 legal experts harkened back to

Articles 111 and 112 of the 2005 Constitution and the legal ambiguity surrounding them. Dr. Carole Nakhle of the Surrey Energy Economics Centre and J. Jay Park of Macleod Dixon LLP discussed some of the GOI's legal options, including the structure of contracts and the constitutional issues involved. Nakhle urged the GOI to come up with a legal framework similar to that adopted for the North Sea, which would allow the government to maintain control over the resources but would also give companies maximum flexibility to develop Iraq's oil and gas fields. Interestingly, Dr. Al-

Hassani pointed out that upstream (and some downstream) activities could be decentralized to the regions/provinces, although the legal questions still have to be answered.

Comment -------

Â¶ 11. (SBU) The conference demonstrated that the Iraqis are thinking seriously about the issues that face them, but it is unclear how much traction these ideas have among Oil Ministry leadership. It was somewhat encouraging to hear Iraqi participants speak so highly of IOC involvement and focus on development and involving the domestic Iraqi private sector in the petroleum sector, although they were unable to provide many specifics ways to solve their problems. Even in the face of some optimism that contract tenders have been offered and that the apparent thaw in GOI-KRG relations can bring about national hydrocarbons legislation, the mood at the conference was somewhat subdued, with many participants acknowledging that the GOI continues to face many of the same issues it has for quite some time. Visit London's Classified Website: XXXXXXXXXXXX

TUTTLE

Viewing cable 09LONDON27, UK MUSLIM DEMOGRAPHICS (C-RE8-02527)



SECRET

Embassy

London

09LONDON27

2009-01-06

11:11

O 061155Z JAN 09

FM AMEMBASSY LONDON


2011-02-04

21:09


DEPARTMENT FOR INR/I AND EUR/WE

E.O. 12958: DECL: 12/30/2018

TAGS: PINR KISL KPLS UK

SUBJECT: UK MUSLIM DEMOGRAPHICS (C-RE8-02527)

REF: A. 08 STATE 128186

Â¶ B. LONDON DAILY REPORT 7-28-08

Classified By: Political Counselor Rick Mills, Jr. for reasons 1.4 (b) and (d)

Â¶ 1. (S/NF) Summary. Per reftel, this cable provides information on the demographics of the Muslim community in the UK. The last official UK census was in 2001 and much of what is provided below is a combination of census figures and subsequent estimates and surveys. Post notes that the information is incomplete and in many cases several years old. This is, however, the most current and accurate information available. Among the findings are that the UK

Muslim population has jumped in seven years from 1.6 million to 2 million. At that rate of increase, HMG estimates that the Muslim population of the UK at the next census in 2011 will be over 2.2 million. End Summary.

Overall Muslim Population Growing But Rate Slowing

--------------------------------------------- -----

Â¶ 2. (C) The 2001 UK census showed a population of 1.6 million

Muslims. In April 2008, the Home Secretary Jacqui Smith announced that HMG estimated the Muslim population at 2 million or 3.3% of the UK population. This represented an increase of 400,000 in seven years. The 1951 census showed a population of Muslims of less than 22,000. Therefore between

1951 and 2001 (50 years) there had been an annualized increase of 31,500 Muslims in the UK, but in the seven year period between 2001 and 2008 there was an actual annualized increase of 57,000. The rate of increase as measured by decades has slowed, however. In 1961, the population of

Muslims in the UK was 2.5 times what it had been in 1951.

Between 1961 and 1971 the Muslim population multiplied an astonishing 5 times its previous population. Thereafter the

Muslim population's rate of growth began to slow. In 1981 it was only 2.4 times the 1971 population (this was attributed to the ending of unlimited Commonwealth immigration in the early 1970's). In 1991 it was only 1.7 times what it had been in 1981; and between 1991 and 2001 it only grew by 1.6 times the previous population. Based on a projected 2011 population of 2.2 million, the rate of increase between 2001 and 2011 is estimated to be 1.4 times the 2001 figure. In overall numbers, the UK Muslim population is rapidly increasing, but its rate of growth is slowly decreasing.

Changes to UK visa rules announced in 2008 may slow this rate even more.

Immigration Or Birthrate?

-------------------------

Â¶ 3. (C) HMG does not categorize either births or immigration by religion. A rough estimate, however, based on immigration statistics by country of origin indicates 50-55,000 "self declared" Muslims were granted settlement (permanent residence) in the UK in 2007. Based on the aforementioned

57,000 annualized growth in the Muslim population, it is clear that a significant portion of the population growth among Muslims in the UK is based on immigration. 34% of

Muslims in 2001 were below the age of 16, however, and 63% of

Muslim households had at least one child and 25% contained 3 or more children. Based on these statistics a report by the

NGO Migration Watch UK (MWUK), which favors restrictions on immigration, estimated in 2008 that the real number of

Muslims in the UK was closer to 3 million which would be 5% of the UK population.

Raw Data: Office of National Statistics

---------------------------------------

Â¶ 4. (SBU) The following are excerpts from the UK's Office of

National Statistics (ONS), all data is from the 2001 UK census unless otherwise noted.

-- The 2001 Census showed that out of the total UK population of 58.8 million, 1.6 million identify as Muslims. At 3 percent, this is the largest non-Christian religious population. They are a young, tightly clustered, but often disadvantaged community, according to UK social and economic statistics.

-- People with Muslim backgrounds are most concentrated in

London (38% of the total UK Muslim population) and other large urban areas, including the West Midlands (14% of the

Muslim population), the North West (13%), and Yorkshire and the Humber (12%). Within these areas, Muslims are highly concentrated spatially. Muslims make up 8% of the population of London overall, but 36% of the Tower Hamlets area and 24% of the Newham area population.

-- 70% of Muslims gave their national identity as British,

English, Scottish, or Welsh; 91% of UK-born Muslims gave a

British national identity.

-- More than half of Muslim adults living in England and

Wales in 2001 said their religion was important to their self-identity.

-- Muslims are the second least-likely of all religious groups to have been born in the UK, with the majority being born outside the UK; 46% were born in the UK, 39% were born

in Asia (Pakistan - 18%; Bangladesh - 9%; India - 3%), 9% were born in Africa (Somalia - 2%; Kenya - 1%), and 4% were born in Europe outside the UK (Turkey - 3%, former

Yugoslavian countries - 1%).

-- Muslims were more likely than all other groups of UK 16 to

24-year-olds to be living with a partner, either as a married or cohabiting couple (19% each).

-- Among 45 to 54-year-olds, 17% described their marital status as divorced, separated or re-married.

-- Muslims households were the least likely to be homeowners

(52%) and are the most likely among all religious groups to be living in accommodation rented from the council or housing association (28%); 4% live rent-free.

-- 32% of Muslim households live in overcrowded accommodation. Average family size for a Muslim family is

3.8, which can contribute to overcrowding. 34% of Muslim households contained more than five people. 63% contained at least one dependent child, and 25% contained three or more dependent children.

-- Unemployment rates were higher for Muslims than any other religion, for both men and women. Muslim male unemployment rate was 13% in 2004, and for women it was 18%.

-- Muslims between the ages of 16 and 24 had the highest unemployment rates at 28%; 11% of Muslims over the age of 25 were unemployed.

-- Muslims were most likely to be unavailable or not actively seeking work due to reasons such as disability, being a student, or looking after the family and home. 31% of working-age men were economically inactive, as were 69% of working-age women.

-- With 34% of Muslims under the age of 16 in 2001, Muslims have the youngest age profile of all the religious groups in

Great Britain. Less than one in ten were aged 65 or older.

-- Muslim men outnumber women 52% to 48%.

-- 74% of Muslims are from an Asian ethnic background

(Pakistani - 43%, Bangladeshi - 16%, Indian - 8%, Other Asian

- 6%), Almost 1.2 million Asian Muslims were living in Great

Britain in 2001. Another 11% were from a White ethnic background, including 4% of White British origin and 7% from another White background (including Turkish, Cypriot, Arab and Eastern European). 6% of Muslims were of Black African origin, mainly from North and West Africa.

-- Muslims, both male and female, had the highest rates of reported ill health in 2000. Age-standardized rates of "not good" health were 13% for Muslim males and 16% for Muslim females.

-- Muslims had the highest rates of disability, with 24% of females and 21% of males claiming a disability.

-- Lone parent households are less common within Muslim communities, with around 50% of Muslim households headed by an individual who is part of a married couple.

-- Muslim households were also more likely to contain more than one family, with 19% of all multiple family households

Muslim.

-- 33% of working-age Muslims in Great Britain had no qualifications in 2004, which is the highest rate of any religious group. At 12%, they were also the least likely to have degrees or equivalent qualifications.

-- Muslims who were born in the UK are more likely than

Muslims born elsewhere to have a degree or equivalent qualification at any age. UK-born Muslims under the age of

30 were almost twice as likely to have degrees as those born elsewhere in 2004.

-- 371,000 school-aged (5 to 16 years old) Muslim children were in England in 2001, and by 2008 there were seven state-maintained Islamic schools catering to around 2,100

Muslim children.

-- One-fifth of Muslims were self-employed n 2004.

-- 37% of Muslim men and over a quarter of Muslim women were working in the distribution, hotel and restaurant industry.

-- One in seven Muslim men work in the transport and communication industry.

-- Less than a third of Muslim men work in managerial or professional occupations, and almost one in ten worked as a taxi driver, cab driver or chauffeur in 2004.

-- Between 16 and 20% of Muslim women work in sales and customer service jobs.

Raw Data: Post's 2008 Religious Freedom Report and NGOs

--------------------------------------------- ----------

Â¶ 5. (SBU) The following are excerpted from Post's

International Religious Freedom Report (IRFR) and reports or studies from various Muslim and migration/immigration NGO's.

Citations are from the IRFR unless otherwise noted.

-- The Government estimates the number of mosques in the UK to be around 1,000.

-- A May 8, 2008, Religious Trends report states that more than 50% of Muslims regularly worship at mosques. (Embassy

Comment: Religious Trends is a UK think tank that monitors a wide array of religious issues. Among other things, the 2008 report noted that while 43 million UK residents claimed to be

Christians, less than 3 million (7%) regularly worship in churches. End Comment).

-- The Crown Prosecution Service (CPS) reported a decrease in prosecutions over the previous reporting period for religiously-motivated incidents, with only 29 cases classified as religiously-aggravated offenses. Of the 23 cases in which the victim's religious affiliation is known,

17 were Muslim.

-- In 2006, controversy arose after 100 Islamic private schools turned out to be "little more than places where the

Koran is recited," the schools promised to upgrade their instruction and they are due for review in 2010.

-- According to a poll of 600 Muslim and 800 non-Muslim students at thirty universities throughout the UK conducted by the Centre for Social Cohesion (CSC), as reported ref B,

32 percent of Muslims on UK campuses believe killing in the name of religion is justified, 54 percent wanted a Muslim

Party to represent their world view in Parliament, and 40 percent want Muslims in the UK to be under Sharia law. Only

2 percent of non-Muslims felt killing in the name of religion could be justified and none believed it was acceptable for

Muslims in the UK to have a religious-based party, or to be under Sharia law. 73 percent of Muslim students are at least occasional participants in Friday services while only 2 percent of non-Muslim students attend any religious service.

The poll results also found that 73 percent of Muslim students believe it is possible to be both Muslim and British and a similar number believe their parents are "much more or somewhat more" strict Muslims than they are. In addition

only six percent believed that people who leave Islam for another religion should be "punished according to Sharia law"

(killed).

-- According to MWUK, arranged marriages in the Muslim community are creating unusually large population growth in areas where Muslims predominate, since first-generation families tend to have larger numbers of children (based on published research and a comparison of the 1991 and 2001 census). For example, in the eighties the Bradford (city)

Council estimated that the Muslim population would reach

130,000 by 2030 and then level off. Now the projection is for 130,000 by 2020 and rising. Bradford is a West Yorkshire industrial city whose 2001 population of 294,000 included an estimated 75,000 Muslims (25%), predominantly of Pakistani origin. Bradford has the largest Muslim population in the UK outside of London, and no single London borough

(neighborhood) has as large a Muslim population.

-- Also according to MWUK, the number of marriageble-age

Muslims in the South Asian community had jumped from 155,000 in 1991 to 236,000 in 2001. MWUK claims the majority of members of these communities seek spouses from overseas in arranged marriages. MWUK claims these figures point to a much larger Muslim population than HMG is reporting and is projecting. HMG says arranged marriages with South Asian partners, "are a normal facet of settlement figures."

Visit London's Classified Website: http://www.intelink.sgov.gov/wiki/Portal:Unit ed_Kingdom

TUTTLE

Viewing cable 09LONDON109, 2009 UK INVESTMENT CLIMATE STATEMENT



09LONDON109

2009-01-15

13:01

2011-02-04

21:09

UNCLASSIFIED

Embassy

London

P 151320Z JAN 09

FM AMEMBASSY LONDON


DEPT OF COMMERCE WASHDC PRIORITY

DEPT OF TREASURY WASHDC PRIORITY

CIMS NTDB WASHDC

USDOC WASHDC

INFO EU MEMBER STATES COLLECTIVE PRIORITY


FOR EB/IFD/OIA

E.O. 12958: N/A

TAGS: ECON EINV OPIC USTR KTDB UK

SUBJECT: 2009 UK INVESTMENT CLIMATE STATEMENT

REF: 08 STATE 123907

Â¶ 1. In response to reftel, the following is the 2009 Investment Climate

Statement for the United Kingdom. The information is updated as of January

1, 2009. 2. Much of the data supplied in this report is from 2007, since end-of-year 2008 figures are not yet available. Given the economic downturn of the past twelve months, we expect that levels of foreign direct investment, the shape and structure of the banking system, including the level of deposits and number of banks, and other macro-economic 2008 data will be significantly different from 2007 figures.

UNITED KINGDOM: 2009 INVESTMENT CLIMATE STATEMENT -------------------------

-------------------- ----

A.1. Openness to Foreign Investment The UK was the world's second largest recipient of foreign direct investment in 2007, receiving U.S. $223.9

billion, according to the United Nations Conference on Trade and

Development (UNCTAD). The UK continued to lead Europe in attracting foreign investment with 26 percent of all FDI inflows into the European

Union (EU). The U.S. and the UK are the largest foreign investors in each other's countries. The stock of U.S. foreign direct investment in the UK totaled $398 billion at year end 2007. With a few exceptions, the UK does not discriminate between nationals and foreign individuals in the formation and operation of private companies. U.S. companies establishing British subsidiaries generally encounter no special nationality requirements on directors or shareholders, although at least one director of any company registered in the UK must be ordinarily resident in the UK. Once established in the UK, foreign-owned companies are treated no differently from UK firms. Within the EU, the British Government is a strong defender of the rights of any British registered company, irrespective of its nationality of ownership. Market entry for U.S. firms is greatly facilitated by a common language, legal heritage, and similar business institutions and practices. Long-term political, economic, and regulatory stability, coupled with relatively low rates of taxation and inflation make the UK particularly attractive to foreign investors. The Labour government continues its commitment to economic reforms, including privatization, deregulation, and support for competition. Local and foreign-owned companies are taxed alike. Inward investors may have access to certain EU and UK regional grants and incentives that are designed to attract industry to areas of high unemployment, but no tax concessions are granted. The UK taxes corporations 28 percent on profits over 1.5 million GBP. Small companies are taxed at a rate of 21 percent for profits up to 300,000 GBP and marginal tax relief is granted on profits from 300,001-1,500,000 GBP.

Tax deductions are allowed for expenditure and depreciation of assets used for trade purposes. These include machinery, plant, industrial buildings, and assets used for research and development. A special rate of 20 percent is given to unit trusts and open-ended investment companies. The UK has a simple system of personal income tax, with one of the lowest top marginal rates of any EU Member State (40 percent). The basic income tax rate is 20 percent on income less than 34,800 GBP. UK citizens also make mandatory payments of about 11 percent of income into the National Insurance system, which funds social security and retirement benefits and is another form of taxation. Effective April 2008, the UK now requires payment of a 30,000 GBP or a tax on worldwide income of non-domiciled residents of the UK after seven years of residence. The Scottish Parliament has the power to increase or decrease the basic income tax rate in Scotland, currently 22 percent, by a maximum of 3 percentage points. Although the Scottish government has this power, it has never been used, and the mechanism for collection and disbursement is unclear. The UK imposes few impediments to foreign ownership. The UK subscribes to the OECD Committee on Investment and Multinational Enterprises' (CIME) National Treatment Instrument and the

OECD Code on Capital Movements and Invisible Transactions (CMIT). U.S. companies have found that establishing a base in the UK is an effective means of accessing the European Single Market, and the abolition of most intra-European trade barriers enables UK-based firms to operate with relative freedom throughout the EU. Several U.S. companies have operations in the UK, including all of the top 100. The UK hosts more than half of the European, Middle Eastern and African corporate headquarters of

American-owned firms.

A.2. Conversion and Transfer Policies The British pound sterling is a free-floating currency with no restrictions on its transfer or conversion.

There are no exchange controls restricting the transfer of funds associated with an investment into or out of the UK. All exchange controls were repealed in 1987. The UK is not a member of the Euro area. Prime Minister

Gordon Brown says he is in favor of joining, but only after a national

referendum and the British public votes to adopt the Euro. The date of this referendum is contingent on a government assessment based on five economic tests, which are sustainable convergence, sufficient flexibility, effect on investment, impact on financial services, and effect on employment. Once these tests are passed, the government must then seek

Parliamentary approval for a national referendum. Given the current lukewarm support for the Euro among the British people and the economic downturn, a referendum is not likely to occur in the near future. The

Finance Act 2004 repealed the old rules governing thin capitalization, which allows companies to assess their borrowing capacity on a consolidated basis. Under the new rules, companies who have borrowed from a UK or overseas parent need to show that the loan could have been made on a standalone basis or face possible transfer pricing penalties. These rules were not established to limit currency transfers, but rather to limit attempts by multinational enterprises to present what is in substance an equity investment as a debt investment to obtain more favorable tax treatment.

A.3. Expropriation and Compensation Expropriation of corporate assets or nationalization of an industry requires a special Act of Parliament, as seen in the February 2008xxxx (month?) nationalization of Northern Rock.

In the event of nationalization, the British government follows customary international law, providing prompt, adequate, and effective compensation.

A.4. Dispute Settlement International disputes are resolved through litigation in the UK Courts or by arbitration, mediation, or some other alternative dispute resolution (ADR) method. Over 10,000 disputes a year take place in London, many with an international dimension, reflecting its strong position as an international center for legal services. Most of the disputes center on the maritime, commodities, financial services, and construction sectors. The London Court of International Arbitration and the International Chamber of Commerce's International Court of Arbitration are the leading administrators of international arbitrations. The Stock

Exchange Panel on Takeovers and Mergers mediates takeover bid disputes, and there is a further right of appeal to the Stock Exchange Appeals Committee.

As a member of the International Center for Settlement of Investment

Disputes, the UK accepts binding international arbitration between foreign investors and the state. As a signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the UK permits local enforcement on arbitration judgments decided in other signatory countries.

A.5. Performance Requirements/Incentives UK business contracts are legally enforceable in the UK, but not U.S. or other foreign ones. Performance bonds or guarantees are generally not needed in British commerce, nor is any technology transfer, joint venture, or local management participation or control requirement imposed on suppliers. Government and industry encourage prompt payment, but a tradition does not exist of providing an additional discount to encourage early settlement of accounts. The UK offers a wide range of incentives for companies of any nationality locating in depressed regions of the country, as long as the investment generates employment. Regional Selective Assistance (RSA) is available from the central government for qualifying projects in parts of the UK needing investment to revitalize their economies. Grants are the main type of assistance, and the level of grant is based on capital expenditure costs and expectations of job creation. In addition to RSA, assistance can be obtained through the EU Structural Funds available from 2007 to 2013. The new EU budget, reflecting the recent enlargement, resulted in a 50 percent

reduction in UK allocations for 2007-2013 in comparison with the funding received for 2000-2006. Assistance is offered to companies that meet the government's objectives for convergence, cooperation, competitiveness and employment. The highest level of assistance convergence funding is available for companies that locate in areas with GDP per capita below 75 percent of the EU average. In the UK, these regions are Cornwall, the

Isles of Scilly, South Yorkshire, Merseyside, West Wales and the Welsh

Valleys. Local authorities in England and Wales also have power under the

Local Government and Housing Act of 1989 to promote the economic development of their areas through a variety of assistance schemes, including the provision of grants, loan capital, property, or other financial benefit. Separate legislation, granting similar powers to local authorities, applies to Scotland and Northern Ireland. Where available, both domestic and overseas investors may also be eligible for loans from the European Investment Bank.

A.6. Right to Private Ownership and Establishment The Companies Act of

1985, administered by the Department for Business, Enterprise and

Regulatory Reform (BERR), governs ownership and operation of private companies. On November 8, 2006 the UK passed the Companies Act of 2006 to replace the 1985 Act. The law simplifies and modernizes existing rules rather than make any dramatic shift in the company law regime. BERR uses a transparent code of practice that is fully in accord with EU merger control regulations, in evaluating bids and mergers for possible referral to the

Competition Commission. The Competition Act of 1998 strengthened competition law and enhanced the enforcement powers of the Office of Fair

Trading (OFT). Prohibitions under the act relate to competition-restricting agreements and abusive behavior by entities in dominant market positions.

The Enterprise Act of 2002 established the OFT as an independent statutory body with a Board, and gives it a greater role in ensuring that markets work well. Also, in accordance with EU law, if deemed in the public interest, transactions in the media or that raise national security concerns may be reviewed by the Secretary of State of BERR. Only a few exceptions to national treatment exist. For example, foreign (non-EU or non-EFTA, European Free Trade Association) ownership of UK airlines is limited by law to 49 percent. Registration of shipping vessels is limited to UK citizens or nationals of EU/EFTA member states resident in the UK.

For some of these companies, restrictions of foreign ownership of ordinary shares apply. Citizenship requirements for certain senior executive and non-executive posts also apply for these enterprises. Foreign investment in financial services that are not covered by EU Directives on banking, investment, services, and insurance may be subject to a bilateral agreement. The privatization of state-owned utilities is now essentially complete. With regard to future investment opportunities, the few remaining government-owned enterprises or remaining government shares in other utilities are also likely to be sold off to the private sector, when market conditions improve. The privatization of London's extensive underground rail network was completed in 2005 but suffered a setback in

2007 when the privatized company went bankrupt and returned to public ownership. The government continues nevertheless to push Public Private

Partnerships (PPP). Under the Private Finance Initiative (PFI), British and foreign-owned companies may bid for long-term franchises to build, run, and improve existing public-sector services in areas such as education, health care, road traffic management, passenger rail, defense, production of coins and currency, port operations, air and water monitoring and cleanup, land use planning, and building control. The government's goal is to provide cost-effective and higher-quality services in partnership with private sector investment capital providers.

A.7. Protection of Property Rights The UK legal system provides a high level of intellectual property rights (IPR) protection. Enforcement mechanisms are comparable to those available in the United States. The UK is a member of the World Intellectual Property Organization (WIPO). The UK is also a member of the major intellectual property protection agreements: the Bern Convention for the Protection of Literary and Artistic Works; the

Paris Convention for the Protection of Industrial Property; the Universal

Copyright Convention; the Geneva Phonograms Convention; and the Patent

Cooperation Treaty. The UK has signed and, through various EU Directives, implemented both the WIPO Copyright Treaty (WCT) and WIPO Performance and

Phonograms Treaty (WPPT), known as the internet treaties. In August 2004, the UK published its first "intellectual property crime strategy." The national strategy, led by the UK Intellectual Property Office (UK IPO) represents important advancements in intelligence sharing and coordination among UK government agencies to combat IP crime, along with a commitment to improve training for customs enforcement agents. On December 6, 2006, HM

Treasury published the independent Gowers Review of Intellectual Property.

The Gowers Review supports the national strategy and, in particular, UK

IPO's development of a central IP crime database, TellPat that brings together information on IP crime and the criminals involved from industry and enforcement agencies. One of the Gowers Review recommendations is for the UK Home Office to recognize IP crime as a component of organized crime in order to better educate the public about the wider dangers of IP crime and to elevate it as a priority for police action. The Gowers Review made

53 additional recommendations in the 150-page report that the government plans to consider. In October 2008, the UK government began consultations on a few of the Gowers Review suggestions. Patents: Many of the key features of the UK Patents Act 2004 entered into effect on January 1, 2005.

The Act is designed to bring UK patent law into line with the updated

European Patent Convention (2000). The Act lifts restrictions on filing patent applications from abroad, with exceptions made for military technology and applications whose contents could affect UK national security. The Act expands options for non-binding, written opinions on patent infringement to be issued by the UK Patent Office. The legislation also lays out significant changes to the process of approaching alleged infringers (sometimes known as "threats"). The changes are designed to aid genuine attempts to settle infringement disputes while providing protection

-- particularly to small and medium enterprises -- against frivolous threats. A UK patent application requires that an invention must be new, involve an innovative step, and be capable of industrial application. A patent cannot be granted in the UK for any invention used for offensive, immoral, or anti-social purpose, for any variety of animal or plant, or for a biological process used in its production. In September 2007, the UK IPO and the U.S. Patent and Trademark Office (USPTO) began a 12-month pilot of the Patent Prosecution Highway (PPH) scheme, which allowed patent applicants who have received a report by either the UK IPO or the USPTO to request accelerated examination of a corresponding patent application filed in the other country. Copyright: The Copyright, Designs and Patents Act of 1988 grants the originator the exclusive right to assign those rights or to exploit them through copying, dissemination, publication, or sale.

Computer programs and semiconductor internal circuit designs are included as works that are protected by this act. Under the terms of an EU

Directive, which took effect in January 1988, databases are also protected in each EU-member country by the national legislation that implements the

Directive. Trademarks: The UK submits to the WIPO system of international registration of marks, as governed by the Madrid Agreement and the Madrid

Protocol. The UK Trade Marks Act of 1994 is the current law providing for the registration and protection of trade marks in the UK, and has been harmonized with EU Directive No 89/104/EEC. Trademarks are considered personal property in the UK, and are normally registered for a period of 10 years with an option to renew. However, trademarks may be removed from the

register if a period of five years has elapsed, during which time there has been no bona fide use of the trademark in relation to the goods by the proprietor. Trade Secrets/Confidential Test Data: Commercially sensitive information is not itself specifically subject to legal protection, but the misappropriation of such information from business premises may be subject to criminal law. Action under employment law may also be taken against an employee who, by disclosing information, breaches a contract with his or her employer. In addition, confidential test data, submitted in conjunction with a registered application for pharmaceuticals or veterinary products, enjoys 10 years of exclusive protection from the date of authorization, provided the product is marketed in the UK.

A.8. Transparency of the Regulatory System- U.S. exporters and investors generally will find little difference between the U.S. and UK in the conduct of business. Common law prevails in the UK as the basis for commercial transactions, and the International Commercial Terms (INCOTERMS) of the International Chambers of Commerce are accepted definitions of trading terms. In terms of accounting standards and audit provisions, as of January 1, 2005 firms in the UK must use the International Financial

Reporting Standards (IFRS) set by the International Accounting Standards

Board (IASB) and approved by the European Commission. The UK's Accounting

Standards Board provides guidance to firms on accounting standards and works with the IASB on international standards. An example of differences between UK law (as well as EU law) and foreign law applies to commercial agents, who are self-employed intermediaries. Often sales are undertaken in the UK by means of appointed distributors, licensees, or "agents" using standard form agreements, or sometimes with no agreement at all. Under UK law, no distribution or licensing arrangements are terminable "at will," and reasonable notice (ranging from 1 to 12 months) is usually required.

In addition the agent is entitled to at least one year's commission in damages when agency agreements are terminated. Many standard form software license agreements have invalid clauses prohibiting copying because they breach the EU Copyright Directive. Non-EU court judgments, apart from those for judgment debts, are often not enforceable in the UK unless a contract between the parties specifically states that U.S. or other country judgments are enforceable. UK law, like other European laws, imposes severe restrictions on exclusions and limitations of implied warranties and liability. There is an exception within UK law that removes most of these restrictions where both parties are overseas, which makes UK law and courts a very favorable compromise choice for corporations contracting elsewhere in Europe. The government's declared intent is to introduce more business competition and to reduce the administrative burden on companies by reducing unnecessary red tape. Statutory authority over prices and competition in various industries is given to independent regulators.

These include the Office of Communications (OFCOM), the Office of Water

Regulation (OFWAT), the Office of Gas and Electricity Markets (OFGEM), the

Office of Fair Trading (OFT), the Rail Regulator, and the Financial

Services Authority (FSA). These regulators work to protect the interests of consumers while ensuring that the markets they regulate are functioning efficiently. Most laws and regulations are published in draft for public comment prior to implementation. Reduction of bureaucratic red tape and the improvement of regulation are priorities for the current government.

Under Gordon Brown, the Better Regulation Executive joined the former

Department for Trade and Industry to form the Department for Business,

Enterprise and Regulatory Reform, with regulatory reform at the heart of its agenda for business success. In December 2008, the government published an update to the Better Regulation Simplification Plan, aimed at reducing the administrative burden on business by 25 percent by 2010. The plan includes cross-cutting simplification initiatives across government departments and leads efforts to promote the success of the EU better

regulation agenda. An example of one simplification project is the formation of an International Trade Single Window, which is aimed at helping importers and exporters by enabling speedier transactions, reduced paperwork and easier access to import rules.

A.9. Efficient Capital Markets and Portfolio Investment The City of London houses one of the world's largest and most comprehensive financial centers.

London offers all forms of financial services: commercial banking; commercial banking; investment banking; insurance; venture capital; private equity, merchant banking, stock and currency brokers; fund managers; commodity dealers; accounting and legal services; as well as electronic clearing and settlement systems and bank payments systems. London has been highly regarded by investors because of its solid regulatory, legal, and tax environment, a supportive market infrastructure, and a dynamic and highly-skilled workforce. As of the December 2008 update of this profile, the international financial markets remain in crisis, and UK banks have not been immune. In February 2008, the Government had to step in and nationalize the UK mortgage lender, Northern Rock, to stop a run on the bank. Since then, it has announced a series of "bank rescue measures" including taking equity stakes in key banks to recapitalize banks and increase liquidity in the banking system. Notwithstanding, the UK economy is in recession, property values have fallen 25%, unemployment is at levels not seen in decades, the pound sterling has fallen 25% in value against the dollar, and Interbank lending for other than extremely short maturities remains largely unavailable. The financial services industry contributes approximately 8 percent to the UK GDP and employs more than 300,000, but redundancies are increasing rapidly, and business conditions in financial services in 2009 are expected to remain harsh. The Government has announced aggressive fiscal stimuli to get the economy growing again, and the Bank of England is pursuing an expansionary monetary policy by lowering the key Bank Rate and adding liquidity to the banking system. In all circumstances, foreign investors, employers, and market participants have been treated equally and benefit from government initiatives equally. There are no signs of increased protectionism, and none are expected. Government policies are intended to facilitate the free flow of capital and to support the flow of resources in the product and services markets. Foreign investors are able to obtain credit in the local market at normal market terms, and a wide range of credit instruments are available. The principles involved in legal, regulatory, and accounting systems are transparent, and they are consistent with international standards. In all cases, regulations have been published and are applied on a nondiscriminatory basis by a single regulatory body, the Financial Services

Authority. The London Stock Exchange is one of the most active equity markets in the world. London's markets have the advantage of bridging the gap between the day's trading in the Asian markets and the opening of the

U.S. market. This bridge effect is also evident as many Russian and Central

European companies have used London stock exchanges to tap global capital markets. The Alternative Investment Market (AIM), established in 1995 as a sub-market of the London Stock Exchange, is specifically designed for smaller, growing companies. The AIM has a more flexible regulatory system than the Main Market and has no minimum market capitalization requirements.

Since its launch, the AIM has raised approximately GBP 34 billion ($51 billion) for more than 2,900 companies. The UK banking sector is the largest in Europe, with 361 banks authorized to do business in the UK, retail deposits of GBP 2.4 trillion ($4.2 trillion - average 2008 exchange rate) and an estimated 50 percent of all the EU's investment banking activity. The total assets of the UK banking sector were about 7.5 trillion

GBP ($12.4 trillion) in September 2008, with domestic banks accounting for about half of the total.

A.10. Political Violence The United Kingdom is politically stable, with a modern infrastructure, but shares with the rest of the world an increased threat of terrorist incidents (recent bombings in London were not foreigners but UK residents/citizens). On June 29 and 30, 2007, terrorists unsuccessfully attempted to bomb a nightclub area in London and the Glasgow airport. In August 2006, the UK government heightened security at all UK airports following a major counterterrorism operation in which individuals were arrested for plotting attacks against U.S.-bound airlines. On July 7,

2005, a major terrorist attack occurred in London, as Islamic extremists detonated explosives on three Underground trains and a bus in Central

London, resulting in over 50 deaths and hundreds of injuries. Following the attacks, the public transportation system was temporarily disrupted, but quickly returned to normal. A similar, but unsuccessful attack against

London's public transport system took place on July 21, 2005. UK authorities have identified and arrested people involved in these attacks.

These attacks do not seem to have significantly impacted investment in the

UK. In Northern Ireland, the re-establishment of a devolved power-sharing government and the decommissioning of most paramilitary organizations have led to the virtual elimination of domestic terrorist incidents. A continuing problem involves UK animal rights activists who employ violent tactics and harassment techniques to disrupt legitimate scientific research; however, the situation is improving with increased government enforcement. The activists forced the shelving of plans for one new research center and severely delayed construction of another. They target existing research centers that use laboratory animals, as well as any company that does business with them. The government has passed legislation to give police stronger authority to crack down on protesters, and courts have begun to use their powers to clarify the line between lawful protest and harassment. In mid-December, four animal rights activists were convicted of blackmailing companies that supplied an animal testing laboratory. Sentencing is scheduled for late January 2009. These actions by activists have the potential to impair the UK's position as one of Europe's leading research and development R&D centers. Environmental pressure groups in the UK have been involved with numerous protests against a variety of business activities including airport expansion, bypass roads, offshore structures, wind farms, civilian nuclear power plants, and petrochemical facilities. These protests tend not to be violent but are disruptive and work toward obtaining maximum media exposure.

A.11.a. Corruption The Prevention of Corruption Act makes bribery of domestic or foreign public officials a criminal offense. The maximum penalty under this act is imprisonment for up to seven years, and/or a fine not exceeding 5,000 GBP ($7,500). Corrupt payments are not deductible for

UK tax purposes. Although isolated instances of bribery and corruption have occurred in the UK, U.S. investors have not identified corruption of public officials as a factor in doing business in the UK. The UK formally ratified the OECD Convention on Combating Bribery in December 1998. Part

12 of the Anti-terrorism, Crime and Security (ATCS) Act of 2001, which came into force on February 14, 2002, includes legislation on bribery and corruption to deter UK companies and nationals from committing acts of bribery overseas. The act gives UK courts jurisdiction over crimes of corruption committed wholly overseas by UK nationals and by bodies incorporated under UK law. In addition to the OECD Convention, the UK also is actively involved in the Council of Europe's Group of States Against

Corruption (GRECO), which helps its members develop effective anticorruption systems. The UK also signed the UN Convention Against

Corruption in December 2003 and ratified it on February 8, 2006. The UK has also launched a number of initiatives to reduce corruption overseas.

The December 2006 decision to abandon the bribery investigation into BAE

Systems Plc and its 20-year, GBP 40bn ($60bn) defense contract with Saudi

Arabia opened the government up to questions regarding its credibility with respect to foreign corrupt practices. Two UK non-governmental organizations challenged the decision in UK counts. In April 2008, the

High Court ruled the decision to abandon the investigation unlawful, but in

July 2008, the House of Lords, the UK's highest body of judicial review, overturned this ruling on appeal, ending the judicial challenge. The OECD

Working Group on Bribery (WGB) has criticized the UK's implementation of the Anti-Bribery convention. In March 2007,the WGB decided to, "conduct a further examination of the UK's efforts to fight bribery," and "reaffirmed its serious concerns about the United Kingdom's discontinuance of the BAE

Al Yamamah investigation and outlined continued shortcomings in UK Anti-

Bribery legislation." Following this out-of-cycle review of UK practices, in October 2008, the WBG said it was, "disappointed and seriously concerned with the unsatisfactory implementation of the [OECD Anti-Bribery]

Convention by the UK."

A.12. Bilateral Investment Agreements The U.S. and UK have no formal bilateral investment treaty relationship, although a Bilateral Tax Treaty reviewed in 2008 specifically protects U.S. and UK investors from double taxation. The UK has its own bilateral tax treaties with more than 100

(mostly developing) countries and a network of about a dozen double taxation agreements. The UK has concluded 106 Bilateral Investment

Treaties (known in the UK as Investment Promotion and Protection

Agreements) with other countries, of which 94 are in force. These countries are: Albania, Antigua and Barbuda, Argentina, Armenia,

Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belize, Benin, Bolivia,

Bosnia & Herzegovina, Bulgaria, Burundi, Cameroon, Chile, China, Congo,

Cote D'Ivoire, Croatia, Cuba, Dominica, Ecuador, Egypt, El Salvador,

Estonia, Georgia, Ghana, Grenada, Guyana, Haiti, Honduras, Hungary, India,

Indonesia, Jamaica, Jordan, Kazakhstan, Kenya, Korea, Kyrgyzstan, Laos,

Latvia, Lebanon, Lesotho, Lithuania, Malaysia, Malta, Mauritius, Mexico,

Moldova, Mongolia, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Oman,

Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland,

Romania, Saint Lucia, Senegal, Serbia, Sierra Leone, Singapore, Slovenia,

South Africa, Sri Lanka, Swaziland, Tanzania, Thailand, Tonga, Trinidad &

Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, UAE, Uruguay,

Uzbekistan, Venezuela, Vietnam, and Yemen.

A.13. OPIC and Other Investment Insurance Agreements OPIC does not operate in the UK. Export-Import Bank (Ex-Im Bank) financing is available to support major investment projects in the UK. A Memorandum of Understanding

(MOU) signed by Ex-Im Bank and its UK equivalent, the Export Credits

Guarantee Department (ECGD), enables bilateral U.S.-UK consortia, intending to invest in third countries, to seek investment funding support from the country of the larger partner. This removes the need for each of the two parties to seek financing from their respective credit guarantee organizations.

A.14. Labor The UK's labor force of over 30 million people is the second largest in the European Union (EU). In the quarterly statistical report for

August through October 2008, UK employment had reached 29.38 million, and the unemployment rate was 6 percent, lower than the EU average of 7 per cent. The effects of the economic downturn are starting to be felt on employment levels. Some analysts predict that unemployment could reach 10 percent in 2008. The employment level (the proportion of working age people

in work) is also high in the UK at 74.4 per cent, compared with the

European Union average of 65.3 per cent. By sector, the largest proportion of the workforce was placed in the Public Administration, Education and

Health Sector with 7,239,546 or 27 percent of the total, followed by the

Distribution, Hotel and Restaurant Sector with 6,477,187 or 23.8 percent;

Banking, Finance and Insurance Sector came third with 5,760,210 or 21.2 percent, followed by Manufacturing with 2,875,201 or 10.6 percent of the UK workforce. The most serious issue facing British employers is a skills gap derived from a high-skill, high-tech economy outpacing the educational system's ability to deliver work-ready graduates. The government has placed a strong emphasis on improving the British educational system in terms of greater emphasis on science, research and development, and entrepreneurship skills. The UK's skills base remains mediocre by international standards, but is improving: the proportion of the population aged 20 to retirement without any formal educational qualifications has fallen by nearly a third over the last decade, from 18% in 1997 to 13% in

2007. About 28 percent of full time UK employees belong to a union, a low proportion by UK historical standards, but still quite high to an employer used to a much lower American percentage. Public-sector workers have a much higher share of union members -- nearly 60 percent -- while the private sector is about 17 percent. Manufacturing, transport, and distribution trades are highly unionized. Unionization of the workforce in the UK is prohibited only in the armed forces, public-sector security services, and police forces. Union membership has been relatively stable in the past few years, although the trend has been slightly downward over the past decade.

Once-common militant unionism is less frequent. Most British unions have adapted to the reality of a globalized economy in which jobs are contingent on the competitiveness of their employers. Privatization of traditional government entities has accelerated such thinking. The Trades Union

Congress (TUC), the British AFL-CIO equivalent, encourages union-management cooperation as do most of the unions likely to be encountered by a U.S. investor. As of October 2008, the minimum wage is GBP 5.73 ($8.25) for adults (those 22 and over) and GBP 4.77 ($6.86) for young people (18-21) and GBP 3.53 ($5.08) for workers aged 16 and 17. (Note: Exchange rate as of

December 31, 2008.) Much of the employment legislation currently affecting the UK labor market is based on EU regulations and directives. EU regulations affect working patterns, wage structures, and employee protection rights. For example, the European Working Time Directive creates an entitlement to minimum daily and weekly rest periods, an average work-week limit of 48 hours, and restrictions on night work. It also entitles workers who meet the qualifying criteria, including part-time and seasonal workers, to a minimum of 28 working days annual paid holiday. The universal application of labor regulations across respective EU borders undermines British competitiveness to the extent that the UK has made its historically more flexible labor market a major selling point to investors.

As it has implemented EU directives, however, the UK government has been proactive in maintaining its flexibility and competitiveness. For example, it negotiated a special provision under the Working Time Directive that allows employees to opt out of the work week limitations and has favored changes to the rules on temporary workers. The 2006 Employment Equality

(Age) Regulations make it unlawful to discriminate against workers, employees, job seekers and trainees because of age. The regulations cover recruitment, terms and conditions, promotions, transfers, dismissals and training. They do not cover the provision of goods and services. The regulations also removed the upper age limits on unfair dismissal and redundancy. It sets a national default retirement age of 65, making compulsory retirement below that age unlawful unless objectively justified.

Employees have the right to request to work beyond retirement age and the employer has a duty to consider such requests.

A.15. Foreign Trade Zones/Free Ports The cargo ports and freight transshipment points at Liverpool, Prestwick, Sheerness, Southampton, and

Tilbury that are used for cargo storage and consolidation are designated as

Free Trade Zones. No activities that add value to the commodities are permitted within the Free Trade Zones, which are reserved for bonded storage, cargo consolidation, and reconfiguration of non-EU goods. The

Free Trade Zones offer little benefit to U.S. exporters or investors, or any other non-EU exporters or investors. A.16. Foreign Direct Investment

Statistics- The UK is the second largest recipient of foreign direct investment (FDI) globally in 2007 according to the United Nations

Conference on Trade and Development (UNCTAD). According to data published by UNCTAD, the stock of outward UK FDI totaled $1,705 billion in 2007 (or

62 percent of GDP), up from $1,440 billion in 2006. The stock of inward UK

FDI at yearend 2007 was $1,348 billion (or 49 percent of GDP), up from

$1,133 billion in 2006. Direct investment outflows in 2007 totaled $266 billion, up from $87 billion in 2006, while inflows increased to $224 billion in 2007 from $148 billion in 2006. The United States remained by far the most popular destination for new UK outward direct investment in

2007, continuing the strong investment partnership between the two countries. In 2007, UK direct investment into the United States accounted for 23 percent of UK-owned assets abroad. Other EU member states attracted much of the remaining outward UK FDI.

Viewing cable 09LONDON1851, IRAN: FCO SHARES LESSONS LEARNED ON

DETAINEES



SECRET

Embassy

London

09LONDON1851

2009-08-11

14:02

2011-02-04

21:09

VZCZCXRO9687

OO RUEHBC RUEHDE RUEHDIR RUEHKUK RUEHTRO

DE RUEHLO #1851 2231436

ZNY SSSSS ZZH

O 111436Z AUG 09

FM AMEMBASSY LONDON




SIPDIS

E.O. 12958: DECL: 08/10/2019

TAGS: PREL PGOV UK IR

SUBJECT: IRAN: FCO SHARES LESSONS LEARNED ON DETAINEES

Classified By: Minister-Counselor for Political Affairs Greg Berry, rea sons 1.4 (b) and (d).

Â¶ 1. (S) SUMMARY: In a meeting with Iran Watcher (poloff) August 11, Will

Gelling, Tom Burn and Rachel Martinek of the FCO's Iran office shared lessons learned from the detention of British sailors by Iran in 2007 and more recently the arrest of nine local staff members from the British

Embassy in Tehran. They also provided an update on the status of their senior locally engaged political analyst, XXXXXXXXXXXX, currently one of dozens of subjects of a show trial underway in Tehran. A legal analysis provided to the UK Embassy in Tehran by XXXXXXXXXXXX (strictly protect) has been sent via classified e-mail to NEA/IR. END SUMMARY.

UK SAILORS AND EMBASSY STAFF; DIFFERENT STAKES, DIFFERENT APPROACHES

Â¶ 2. (S) Although none of the three FCO officers were involved directly in securing the release of the UK sailors detained in 2007, they were able to share a few points on the approach of HMG to the crisis. Tom Burn, fresh back from Tehran after being expelled by the IRIG last month (Note: He was the political officer expelled as part of the tit for tat expulsion of two

UK diplomats from Tehran and two Iranian officials from London. End note.), said lobbying by "unexpected actors" had paid dividends in the case of the UK sailors. The sailors were captured by the IRGC navy about a week before an OIC ministerial meeting, and HMG lobbied Gulf states vigorously in advance of the ministerial to raise the issue with Iranian FM Mottaki.

Mottaki is known to have delivered the message back to Tehran that the IRIG had run afoul not only of the UK, but of regional governments as well. Ali

Larijani, who at the time was Supreme National Security Council Secretary and represented a more pragmatic counterpoint to the IRGC, also was an important conduit to the regime. The UK also came out quickly and forcefully in public with its version of events (i.e., that the soldiers were unlawfully captured in international waters), but refused to respond to taunts from the IRIG.

Â¶ 3. (S) The cases of the UK Embassy local staff detained by the IRIG required a different approach. Unlike in the case of the sailors, Gulf states, while sympathetic, declined to intervene with the IRIG on behalf of the embassy staffers for fear of being accused of "interfering in internal

Iranian politics." Turkey, however, had proved extremely helpful in delivering strongly-worded messages to the IRIG on behalf of HMG. But it appears that EU unity proved one of the most crucial elements in securing the release of the embassy staff. HMG was able to tell the IRIG that if the staff were not released by date "x," the EU would take unified action against Iran.

UK LOCAL STAFFER INCLUDED IN SHOW TRIAL

Â¶ 4. (S) HMG remains very concerned about the fate of its senior local political analyst, XXXXXXXXXXXX, who is one of dozens of defendants in the ongoing show trial in Tehran. FCO provided poloff with an analyis of the

"trial" by XXXXXXXXXXXX (strictly protect). (Note: The analysis was sent by classified e-mail to NEA/IR. End note.) It is difficult to know how long the trial will last, as it is clear the proceedings are a political process aimed at intimidating the opposition, not a legal one. Meanwhile,

HMG continues to demand the charges against XXXXXXXXXXXX be dropped and all embassy staff be permitted to return to work. Visit London's Classified

Website: XXXXXXXXXXXX

LeBaron

Viewing cable 09LONDON2214, U/S TAUSCHERâ€™S BILATERAL MEETINGS IN

LONDON WITH



09LONDON2214

2009-09-23

16:04

2011-02-04

21:09

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DE RUEHLO #2214/01 2661624

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FM AMEMBASSY LONDON


INFO RUCNDSC/DISARMAMENT CONFERENCE COLLECTIVE



RUEHGG/UN SECURITY COUNCIL COLLECTIVE



RUEHNE/AMEMBASSY NEW DELHI 0948



RUEHGV/USMISSION GENEVA 1272


S E C R E T SECTION 01 OF 07 LONDON 002214

Embassy

London

NOFORN

SIPDIS

EO 12958 DECL: 09/22/2019

TAGS PREL, PARM, KNNP, CH, EG, FR, IN, IR, KN, PK, RS, UK

SUBJECT: U/S TAUSCHERâ€™S BILATERAL MEETINGS IN LONDON WITH

RUSSIAN, CHINESE, AND FRENCH OFFICIALS

REF: A. (A) LONDON 2198 B. (B) LONDON 2199

Classified By: Political Counselor Robin Quinville for reasons 1.4 (b) and

(d).

Â¶ 1. (S/NF) Summary: U/S for Arms Control and International Security Ellen

Tauscher and Special Representative for Nuclear Nonproliferation Ambassador

Susan Burk held bilateral consultations in London September 3-4, on the margins of the P5 Conference on Confidence Building Measures Towards

Nuclear Disarmament, with Russian Deputy Foreign Minister Sergei Ryabkov,

Chinese Vice-Minister of Foreign Affairs He Yafei, and French Director for

Strategic Affairs Patrick Maisonnave. (Refs) All interlocutors agreed on the need for close P5 coordination in the lead-up to the UNSC Heads of

Government Summit and the Nuclear Nonproliferation Treaty Review Conference

(NPT RevCon). French interlocutors expressed a particular need for closer, more efficient P3 coordination. All interlocutors were supportive of the

Presidentâ€™s proposed Nuclear Security Summit. End Summary.

Russian Perspective -- NPT

--------------------------

Â¶ 2. (S/NF) U/S for Arms Control and International Security Ellen Tauscher and Special Representative for Nuclear Nonproliferation Ambassador Susan

Burk held bilateral meetings in London September 3-4, on the margins of the

P5 Conference on Confidence Building Measures Towards Nuclear Disarmament, with Russian Deputy Foreign Minister Sergei Ryabkov, Chinese Vice-Minister of Foreign Affairs He Yafei, and French Director for Strategic Affairs

Patrick Maisonnave. Ambassador Burk opened the first meeting, with Russian

DFM Ryabkov, by presenting an outline of U.S. objectives for the Nuclear

Nonproliferation Treaty Review Conference (NPT RevCon). DFM Ryabkov stated that Russia and the U.S. are â€œvery much in line with each otherâ€ regarding the NPT RevCon. He confirmed that Russia seeks a P5 consensus with a results-oriented NPT conclusion. â€œWe cannot allow the NPT to fail,â€ he said. Ryabkov cited the â€œgood experience of being almost thereâ€ in terms of the chairâ€™s recommendations from the third

Preparatory Committee (PrepCom). â€œWe must focus while moving toward the

NPT RevCon on realistic deliverables in all areas,â€ he said, which means avoiding pretexts for the Non-Aligned Movement (NAM) to balk. Russia seeks to avoid â€œprescriptive outcomes.â€ He expressed the view that the UK draft text was a good basis for a P5 statement. Ryabkov said Russia would stress universal adherence to the NPT, universal adherence to the

Additional Protocol, the Comprehensive Nuclear Test-Ban Treaty (CTBT), the

Fissile Material Cut-off Treaty (FMCT), and negative security assurances.

He noted the importance of â€œprogressâ€ on CTBT ratification, preferably before the end of the conference. He stated the importance of developing

International Atomic Energy Agency (IAEA) verification and control mechanisms, and that negative security guarantees are key. Russia would think positively about the development of a legal instrument.

Egypt

-----

Â¶ 3. (S/NF) DFM Ryabkov said the Egyptian position gives Russia â€œserious concern.â€ Russia regularly engages with the Egyptians, but the Egyptians do not seem to understand the gravity of the situation. Ryabkov expressed hope that the U.S. would support ideas such as a special coordinator and comprehensive IAEA coverage of facilities in the Middle East. He noted that Middle Eastern countries need to ratify the CTBT. Russia has been in touch with Israel to see if it would consider becoming part of the Chemical

Weapons Convention (CWC), which would â€œplay wellâ€ with the Egyptians.

U/S for Arms Control and International Security Tauscher said she had been working with Egypt, including with Foreign Minister Aboul Gheit, and would continue to do so in the coming weeks. She said that some Egyptians consider their approach last year to be a mistake, and that we were working to get Egypt and Israel to come together on an approach that would command consensus. Ryabkov said Russia had not detected reconsideration by Egypt, and promised to â€œexploreâ€

LONDON 00002214 002 OF 007

Tauscherâ€™s suggestion that the U.S. and Russia meet jointly with the

Egyptians to show U.S.-Russia coordination and to explain concerns to the

Egyptians.

Multilateral Approaches to the Fuel Cycle

-----------------------------------------

Â¶ 4. (S/NF) DFM Ryabkov said Russia was surprised by opposition to initiatives, â€œboth yours and ours,â€ at the most recent Board of

Governors (BOG) meeting. Russia will continue to push forward on its

Angarsk idea. Russia will soon circulate a draft agreement and will consult with the U.S and as many other potential co-sponsors as possible to increase the chances of a positive outcome. U/S Tauscher made clear the

U.S. supports the Angarsk initiative and wants to push it forward at the

November Board as the first step; other steps could follow using the

Angarsk precedents. Ryabkov expressed appreciation for U.S. expressions of support for Angarsk and asked the U.S. to make positive remarks at the next

BOG meeting.

â€œCreative Waysâ€ to Present Arguments Needed

-------------------------------------------

Â¶ 5. (S/NF) DFM Ryabkov said it is important in the lead up to the RevCon to find â€œcreative waysâ€ to present our arguments, citing Egyptian skepticism. U/S Tauscher agreed that we need to find better ways to get our narrative out, and proposed that the two of them write an op-ed that could run in New York at the time of the UNGA. Ryabkov responded that such a piece could make clear that the U.S. and Russia stand together on fuel assurances. He said it was a â€œgood idea,â€ and they should look for the right occasion. Ryabklov also raised the 13 steps, suggesting that some elements were â€œOBEâ€ and the context was now different.

Nuclear Security Summit

-----------------------

Â¶ 6. (S/NF) Senior Director for WMD Terrorism and Threat Reduction at the

National Security Council Laura Holgate briefed on plans for the Nuclear

Security Summit in April. Ryabkov expressed appreciation and said the summit should seek a result that is both â€œpolitical and technical,â€ which he characterized as â€œa huge task requiring thorough preparation.â€

He stressed the importance of early exchanges on summit preparations. He promised that Russia would work to develop ideas by the Sherpa meeting or shortly thereafter. However, the time frame is â€œextraordinarily short,â€ even if the summit is postponed until April. The summit should seek a â€œdefendable nicheâ€ that will not take away from NPT, he said.

CTBT, FMCT

----------

Â¶ 7. (S/NF) U/S Tauscher said the U.S. was carefully preparing for ratification of the CTBT by the Senate, including a new study by the

National Academy. Another key priority for the U.S. is the FMCT. We were encouraged by the steps in the Conference on Disarmament (CD) in May, but

Pakistan has blocked implementation. She said the P5 must work together to preserve the work plan in January and commence actual negotiations. Ryabkov responded that Russia would welcome early U.S. CTBT ratification. Russia had talked to the Pakistanis about the FMCT, but DFM Ryabkov indicated that they were â€œquite evasive.â€ He urged the U.S. to engage the Pakistanis.

Tauscher said we would continue to do so and encourage the rest of the P5 to do so as well.

Iranian Threat, Missile Defense

-------------------------------

Â¶ 8. (S/NF) U/S Tauscher proposed that Russia and the U.S. implement together the understandings reached by the two Presidents in Moscow regarding missile defense, joint threat assessment and the Joint Data

Exchange Center (JDEC). Responding to her proposal to send a team to Moscow to get Russiaâ€™s intelligence assessment on the Iranian missile threat,

Ryabkov said that missile defense remains a difficult

LONDON 00002214 003 OF 007

issue for Russia; the Presidential text was good guidance, but Russia needed more time to consider the U.S. view regarding the missile threat from Iran and issues of their missile technology. Russia has â€œobjective dataâ€ and the differences between the Russian and U.S. views are

â€œconsiderable.â€

Â¶ 9. (S/NF) Tauscher described the missile defense review underway in

Washington. Ryabkov expressed appreciation, and suggested that they revisit the joint threat assessment and the JDEC after the Ballistic Missile

Defense (BMD) review has been completed.

Nuclear Cooperation

-------------------

Â¶ 10. (S/NF) U/S Tauscher welcomed Head of Federal Atomic Energy Agency

Sergei Kiriyenko,s planned visit to Washington and the establishment of the working group on nuclear energy and nuclear cooperation. She pressed for approval and signature of the plutonium disposition agreement. DFM Ryabkov replied that the situation with respect to plutonium disposition was the same as it was during the President,s visit to Moscow. The issue of financing had precluded real progress before the POTUS visit. Russia needs to figure out what is realistic. There are no political constraints. Russia is disposing of highly toxic materials. Ryabkov expressed interest in information about what the U.S. was doing in that regard.

S-300 Air Defense Missiles

--------------------------

Â¶ 11. (S/NF) DFM Ryabkov asked about the status of the Russia 123 agreement. U/S Tauscher responded that some in Congress are interested in moving forward on the 123 agreement, and that further discussions could be held in October. It is crucial that Russia not transfer the S-300 system to

Iran if Congress is to allow the agreement to come into force, she added.

Ryabkov said Russia had a valid contract for the sale of the S-300s, and acknowledged that Russia needed to make a decision regarding the S-300 sale to Iran, an issue that has been the subject of â€œutmost attention in many places.â€ Russia is in a position of growing difficulty for not honoring its contractual obligations and, finances aside, Russia is getting â€œno points in Iran.â€ Ryabkov said Russia understands the U.S. and Israeli arguments and wants to be transparent on the topic, and noted that the U.S. and Russian presidents have discussed it. The current situation is not sustainable; Russia cannot hold up the sale indefinitely. At some point

Russia will have to make up its mind, Ryabkov said. Russia did not agree to sell surface-to-surface missiles but has a contract to sell Iran air defense systems.

Votkinsk

--------

Â¶ 12. (S/NF) DFM Ryabkov said that Russia and the U.S. have different views on whether continuous monitoring at Votkinsk should be continued in the

Stategic Arms Reduction Treaty (START) follow-on agreement. Russia considers the importance of switching off the system to be quite high. The run-up to the end date of START could create difficulties. U/S Tauscher stated that we have the right to monitor until December 5, to which Ryabkov replied, â€œThat goes without saying.â€ Tauscher went on that we see merit in continuing with the Votkinsk system in the new agreement. If the final decision is not to continue the system, we are prepared to work out an arrangement that maintains our rights through December 4. Contractors can box and ship the equipment; there are ways to manage this, she said.

Conventional Forces in Europe (CFE)

-----------------------------------

Â¶ 13. (S/NF) DFM Ryabkov said that Russia circulated its ideas on the

Conventional Forces in Europe (CFE) treaty in Vienna on May 5. â€œWe donâ€™t want to abandon the CFE regime altogether,â€ he said. Russia has the sense that NATO is â€œbecoming comfortableâ€ with the current situation. Russia,

LONDON 00002214 004 OF 007 however, does not want to return to the old treaty. CFE adaptation plus more is required. Flank limitations are the core problem. Ryabkov said

Turkey is not that concerned about flank limitations but wants to keep the system for its own reasons. There could be a chance to â€œmove innovativelyâ€ regarding CFE, but the current situation is unsustainable.

Â¶ 14. (S/NF) Ryabkov concluded by saying Russia wants someone on the U.S. side who will deal with this issue on a regular basis with MFA Security and

Arms Control Director Anatoly Antonov. Russia wants to move forward and wants to reinvigorate the Vienna process without undermining the bilateral process.

Australia Group

---------------

Â¶ 15. (S/NF) Ryabkov asked for a â€œfresh lookâ€ regarding the Australia group, since the U.S. and Russia are now cooperating in many ways. U/S

Tauscher said she has seen no interest on the part of the other members of the Australia Group in Russian membership given the concerns with respect to Russian implementation of the Chemical Weapons Convention (CWC) and

Biological Weapons Convention (BWC). Ryabkov responded that he thought they had dealt with those questions.

MANPADS -- Venezuela

--------------------

Â¶ 16. (S/NF) U/S Tauscher asked that Russia look further into the end-use controls on Man-portable air-defense systems (MANPADS) transferred to

Venezuela to ensure they do not wind up with the Revolutionary Armed Forces of Columbia (FARC). Ryabkov affirmed Russiaâ€™s commitment to ensure legitimate end-user certificates and the ability to conduct inspections; this is true for MANPADS. The information provided was fragmentary, he said. Russia concluded that the factory marks on the munitions made it difficult to determine if they were part of the equipment sold to the

Venezuelan government. Ryabkov said Russia understood the tense situation between Venezuela and Colombia.

Chinese Perspective -- CTBT

---------------------------

Â¶ 17. (S/NF) U/S Tauscher opened the discussion with Chinese Vice-Minister of Foreign Affiars He Yafei with a description of U.S. preparations to seek ratification of the CTBT in the Senate. VFM He asked â€œAre you there yet?â€ Tauscher asked if China would follow with its own ratification, and

He replied that it is â€œlikelyâ€ that China would follow if the U.S. ratified the CTBT.

U.S.-China Cooperation

----------------------

Â¶ 18. (S/NF) VFM He said China and the U.S. have many common interests and

â€œweâ€™re flooded with issues.â€ President Obamaâ€™s Prague speech

â€œcaught the attention of many.â€ The NPT is â€œimportant but we must improve on itâ€ and must â€œstart and restartâ€ issues of disarmament, nonproliferation and peaceful use. The Chinese Presidentâ€™s vision is to study issues in the context of Chinese and U.S. cooperation. â€œI have a mandate to work with you,â€ He said. Nonproliferation issues have been dormant for a dozen years, but the context has changed. Chinaâ€™s goal is a

â€œserious reduction of the nuclear threat.â€ The time to act is now since

â€œwe have a mandate and a consensus at the top level.â€

P5 Consultation in Advance of the NPT RevCon

--------------------------------------------

Â¶ 19. (S/NF) VFM He said the P5 may not always see eye-to-eye but should closely consult in the lead-up to the NPT RevCon. The P5 should â€œstand togetherâ€ and unite since the P5 countries are a â€œtarget.â€ He added that is important to improve communications with non-nuclear states.

Â¶ 20. (S/NF) VFM He raised the issue of the Egyptian Middle East nuclearfree zone. U/S Tauscher responded that the U.S.

LONDON 00002214 005 OF 007 was working hard with both Egypt and Israel to find a common approach and avoid confrontation at the IAEA General Conference and the NPT RevCon. He

said China was prepared to support that effort. He added the P5 should carefully review Iran and the DPRK but deal with them separately from the upcoming UNSC Summit and the RevCon.

FMCT, Pakistan

--------------

Â¶ 21. (S/NF) U/S Tauscher outlined the problem caused by Pakistan in blocking implementation of the CD program of work. She said the U.S. was talking to Pakistan and arguing that Pakistan could make its points in the negotiations but should not block the beginning of talks. VFM He agreed that the Pakistanis â€œhave concernsâ€ regarding the FMCT negotiations. He said he understood Pakistani â€œhesitancy,â€ as well as their â€œlogicâ€ and â€œillogic.â€ The solution is to address the underlying problem, which is that India and Pakistan view each other as enemies. Nuclear weapons are crucial to Pakistan. Indeed, a Pakistani military leader said his army was no match for the Indian army. â€œIndia is the lynchpinâ€ to assuaging

Pakistanâ€™s fears and the U.S. could influence India. China has resolved all border issues except those with India, He observed. In response to

Tauscher,s expression of appreciation for Chinaâ€™s efforts in the CD with

Pakistan, He said China would engage the Pakistanis.

UNSC Summit

-----------

Â¶ 22. (S/NF) VFM He said that the U.S. draft for the UNSC Summit was fairly good, but that China had amendments. Chinaâ€™s Ambassador to the UN has authority to negotiate on the draft resolution which, unfortunately, does not mention Chinaâ€™s disarmament efforts, though the efforts of other P5 countries are noted. China should get credit for, for example, its no first use policy. VFM He also said that China has a different view on the proposed moratorium on the production of fissile material. China supports a ban, but not a moratorium, which raises questions concerning definition, how long, verification, and the like.


-----------------------

Â¶ 23. (S/NF) Senior Director Holgate briefed on planning for the Nuclear

Security Summit in the spring. VFM He said China supports this initiative, which he described as a â€œhuge, daunting job.â€ He advised the U.S. to consider establishing a â€œsmall, informal group to resolve issuesâ€ before the summit--U.S., UK, China, Russia, and a few others--to make sure the major parties are comfortable.

DPRK

----

Â¶ 24. (S/NF) U/S Tauscher mentioned Ambassador Philip Goldberg,s useful talks, which would continue. She asked where the DPRK stood. VFM He responded that the United States is the DPRKâ€™s main preoccupation. The country views normalization of its relations with the U.S. as the only way out of its current â€œmess.â€ China believes the DPRK leadership is anxious about economic development but they believe their security concerns override their economic concerns. Nonetheless, there are signs the DPRK is reaching out. DPRK wants bilateral talks with the U.S., not Six-Party

Talks. China wants the Six-Party Talks to continue. The DPRK wants

â€œsomething in returnâ€ to restart the talks. VFM He asserted that China is encouraging the DPRK to return to the Six-Party Talks. China is also trying to convince the DPRK not to go back on its promise to denuclearize.

The DPRK leader appears to be in good health and control.

Civil Nuclear Cooperation with Pakistan

---------------------------------------

Â¶ 25. (S/NF) U/S Tauscher asked about the status of civil nuclear cooperation with Pakistan. VFM He responded that all

LONDON 00002214 006 OF 007 cooperation is for civil purposes, under safeguards, and that China is not going out of that mode. It is not in Chinaâ€™s interest to proliferate nuclear technology. Tauscher asked about Pakistan,s financial situation.

VFM He replied that Pakistan was hit hard by the financial crisis, but it is a largely agrarian society that needs little cash to survive and is in no danger of going broke. China is the only country that has given cash support to Pakistan, he said.

French Perspective -- P3 Coordination

-------------------------------------

Â¶ 26. (S/NF) In a final meeting, French Director for Strategic Affairs

Patrick Maisonnave expressed a need to reinforce P3 coordination.

Maisonnave noted his disappointment at the current negotiating process in

New York, stating that â€œP3 coordination could be more efficient.â€ U/S

Tauscher agreed the P3 needed to stick together and suggested frequent telephone calls. Maisonnave said he looked forward to frequent phone contact among the three countries.

UNSC Summit

-----------

Â¶ 27. (S/NF) Regarding the September UNSC Heads of State Summit, Maisonnave observed that it could be difficult, if not impossible, to achieve consensus on specific language regarding the DPRK and Iran, but â€œa strong generic message would help.â€ This was important to French political authorities. U/S Tauscher agreed, and asked if there were other political messages France wanted to send. DAS-equivalent for Disarmament and Nuclear

Non-Proliferation Martin Briens said France wanted the text of the

Summitâ€™s resolution to put the issue of nuclear nonproliferation in a broader context. He suggested a short sentence asserting that â€œwe need to make progress on other forms of disarmament.â€ Briens said that France wants a paragraph in the resolution setting out concrete measures against proliferation. He also noted â€œsome technical problemsâ€ that needed to be resolved, such as issues surrounding the return of property and equipment.

Defining Language and Minimum Objectives

----------------------------------------

Â¶ 28. (S/NF) DAS-equivalent Briens noted the â€œpolitical requirementâ€ of sending a message to Iran and the DPRK, of â€œnot letting them off the hook.â€ Maisonnave said that one red line for France was that there must be nothing in the final text of the resolution that would weaken deterrence. He expressed support for a â€œbalanced resultâ€ and called for managing expectations. Maisonnave stressed the importance of supporting access to civil nuclear energy. P3 consultations would provide an opportunity to clarify goals and to â€œdefine minimum objectives.â€ Briens said that when the P3 meets in early October, there would be an opportunity to set â€œminimum goalsâ€ and â€œwork on our statetgy.â€ The October 8-9

Center for Strategic and International Studies (CSIS) Conference in

Washington would potentially be a good time for experts to meet, Briens said.

Â¶ 29. (S/NF) U/S Tauscher noted the importance of coordinating public diplomacy messages. Brien concurred on the importance of better public outreach.


-----------------------

Â¶ 30. (S/NF) Senior Director Holgate briefed on plans for the Nuclear

Security Summit. Maisonnave expressed support for the summit next spring and sought details about timing and goals. He described it as an

â€œexcellent initiativeâ€ and said that French officials would have their first planning meeting September 8. Briens said that the summit would give political momentum and help provide political will to reenforce nonproliferation mechanisms. Briens expressed â€œone small caveatâ€ about such mechanisms, citing French displeasure with the Global Partnership and remarking that it provides a â€œhuge benefit for Russiaâ€ by paying for its

LONDON 00002214 007 OF 007 disarmament while Russia builds submarines. â€œLetâ€™s leverage what we have rather than spend moneyâ€ at the summit, Briens said. Maisonnave expressed appreciation for reassurance that the Presidentâ€™s summit would not be a pledging conference.

FMCT: P3 Coordination and Red Lines

-----------------------------------

Â¶ 31. (S/NF) U/S Tauscher provided an update on START negotiations,

Administration strategy regarding CTBT ratification, the Nuclear Posture

Review (NPR), the Ballistic Missile Defense (BMD) review, and Pakistanâ€™s actions to prevent the beginning of negotiations on the FMCT at the CD.

Briens agreed that Pakistan had been a problem regarding the FMCT. He added that France shares some common interests with the U.S. regarding the FMCT but said that â€œwe need to discuss some technical details.â€ He stated that France would be reluctant to agree to terms regarding transparency of fissile material stockpiles. He underscored the importance of not raising expectations and stressed that there are â€œsensitive issues that we must coordinate carefully with the P3â€ and discuss in detail. He said that national experts should talk directly on sensitive technical issues, and that France has some red lines that need to be discussed.

IAEA

----

Â¶ 32. (S/NF) U/S Tauscher encouraged support for the new IAEA Director

General Amano, saying we need to make him a success and make sure he has the budget to do his job. Briens agreed that the U.S. and France should talk to DG Amano regarding shared priorities, â€œand make sure he does the right thing.â€ He also agreed that the U.S. and France should consult with each other regarding the IAEA budget. The U.S. and France should also think about what can be done to improve IAEA verification safeguards.

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09LONDON2230

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2011-02-04

21:09

CONFIDENTIAL

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E.O. 12958: DECL: 09/22/2019

TAGS: ENRG ECON UK

SUBJECT: CASPIAN ENERGY: UK TELLS AMB MORNINGSTAR THEY ARE

ON SAME PAGE AS U.S.

Classified By: Jock Whittlesey, A/Econ Couns, reasons 1.4 b & d

Â¶ 1. (C/NF) Summary: Ambassador Richard Morningstar, Special Envoy for

Eurasian Energy Diplomacy, and UK government and private officials agreed on the need for continued engagement with Caspian governments on energy issues, while encouraging Europe to increase both its outreach to the region and internal reform efforts. In meetings with UK Foreign Office and

Department of Energy and Climate Change officials, Prince Andrew (the UK

Special Representative for International Trade and Investment), ExxonMobil,

BP, and an industry group hosted by British American Business, all agreed

Europe needs to organize itself and its energy markets, while continuing to press for Southern Corridor oil and gas routes. UK government officials also expressed concerns about Ukraine's ability to reform itself adequately, and Russia's continued use of energy policy as a tool to extract other concessions from former Eastern bloc countries. A Chevron representative said if Caspian Pipeline Company (CPC) expansion does not take place immediately, Russia will be able to slowly shut down the Baku-

Tblisi-Ceyan oil corridor (a key non-Russian route). Chevron also said

China is increasing its presence in Iran because Beijing fears U.S. companies will pile in if U.S.-Iran relations improve.

Â¶ 2. (C/NF) Amb. Morningstar described USG goals in the region as: -

Protecting U.S. energy security; -Helping Europe achieve its own energy security; -Helping Caucas and Central Asian countries increase production, be independent, and develop their economies. In describing

Russian/Ukrainian issues, Amb. Morningstar stressed the USG is not anti-

Russian (we don't oppose either Nord-Stream or South Stream, although we question their viability and cost), but rather we needed to work closely with both Moscow (through the Clinton-Lavrov Committee and its Energy

Market Sub-Committee) and Kyiv. The Southern Corridor is very important, but Nabucco and other projects are not the only pieces of the puzzle, and

Europe needs to reform its own market, become more interconnected, and increase gas storage and Liquefied Natural Gas. Morningstar stressed the

U.S. cannot be out in front of the Europeans on their own energy issues.

We can help push them in the right direction, but Europe will need to do its own work to reduce its dependency on Russia. Morningstar said USG action over the next six months include: 1) shoring up Ukraine gas issues to prevent last year's cutoff; 2) pressing Turkey and Azerbaijan to settle pricing, transit and other disagreements; 3) getting as much high-level

European involvement in these and other issues (he said it was a positive sign former German Foreign Minister Joscka Fischer was representing

European companies.) End Summary.

UK Officials Agree on Long-game in Caspian ----------------------------- --

----------

Â¶ 3. (C/NF) Amb. Morningstar and UK government officials, led by Michael

Davenport, Head of the Russia/Central Asia Directorate, in the Foreign

Office (FCO), and John Neve, Director for International Energy at the

Department of Energy and Climate Change (DECC), agreed the Southern corridor gas and oil pipeline projects are an important part of the strategy for improving energy transport and independence, but they are not the entire strategy. The British government continues to engage in the region, and will send DECC Secretary Ed Miliband to Moscow in early October to discuss bilateral energy issues (despite the UK receiving less than one percent of its energy supplies from Russia) and Copenhagen climate change plans. UK officials were enthused about prospects for the US-EU Energy

Council, and thought the USG could assist them in pressing the EU to reform its internal market, improve research and technology, and improve regulatory policies.

Â¶ 4. (C/NF) British officials agreed with Amb. Morningstar that Ukraine is not helping its own case. FCO officials were unsure if current leaders in

Kyiv were up to the task of reforming, but felt the upcoming elections

would have an impact on the politicians' behavior. The FCO thought Russia would be happier with Yanukovich than with Tymoshenko, due to the former's predictability, but would likely be fine with either in the Presidency.

Turning to Turkmenistan, Davenport said British companies were starting to become frustrated with getting little-to-no movement out of the government in Ashgabat. UK companies fear they will never be permitted a toe-hold in the Turkmen market. Amb. Morningstar said he was counseling western companies to stay engaged, and to think long-term. Turkmen President

Berdimuhamedov will be in London in March 2010 for a Chatham House

Conference.

Â¶ 5. (C/NF) Elsewhere, the FCO told Ambassador Morningstar there is a difference of opinion between the UK and the rest of the EU on Uzbekistan and whether to maintain an arms embargo against them or not (UK does not support an embargo.) The UK is not engaged with Uzbekistan on energy.

Within the EU itself, however, the UK is pressing hard for a permanent representative to the Caspian region. They have contemplated sending 4-5 member state representatives out in a group, but fear the problem of divergent interests. In addition, the EU has no permanent representative in Baku, and despite Pierre Morel wearing the Caspian hat, his effectiveness is diluted because he also handles Georgian issues for the

EC. British officials told Morningstar it was difficult to get sustained political engagement in Europe over energy issues, and they even have difficulty getting the attention of their ministers in London.

Prince Andrew's Involvement in the Region --------------------- -----------

--------

Â¶ 6. (C/NF) Prince Andrew's position as UK Special Representative for

International Trade and Investment often takes him to the region. He said the Turkmen want to expand exports in all directions: North to Russia,

South to Iran, East to China and West to Europe, but they don't realize yet how much they need the West. As an example, he said the Malaysians desperately want to enter the Turkmen market, but Petronas doesn't have the technology Western companies have. Other concerns, Prince Andrew said, are that binding arbitration in the region is not at all binding. There is no pressure on local governments to abide by contracts so companies must rely on fickle good will. To make matters worse, he said, the Europeans are in disarray and can not come up with a united energy plan.

Industry's Activities ---------------------

Â¶ 7. (SBU) ExxonMobil: In a private meeting with ExxonMobil executives, led by Paul Tobin, Transportation Manager, and Rob Young,

Caspian/Europe/Russian Exploration Manager, Tobin described the company's plans to move into "unconventional" resources across Europe. These include

"tight gas" and "shale gas" - the latter in Germany and the Netherlands.

ExxonMobil is also focusing on untested possibilities in the Black Sea, such as deep water sites at over 1500 meters, where they have a few licenses for wild-cat exploration. Exploration results in the South

Caspian/Azerbaijan areas have been disappointing, but the North Caspian have been successful. The business climate in Kazakhstan has deteriorated since the late 1990's and ExxonMobil does not see it getting better. Young thought that the depths discussed for South Stream were doable, and in fact had been done before; however, it would be expensive.

Â¶ 8. (SBU) On Russia, ExxonMobil feels generally positive; for instance

President Medvedev recently supported CPC expansion. However, questions remain about how the Kazakhs (KMG) will execute the work (i.e., whether to hire an outside manager or one from within the consortium.) ExxonMobil believes the involvement of Transneft, because of its political connections, has improved the situation. In the end, ExxonMobil does not think Kazakhstan will vote down proposals to go forward.

Â¶ 9. (SBU) ExxonMobil's interests in Turkmenistan are a bit broader than other companies', they said. They are interested in both on-shore and offshore gas development, but they don't see much potential for off-shore now.

The Turkmen are apprehensive about who would control the reserves if the

International Oil Companies developed fields. The government's personnel resources are also stretched beyond capacity; officials don't have either the skills or the understanding to properly develop the natural resources efficiently. They have had little luck convincing the Turkmen to allow them to work with ExxonMobil. Ambassador Morningstar said he has told the

Turkmen they would benefit from Western companies' capital and technology.

Â¶ 10. (SBU) Chevron's Luis Coimbra, General Manager of Marketing and

Transportation, said five years of working on Southern Corridor oil transport (Caspian Pipeline Company - CPC) has shown no progress. Russia is over-building pipeline, and is well-positioned to attract any spare oil production for its own routes. Coimbra said without significant movement on Southern Corridor oil routes, Russia could soon stop development of other projects at critical political points. He predicted that without a

Southern passage through the Caucuses soon, Baku-Tblisi-Ceyan capacity could drop by one-half within 10 years, and would be empty another 10 years later. Chevron didn't want to see another Odessa-Brody (i.e., an empty tube.) Chevron's top priority is CPC expansion. Shell shares Chevron's concerns about the urgency of getting CPC done soon.

Â¶ 11. (SBU) BP, led by David Peattie, Group Vice President for Russia, said the company's outlook in the region was premised on estimates of $60-

90/barrel range for the next 5-10 years. BP's margins are low now. Gas prices are very low, and profitability will suffer until prices rise a bit in the medium term. With this overview, he said TNK-BP is doing well (they earned a $3 bn profit in six years, from an $8.5 bn investment and are still one-half invested). In fact, BP shifted personnel to Moscow soon after the problems with TNK-BP because they saw the need to beef up their presence there. BP's long-term goal is to partner with a state-run oil and gas company in Russian. On the other hand, BP has decided to exit

Kazakhstan, as Russia and Azerbaijan look more promising. In addition, some of BP's interests in Russia conflict with Kazakh projects, i.e., CPC expansion. Arctic exploration is the next frontier for BP, with hundreds of billions of barrels in difficult-to-reach locations. BP is sensitive to environmental concerns in the region and border issues. On Turkmenistan,

BP sees a 30-40 year horizon and is taking things step-by-step in their development of an on-shore operation. BP's John Gerson, Chief of

Government and Political Affairs, said the new USG policy is consistent and less antagonistic than in the past, and will be helpful to Western companies' efforts in the region. This cable was cleared by Ambassador

Morningstar. Visit London's Classified Website: XXXXXXXXXXXX

SUSMAN

Viewing cable 09LONDON2567, AMBASSADOR MCELDOWNEY'S BILATERAL

MEETINGS IN



09LONDON2567

2009-11-

16 15:03

2011-02-04

21:09


Embassy

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RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY


NOFORN

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E.O. 12958: DECL: 11/15/2019

TAGS: PGOV PREL MOPS SOCI ECON PK AF OSCE NATO EU

RS, IR, UK

SUBJECT: AMBASSADOR MCELDOWNEY'S BILATERAL MEETINGS IN

LONDON

REF: LONDON 2509 Classified By: Political Minister-Counselor Greg Berry, for reasons 1.4(b) and (d)

Â¶ 1. (C/NF) Summary and Introduction. During her November 9-11 visit to

London, Principal Deputy Assistant Secretary of State Nancy McEldowney discussed a range of issues in bilateral meetings with UK officials.

Julian Miller, Deputy Head of the Foreign and Defence Policy Secretariat at

the Cabinet Office, affirmed Prime Minister Brown's commitment to the UK's engagement in Afghanistan, noting that Brown delivered a November 6 speech about Afghanistan to "steady the ship" and ensure that the UK's Afghan policy remains on course. Ambassador McEldowney discussed the NATO

Strategic Review, strategic nuclear deterrence issues, NATO-EU cooperation,

EU foreign policy and defense issues, OSCE's Corfu process, missile defense, and CFE with HMG interlocutors. Miller said that the NATO

Strategic Review should reflect the role of nuclear deterrence and firmly reiterate Article 5 commitments. Paul Johnston, the Foreign and

Commonwealth Office's (FCO) Director for International Security, said that the U.S. nuclear policy review would be particularly important for the

Alliance, given the new German government. Johnston agreed that discussion of the Medvedev proposal should remain anchored in OSCE's Corfu process.

Matthew Rycroft, Director of the European Union Office at the FCO, told

McEldowney that when the U.S. proclaims it supports a strong and united

Europe, it sends a powerful message to the UK, which wants to be a strategic transatlantic partner as well as an influential player in Europe.

Â¶ 2. (C/NF) Summary and Introduction Continued: Conservative Shadow

Minister for Europe Mark Francois told Ambassador McEldowney that the

Tories would continue to be supportive in Afghanistan, recognizing that a

"long-haul" commitment would be necessary to confront the "complexity" of the threat emanating from Afghanistan and its potential to spread to

Pakistan and Iran. In addition to her bilateral meetings, Ambassador

McEldowney participated in a "Quad" meeting with her UK, French and Germany counterparts. (Septel) End Summary and Introduction.

Afghanistan -----------

Â¶ 3. (C/NF) Julian Miller, Deputy Head of the Foreign and Defence Policy

Secretariat at the Cabinet Office, stated that Prime Minister Brown delivered a November 6 speech about Afghanistan to "steady the ship" and ensure that the UK's Afghan policy remains on course. Recent British casualties in Afghanistan, especially during the previous week, had made for a "very difficult" period and Brown delivered his speech in order to reaffirm and clarify the reasons for the UK's commitment in Afghanistan,

Miller said. Brown feels "very deeply" about corruption and the needs of the Afghan people, as outlined in his speech, Miller stated.

Â¶ 4. (C/NF) Miller observed that the U.S. focus on dismantling and destroying Al Qaida, encouraging the reintegration into mainstream Afghan society of moderate Taliban elements, protecting the civilian population, and building indigenous capabilities complements and corresponds with the

UK position. Miller stated that HMG is inclined to support the establishment of a senior coordinator to serve alongside General

McChrystal, but he acknowledged that "finding the right person is complicated."

Nuclear Disarmament -------------------

Â¶ 5. (C/NF) Miller asked Ambassador McEldowney to keep HMG informed of the progress of the Nuclear Posture Review. Miller affirmed that Prime

Minister Brown shares President Obama's vision of a nuclear weapons free

world. Brown believes "it is important to have a vision ) but a realistic one," as outlined by the President, Miller said. Brown has concluded that nuclear weapons states can make progress toward multilateral nuclear disarmament and non-nuclear weapons states can contribute to global nonproliferation goals, Miller stated. Miller affirmed that HMG is committed to maintaining a "minimum, credible, independent, nuclear deterrent."

NATO: Nuclear Policy, Strategic Concept -----------------------------------

----

Â¶ 6. (C/NF) The NATO Strategic Review should reflect the role of nuclear deterrence and firmly reiterate Article 5 LONDON 00002567 002 OF 004 commitments, Miller stated. Miller said he rejected the "false zero sum" view of some allies that holds that "anything that envisages a new role for

NATO comes at the expense of Article 5 guarantees . . . our view is the opposite." The new Strategic Concept should reflect a "process that does not paint us into a corner before other countries can make their views known," he said. Miller stated that the U.S. decision on missile defense appeared to be a "smart move."

Â¶ 7. (C) Miller expressed general agreement with Ambassador McEldowney's description of NATO's open door policy, observing that "the principle of not having a closed door seems right."

Â¶ 8. (C/NF) Paul Johnston, the FCO's Director for International Security, believed that the U.S. nuclear policy review would be particularly important for the Alliance, given the new German government. While some

Allies believed there was no deterrent value, others saw it as the political underpinning of the U.S. commitment to Europe. Johnston said that HMG had no fixed opinion, though it had prepared an options paper questioning whether there was anything to be gained from the Russians by changing policy. Allies also needed to decide how to treat deterrence in the review of NATO's Strategic Concept; in 1999, it had been a struggle to include language on this point. While the Strategic Concept needed to confirm the role of extended deterrence, it may not need to go into specifics.

Â¶ 9. (C/NF) McEldowney agreed; extended deterrence was part of a strong

Article 5 commitment. But we also needed to signal support for the NPT process in the new Strategic Concept. McEldowney stressed that these were not war-fighting instruments, but elements of geostrategic and political deterrence. Above all, we wanted to move forward in a way that drew Allies together.

Â¶ 10. (C/NF) Johnston said that when Foreign Secretary Miliband meets

NATO SYG Rasmussen on November 12, he plans to put forward a two-part approach to the Strategic Concept: a short political document that would reaffirm key concepts (Articles 4 and 5, deterrence, consultation, working in partnership), and a second document spelling out how to meet those challenges, including NATO priorities and reform. McEldowney agreed we should not reprise the 1999 effort, but aim for something succinct at the political level that gives strong impetus to reform, restructuring, and

preparedness to meet new threats, including equipment and training.

Johnston agreed; forces should be flexible and capable, not limited by geographic scope.

NATO-EU -------

Â¶ 11. (C/NF) On NATO-EU cooperation, Johnston discounted the likelihood of a change in Turkey's views (at least prior to its eventual EU entry).

The UK was concerned that people would gradually come to view the relationship as simply dysfunctional. If so, that would bolster arguments by some in the EU who favored separate capabilities ) a waste of resources.

The French continued to resist NATO-EU defense planning; the UK goal was not to undermine EU autonomy, but to allow the two organizations to interface better. However, Johnston hoped that implementation of the EU's

Lisbon Treaty would allow the NATO SYG and the new EU High Representative to work together.

EU Security and Foreign Policy Issues -------------------------------------

Â¶ 12. (C/NF) Despite France's insistence to keep European Security and

Defense Policy out of the purview of the External Action Service (EAS), the

UK eventually prevailed in convincing France and other Member States to incorporate three and possibly four civilian-military bodies under EAS,

Matthew Rycroft, Director of the European Union Office, FCO, told

McEldowney. They are: the Civilian Planning and Coordination Cell,

Civilian Military Planning Directorate, the EU Military Staff and the

Situation Center; consensus on the last is still not assured, however. The depth and scope of the External Action Service are still under debate, particularly in the areas of development assistance and consular protection; the UK is focused on ensuring that the EAS in all its various dimensions is compatible with the UK's foreign policy objectives, he stated. Rycroft concurred with McEldowney's observation that there needs to be greater EU-NATO cooperation, but also acknowledged that the issues of

Turkey and Cyprus often present impediments to enhanced LONDON 00002567

003 OF 004 cooperation.

Â¶ 13. (C/NF) On Bosnia and Herzegovina, Rycroft, who was recently the UK's

Ambassador to Sarajevo, said he was concerned about the deepening ethnic divisions and the threat of a new conflict. The UK believes it might not be appropriate to close right now the Office of the High Representative

(OHR), but Rycroft noted that many other European countries are pressing for an immediate closure. McEldowney pointed to the work of Deputy

Secretary Jim Steinberg and former Swedish PM Carl Bildt in Bosnia as an example of how the U.S. and EU can cooperate on a critical foreign policy issue.

Â¶ 14. (C/NF) On enlargement, the UK would advocate for a greater push on the membership of the Balkan states, Rycroft said, but noted that the tide toward enlargement in general has shifted, especially in light of the economic crisis. Member States are focused on getting their own economic houses in order before they would be willing to consider taking on countries with struggling economies. He also pointed to the problem of

Macedonia. McEldowney briefed him on discussions with Greek PM Papandreou concerning the naming issue of Macedonia.

Â¶ 15. (C/NF) On a "united" Europe, Rycroft said that when the U.S. proclaims it supports a strong and united Europe, it sends a powerful message to the UK, which wants to be a strategic transatlantic partner as well as an influential player in Europe. This message helps pro-Europe

British politicians effectively play both roles. He added the current UK government prefers having a transformative figure to be selected as EU

President, and believes that Tony Blair is not completely out of the running as a candidate.

CFE ---

Â¶ 16. (C/NF) On CFE, McEldowney confirmed in her meeting with Paul

Johnston that ) despite Russia's two-year non-observance ) we would exchange data this year. However, the situation was not sustainable, and we would call on Russia to observe its obligations. The question remained: how to bring Russia on board while preserving Alliance unity? Johnston agreed that the Quad needed to reflect on its CFE equities. The outlines of a "deal" Russia would accept were clear, but was it a deal worth having?

How damaging would Russia's non-participation be? Should we seek a modernized regime? In the short term, we needed to keep the Alliance on the same page. McEldowney noted that even if we could reach agreement with

Russia on the flank, we would not get Alliance agreement on Russian forces in Georgia and Moldova ) and nor would we get such a deal through Congress or the House of Commons.

OSCE ----

Â¶ 17. (C/NF) McEldowney stressed to Johnston that the Medvedev proposal should remain firmly in the OSCE's Corfu process. We would not be in a position to endorse the Kazakh proposal for a Summit during this month's

Athens ministerial; we would want to see sufficient progress on substance before agreeing. Johnston agreed that discussion should remain anchored in

OSCE; Russia now appeared to be "forum shopping," advocating a different process (or discussion in the NATO-Russia Council).

Â¶ 18. (C/NF) Johnston noted that the Russians were also pressing for a review of the OSCE's Vienna Document; the U.S. and UK were both opposed

(though France, Germany, Turkey, Spain, Luxembourg and Italy were inclined to support it). As FSC chair, the UK did not intend to accept the Russian proposal, but rather look at ways to examine CSBMs.

Missile Defense ---------------

Â¶ 19. (C/NF) On ballistic missile defense, McEldowney welcomed the positive deliberations at the Defense Ministerial in Bratislava. On balance, it was better to wait for endorsement at Lisbon, however, rather than pushing for it at December's ministerial. Our phased adaptive

approach made NATO's BMP more credible. Johnston agreed it would provide a meaningful base at Lisbon.

Â¶ 20. (C/NF) In light of the Foreign Secretary's recent visit to Moscow,

Johnston asked whether the Russians were taking the opportunity to "reset" relations with the U.S. McEldowney LONDON 00002567 004 OF 004 underscored our focus on getting a START agreement by the December 5 deadline. In addition, the NATO-Russia council should be more productive, including taking practical steps on missile defense, counter-narcotics, and

Afghanistan. On CSTO, Johnston and McEldowney agreed that we should not give it more legitimacy, nor treat it as a parallel to NATO.

One Conservative Perspective ----------------------------

Â¶ 21. (C/NF) Conservative Shadow Minister for Europe Mark Francois previewed for PDAS McEldowney priorities and positions that a future

Conservative government would have with respect to Afghanistan, the

European Union, and the Balkans. Francois indicated that the Tories would continue to be supportive in Afghanistan, recognizing that a "long-haul" commitment would be necessary to confront the "complexity" of the threat emanating from Afghanistan and its potential to spread to Pakistan and

Iran. Francois, a former Territorial Army officer, criticized HMG for its failure to provide adequate equipment to British forces in Afghanistan and its failure to advocate effectively for the war effort at home. He noted diminished public support for the war in the UK and expressed the hope that the President would make his decision on next steps in Afghanistan quickly so that the UK could adjust its own policy and hoped that the U.S. would be

"forward-leaning" in reviewing its options. Francois reiterated that the

Tories in government would do what they could if Britain were asked to provide more troops.

Â¶ 22. (C/NF) Francois recalled that public opinion on HMG's handling of the European Union's Lisbon Treaty had been consistently low, and that all parties had promised a referendum on the treaty in some degree. The package of measures that party leader David Cameron had announced (reftel) were realistic and would ensure an "Irish lock" for future referenda.

British opt-outs and a proposed Sovereignty Bill under the Conservatives, he said, would help delineate and define the EU's power in the UK.

Francois also raised the Balkans and the need to be doing more to confront troubling developments in Bosnia Herzegovina and Republic Srpska. He indicated that it remained the Tory position to maintain the Office of High

Representative in Bosnia and that there was a positive role for the EU to play. Arminka Helic, Shadow Foreign Secretary William Hague's senior advisor, added that it would help to have an increased U.S. role in the

Balkans to move things forward.

Â¶ 23. (U) This cable was cleared by PDAS McEldowney. Visit London's

Classified Website: XXXXXXXXXXXX

Susman

Viewing cable 09LONDON2626, UK, WITH EU PARTNERS, TO CONDEMN SYRIA AT

IAEA



09LONDON2626

2009-11-

23 17:05

2011-02-04

21:09


Embassy

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NOFORN

SIPDIS

STATE FOR ISN/RA

E.O. 12958: DECL: 11/23/2019

TAGS: PARM IAEA KNNP SY IR UK

SUBJECT: UK, WITH EU PARTNERS, TO CONDEMN SYRIA AT IAEA

BOARD OF GOVERNORS MEETING

REF: SECSTATE 119161 Classified By: Political Minister Counselor Gregory

Berry for reasons 1.4 (b) and (d).

Â¶ 1. (C/NF) Summary: The UK is in full agreement with reftel points concerning Syria and will, with EU Partners, issue a statement condemning

Syria for its lack of cooperation with the IAEA at the Board of Governors

(BOG) meeting on November 26-27. While the UK has on previous reports lobbied non-EU states on Syria, the UK will not do so this time and will instead focus on Iran. The UK may, however, lobby non-EU states after the

Board of Governors meeting. See para 6 for the full text of the draft EU statement on Syria. End Summary.

Â¶ 2. (C/NF) Poloff delivered reftel demarche to Foreign and Commonwealth

Office (FCO) Counter-Proliferation Department Regional Issues Desk Officer

Duncan Johnson on November 23. Johnson indicated that HMG was in full agreement with USG policy with regard to Syria and the IAEA, calling the recent IAEA report on Syria "dreadful" and noting that the Syrians were probably being less cooperative than the Iranians.

Â¶ 3. (C/NF) Johnson said that the UK, together with EU Partners, would issue a "quite strong" statement condemning Syria for its failure to cooperate with IAEA inspectors and urging it to reform and cooperate fully with the Agency at the IAEA Board of Governors (BOG) meeting on November

26-27. See para 6 for the full text of the draft statement.

Â¶ 4. (C/NF) Johnson said that on previous IAEA reports on Iran and Syria, the UK had lobbied non-EU states, notably those in the Non-Aligned

Movement, pointing out the seriousness of both countries' offenses and asking states to issue condemnations of Syrian and Iranian actions.

Johnson said that on this particular report, the UK was working to lobby non-EU states on Iran and would not be lobbying on Syria. Johnson cited differences in France and Germany's thinking on Syria, the European push for rapprochement with Syria, and the FCO's Syria desk's attempts to win the Syrians over on the Middle East peace process as reasons for not lobbying strongly on Syria on this report. Johnson did say, however, that the UK might take follow-up action on Syria after the BOG meeting, which could include lobbying non-EU countries.

Â¶ 5. (C/NF) Johnson said that the UK was preparing notes for the new IAEA

DG noting the need to "keep the foot on the pedal" with regard to pressing

Syria to cooperate with the IAEA. Johnson said that the UK had also, in the past, spoken to states like Turkey and asked them to talk to the

Syrians privately and attempt to convince them that it was in their interest to cooperate with IAEA inspectors. Johnson said, however, that the UK had not had such conversations with regard to the most recent report. 6. (C/NF) Johnson provided the text of a final draft EU statement on Syria, to be delivered at the IAEA BOG meeting on November 26-27: Begin

Text: International Atomic Energy Agency Final Draft Agenda item 4 (d)

Implementation of the NPT-safeguards agreement in the Syrian Arab Republic

Mr. Chairman, 1. I have the honour to speak on behalf of the European

Union. (The candidate countries Croatia, the former Yugoslavian Republic of

Macedonia and Turkey, the Countries of the Stabilization and Association process and potential candidates Albania, Bosnia and Herzegovina,

Montenegro and Serbia, the EFTA countries Iceland, Liechtenstein and

Norway, members of the European Economic Area, as well as Armenia,

Azerbaijan, Georgia, the Republic of Moldova and Ukraine, associate themselves with this statement). 2. The European Union thanks the

Director General for his report on the Implementation of NPT Safeguards

Agreement in Syria (document GOV/2009/75). The EU commends the DG and the

Secretariat for their continuing efforts to clarify all outstanding issues with Syria. 3. The EU is concerned about the lack of progress to clarify these issues in the implementation of Syria,s safeguards agreement.

4. Syria has still not provided information or access that would allow the Agency to confirm Syria,s statements regarding the non-nuclear nature of the destroyed building on the Dair Alzour site. There has been no cooperation on the part of the Syria to enable the Agency to determine the origin of the anthropogenic natural uranium particles, of a type not included in Syria,s declared inventory, found at the Dair Alzour site. The

Agency has not been allowed access to locations and documentation as

requested for this purpose. Syria has also failed to substantiate its claims that certain procurement efforts were related to civilian activities. There has been no willingness on the part of Syria to engage in substantive discussions with the IAEA. 5. The results of the samples taken in July at the Miniature Neutron Source Reactor (MNSR) in Damascus do not support Syria,s earlier explanation for the origin and presence of the anthropogenic natural uranium particles, of a type not in Syria,s declared inventory, found there. Lately Syria has identified other possible sources to the anthropogenic natural uranium particles. These explanations, however, need to be investigated further by the Agency. The EU supports the Agency,s efforts in this regard and hopes that the activities carried out during the inspection of 17 November did not provide the clarification sought. Mr. Chairman, 6. Refusal to cooperate will not do. Safeguards

Agreements must be implemented in full. It is the obligation of each state with a Comprehensive Safeguards Agreement in force to declare all its nuclear installments and material and to report on any new nuclear facility to the Agency once the decision on its construction is taken. 7. The EU thus urges Syria to cooperate with the Agency in order to ensure that safeguards are applied to all source and special fissionable material subject to Syria,s Safeguards Agreement. In the absence of the necessary co-operation with the IAEA the completeness and correctness of Syria,s declarations under its Comprehensive Safeguards Agreement would clearly remain in doubt. 8. The EU understands Syria,s concerns about the sensitivity of information and locations in a site of a declared military nature, but would like to remind Syria that this does not preclude investigations by the Agency. The EU is convinced that it will be possible for Syria and the Agency to establish the necessary modalities that will enable the Agency to proceed with its verification while protecting sensitive military information. 9. The EU calls upon Syria to sign and ratify the Additional Protocol as soon as possible as a means to strengthen the confidence of the international community about the peaceful nature of

Syria,s nuclear activities. 10. The EU acknowledges the Director

General,s request to other Member States, which may possess information relevant to the verification of Syria,s Safeguards Agreement, especially on the issue of Dair Alzour, to provide the Agency with all such information.

Thank you, Mr. Chairman. End Text. Visit London's Classified Website:

XXXXXXXXXXXX

Susman

Viewing cable 10LONDON92, United Kingdom: Investment Climate Statement 2010



10LONDON92

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RUEHBL/AMCONSUL BELFAST PRIORITY 1489

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SIPDIS

DEPT FOR EB/IFD/OIA

DEPT ALSO FOR USTR

E.O. 12958: N/A

TAGS: ECON EFIN ETRD EINV OPIC KTDB USTR UK

SUBJECT: United Kingdom: Investment Climate Statement 2010

REF: 09 State 124006 LONDON 00000092 001.3 OF 012 1. In response to reftel, the following is the 2010 Investment Climate Statement for the

United Kingdom. The information is updated as of January 1, 2010. UNITED

KINGDOM: 2010 INVESTMENT CLIMATE STATEMENT --------------------------------

------------- ---- A.1. Openness to Foreign Investment The UK was the world's fourth largest recipient of foreign direct investment in 2008, receiving U.S. $96.9 billion, according to the United Nations Conference on

Trade and Development (UNCTAD), latest available figures. The UK attracted

19 percent of all FDI inflows into the European Union (EU). The stock of

U.S. foreign direct investment in the UK totaled $421 billion at year end

2008. With a few exceptions, the UK does not discriminate between nationals and foreign individuals in the formation and operation of private companies. U.S. companies establishing British subsidiaries generally encounter no special nationality requirements on directors or shareholders, although at least one director of any company registered in the UK must be ordinarily resident in the UK. Once established in the UK, foreign-owned companies are treated no differently from UK firms. Within the EU, the

British Government is a strong defender of the rights of any British registered company, irrespective of its nationality of ownership. Market entry for U.S. firms is greatly facilitated by a common language, legal heritage, and similar business institutions and practices. Long-term political, economic, and regulatory stability, coupled with relatively low rates of taxation and inflation make the UK particularly attractive to foreign investors. The Labour government continues its commitment to economic reforms, including privatization, deregulation, and support for competition. Local and foreign-owned companies are taxed alike. Inward

investors may have access to certain EU and UK regional grants and incentives that are designed to attract industry to areas of high unemployment, but no tax concessions are granted. The UK taxes corporations 28 percent on profits over 1.5 million GBP. Small companies are taxed at a rate of 21 percent for profits up to GBP 300,000 and marginal tax relief is granted on profits from 300,001-1,500,000 GBP. Tax deductions are allowed for expenditure and depreciation of assets used for trade purposes. These include machinery, plant, industrial buildings, and assets used for research and development. A special rate of 20 percent is given to unit trusts and open-ended investment companies. The UK has a simple system of personal income tax. The basic income tax rate is 20 percent on income less than GBP 37,400. The higher rate of income tax, payable on income over GBP 37,400 is 40 percent. From the start of the

2010-2011 tax year, income tax on all income over GBP 150,000 will increase from 40 to 50 percent. A temporary bank payroll tax of 50 percent was applied to discretionary bonuses above GBP 25,000 awarded by banks between

December 9 2009 and April 5 2010. UK citizens also make mandatory payments of about 11 percent of income into the National Insurance system, which funds social security and retirement benefits. Effective April 2008, the

UK requires non-domiciled residents of the UK to either pay tax on their worldwide income or a flat rate of GBP 30,000 after seven years of residence. The Scottish Parliament has the power to increase or decrease the basic income tax rate in Scotland, currently 20 percent, by a maximum of 3 percentage points. Although the Scottish government has this power, it has never been used, and the mechanism for collection and disbursement is unclear. The UK imposes few impediments to foreign ownership. The UK subscribes to the OECD Committee on Investment and Multinational

Enterprises' (CIME) National Treatment Instrument and the OECD Code on

Capital Movements and Invisible Transactions (CMIT). U.S. companies have found that establishing a base in the UK is an effective means of accessing the European Single Market, and the abolition of most intra-European trade barriers enables UK-based firms to operate with relative freedom throughout the EU. Many U.S. companies have operations in the UK, including all of the top 100. The UK hosts more than half of the European, Middle Eastern and African corporate headquarters of American-owned firms. LONDON

00000092 002.3 OF 012 British Overseas Territories The British Overseas

Territories (BOTs) comprise Anguilla, British Antarctic Territory, Bermuda,

British Indian Ocean Territory, British Virgin Islands, Cayman Islands,

Falkland Islands, Gibraltar, Montserrat, Pitcairn Islands, St. Helena and its dependencies Ascension and Tristan da Cunha, Turks and Caicos Islands,

South Georgia and South Sandwich Islands, and Sovereign Base Areas on

Cyprus. The BOTs retain a substantial measure of responsibility for their own affairs. Local self-government is usually provided by an Executive

Council and elected legislature. Governors or Commissioners are appointed by the Crown on the advice of the British Foreign Secretary, and retain responsibility for external affairs, defense, and internal security.

However, the UK imposed direct rule on the Turks and Caicos Islands in

August 2009 after an inquiry found evidence of corruption and incompetence.

Its Premier was removed and its constitution was suspended. The UK now rules directly through its Governor. The UK's Department for International

Development (DFID) is committed to meeting the "reasonable assistance needs" of the BOTs. Many of the territories are now broadly selfsufficient. However, DFID maintains development assistance programs in St.

Helena, Montserrat and Pitcairn, including budgetary aid to meet the islands' essential needs and development assistance to help encourage economic growth and social development. Other BOTs receive small levels of assistance through "cross-territory" programs for issues such as environmental protection, disaster prevention, HIV/AIDS and child protection. The UK also lends to the BOTs as needed, up to a pre-set limit, but assumes no liability for them if they encounter financial difficulty. Many of the BOTs, particularly those in the Caribbean, have

been hit hard by the financial crisis. In the Cayman Islands, the British

Virgin Islands, the Turks and Caicos and Anguilla, decreases in financial services activity and tourism have resulted in falling output and government revenue. Fisheries and tourism activity in the Falkland Islands have fallen while the government revenues of Gibraltar, with its more diversified economy, have been resilient. To mitigate the impact of the crisis, the territories are reprioritizing government expenditure and looking at ways to increase revenue. Additionally, BOTs may request higher borrowing limits from the UK. Seven of the BOTs have financial centers:

Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar,

Montserrat and the Turks and Caicos Islands. In April 2009, during the

London G20 Summit, all of these territories were placed on the OECD's "grey list" of jurisdictions that have committed to the internationally agreed tax standard, developed by the OECD, but have not yet substantially implemented it by signing the 12 tax information exchange agreements. As of January 11, 2010, all but Anguilla and Montserrat were listed on the

OECD's list of jurisdictions that have substantially implemented the internationally agreed tax standard. -- Anguilla: Anguilla is a neutral tax jurisdiction. There are no income, capital gains, estate, profit or other forms of direct taxation on either individuals or corporations, for residents or non-residents of the jurisdiction. The territory has no exchange rate controls. Non-Anguillian nationals may purchase property, but the transfer of land to an alien includes a 12.5 percent tax. --

Bermuda: See independent Investment Climate Statement. -- British Virgin

Islands: The government of the British Virgin Islands welcomes foreign direct investment and offers a series of incentive packages aimed at reducing the cost of doing business on the islands. These range from relief on customs duties on imported capital goods to relief from corporation tax payments over specific periods. Crown land grants are not available to non-British Virgin Islanders, but private land can be leased or purchased following the approval of an Alien Land Holding License.

Company tax is 15 percent on chargeable income. Personal income taxes are payable at the rate of three percent on the first $2,500 of income, six percent on the next $5,000, ten percent on the next $7,500, 15 percent on the next $10,000 and 20 percent on income exceeding $25,000. -- Cayman

Islands: There are no direct taxes in the Cayman Islands. The government charges stamp duty of six percent on the value of real estate at sale and there is a one percent fee payable on mortgages of less than CI$300,000, and one and a half percent on mortgages of CI$300,000 or higher. There are no controls on the LONDON 00000092 003.3 OF 012 foreign ownership of property and land. Investors can receive import duty waivers on equipment, building materials, machinery, manufacturing materials, and other tools. -

- Falkland Islands: Companies located in the Falkland Islands are charged corporation tax at 21 percent on the first GBP one million and 26 percent for all amounts in excess of GBP one million. The individual income tax rate is 21 percent for earnings below GBP 13,000 and 26 percent above this level. -- Gibraltar: The government of Gibraltar encourages foreign investment. Gibraltar is a low-tax jurisdiction (no capital or sales taxes) with a stable currency and few restrictions on moving capital or repatriating dividends. It is a member of the EU and offers EU funding for projects that improve the island's economic development. -- Montserrat:

The government of Montserrat welcomes new private foreign investment.

Foreign investors are permitted to acquire real estate, subject to the acquisition of an Alien Land Holding license. Foreign investment in

Montserrat is subject to the same taxation rules as local investment, and is eligible for tax holidays and other incentives. Montserrat has preferential trade agreements with the United States, Canada and Europe.

The government allows 100 percent foreign ownership of businesses but the administration of public utilities remains wholly in the public sector. --

St. Helena: The island of St. Helena is open to foreign investment and welcomes expressions of interest from companies wanting to invest. Its

government operates an Approved Investor scheme, which offers concessions to businesses that meet a set of criteria outlined in the government's

Economic Development Ordinance and Tourism Policy - particularly tourism projects that will be trading at the time of the opening of the St. Helena airport. All applications under the scheme are processed by the St. Helena

Development Agency. -- Pitcairn Islands: The Pitcairn Islands have approximately 50 residents, with a workforce of approximately 15. The territory does not have an airstrip or safe harbor. Residents exist on fishing, subsistence farming, handcrafts and postage stamps. -- The Turks and Caicos Islands: The islands operate an "open arms" investment policy.

Through the policy, the government commits to: a streamlined business licensing system; a responsive immigration policy to give investment security; access to government owned land under long term leases; and a variety of duty concessions to qualified investors. The islands have a "no tax" status. Measure Year Index/Rating for the UK -------

---- ------------ TI Corruption Index 2008 Sixteenth/7.7 Heritage

Economic Freedom 2009 Tenth/79 World Bank Doing Business 2009 Fifth A.2.

Conversion and Transfer Policies The British pound sterling is a freefloating currency with no restrictions on its transfer or conversion.

There are no exchange controls restricting the transfer of funds associated with an investment into or out of the UK. All exchange controls were repealed in 1987. The UK is not a member of the Euro area. Prime Minister

Gordon Brown has said he is in favor of joining, but only after a national referendum and the British public votes to adopt the Euro. The date of this referendum is contingent on a government assessment based on five economic tests, which are sustainable convergence, sufficient flexibility, effect on investment, impact on financial services, and effect on employment. Once these tests are passed, the government must then seek

Parliamentary approval for a national referendum. Given the current lukewarm support for the Euro among the British people and the economic downturn, a referendum is not likely to occur in the near future. The

Finance Act 2004 repealed the old rules governing thin capitalization, which allowed companies to assess their borrowing capacity on a consolidated basis. Under the new rules, companies who have borrowed from a UK or overseas parent need to show that the loan could have been made on a stand-alone basis or face possible transfer pricing penalties. These rules were not established to LONDON 00000092 004.3 OF 012 limit currency transfers, but rather to limit attempts by multinational enterprises to present what is in substance an equity investment as a debt investment to obtain more favorable tax treatment. A.3. Expropriation and

Compensation Expropriation of corporate assets or nationalization of an industry requires a special Act of Parliament, as seen in the February 2008 nationalization of Northern Rock. In the event of nationalization, the

British government follows customary international law, providing prompt, adequate, and effective compensation. A.4. Dispute Settlement

International disputes are resolved through litigation in the UK Courts or by arbitration, mediation, or some other alternative dispute resolution

(ADR) method. Over 10,000 disputes a year take place in London, many with an international dimension, reflecting its strong position as an international center for legal services. Most of the disputes center on the maritime, commodities, financial services, and construction sectors. The

London Court of International Arbitration and the International Chamber of

Commerce's International Court of Arbitration are the leading administrators of international arbitrations. The Stock Exchange Panel on

Takeovers and Mergers mediates takeover bid disputes, and there is a further right of appeal to the Stock Exchange Appeals Committee. As a member of the International Center for Settlement of Investment Disputes, the UK accepts binding international arbitration between foreign investors and the state. As a signatory to the 1958 New York Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, the UK permits local enforcement on arbitration judgments decided in other signatory

countries. A.5. Performance Requirements/Incentives UK business contracts are legally enforceable in the UK, but not U.S. or other foreign ones.

Performance bonds or guarantees are generally not needed in British commerce, nor is any technology transfer, joint venture, or local management participation or control requirement imposed on suppliers.

Government and industry encourage prompt payment, but a tradition does not exist of providing an additional discount to encourage early settlement of accounts. The UK offers a wide range of incentives for companies of any nationality locating in depressed regions of the country, as long as the investment generates employment. Grants for Business Investment (GBI) are available from the central government for qualifying projects in parts of the UK needing investment to revitalize their economies. Grants are the main type of assistance, and the level of grant is based on capital expenditure costs and expectations of job creation. In addition to GBI, assistance can be obtained through the EU Structural Funds available from

2007 to 2013. The UK will receive approximately 9.4 billion in structural funds including: approximately 2.6 billion in convergence funding for the

UK's poorest regions; approximately 6.2 billion in competitiveness and employment funding for other regions; and approximately 0.6 billion in cooperation funding for cross-border and trans-national activities.

Assistance is offered to companies that meet the government's objectives for convergence, cooperation, competitiveness and employment. Convergence funding is available to companies that locate in areas with GDP per capita below 75 percent of the EU average. In the UK, these regions are Cornwall, the Isles of Scilly, West Wales and the Welsh Valleys. Local authorities in England and Wales also have power under the Local Government and Housing

Act of 1989 to promote the economic development of their areas through a variety of assistance schemes, including the provision of grants, loan capital, property, or other financial benefit. Separate legislation, granting similar powers to local authorities, applies to Scotland and

Northern Ireland. Where available, both domestic and overseas investors may also be eligible for loans from the European Investment Bank. A.6.

Right to Private Ownership and Establishment The Companies Act of 1985, administered by the Department for Business, Innovation and Skills (BIS), governs ownership and LONDON 00000092 005.3 OF 012 operation of private companies. On November 8, 2006 the UK passed the Companies Act of 2006 to replace the 1985 Act. The law simplifies and modernizes existing rules rather than make any dramatic shift in the company law regime. BIS uses a transparent code of practice that is fully in accord with EU merger control regulations, in evaluating bids and mergers for possible referral to the

Competition Commission. The Competition Act of 1998 strengthened competition law and enhanced the enforcement powers of the Office of Fair

Trading (OFT). Prohibitions under the act relate to competition-restricting agreements and abusive behavior by entities in dominant market positions.

The Enterprise Act of 2002 established the OFT as an independent statutory body with a Board, and gives it a greater role in ensuring that markets work well. Also, in accordance with EU law, if deemed in the public interest, transactions in the media or that raise national security concerns may be reviewed by the Secretary of State of BIS. Only a few exceptions to national treatment exist. For example, foreign (non-EU or non-EFTA, European Free Trade Association) ownership of UK airlines is limited by law to 49 percent. Registration of shipping vessels is limited to UK citizens or nationals of EU/EFTA member states resident in the UK.

For some of these companies, restrictions of foreign ownership of ordinary shares apply. Citizenship requirements for certain senior executive and non-executive posts also apply for these enterprises. Foreign investment in financial services that are not covered by EU Directives on banking, investment, services, and insurance may be subject to a bilateral agreement. The privatization of state-owned utilities is now essentially complete. With regard to future investment opportunities, the few remaining government-owned enterprises or remaining government shares in

other utilities are also likely to be sold off to the private sector, when market conditions improve. The privatization of London's extensive underground rail network was completed in 2005 but suffered a setback in

2007 when the privatized company went bankrupt and returned to public ownership. The government continues nevertheless to push Public Private

Partnerships (PPP). Under the Private Finance Initiative (PFI), British and foreign-owned companies may bid for long-term franchises to build, run, and improve existing public-sector services in areas such as education, health care, road traffic management, passenger rail, defense, production of coins and currency, port operations, air and water monitoring and cleanup, land use planning, and building control. The government's goal is to provide cost-effective and higher-quality services in partnership with private sector investment capital providers. A.7. Protection of Property

Rights The UK legal system provides a high level of intellectual property rights (IPR) protection. Enforcement mechanisms are comparable to those available in the United States. The UK is a member of the World

Intellectual Property Organization (WIPO). The UK is also a member of the major intellectual property protection agreements: the Bern Convention for the Protection of Literary and Artistic Works; the Paris Convention for the

Protection of Industrial Property; the Universal Copyright Convention; the

Geneva Phonograms Convention; and the Patent Cooperation Treaty. The UK has signed and, through various EU Directives, implemented both the WIPO

Copyright Treaty (WCT) and WIPO Performance and Phonograms Treaty (WPPT), known as the internet treaties. In August 2004, the UK published its first

"intellectual property crime strategy." The national strategy, led by the

UK Intellectual Property Office (UK IPO) represents important advancements in intelligence sharing and coordination among UK government agencies to combat IP crime, along with a commitment to improve training for customs enforcement agents. On December 6, 2006, HM Treasury published the independent Gowers Review of Intellectual Property. The Gowers Review supports the national strategy and, in particular, UK IPO's development of a central IP crime database, TellPat that brings together information on IP crime and the criminals involved from industry and enforcement agencies.

One of the Gowers Review recommendations is for the UK Home Office to recognize IP crime as a component of organized crime in order to better educate the public about the wider dangers of IP crime and to elevate it as a priority for police action. The Gowers Review made 53 additional recommendations in the 150-page report that the government plans to consider. In October 2008, the UK government began consultations on LONDON

00000092 006.3 OF 012 a few of the Gowers Review suggestions. In January

2009, the Parliamentary All-Party IP Group released a follow-on report that looked at the government's accomplishments two years after the release of the Gowers' report. The results showed that only half of the recommendations had been implemented, and of those that had, many only partially so. Patents: Many of the key features of the UK Patents Act

2004 entered into effect on January 1, 2005. The Act is designed to bring

UK patent law into line with the updated European Patent Convention (2000).

The Act lifts restrictions on filing patent applications from abroad, with exceptions made for military technology and applications whose contents could affect UK national security. The Act expands options for nonbinding, written opinions on patent infringement to be issued by the UK

Patent Office. The legislation also lays out significant changes to the process of approaching alleged infringers (sometimes known as "threats").

The changes are designed to aid genuine attempts to settle infringement disputes while providing protection -- particularly to small and medium enterprises -- against frivolous threats. A UK patent application requires that an invention must be new, involve an innovative step, and be capable of industrial application. A patent cannot be granted in the UK for any invention used for offensive, immoral, or anti-social purpose, for any variety of animal or plant, or for a biological process used in its production. In September 2007, the UK IPO and the U.S. Patent and Trademark

Office (USPTO) began a 12-month pilot of the Patent Prosecution Highway

(PPH) scheme, which allowed patent applicants who have received a report by either the UK IPO or the USPTO to request accelerated examination of a corresponding patent application filed in the other country. Copyright:

The Copyright, Designs and Patents Act of 1988 grants the originator the exclusive right to assign those rights or to exploit them through copying, dissemination, publication, or sale. Computer programs and semiconductor internal circuit designs are included as works that are protected by this act. Under the terms of an EU Directive, which took effect in January

1988, databases are also protected in each EU-member country by the national legislation that implements the Directive. Trademarks: The UK submits to the WIPO system of international registration of marks, as governed by the Madrid Agreement and the Madrid Protocol. The UK Trade

Marks Act of 1994 is the current law providing for the registration and protection of trade marks in the UK, and has been harmonized with EU

Directive No 89/104/EEC. Trademarks are considered personal property in the

UK, and are normally registered for a period of 10 years with an option to renew. However, trademarks may be removed from the register if a period of five years has elapsed, during which time there has been no bona fide use of the trademark in relation to the goods by the proprietor. Trade

Secrets/Confidential Test Data: Commercially sensitive information is not itself specifically subject to legal protection, but the misappropriation of such information from business premises may be subject to criminal law.

Action under employment law may also be taken against an employee who, by disclosing information, breaches a contract with his or her employer. In addition, confidential test data, submitted in conjunction with a registered application for pharmaceuticals or veterinary products, enjoys

10 years of exclusive protection from the date of authorization, provided the product is marketed in the UK. A.8. Transparency of the Regulatory

System U.S. exporters and investors generally will find little difference between the U.S. and UK in the conduct of business. Common law prevails in the UK as the basis for commercial transactions, and the International

Commercial Terms (INCOTERMS) of the International Chambers of Commerce are accepted definitions of trading terms. In terms of accounting standards and audit provisions, as of January 1, 2005 firms in the UK must use the

International Financial Reporting Standards (IFRS) set by the International

Accounting Standards Board (IASB) and approved by the European Commission.

The UK's Accounting Standards Board provides guidance to firms on accounting standards and works with the IASB on international standards.

An example of differences between UK law (as well as EU law) and foreign law applies to commercial agents, who are self-employed intermediaries.

Often sales are undertaken in the UK by means of appointed distributors, licensees, or "agents" using standard form agreements, or sometimes with no agreement at all. Under UK law, no distribution or licensing arrangements are terminable "at will," and LONDON 00000092 007.3 OF 012 reasonable notice (ranging from 1 to 12 months) is usually required. In addition, the agent is entitled to at least one year's commission in damages when agency agreements are terminated. Many standard form software license agreements have invalid clauses prohibiting copying because they breach the EU

Copyright Directive. Non-EU court judgments, apart from those for judgment debts, are often not enforceable in the UK unless a contract between the parties specifically states that U.S. or other country judgments are enforceable. UK law, like other European laws, imposes severe restrictions on exclusions and limitations of implied warranties and liability. There is an exception within UK law that removes most of these restrictions where both parties are overseas, which makes UK law and courts a very favorable compromise choice for corporations contracting elsewhere in Europe.

Statutory authority over prices and competition in various industries is given to independent regulators. These include the Office of

Communications (OFCOM), the Office of Water Regulation (OFWAT), the Office of Gas and Electricity Markets (OFGEM), the Office of Fair Trading (OFT),

the Rail Regulator, and the Financial Services Authority (FSA). These regulators work to protect the interests of consumers while ensuring that the markets they regulate are functioning efficiently. Most laws and regulations are published in draft for public comment prior to implementation. The government's declared intent is to introduce more business competition and to reduce the administrative burden on companies by reducing unnecessary red tape. In December 2008, the government published an update to the Better Regulation Simplification Plan, aimed at reducing the administrative burden on business by 25 percent by 2010. The plan includes cross-cutting simplification initiatives across government departments and leads efforts to promote the success of the EU better regulation agenda. An example of one simplification project is the formation of an International Trade Single Window, which is aimed at helping importers and exporters by enabling speedier transactions, reduced paperwork and easier access to import rules. A.9. Efficient Capital

Markets and Portfolio Investment The City of London houses one of the world's largest and most comprehensive financial centers. London offers all forms of financial services: commercial banking; investment banking; insurance; venture capital; private equity; stock and currency brokers; fund managers; commodity dealers; accounting and legal services; as well as electronic clearing and settlement systems and bank payments systems.

London has been highly regarded by investors because of its solid regulatory, legal, and tax environment, a supportive market infrastructure, and a dynamic and highly-skilled workforce. The financial services industry contributes approximately 8 percent to UK GDP, down from 10 percent in 2007, and employs more than 300,000 people. While banks are concerned that excessive regulation in the wake of the financial crisis will drive business from London, the UK is expected to maintain its position as a top financial hub. UK banks have been particularly hard-hit by the global financial crisis. Large-scale lay-offs have been common over the past year and business conditions in financial services in 2010 are expected to remain difficult. Mergers, nationalizations, and bank failures, have left a consolidated playing field. In February 2008, the

Government nationalized the UK mortgage lender, Northern Rock, to stop a retail run on the bank. It later nationalized troubled bank Bradford &

Bingley. The government has developed plans for the re-privatization of

Northern Rock, reviewed by the EU's Competition Commission, but this will be a multi-year process. The Government also announced a series of "bank rescue measures" including taking large equity stakes in two key banks, the

Royal Bank of Scotland and Lloyds Banking Group. Government stakes are managed at arm's-length by the newly created body, UK Financial

Investments. The UK economy, which has been in recession since the third quarter of 2008, is expected to see slight economic growth in 2010, with continued recovery in 2011 and 2012. Property values have fallen 25 percent, and are slowly rising, though UK economists believe residential property prices are still overvalued. Unemployment has peaked at levels not seen in decades, the pound sterling has fallen significantly in value against the dollar, and credit remains limited and costly as compared with the boom years. Working within budget constraints, the Government introduced a temporary fiscal stimulus package to get the economy growing again. The Bank of England also pursued an aggressive, expansionary LONDON

00000092 008.3 OF 012 monetary policy by lowering the key interest rate to a record low of 0.5 percent while embarking on a GBP 200 billion quantitative easing program. In all circumstances, foreign investors, employers, and market participants have been treated equally and benefit from government initiatives equally. There are no signs of increased protectionism against foreign investment, and none are expected.

Government policies are intended to facilitate the free flow of capital and to support the flow of resources in the product and services markets.

Foreign investors are able to obtain credit in the local market at normal market terms, and a wide range of credit instruments are available. The

principles involved in legal, regulatory, and accounting systems are transparent, and they are consistent with international standards. In all cases, regulations have been published and are applied on a nondiscriminatory basis by a single regulatory body, the Financial Services

Authority. The London Stock Exchange is one of the most active equity markets in the world. London's markets have the advantage of bridging the gap between the day's trading in the Asian markets and the opening of the

U.S. market. This bridge effect is also evident as many Russian and

Central European companies have used London stock exchanges to tap global capital markets. The Alternative Investment Market (AIM), established in

1995 as a sub-market of the London Stock Exchange, is specifically designed for smaller, growing companies. The AIM has a more flexible regulatory system than the Main Market and has no minimum market capitalization requirements. Since its launch, the AIM has raised approximately GBP 34 billion ($51 billion) for more than 2,900 companies. The UK banking sector is the largest in Europe, with 361 banks authorized to do business in the

UK, retail deposits of GBP 2.4 trillion ($4.2 trillion - average 2008 exchange rate) and an estimated 50 percent of all the EU's investment banking activity. The total assets of the UK banking sector were about 7.5 trillion GBP ($12.4 trillion) in September 2008, with domestic banks accounting for about half of the total. A.10. Competition from State-Owned

Enterprises (SOEs) There are approximately 30 state-owned, or partlyowned, enterprises in the UK, with a combined turnover of about GBP 21 billion. The UK's state-owned enterprises are spread across a wide range of sectors. They range from large, well known companies such as the Royal

Mail and Northern Rock, to small trading funds like the UK Hydrographic

Office which supplies marine navigational information and services. The

UK's Shareholder Executive, within the Department for Business, Innovation and Skills (BIS), works with government departments and management teams to help these companies perform effectively. It advises government ministers and officials on a wide range of shareholder issues including objectives, governance, strategy, performance, monitoring, board appointments and remuneration. It sets overall objectives for the businesses and agrees on a strategic plan with the board for delivering those objectives; the board is then accountable for delivery. Where appropriate, it appoints the Chair and actively participates in other board appointments. It sets compensation principles, works with the business to agree dividend policy, and monitors performance. Under the terms of the Government-Owned Business

Framework, the UK government must provide all external financing for stateowned business. Businesses are charged at the market rate to ensure they do not receive any commercial advantage from the ability to borrow at, or below, the market rate. During 2008 and 2009, the UK government nationalized two banks, Northern Rock and Bradford & Bingley, and took significant stakes in the Royal Bank of Scotland (RBS) and Lloyds Banking

Group. The government's stake in these banks is managed, at arm's-length, by UK Financial Investments (UKFI), a company wholly owned by HM Treasury.

With the exception of Bradford & Bingley (which will be wound down), UKFI will execute an investment strategy for disposing of the investments through sale, redemption or buy-back. The UK government does not intend to be a permanent investor in UK financial institutions. The rescue packages were authorized by the European Commission under EC Treaty state aid rules, which ensures state aid packages do not result in significant market distortions. At the end of 2009, the European Commission approved state aid measures for RBS and Lloyds but insisted on substantial divestments to limit market distortions. A.11. Corporate Social Responsibility LONDON

00000092 009.3 OF 012 Businesses in the UK are accountable for some activities that fall under corporate social responsibility - such as human resources, environmental issues, sustainable development, health and safety practices - through a wide variety of existing guidelines at national, EU and global levels. There is a strong awareness of corporate social responsibility principles among UK businesses, promoted by UK business

associations such as the Confederation of British Industry and the UK government. The UK government has signed up to the OECD's guidelines for

Multinational Enterprises. The government is committed to the promotion and implementation of these guidelines and encourages UK multinational enterprises to adopt high corporate standards involving all aspects of the guidelines. The UK has established a National Contact Point (NCP) to promote the guidelines and to consider allegations that a multinational enterprise's behavior is inconsistent with them. The NCP is staffed by officials from the Department for Business, Innovation and Skills. A

Steering Board was established in 2007 to monitor the work of the UK NCP and provide strategic guidance. It is composed of representatives of relevant government departments and four external members nominated by the

Trades Union Congress, the Confederation of British Industry, the All Party

Parliamentary Group on the Great Lakes Region of Africa, and the NGO community. A.12. Political Violence The United Kingdom is politically stable, with a modern infrastructure, but shares with the rest of the world an increased threat of terrorist incidents. On June 29 and 30, 2007, terrorists unsuccessfully attempted to bomb a nightclub area in London and the Glasgow airport. In August 2006, the UK government heightened security at all UK airports following a major counterterrorism operation in which individuals were arrested for plotting attacks against U.S.-bound airlines.

On July 7, 2005, a major terrorist attack occurred in London, as Islamic extremists detonated explosives on three Underground trains and a bus in

Central London, resulting in over 50 deaths and hundreds of injuries.

Following the attacks, the public transportation system was temporarily disrupted, but quickly returned to normal. A similar, but unsuccessful attack against London's public transport system took place on July 21,

2005. UK authorities have identified and arrested people involved in these attacks. These attacks do not seem to have significantly impacted investment in the UK. In Northern Ireland, the re-establishment of a devolved power-sharing government and the decommissioning of most paramilitary organizations have improved the political situation. In

November 2009, however, the Independent Monitoring Commission (IMC) reported that the dissident republican threat in Northern Ireland was at its highest level in six years. The IMC said that the two main dissident republican groups, the real IRA and the Continuity IRA, were increasing the threat posed to security forces. Attacks by these groups have focused primarily on police and military targets, and involved the use of firearms and explosives. It is anticipated that these types of attacks will continue in the future. A continuing problem involves UK animal rights activists who employ violent tactics and harassment techniques to disrupt legitimate scientific research; however, the situation is improving with increased government enforcement. The activists forced the shelving of plans for one new research center and severely delayed construction of another. They target existing research centers that use laboratory animals, as well as any company that does business with them. The government has passed legislation to give police stronger authority to crack down on protesters, and courts have begun to use their powers to clarify the line between lawful protest and harassment. In mid-December, four animal rights activists were convicted of blackmailing companies that supplied an animal testing laboratory. Sentencing is scheduled for late January 2009. These actions by activists have the potential to impair the UK's position as one of Europe's leading research and development R&D centers. Environmental pressure groups in the UK have been involved with numerous protests against a variety of business activities including airport expansion, bypass roads, offshore structures, wind farms, civilian nuclear power plants, and petrochemical facilities. These protests tend not to be violent but are disruptive and work toward obtaining maximum media exposure. A.13.

Corruption LONDON 00000092 010.3 OF 012 The Prevention of Corruption

Act makes bribery of domestic or foreign public officials a criminal offense. The maximum penalty under this act is imprisonment for up to

seven years, and/or a fine not exceeding GBP 5,000 ($8,000). Corrupt payments are not deductible for UK tax purposes. Although isolated instances of bribery and corruption have occurred in the UK, U.S. investors have not identified corruption of public officials as a factor in doing business in the UK. The UK formally ratified the OECD Convention on

Combating Bribery in December 1998. Part 12 of the Anti-terrorism, Crime and Security (ATCS) Act of 2001, which came into force on February 14,

2002, includes legislation on bribery and corruption to deter UK companies and nationals from committing acts of bribery overseas. The act gives UK courts jurisdiction over crimes of corruption committed wholly overseas by

UK nationals and by bodies incorporated under UK law. In addition to the

OECD Convention, the UK is also actively involved in the Council of

Europe's Group of States Against Corruption (GRECO), which helps its members develop effective anti-corruption systems. The UK also signed the

UN Convention Against Corruption in December 2003 and ratified it on

February 8, 2006. The UK has launched a number of initiatives to reduce corruption overseas. In December 2006, the UK's Serious Fraud Office (SFO) abandoned the bribery investigation into BAE Systems Plc and its 20-year,

GBP 40 billion ($64bn) defense contract with Saudi Arabia opened the government up to questions regarding its credibility with respect to foreign corrupt practices. Two UK non-governmental organizations challenged the decision in UK courts. In April 2008, the High Court ruled the decision to abandon the investigation unlawful, but in July 2008, the

House of Lords, the UK's highest body of judicial review, overturned this ruling on appeal, ending the judicial challenge on BAE's deals with Saudi

Arabia. However, investigations into BAE contracts with six other countries - Chile, the Czech Republic, Romania, South Africa and Tanzania - also opened in 2005, continued. On October 14, 2009, the SFO announced it had failed to come to a negotiated settlement with BAE over these allegations. The SFO is currently conducting further investigations. The

OECD Working Group on Bribery (WGB) has criticized the UK's implementation of the Anti-Bribery convention. In March 2007, the WGB decided to,

"conduct a further examination of the UK's efforts to fight bribery," and

"reaffirmed its serious concerns about the United Kingdom's discontinuance of the BAE Al Yamamah investigation and outlined continued shortcomings in

UK Anti-Bribery legislation." Following this out-of-cycle review of UK practices, in October 2008, the WBG said it was, "disappointed and seriously concerned with the unsatisfactory implementation of the [OECD

Anti-Bribery] Convention by the UK." In 2007, the UK Law Commission began a consultation process to draft a Bribery Bill that met OECD standards. A report was published in October 2008 and consultations with experts from the OECD were held in early 2009. A draft bill was published in March 2009 and was announced as one of the government's priorities in the Queen's speech, November 18, at the State Opening of Parliament. The bill has received support from the Conservative opposition party and is currently being examined in the House of Lords. Secretary of State for Justice, Jack

Straw, has repeatedly and publicly stated his personal commitment to see the Bribery Bill passed into law before the end of his term in office.

A.14. Bilateral Investment Agreements The U.S. and UK have no formal bilateral investment treaty relationship, although a Bilateral Tax Treaty reviewed in 2008 specifically protects U.S. and UK investors from double taxation. The UK has its own bilateral tax treaties with more than 100

(mostly developing) countries and a network of about a dozen double taxation agreements. The UK has concluded 106 Bilateral Investment

Treaties (known in the UK as Investment Promotion and Protection

Agreements) with other countries, of which 94 are in force. These countries are: Albania, Antigua and Barbuda, Argentina, Armenia,

Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belize, Benin, Bolivia,

Bosnia & Herzegovina, Bulgaria, Burundi, Cameroon, Chile, China, Congo,

Cote D'Ivoire, Croatia, Cuba, Dominica, Ecuador, Egypt, El Salvador,

Estonia, Georgia, Ghana, Grenada, Guyana, Haiti, Honduras, Hungary, India,

Indonesia, Jamaica, Jordan, Kazakhstan, Kenya, Korea, Kyrgyzstan, Laos,

Latvia, Lebanon, Lesotho, Lithuania, Malaysia, LONDON 00000092 011.3 OF

012 Malta, Mauritius, Mexico, Moldova, Mongolia, Morocco, Mozambique,

Nepal, Nicaragua, Nigeria, Oman, Pakistan, Panama, Papua New Guinea,

Paraguay, Peru, Philippines, Poland, Romania, Saint Lucia, Senegal, Serbia,

Sierra Leone, Singapore, Slovenia, South Africa, Sri Lanka, Swaziland,

Tanzania, Thailand, Tonga, Trinidad & Tobago, Tunisia, Turkey,

Turkmenistan, Uganda, Ukraine, UAE, Uruguay, Uzbekistan, Venezuela,

Vietnam, and Yemen. A.15. OPIC and Other Investment Insurance Agreements

OPIC does not operate in the UK. Export-Import Bank (Ex-Im Bank) financing is available to support major investment projects in the UK. A Memorandum of Understanding (MOU) signed by Ex-Im Bank and its UK equivalent, the

Export Credits Guarantee Department (ECGD), enables bilateral U.S.-UK consortia, intending to invest in third countries, to seek investment funding support from the country of the larger partner. This removes the need for each of the two parties to seek financing from their respective credit guarantee organizations. A.16. Labor The UK's labor force of over

30 million people is the second largest in the European Union (EU). As of

October 2009, UK employment was 28.93 million, and the unemployment rate was 7.9 percent, lower than the EU average of 9.5 percent. But the effects of the economic downturn are starting to be felt on employment levels.

Some analysts predict that unemployment could peak at 10 percent in 2010.

The employment level (the proportion of working age people in work) is also high in the UK at 72.5 per cent. By sector, the largest proportion of the workforce was placed in the education, health, and public administration sector with 8.237 million people or 27 percent of the total, followed by the distribution, hotels and restaurants Sector with 6.830 million people or 22 percent; the finance and business services sector came third with

6.375 million people or 21 percent, followed by manufacturing with 2.84 million or 9 percent of the UK workforce. The most serious issue facing

British employers is a skills gap derived from a high-skill, high-tech economy outpacing the educational system's ability to deliver work-ready graduates. The government has placed a strong emphasis on improving the

British educational system in terms of greater emphasis on science, research and development, and entrepreneurship skills. The UK's skills base remains mediocre by international standards, but is improving: the proportion of the population aged 20 to retirement without any formal educational qualifications has fallen by nearly a third over the last decade, from 18 percent in 1997 to 12 percent in 2008. About 25 percent of full time UK employees belong to a union, a low proportion by UK historical standards, but still quite high to an employer used to a much lower

American percentage. Public-sector workers have a much higher share of union members -- nearly 60 percent -- while the private sector is about 15 percent. Manufacturing, transport, and distribution trades are highly unionized. Unionization of the workforce in the UK is prohibited only in the armed forces, public-sector security services, and police forces.

Union membership has been relatively stable in the past few years, although the trend has been slightly downward over the past decade. Once-common militant unionism is less frequent, but occasional bouts of industrial action, or threatened industrial action, can still be expected. Most

British unions have adapted to the reality of a globalized economy in which jobs are contingent on the competitiveness of their employers.

Privatization of traditional government entities has accelerated such thinking. The Trades Union Congress (TUC), the British AFL-CIO equivalent, encourages union-management cooperation as do most of the unions likely to be encountered by a U.S. investor. As of December 2009, the minimum wage is GBP 5.80 ($9.28) for adults (those 22 and over) and GBP 4.83 ($7.73) for young people (18-21) and GBP 3.57 ($5.71) for workers aged 16 and 17. Much of the employment legislation currently affecting the UK labor market is based on EU regulations and directives. EU regulations affect working patterns, wage structures, and employee protection rights. For example,

the European Working Time Directive creates an entitlement to minimum daily and weekly rest periods, an average work-week limit of 48 hours, and restrictions on night work. It also entitles workers who meet the qualifying criteria, including part-time and seasonal workers, to a minimum of 28 working days LONDON 00000092 012.3 OF 012 annual paid holiday.

The universal application of labor regulations across respective EU borders undermines British competitiveness to the extent that the UK has made its historically more flexible labor market a major selling point to investors.

As it has implemented EU directives, however, the UK government has been proactive in maintaining its flexibility and competitiveness. For example, it negotiated a special provision under the Working Time Directive that allows employees to opt out of the work week limitations and has favored changes to the rules on temporary workers. The 2006 Employment Equality

(Age) Regulations make it unlawful to discriminate against workers, employees, job seekers and trainees because of age. The regulations cover recruitment, terms and conditions, promotions, transfers, dismissals and training. They do not cover the provision of goods and services. The regulations also removed the upper age limits on unfair dismissal and redundancy. It sets a national default retirement age of 65, making compulsory retirement below that age unlawful unless objectively justified.

Employees have the right to request to work beyond retirement age and the employer has a duty to consider such requests. A.17. Foreign Trade

Zones/Free Ports The cargo ports and freight transshipment points at

Liverpool, Prestwick, Sheerness, Southampton, and Tilbury that are used for cargo storage and consolidation are designated as Free Trade Zones. No activities that add value to the commodities are permitted within the Free

Trade Zones, which are reserved for bonded storage, cargo consolidation, and reconfiguration of non-EU goods. The Free Trade Zones offer little benefit to U.S. exporters or investors, or any other non-EU exporters or investors. A.18. Foreign Direct Investment Statistics The UK was the fourth largest recipient of foreign direct investment (FDI) globally in

2008 according to the United Nations Conference on Trade and Development

(UNCTAD). According to data published by UNCTAD, the stock of outward UK

FDI totaled $1,511 billion in 2008 (or 56.7 percent of GDP), down from

$1,841 billion in 2007. The stock of inward UK FDI at yearend 2008 was

$982 billion (or 36.9 percent of GDP), down from $1,264 billion in 2007.

Direct investment outflows in 2008 totaled $111 billion, down from $275 billion in 2007, while inflows decreased to $96.9 billion in 2008 from $183 billion in 2007. The United States remained the most favored location for

UK direct investment abroad in 2008, continuing the strong investment partnership between the two countries. In 2008, UK direct investment into the United States accounted for 23 percent of UK-owned assets abroad.

Other EU member states attracted much of the remaining outward UK FDI.

SUSMAN

Viewing cable 08TRIPOLI912, LIBYA COMMERCIAL ROUND-UP FOR OCTOBER 2008

OIL AND GAS



08TRIPOLI912

2008-11-25

11:11

2011-02-05

00:12

UNCLASSIFIED

Embassy

Tripoli

R 251104Z NOV 08



INFO DEPT OF COMMERCE WASHINGTON DC

DEPT OF ENERGY WASHINGTON DC

AMEMBASSY TUNIS

AMEMBASSY CAIRO

AMEMBASSY RABAT

AMEMBASSY VALLETTA

AMEMBASSY ALGIERS

AMEMBASSY TRIPOLI

UNCLAS TRIPOLI 000912

DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON; ENERGY FOR GINA ERIKSON; CAIRO

FOR CLARENCE (ALEX) SEVERENS

E.O. 12958: N/A

TAGS: EINV EIND ECON EMIN ENRG EPET ETRD PGOV LY

SUBJECT: LIBYA COMMERCIAL ROUND-UP FOR OCTOBER 2008 OIL AND GAS

Â¶ 1. (U) A New Oil Discovery by Sirte Oil Company: On October 7, Sirte Oil, a state-owned company, announced a new oil discovery in the well A1-NC216A in the Ghadames Basin. The well is located approximately 310 km southwest of Tripoli. The initial production testing established an oil rate of 1,725 barrels per day, and a gas rate of 0.25 million standard cubic feet per day. This well represents the company's first discovery in the block.

[noc.com.ly, 10/7/2008]

Â¶ 2. (U) Russian-British Firm TNK-BP Seeks to Develop Major Libyan Oil

Field: After a conflict between the oil company's Russian and British shareholders was settled, TNK-BP received the right to compete with BP in international projects. TNK-BP is negotiating to develop Libya's Sarir field, one of the largest oilfields in Libya located about 500 kilometers east of Tripoli in the Sirte Basin. TNK-BP is ready to sell $1bn-$2bn to obtain the status of operator of Libya's Sarir project. The Russian-British oil producer is now in talks with Libya's National Oil Corporation (NOC) regarding the development of the Sarir field. In September, a delegation of

TNK-BP top executives visited the country to hold cooperation talks.

However, investment in the Libyan oil project, which may total between $1bn and $7bn, has yet to be approved by TNK-BP's new CEO.

[oilandgaseuroasia.com, 10/21/2008]

Â¶ 3. (U) WesternGeco Wins Libyan Seismic Deal: WesternGeco, part of oil field services giant Schlumberger, has won a contract from Russia's Gazprom to gather 3D seismic data on its Ghadames Basin acreage in Libya.

WesternGeco says the survey will start in November, with data to be processed in its new processing center in Tripoli. Gazprom was awarded offshore Area 19 in the Libyan third oil and gas exploration licensing round last year. [MEED, 10/22/2008]

Â¶ 4. (U) Fourth Forum and Exhibition of Oil and Gas Technologies: The forum and exhibition took place in Tripoli from October 20 to 23. The event was sponsored by the NOC and organized by the Libyan Oil Institute. 120 international companies operating in the oil and gas industry from 20 countries as well as Libyan oil companies participated in the event. The exhibition aims to contribute to the communication between the parties of the oil and gas industry, and their counterparts in the international oil and gas industry, and to get an access to the latest techniques and methods in exploration, production, maintenance, marketing, and consuming.

[noc.com.ly, 10/22/2008]

Â¶ 5. (U) Foster Wheeler confirms Libyan Refinery Deal: The U.S. company

Foster Wheeler has been awarded a project management and consultancy contract for the development of a $4 billion, 200,000 barrel a day refinery in Zwara, western Libya. Foster Wheeler says the Zwara refinery is expected to be completed by 2014; producing gasoline, jet fuel and diesel. The client is Zwara Oil Refining Company (Zorco), a project company in which

Libya's state-run Tamoil Africa Holdings has the equity. Foster Wheeler says its contract includes the refinery configuration, the selection of the licensors and the front-end engineering and design (FEED) phase, including preparation of a cost estimate. The firm will also prepare the tender documents for the engineering, procurement and construction (EPC) phase, assist Zorco in selecting the EPC contractor and act as project management consultant during construction. The refinery, located near the Tunisian border, will boost the country's refinery capacity to nearly 600,000 barrels a day. [MEED, 10/30/2008]

CONSTRUCTION

Â¶ 6. (U) Al Maabar Plans $11.5 billion Investments: Abu Dhabi-based Al

Maabar International Investments has lined up overseas investments worth

$11.5 billion over 10 years. The investments will be in real estate projects in Morocco, Libya, Tunisia, Qatar, Belarus and Jordan. The projects in Libya and Morocco are to be immediately funded. The rest of the projects are long-term; they are now either under initial master plan or are going into detail design. [gulfnews.com, 10/5/2008]

Â¶ 7. (U) Hill Signs $42 million Libya University Project: U.S. company Hill

International has signed a $42 million contract to provide construction supervision services at a university expansion project in Tripoli. The 21month contract from the Libyan Organization for the Development of

Administrative Centers is part of a $2 billion expansion of Al Fateh

University, Libya's largest institute of higher education. Under a 2007 agreement, Hill already provides project management services for the expansion, which will add 17.9 million square feet of space to 39 buildings. [njbiz.com, 10/12/2008]

Â¶ 8. (U) Libyan Iron Steel Company Signed a Contract to Establish a New

Factory for Iron Bars Industry: Libyan Iron Steel Company (LISCO) signed a contract to establish a new factory for iron bars with a production capacity of 800,000 tons a year and at a cost of $240 million. After completion of the project, the total production will reach 1.8 million tons against 500 tons a year in 2007. LISCO has signed contracts with specialized Italian companies to get this project executed. The project is expected to be finished in about 30 months. [MEsteel.com, 10/19/2008]

Â¶ 9. (U) ESDF, Asamer Launch First Concrete Plant: Libyan Cement

Manufacturing Joint Venture Company (JLCC), a joint venture between the

Economic Social Development Fund (ESDF) and the Austrian Asamer Group

Company, launched the first concrete plant in Tajura. The Tajura concrete plant is the company's second big project launched in Libya. The first one was the cement plant in Benghazi with a minimal capacity of three million tones of cement. [Tripoli Post, 10/19/2008]

Â¶ 10. (U) Turkey's Floating Fair Carries Machinery and Construction

Industry to North Africa: Floating Fair Bluexpo's journey included four important trade centers of North Africa; Alexandria in Egypt, Tripoli in

Libya, Tunis in Tunisia, and Algiers in Algeria. About 3,500 sector professionals visited the fair located in two ferries; the exhibition involved 150 businesspeople from Turkey who came to Libya under the umbrella of the Turkish Contractors Association. Bluexpo North Africa

Construction project aims to provide business opportunities to Turkish companies supplying service and materials in infrastructure and building industries, which have an investment priority in the North African countries. [adg.com, 10/20/2008]

REGIONAL ISSUES

Â¶ 11. (U) More Cooperation in Electricity: Egypt and Libya agreed on boosting joint cooperation in electricity production. The agreement was reached at a meeting between Egypt's Holding Company for Electrifying Egypt and a visiting delegation of the Libyan electricity authority. The two sides reached an agreement on Libya's contribution in implementing a power generation plant in southern Giza area at a total capacity expected to reach 1,300 megawatts. The plant will start operation in 2012. It was also agreed that Libya will contribute to other electricity projects in Egypt.

[ANSAmed, 10/1/2008]

Â¶ 12. (U) U.S. Opens Trade Office in Libya: on October 5, the American

Commercial Service Office was opened in Tripoli to take part in promotion of the economic cooperation among the different Libyan and American institutions. Libyan officials and businessmen from both countries attended the office's opening. The American Assistant Secretary of Commerce underlined the importance of this office to strengthen economic and commercial ties between both countries, clarifying that the office is a good move to boost cooperation and bilateral commercial exchange. The Under

Secretary of the General People's Committee for Economy, Trade and

Investment said that this office will be a means to provide the institutions and companies with sufficient information about commercial and

economic laws and legislations applied in both countries; provide the commercial information required by the American companies that have the desire to execute projects in Great Jamahiriya; and to provide the American investors with information about the Libyan markets and their needs.

[ljbc.com, 10/7/2008]

Â¶ 13. (U) Libya Maritime Exhibition and Conference: The Libya Maritime

Exhibition and Conference (LIMEX 2008) was held at the naval base in

Tripoli from October 13 to 15. It showcased the latest maritime technology by bringing together key industry, government and defense personnel from

Libya and Overseas. [ljbc, 10/16/2008]

Â¶ 14. (U) Finance Ministers and Central Banks Governors to Discuss Global

Financial Crisis on African Economy: The African Development Bank called on

African Union finance ministers and governors of Central Banks to meet

November 12, to discuss repercussions of the global financial crisis on

African economy. The conference aims at taking a unified stance amongst

African Union member states in confronting the global financial crisis, the bank said in a statement issued in Tunis. The statement also said the

African Development Bank and the African Union Commission affirm that

Africa's voice would be heard during discussions on the reform of the World

Bank and the International Monetary Fund following the financial collapse of the capitalist system. [ljbc, 10/26/2008]

IT

Â¶ 15. (U) Libyans Take to the Mobile Web: BuzzCity, which provides global wireless communities and consumer services, has published the Global Mobile

Advertising Index, which shows the growing use of the mobile Internet and the ensuing advertiser interest. BuzzCity reports continued growth in

Indonesia, which remains in top position despite network irregularities, as well as significant growth in Kenya, USA and Bangladesh. BuzzCity also reports record growth for demand of its service in Libya, which it says will surprise both the global mobile community and digital advertising industries. Only six months ago Libya was in 93rd position. BuzzCity says the growth is likely to be directly linked with changes in mobile operator business models, offering affordable and understandable mobile data packages. [mobilemarketingmagazine.co.uk, 10/14/2008]

INVESTMENT

Â¶ 16. (U) Libyan Investment Projects Increase: Resources in the Board of

Encouraging Investment mentioned that the size of investment increased from

$200 million in 2003 to $2.157 billion in the first half of year 2008. The increase is varied in the size of investment from one year to another and the year 2007 recorded the highest development average. It created ten thousand opportunities of jobs to the national elements. The projects were increased by a value of $1.5 billion in comparison to $720 million in 2007.

The number of investment projects that entered the operations in the first half of this year provided 2,267 opportunities of employment for Libyans.

[libyaninvestment.com, 10/22/2008]

Â¶ 17. (U) Libya Eyes European, U.S. Equities: The Libyan Investment

Authority is looking to invest $65 billion in European and U.S. equities to diversify its portfolio after recent market declines. "We want to diversify, number one in Europe, number two in the United States, and then in emerging market economies," said Farhat Bin Guidara, Governor of the

Central Bank of Libya and a member of the board of the state's investment authority. "We are going more towards pharmaceuticals, telecoms, utilities and food manufacturing," he told reporters on the sidelines of a conference in Cairo. [Reuters, 10/24/2008]

BANKING

Â¶ 18. (U) Libya Buys 4.23% Stake in UniCredit: The Central Bank of Libya, the Libyan Investment Authority and the Libyan Foreign Bank acquired a combined 4.23% stake in Italian bank UniCredit SpA (UCG.MI). According to

UniCredit's spokesman, the acquisition by Libyan interests is "friendly."

The stake initially held by Libyan interests in the Italian bank was 0.87%, the UniCredit spokesman said, with the rest being purchased over the last few days. UniCredit shares have had hardly any relief from selling and have lost 30% since the bank announced its funding plans on October 5. Italian

Premier Silvio Berlusconi said he is concerned sovereign wealth funds from oil-producing countries could launch a hostile takeover for Italian companies, given their low valuations after the recent sharp fall in the stock markets. [libyaninvestment.com, 10/19/2008]

Â¶ 19. (U) Egypt's Naeem Wins Approval to Open in Libya: Naeem Holding,

Egypt's second-largest publicly traded investment bank, said on Sunday it had won approval to open a representative office in Libya. The bank did not say when it would open the office in a statement on the stock exchange website. A company spokesman said he could not immediately give further details. Naeem, which operates in Saudi Arabia, Egypt and the United Arab

Emirates, said in May it planned to reduce the proportion of its revenue from Egypt to between 35 percent and 40 percent from 70 percent within two years. [Reuters, 10/27/2008]

AUTOMOTIVE INDUSTRY

Â¶ 20. (U) Zhongxing Auto to Export 5,000 Pick-ups to Libya: Hebei Zhongxing

Automobile Co., Ltd., an expert of pick-up trucks and SUVs in North China, clinched an agreement with Libya on October 20, 2008 on exporting 5,000 pick-ups. The Hebei-based carmaker exported 4,000 cars to the North African country in 2003 and those products used by government organs and social organizations won excellent public praise in the country for the company, laying a strong foundation for the big order this time. The order of 5,000 pick-ups accounts for 40%-50% of the market demand for 10,000-12,000 such cars in Libya this year. The company expects to sell 35,000 to 40,000 cars this year, with a yearly increase of 15% to 20%. [tmcnet.com, 10/23/2008]

LABOR

Â¶ 21. (U) Libya to Recruit Large Number of Bangladeshi Laborers: Libya signed a Memorandum of Understanding (MoU) with Bangladesh to recruit a large number of workers as Tripoli launched a $130 billion infrastructure development program that will require over one million foreign workers. The

MoU was signed by the Bangladesh Foreign Adviser, Iftekhar Ahmed Chowdhury and the Libyan Labor Minister Maa'touq Mohammed Maa'touq. Under the fiveyear development program, Libya will construct 300,000 housing units, 27 university complexes, over 10,000 kilometer roads and maintain 24,000 kilometer roads. Presently, some 25,000 Bangladeshi are employed in Libya.

The Libyan minister did not give the exact number of Bangladeshi workers they will recruit but said they issued 6,000 visas for Bangladeshi workers last month. [thedailystar.com, 10/31/2008]

STEVENS

Viewing cable 09BRASILIA43, BRAZIL: AMORIM FLIES TO MIDDLE EAST AS ISRAEL



09BRASILIA43

2009-01-09

21:09

2011-02-06

VZCZCXRO3723

RR RUEHRG

DE RUEHBR #0043/01 0092142

ZNR UUUUU ZZH

R 092142Z JAN 09





RUEHAC/AMEMBASSY ASUNCION 7311

RUEHSW/AMEMBASSY BERN 0119

RUEHBO/AMEMBASSY BOGOTA 4837

RUEHBU/AMEMBASSY BUENOS AIRES 6024



RUEHLP/AMEMBASSY LA PAZ 6787

RUEHPE/AMEMBASSY LIMA 4080

RUEHMD/AMEMBASSY MADRID 0707

RUEHMN/AMEMBASSY MONTEVIDEO 7640


RUEHQT/AMEMBASSY QUITO 2675

00:12

UNCLASSIFIED

Embassy

Brasilia

RUEHSG/AMEMBASSY SANTIAGO 0805






RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 BRASILIA 000043

SIPDIS

E.O. 12958: N/A

TAGS: PREL KPAL IR BR

SUBJECT: BRAZIL: AMORIM FLIES TO MIDDLE EAST AS ISRAEL

FACES BLISTERING CRITICISM

REF: 08 BRASILIA 1685

Â¶ 1. (SBU) Summary: Reactions in Brazil to the crisis in Gaza continue

(reftel) to focus almost exclusively on the suffering of the Palestinian population caused by Israel's response to HAMAS' attacks while at the same time minimizing Israel's concerns over its security. Criticism of Israel from political leaders, media outlets, and government officials, have ranged from radical to moderate (or, from calling Israel's actions "state terrorism" to "disproportionate"); pro-Israeli voices are essentially nonexistent outside of the local Jewish community. The ruling Workers Party

(PT) has been the most critical of Israel's actions, comparing Israel's attacks to Nazism. The government, led by the Foreign Ministry (Itamaraty), has taken a moderate tone, deploring Israel's ground incursion into Gaza, but consistently stressing that a viable peace requires the recognition of

Israel's right to exist and to live in peace. Itamaraty is also taking advantage of the crisis to stake a claim to participate in any resolution of the crisis, after gaining a seat at the peace table at Annapolis; since the crisis started, Foreign Minister Amorim has worked the phones with foreign capitals, organized a shipment of humanitarian aid to Gaza, and announced a round of shuttle diplomacy to Israel, the West Bank, Syria and

Jordan that will take place from 11-13 January. End Summary.

------------------------------ Views range from radically anti-Israeli (e.g

Workers Party)... ------------------------------

Â¶ 2. (U) On January 7, the PT released an official statement signed by national party chairman, Federal Deputy Ricardo Berzoini calling Israel's actions in Gaza "state terrorism" for causing the death of innocent

civilians. The statement also rejected Israel's justification of selfdefense, noting that "retaliation cannot be aimed at civilians." The statement further compared Israel's actions to Nazism. Other members of the

PT, such as the head of the Chamber of Deputies Brazil-Arab Countries

Caucus Nilson Mourao (PT-Acre), called Israel's actions "genocide" against the Palestinian people. Mourao and Senator Cristovam Buarque (PDT-Federal

District) met with the Israeli Embassy on Wednesday, January 7 to call for

Israeli withdrawal from Gaza and for it to halt military actions.

------------------------------ ...to pro-Palestinian (e.g most news outlets)... ------------------------------

Â¶ 3. (U) The conflict has been covered extensively by Brazilian media; explicit shots of dead children, lines of corpses, and scenes of general destruction and mayhem are frequent front-page fodder. Stories have focused on Israel's actions and have tended to downplay Israel's efforts to minimize civilian casualties or Israel's efforts to provide humanitarian relief. While news coverage below the fold and inside the paper tended to focus more on the suffering inflicted on the Palestinian population, opinion columns offered a more balanced mix of views. Balanced coverage, however, usually comes when running pieces by foreign authors such as

Thomas Friedman, rather than local pundits and analysts.

Â¶ 4. (U) Reaction among the large Arab community and other organizations that support the Palestinian cause in Brazil has been vocal, with protests held in Sao Paulo, Florianopolis, Brasilia, and others scheduled for Rio de

Janeiro, Recife, Curitiba and other Brazilian cities, but so

BRASILIA 00000043 002 OF 003 far its protests have been small. A protest in Sao Paulo gathered an estimated 400 protesters, a fairly small gathering considering that the

Arab community in Sao Paulo numbers in the millions.

---------------------------- ...to essentially moderate (e.g. Itamaraty,

Planalto, PSDB) ----------------------------

Â¶ 5. (U) Planalto Palace and Itamaraty have taken more moderate tones, with

Itamaraty being the most balanced of the two. (Comment: Itamaraty realizes that in order to further Brazil's goal of enhancing its role as a player in

Middle East peace talks it has to strike a balanced tone. End comment.)

Echoing the PT's criticism of Israel, President Lula's foreign policy advisor (and long-time PT-stalwart) Marco Aurelio Garcia asserted that

Israel's actions "against civilians" amounted to "state terrorism." At the same time, Garcia took pains to add that Israel is or should be

"untouchable" and that Brazil's commitment to Israel's right to exist and to live in peace among its neighbors is uncompromising. Further, to highlight Brazil's neutrality, he noted that President Lula's long-in-theworks visit to Israel should take place this year.

Â¶ 6. (U) Since the beginning of the crisis, Itamaraty has worked the phones with his counterparts in European, and Middle Eastern capitals, and issued essentially anodyne statements noting Brazil's concerns over the humanitarian situation and calling for a ceasefire and an international conference involving neutral countries. Despite these more moderate statements, Brazilian officials have not missed an opportunity to criticize the United States for failing in its role as a peace broker. Both Lula and

Amorim named the United States the key stumbling block to achieving a ceasefire as a result of what they have called United States' being reflexively pro-Israeli, an obstacle that has to be overcome if breakthrough is to be achieved. Peace will be achieved, according to both

Lula and Amorim, if "neutral" countries such as Brazil have a bigger role in the peace process.

Â¶ 7. (U) Among the major four political parties, the only other one to have issued an official statement was the opposition Brazilian Social Democracy party (PSDB), which criticized the PT's statement, called the crisis in

Gaza complex, and noted that Brazil has traditionally maintained a posture of neutrality in the conflict and that maintaining such a posture is important if Brazil is to act as an honest broker in this conflict.

------------------------------- Staking Claim to Peace Table with Round of

Shuttle Diplomacy -------------------------------

Â¶ 8. (U) Itamaraty is aggressively positioning itself to continue or expand on the role it gained in the peace process when it was invited to participate in the Annapolis conference in 2007. Since the conflict started, Foreign Minister Amorim has been on the phone with Secretary Rice, with UN Secretary General Ban Ki-moon, with the Arab League, EU president

Barroso, and with the Foreign Ministers of Israel, France, Egypt, Turkey,

Spain, Switzerland, and Syria. Brazil is also shipping 14 tons of food and medicine and Amorim announced plans to visit several Middle Eastern capitals from 11-13 January. He will meet in Damascus with Syrian president

Bashar al Assad and Foreign Minister Wallid Muallem, then travel on the same day to Jerusalem to meet with Israeli foreign minister Tzipi Livni, followed with stops in Ramallah to meet with Palestinian Authority head

BRASILIA 00000043 003 OF 003

Mahmoud Abbas and Prime Minister Salam Fayaad, and ending on the 13 January with a stop in Amman, to meet with King Abdullah II and Foreign Minister

Bashir.

SOBEL

Viewing cable 09BRASILIA679, BRAZILIAN FOREIGN MINISTER - AND POSSIBLE

CANDIDATE FOR IAEA



09BRASILIA679

2009-05-28

20:08

2011-02-06

00:12


Embassy

Brasilia

VZCZCXRO5270

RR RUEHRG

DE RUEHBR #0679/01 1482004

ZNY CCCCC ZZH

R 282004Z MAY 09



INFO RUEHSO/AMCONSUL SAO PAULO 4133






NOFORN

SIPDIS

E.O. 12958: 05/20/19

TAGS: PREL ENRG ETTC EPET EINV KNNP IAEA IR BR

SUBJECT: BRAZILIAN FOREIGN MINISTER - AND POSSIBLE CANDIDATE FOR IAEA

DIRECTOR GENERAL - ON IRAN

REF: A) BRASILIA 304,

B) RIO DE JANEIRO 52,

C) BRASILIA 667

Classified by: Charge d'Affaires Lisa Kubiske. Reason 1.4a and b

Â¶ 1. (C) SUMMARY: There have been press reports that Brazil's Minister for

Exterior Relations Celso Amorim wants to be a candidate to become the next

Director General of the International Atomic Energy Agency (IAEA). Although

Amorim has denied any interest in the IAEA job, the persistence of the

reports and their likely origin within the MRE indicate that he should be viewed as a potential candidate should any of the present candidates fail to gain sufficient votes. Given the prominent role the IAEA plays in trying to learn more about Iran's nuclear program and deter nuclear proliferation,

Post has collected highlights of Amorim's recent actions and public statements about Iran. In brief, Amorim has welcomed closer ties between

Brazil and Iran, but has not openly embraced Iran's activities or views.

END SUMMARY.

Â¶ 2. (C) In November of 2008, Minister Celso Amorim of the Brazilian

Ministry of Exterior Relations (MRE) traveled to Tehran to meet with

Iranian President Mahmoud Ahmadinejad. This marked the first time in 17 years that a Brazilian senior diplomat had been to the country. While in

Iran, Amorim and Ahmadinejad closed several bilateral commercial agreements between the two countries. Moreover, Amorim proposed a visit by the Iranian president to Brazil in 2009. The two sides also reportedly discussed nuclear issues during the visit. Amorim commented that "Brazil recognizes that all countries have the right to develop nuclear programs for pacific means," a common refrain from Brazilian officials when discussing Iran's nuclear program.

Â¶ 3. (C) Pursuant to Amorim's invitation, Ahmadinejad had planned to lead a delegation to Brazil in May. However, the trip was postponed at the last minute. A day after Ahmadinejad made controversial remarks at the United

Nations World Conference on Racism in Geneva on April 20, 2009 regarding

Israel and the Holocaust, the MRE released a note criticizing his comments.

Despite the MRE's criticism, Amorim had continued to affirm that Brazil's desire to cooperate with Iran and his continued support for Ahmadinejad's trip to Brazil. In an interview with the press shortly after the United

Nations conference, Amorim explained his reasons. He said that Brazil must engage in a dialogue with Iran because it is a country with a large population, economic wealth, and "history." He explained that meeting with

Iran "doesn't keep us from expressing an opinion. [The MRE] issued a statement which [was published] on our position (censoring Ahmadinejad's statements on the Holocaust). That is not going to keep us from cooperating, nor from saying what we think." Amorim said he considers Iran a key component to creating and maintaining peace in the Middle East, and would like to see more western involvement with the country. In addition, he noted that President Obama has also expressed what Amorim believed was a similar desire to open a dialogue with Iran.

Â¶ 4. (C) The day before Ahmadinejad was scheduled to leave on a tour of several South American countries, starting in Brazil, he postponed the trip without providing any specific reasons. In the days leading up to the suspended visit, the Israeli Government had formally complained to the

Brazilian Ambassador in Israel about Ahmadinejad's upcoming visit to

Brazil. Further, several hundred Brazilians held protests in plazas in the cities of Sao Paulo and Rio de Janeiro. The Brazilian Minister on Human

Rights, Paulo Vannuchi, came out shortly after the postponement to express his relief. In interviews with the press, Vannuchi stated that "questioning the Holocaust is a grave problem . . . and as the Minister on Human Rights,

I cannot adopt the attitude of thinking that this is not a problem," and affirmed that he would recommend to Amorim that Brazil in no way accept

Ahmadinejad's proclamation.

Â¶ 5. (C) Despite the postponement, Amorim continues to affirm that both the

Brazilian and Iranian governments are on good terms and that he continues to welcome a visit to Brazil by the Iranian President. In public remarks following the suspension of the trip, Amorim explained, "we don't talk with just the countries we agree with. . . . We do not agree with some of

[President Ahmadinejad's] opinions. We've already said that, and we don't need to repeat it . . . but that should not impede us from forming a dialogue because we cannot talk to only those with whom we agree, that isn't a dialogue; it is a monologue." Amorim stated that Brazil would like to maintain a dialogue between their government and that of Iran, and that

Brazil welcomes a visit by Ahmadinejad or whoever might replace him after the June 12 elections in Iran.

Â¶ 6. (C) COMMENT. Brazil's intent in seeking closer relations with Iran is driven by the broad objectives of President Lula's foreign policy: to cultivate a major regional economic and political player,

BRASILIA 00000679 002 OF 002 as it has also done for example with South Africa, Turkey, and Egypt, with a particular interest in boosting exports, but also with an eye toward increasing its own perceived standing as a global political player that

"can talk to all sides." Amorim's predisposition to dialogue with Iran,

North Korea and other non-democratic states has been a cornerstone of

Brazil's foreign policy during his tenure. However, Brazil is also careful to adhere to UN sanctions regimes, and its reaction to the recent DPRK nuclear test (REFTEL C) demonstrates that it takes these issues seriously.

Indications are that he would attempt to follow the same principles if he were to become head of the IAEA. MRE sources have been quoted in the press stating that they believe Amorim's good relations with Iran and the United

States would be to his advantage in the IAEA context. Amorim's affirmation of Iran's "right" to nuclear energy (paralleling the right claimed by

Brazil in its Defense Strategy), without mentioning Iran's non-compliance with its IAEA obligations could, however, raise objections to an Amorim candidacy among IAEA members.

KUBISKE

Viewing cable 09BRASILIA1188, BRAZILIAN FOREIGN MINISTER - AND POSSIBLE

CANDIDATE FOR IAEA DIRECTOR GENERAL - ON IRAN



09BRASILIA1188

2009-09-23

18:06

VZCZCXRO2739

2011-02-06

00:12

CONFIDENTIAL

Embassy

Brasilia

PP RUEHBZ RUEHDU RUEHMR RUEHPA RUEHRN RUEHTRO

DE RUEHBR #1188/01 2661814

ZNY CCCCC ZZH

P 231814Z SEP 09



INFO RUEHZO/AFRICAN UNION COLLECTIVE





SENSITIVE

SIPDIS

STATE PASS WHA/EPSC AND EEB/BTA

E.O. 12958: DECL: 09/23/2019

TAGS: PGOV PREL EAID ECON IS

SUBJECT: BRAZILIAN FOREIGN MINISTER - AND POSSIBLE CANDIDATE FOR IAEA

DIRECTOR GENERAL - ON IRAN

REF: A) BRASILIA 304,

B) RIO DE JANEIRO 52,

C) BRASILIA 667

Classified by: Charge d'Affaires Lisa Kubiske. Reason 1.4a and b

Â¶ 1. (C) SUMMARY: There have been press reports that Brazil's Minister for

Exterior Relations Celso Amorim wants to be a candidate to become the next

Director General of the International Atomic Energy Agency (IAEA). Although

Amorim has denied any interest in the IAEA job, the persistence of the reports and their likely origin within the MRE indicate that he should be viewed as a potential candidate should any of the present candidates fail to gain sufficient votes. Given the prominent role the IAEA plays in trying to learn more about Iran's nuclear program and deter nuclear proliferation,

Post has collected highlights of Amorim's recent actions and public statements about Iran. In brief, Amorim has welcomed closer ties between

Brazil and Iran, but has not openly embraced Iran's activities or views.

END SUMMARY.

Â¶ 2. (C) In November of 2008, Minister Celso Amorim of the Brazilian

Ministry of Exterior Relations (MRE) traveled to Tehran to meet with

Iranian President Mahmoud Ahmadinejad. This marked the first time in 17 years that a Brazilian senior diplomat had been to the country. While in

Iran, Amorim and Ahmadinejad closed several bilateral commercial agreements between the two countries. Moreover, Amorim proposed a visit by the Iranian president to Brazil in 2009. The two sides also reportedly discussed nuclear issues during the visit. Amorim commented that "Brazil recognizes that all countries have the right to develop nuclear programs for pacific means," a common refrain from Brazilian officials when discussing Iran's nuclear program.

Â¶ 3. (C) Pursuant to Amorim's invitation, Ahmadinejad had planned to lead a delegation to Brazil in May. However, the trip was postponed at the last minute. A day after Ahmadinejad made controversial remarks at the United

Nations World Conference on Racism in Geneva on April 20, 2009 regarding

Israel and the Holocaust, the MRE released a note criticizing his comments.

Despite the MRE's criticism, Amorim had continued to affirm that Brazil's desire to cooperate with Iran and his continued support for Ahmadinejad's trip to Brazil. In an interview with the press shortly after the United

Nations conference, Amorim explained his reasons. He said that Brazil must engage in a dialogue with Iran because it is a country with a large population, economic wealth, and "history." He explained that meeting with

Iran "doesn't keep us from expressing an opinion. [The MRE] issued a statement which [was published] on our position (censoring Ahmadinejad's statements on the Holocaust). That is not going to keep us from cooperating, nor from saying what we think." Amorim said he considers Iran a key component to creating and maintaining peace in the Middle East, and would like to see more western involvement with the country. In addition, he noted that President Obama has also expressed what Amorim believed was a similar desire to open a dialogue with Iran.

Â¶ 4. (C) The day before Ahmadinejad was scheduled to leave on a tour of several South American countries, starting in Brazil, he postponed the trip without providing any specific reasons. In the days leading up to the suspended visit, the Israeli Government had formally complained to the

Brazilian Ambassador in Israel about Ahmadinejad's upcoming visit to

Brazil. Further, several hundred Brazilians held protests in plazas in the cities of Sao Paulo and Rio de Janeiro. The Brazilian Minister on Human

Rights, Paulo Vannuchi, came out shortly after the postponement to express his relief. In interviews with the press, Vannuchi stated that "questioning the Holocaust is a grave problem . . . and as the Minister on Human Rights,

I cannot adopt the attitude of thinking that this is not a problem," and affirmed that he would recommend to Amorim that Brazil in no way accept

Ahmadinejad's proclamation.

Â¶ 5. (C) Despite the postponement, Amorim continues to affirm that both the

Brazilian and Iranian governments are on good terms and that he continues to welcome a visit to Brazil by the Iranian President. In public remarks following the suspension of the trip, Amorim explained, "we don't talk with just the countries we agree with. . . . We do not agree with some of

[President Ahmadinejad's] opinions. We've already said that, and we don't need to repeat it . . . but that should not impede us from forming a dialogue because we cannot talk to only those with whom we agree, that isn't a dialogue; it is a monologue." Amorim stated that Brazil would like to maintain a dialogue between their government and that of Iran, and that

Brazil welcomes a visit by Ahmadinejad or whoever might replace him after the June 12 elections in Iran.

Â¶ 6. (C) COMMENT. Brazil's intent in seeking closer relations with Iran is driven by the broad objectives of President Lula's foreign policy: to cultivate a major regional economic and political player,

BRASILIA 00000679 002 OF 002 as it has also done for example with South Africa, Turkey, and Egypt, with a particular interest in boosting exports, but also with an eye toward increasing its own perceived standing as a global political player that

"can talk to all sides." Amorim's predisposition to dialogue with Iran,

North Korea and other non-democratic states has been a cornerstone of

Brazil's foreign policy during his tenure. However, Brazil is also careful to adhere to UN sanctions regimes, and its reaction to the recent DPRK nuclear test (REFTEL C) demonstrates that it takes these issues seriously.

Indications are that he would attempt to follow the same principles if he were to become head of the IAEA. MRE sources have been quoted in the press stating that they believe Amorim's good relations with Iran and the United

States would be to his advantage in the IAEA context. Amorim's affirmation of Iran's "right" to nuclear energy (paralleling the right claimed by

Brazil in its Defense Strategy), without mentioning Iran's non-compliance with its IAEA obligations could, however, raise objections to an Amorim candidacy among IAEA members.

KUBISKE

Viewing cable 09BRASILIA1435, Strategy for Engaging Brazil on Defamation of

Religions



2011-02-06

00:12

CONFIDENTIAL

Embassy

Brasilia

09BRASILIA1435

2009-12-22

19:07

VZCZCXYZ0002

OO RUEHWEB

DE RUEHBR #1435/01 3561928

ZNY CCCCC ZZH

O R 221928Z DEC 09



INFO RUCNDT/USMISSION USUN NEW YORK 0002


RUEHRI/AMCONSUL RIO DE JANEIRO

RUEHSO/AMCONSUL SAO PAULO


SIPDIS

DEPARTMENT FOR THE SECRETARY FROM CHARGE D'AFFAIRES

AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE

E.O. 12958: DECL: 2019/12/22

TAGS: PHUM PREL KISL KDEM PGOV OPDC BR

SUBJECT: Strategy for Engaging Brazil on Defamation of Religions

REF: STATE 128320; STATE 128322; BRASILIA 1134; BRASILIA 1194 BRASILIA

1280; BRASILIA 1418 CLASSIFIED BY: Lisa Kubiske, Charge d'Affaires a.i.;

REASON: 1.4(D)

Â¶ 1. (C) Summary: Brazilbs position on the bDefamation of Religionsb issue in the UN Human Rights Commission reflects a compromise between its objection to the concept on human rights grounds and its desire not to antagonize OIC countries with which it is trying to build relationships and which it sees as an important set of votes as iteyes a permanent seat on the UN Security Council. In light of the political rationale for Brazilbs abstention, I propose a four-pronged approach involving approaches to senior-level contacts at the Foreign Ministry; a visit to Brasilia aimed at finding ways to work with the GOB on this and other human rights issues; other governments willing to speak with the GOB; and more intense public affairs outreach via media and religious communities. End summary.

Background: Where Human Rights and Security Council Ambitions Collide

Â¶ 2. (SBU) Embassy has raised the issue of Brazilbs voting record on bdefamation of religionsb several times in the Department of Human Rights and Social Affairs (DDS), Ministry of External Relations (MRE). (NOTE: All

UNHRC and UN human rights matters generally are handled out of DDS, not out of the International Organizations Department. END NOTE.) The last time was with DDS Chief (A/S level) Minister Glaucia Gauch. Brazil has not disagreed with a single argument in our previous demarches and non-papers. The response has been always the same: the concept of bdefamation of religionsb is repugnant to Brazilian values and principles, and it is inconsistent with Brazilian law and international law. For those reasons, Brazil cannot and will not support a resolution that purports to punish the bdefamation of religions;b instead, Brazil consistently abstains.

Â¶ 3. (C) When asked why Brazil does not vote against a resolution it finds totally objectionable, Gauch responded that it was enough to abstain. In

the GOBbs view, Brazil is taking a principled but practical position on the issue, not desiring to offend OIC countries, in particular powerful ones like Iran, Egypt, Turkey, and Saudi Arabia with which Brazil is attempting to deepen relations. Moreover, obtaining a permanent seat on the UNSC remains Brazilbs overriding foreign policy goal. As a result, the GOB prefers to avoid antagonizing countries and groups of countries whose votes might be valuable in a future election. A Four-Pronged Approach

Â¶ 4. (SBU) In light of this complicated reality, I propose a four-pronged approach to Brazil on this issue. At the forefront of each element must be the stated USG commitment to dialogue and cooperation, as well as a careful effort to cultivate Brazil as a leader and partner on this issue. o,7 High-

Level Discussions: Essential to persuading Brazil to change its vote on bDefamation of Religionsb and to work with us toward a compromise solution is an approach at the highest levels of MRE. A call from the Secretary to

Foreign Minister Amorim, following up her recent letter, would demonstrate the importance the USG attaches to this issue. Approaches from the Deputy

Secretary to Secretary General (Deputy Minister) AntC4nio Patriota and from

Under Secretary Burns to Under Secretary for Political Affairs I Amb. Vera

Machado (who oversees both human rights and international organizations policy) would similarly help elevate the importance of the issue in the

Braziliansb minds. Lower level approaches alone are unlikely to change

Brazilbs hands-off approach to the subject. o,7 A Dialogue on Human Rights:

A visit exclusively on this issue would, in my view, be of limited value, as Brazil accepts the basic premise of our objection. At the same time, a more detailed discussion of our views and action plan with both workinglevel and policy-level MRE players would be of value. The most effective approach (and, in the long run, a more valuable one to broader USG interests) would be to include the issue in a new regular dialogue on human rights, something that the MRE itself (via Amb. Patriota) has recently proposed. The broader context of an effort to exchange views and to find ways to work more closely with the GOB on human rights issues in international organizations (addressing, perhaps, some of the key country concerns, including Iran and the DPRK, on which Brazil has consistently abstained) would provide an ideal forum for discussing and seeking GOB support for the USG proposed action plan. Such a broad-based approach, which would appeal to Braziliansb interest in partnership with the United

States that serves to validate their desire to be perceived as an international leader, will be better received than a targeted approach on this one issue. o,7 Third-Country Approaches: As it has stepped out onto the international stage, the current Brazilian government has been careful to avoid aligning its policies with those of the United States. It values what it sees as its position as a bbridgeb between developing and developed countries, and its ability to talk with all countries. This general approach tends to limit the weight of USG opinions within the GOB. Because

Brazil views itself as a leader in the Latin American bloc of countries, their influence on Brazilbs views is limited. It is more likely to listen to other countries it perceives as bindependentb of the United States, including South Africa, Russia, China, India, and France. Gaining support for our approach from some OIC membersb" particularly Egypt, Turkey, and other influential bindependentb voicesb"would be very important to our success in influencing Brazil. In general, approaches from any other country that supports our proposed action plan and testify to the collaborative nature of our effort will be helpful. o,7 Increased Media and

Religious Community Outreach: There are currently no groups within Brazil that have taken up this issue. However, Brazil is a multi-religious, multiethnic society that values freedom of religion, and an effort to increase understanding of the dangers of the bDefamation of Religionsb approach might well yield dividends. Large media outlets such as O Estado de S. Paulo, the O Globo media outlets, and Veja magazine, were they to

focus on this issue, could raise the public concern, particularly among the elite. Mission has had significant success in placing interviews and op-eds by senior USG officials and respected academics. Visits by experts or senior USG officials would be excellent opportunities to address this question with the press. Again, third-country experts and officials supporting the view would provide important impetus to our efforts. In addition, outreach on the issue targeted, in the first instance, to religious communities that seemed to influence the GOB when they opposed the visit of Iranian President Ahmadinejad in Novemberb"particularly the

Bahabis and Jewish communityb"could be expanded to include activist

Catholics and Evangelicals and even indigenous groups and moderate Muslims.

KUBISKE

Viewing cable 09BAGHDAD2744, EVOLUTION OF INFLUENCE IN IRAQ: COMMERCIAL



09BAGHDAD2744

2009-10-12

15:03

2011-02-09

21:09

SECRET

VZCZCXRO7880

PP RUEHAG RUEHBC RUEHDE RUEHDH RUEHIHL RUEHKUK RUEHROV RUEHSL

DE RUEHGB #2744/01 2851510

ZNY SSSSS ZZH

P 121510Z OCT 09

FM AMEMBASSY BAGHDAD



RUCNRAQ/IRAQ COLLECTIVE PRIORITY





RUEHRL/AMEMBASSY BERLIN 0119



RUEHKU/AMEMBASSY KUWAIT 0612



Embassy

Baghdad

RUEHUL/AMEMBASSY SEOUL 0041

RUEHSM/AMEMBASSY STOCKHOLM 0049


S E C R E T SECTION 01 OF 04 BAGHDAD 002744

SIPDIS

COMMERCE PASS TO A/S FOR MAC

E.O. 12958:

TAGS: ECON POL PGOV PREL IZ EINV

SUBJECT: EVOLUTION OF INFLUENCE

DECL:

IN IRAQ:

10/05/2014

COMMERCIAL

ENGAGEMENT

REF:

Â¶ B.

Â¶ C.

AS

A.

A

BAGHDAD

BAGHDAD

POLITICAL

BAGHDAD

TOOL

1805

2078

2637

Â¶ D.

Â¶ E.

BAGHDAD

BAGHDAD

2561

2562 r

Classified By: Classified By: Economic Minister-Counselor John Desroche for reasons 1.4 b and d

Â¶ 1. (C) SUMMARY: Iraq's evolving political and economic environment has led to increased engagement from other

countries using commercial advocacy on behalf of their national political interests. The GOI has begun to engage a number of countries in high level commercial dialogue, and despite its budgetary challenges, is providing contracts to international firms for materials, goods, and services. We expect that the GOI will use these commercial relationships not only for its economic benefit, but also to achieve political and diplomatic objectives, including balancing the perception of undue U.S. influence.

END SUMMARY.

THE CHANGING FACE OF ECONOMIC ENGAGEMENT IN IRAQ, AN OVERVIEW:

---------------- ---------------------------------------------

RUSSIA/CHINA

------------

Â¶ 2. (C) Punctuated by Prime Minister Maliki's state visit to

Moscow earlier this year, Iraqi-Russian commercial ties are military trading strengthening. partner with expanding its

Long

Iraq a during commercial commercial the and

Saddam engagement, era, with

Russia is dedicated

commercial advocacy offices in both Baghdad and Erbil.

Most notably, Lukoil and Gazprom participated in the recent oil and gas bid round (ref A), and post continues to hear reports of visits from Russian business executives in addition to discussions between the GOI and GOR on foreign military sales. (Note: Russian Deputy FM Alexander Sultanov recently met with PM Maliki and expressed Russia's desire to assist Iraq with economic development. Additionally,

Sultanov

Conference announced to plans occur for in a Russian/Iraqi

2010. End

Investment

Note)

Â¶ 3. (C) China is posturing to be a major player in the oil and gas sector and has shown interest in the construction as well. Together with and telecommunications

British Petroleum, sectors

CNPC was the sole international oil company (IOC) to agree to commercially unattractive terms in

Iraq's recent oil and gas bid round (ref A). CNPC is already working on a smaller field (Ahdab) near Baghdad.

China appears to be adopting the same model in Iraq that it utilizes in other developing countries, namely the importation of low cost Chinese labor to reduce costs and the focus on using state assets to acquire natural resources with little concern for profitability. (Note:

CNPC has experienced a measure of local resistance to the company,s use of imported Chinese labor at Ahdab. End

Note.)

THE EUROPEANS: "WE DON'T HAVE

---------------------------------------------

THE SAME BAGGAGE."

--

Â¶ 4. (C) France, Germany, Sweden and the U.K. have signed bilateral commercial agreements with the GOI. With the exception of the U.K., the Europeans see themselves as having a commercial advantage over the United States because they do not have the same public perception

Qbecause they do not have the same public perception challenges arising from our military presence. France and

Germany have a history of doing business in Iraq during the

Saddam era and are re-kindling those ties and relationships. In the past six months, we have seen nearly a

BAGHDAD 00002744 002 OF 004 dozen high-level commercial visits and/or delegations

from European countries; among the most visible are: French

President Nicholas Sarkozy, the U.K.'s Lord Peter and German Foreign Minister Frank-Walter Mandelson,

Steinmeier. (Note: Major European companies currently contracting with or negotiating with Iraq include: EADS,

British Petroleum, Lefarge, Total, Shell, and Deutche Bahn.

End note.) In a recent meeting, the German trade representative to Iraq made special mention that "we don't have the same baggage as you" when discussing Germany's business prospects in Iraq. The Governments of France,

Sweden and Germany are planning to hold investment with the GOI in the coming months. conferences

Â¶ 5. (SBU) Another examples of European activity includes the recent visit of French Prime Minister Francois Fillon, who brought with him a trio of French companies and a variety of

MOUs to be signed with the GOI on commercial and security-related areas of cooperation. Speaking at a press conference during the French visit, GOI spokesman Ali al

Dabbagh noted that "our country wants to become a strategic partner (with France), especially in the economic field."

Post has also noted the development of the familiar Boeing vs. Airbus interplay for commercial aviation contracts, in

which Boeing claims Airbus is lobbying the GOI to cancel its current contract with Boeing in exchange for a

Airbus offering with 100 percent Airbus/EADS comparable

Financing.

JAPAN/SOUTH

-----------------

KOREA

Â¶ 6. (C) The Japanese also see themselves as having an advantage in Iraq, given their lack of strategic intervention in the region and historically strong commercial ties. Primarily concerned with the energy sector, the Japanese continue to enlist USG assistance to support their risk adverse diplomatic mission in Iraq.

After a spring trade delegation in Iraq led by senior MOFA officials, the GOJ hosted senior GOI officials in Tokyo in

June. Likewise, South Korean economic interests are notable, particularly in the Kurdistan region. With commercial representation at their Embassy in Baghdad and a

Consulate in Erbil, South Korean firms are engaging in the oil and gas, energy, engineering, manufacturing (steel) and auto sectors.

REGIONAL

------------------

INTERESTS

Â¶ 7. (C) The geographic proximity of Turkey, Jordan, Lebanon,

Syria, and Egypt encourages natural trading partnerships.

These countries continue to do business in and with Iraq.

The relationship security and between cross

Turkey border and Iraq, cooperation, predicated has on improved dramatically in recent months. Turkish PM Recep Tayyip

Edrogan made his first state visit to Iraq earlier this year and is planning another for late 2009. Turkey's commercial interests continue to grow, particularly in the

Kurdistan region, but they are also focused on Mosul,

Baghdad, and Basra where it recently opened a consulate.

Turkish companies are operating in the oil, construction,

QTurkish companies are operating in the oil, construction, transportation, and defense sectors, and Turkish interest in

Iraqi natural gas is keen (ref C). (Note: PM Maliki recently committed Iraq to supply roughly half of the gas for the proposed Nabucco pipeline, a pledge that reveals the desire to be a regional energy supplier in the coming

years (ref B) End Note.) The Egyptian Minister of

Investment visited Baghdad in August with a delegation of eighty businessmen and government officials, signing several MOUs. The UAE, Saudi Arabia, Qatar, and Kuwait could influential in Iraq's economic development by become

BAGHDAD 00002744 003 OF 004 leveraging

IRAN: their substantial

UNIQUE capital resources.

CHALLENGES

-----------------------

Â¶ 8. (S) Sharing a border of nearly 1000 miles, Iran has long been a key trading partner with Iraq and the commercial ties continue today. Reliable statistics are hard to come by; however, the bilateral trade relationship appears to favor Iran given its stronger manufacturing and export sector and broader ability to penetrate the Iraqi market. The relationship presents several unique issues in the context of policy concerns for governance,

Sunni-Shia-Kurdish challenge relations, and domestic and regional influence. From a purely economic standpoint however, the remains in separating legitimate commercially-focused Iranian trade and investment in Iraq from that agendas. which

Iranian serves malign commercial political interests or focus ideological chiefly on exports religious to Iraq, construction tourism, banking, and

(including project religious finance. sites),

These

WHY efforts form an important part of Iran's 'soft power' approach to expanding its sphere of influence in Iraq and the region. In discussions with Iraqi businessmen, post frequently hears that Iraqis do business with Iran largely out of necessity and proximity.

SHOULD WE CARE? - WHERE THE IRAQIS ARE GOING

--------------------------------------------- ---

Â¶ 9. (C) The GOI is beginning to utilize commercial relationships with a wide variety of countries not only for economic benefit, but also for its political and diplomatic objectives. One objective that is becoming increasingly clear is Iraq's desire to distance itself from the perception

of undue USG influence. As the world learned at

Iraq's last oil and gas bid round, the GOI is not afraid to drive a hard bargain, even when faced with significant budgetary pressures (ref A). The political influences on economic structures are many, and Iraqi nationalism is not a concept to be taken lightly by the international community.

Iraq's actions in widely engaging the world's major powers may belie a strategy that places commercial engagement as a major tool in their political and diplomatic toolbox.

WHY SHOULD WE CARE? - THE STRATEGIC FRAMEWORK AGREEMENT

(SFA)

--------------------------------------------- ----------

Â¶ 10. (SBU) The USG has committed to assisting the GOI with economic development and integration into the global marketplace within the context of the SFA. Initiatives such as Iraq's accession to the WTO, ratification of the

OPIC Investor Incentive Agreement, the Trade and Investment

Framework Agreement, and the Bilateral Assistance Agreement

are all priority issues currently being addressed, although progress remains slow. In addition to USAID programs targeting economic development, other examples of USG assistance include the DOC Commercial Law Development

Program (CLDP), modernization, an funding extensive for land judicial registration training technology program that will in part, focus on commercial and customs law, and the

Qwill in part, focus on commercial and customs law, and the

October 20-21 USG/U.S. Chamber of Commerce-hosted U.S.-Iraq

Business and Investment Conference.

COMMMENT

--------

BAGHDAD 00002744 004 OF 004

Â¶ 11. (C) Despite the many high-level visits, MOUs, and agreements, few international companies, including from the

United States, have had tangible commercial successes in

Iraq. That said, demand for U.S. products and investment

presents opportunities in almost every sector of the Iraqi economy. The upcoming October 20-21 U.S.-Iraq Business and

Investment Conference in Washington has the potential to measurably build on this demand and improve overall ties. commercial

HILL

Viewing cable 05PARIS4760, PS FIRST SECRETARY FRANCOIS HOLLANDE

UNDERWHELMS



05PARIS4760

2005-07-08

08:08

2011-02-10

08:08

CONFIDENTIAL

Embassy

Paris

Appears in these articles: http://abonnes.lemonde.fr/documents-wikileaks/article/2011/02/09/wikileaks-les-visiteurs-del-ambassade_1477418_1446239.htm


080857Z Jul 05


SIPDIS

E.O. 12958: DECL: 07/07/2015

TAGS: PGOV PREL FR

SUBJECT: PS FIRST SECRETARY FRANCOIS HOLLANDE UNDERWHELMS

AMBASSADORIAL GROUP

Classified By: DCM Alex Wolff for reasons 1.4 (b) and (d).

Â¶ 1. (C) Summary: Francois Hollande, First Secretary of

France's deeply fragmented Socialist Party (PS), on June 30 presented his take on a variety of French, EU and foreign policy issues to an informal "Circle of Ambassadors" group, attended by Charge. Hollande's analysis impressed participants as sound and insightful. His lack of a clear program of action to contend with French socio-economic difficulties, however, left his audience asking if he is capable of projecting himself as a candidate with a clear message and a winning program. On display were both

Hollande's questionable viability as a candidate in the 2007 elections and the PS's lack of unity and coherent vision.

End Summary.

EU Constitution and the PS

--------------------------

Â¶ 2. (SBU) France's Socialist Party (PS) hosted, for the first time, a "Circle of Ambassadors" group to hear party First

Secretary Francois Hollande give an overview of key issues

SIPDIS and answer participants' questions. While his general presentation was unremarkable, Hollande proved more insightful in answering questions. Addressing the failed EU

Constitutional referendum, Hollande noted there were a number of reasons for the 'no' outcome, including the need for a collective effort earlier in the campaign to better explain the content of the treaty. Part of the problem, Hollande reasoned, was in the prevailing view of the EU; whereas it had previously been seen as a protective institution, issues such as the Bolkestein proposal to create a single services market and "liberal" (free-market) labor laws have sparked fear and concern. Hollande also saw rising nationalism as a factor. Rather than seeing the EU as the guarantor of peace

and stability, citizens are asking what is in it for them.

Hollande expressed his disappointment in the lack of discipline within the PS in support of the Constitution adding that just as lack of party discipline had had consequences for the future of Europe, it should also have consequences for those party members who broke ranks. The split within the Socialists over the EU Constitution was a key factor in its defeat, according to Hollande. The divide legitimized both the PS 'yes' and 'no' camps, as supporters of either could point to a PS leader championing their cause.

Hollande took a swipe at PS no-camp leader Laurent Fabius, stating that his support of the 'no' was not based on the merits of the Constitution, but on "ulterior motives" -- that is, Fabius's ambition to make himself the PS candidate in the

2007 presidential election. Hollande announced that the PS would decide on its candidate for 2007 at the party congress in mid-November, and added that party members who, afterwards, presented themselves as an alternative candidate would be expelled from the party.

Future of the EU

----------------

3.. (SBU) All elections within Europe have an EU dimension, according to Hollande, who added that domestic and EU policy were becoming difficult to separate. Hollande noted that, over the medium-to-long term, politics in European countries tend towards regular alternation in power between center-left and center-right -- which should currently favor the center-left, as many European countries (among them France, the Netherlands, and Italy) are currently led by the center-right. Hollande said that the center-left parties of

Europe needed to work together and develop a coordinated, common approach. Hollande also remarked that Europe was facing a crisis of confidence and identity. The French and

Dutch rejections of the EU Constitution laid bare this crisis in Europe and would have the effect of prolonging it. First among the concerns was the issue of EU borders. An EU-wide

debate was necessary to discuss how big the EU should become and what its purpose should be. These comments struck many as intimating re-consideration by the PS of its position favoring Turkey's inclusion in the EU. Hollande also noted that the EU shouldn't wait for any new constitutional initiatives to secure several essential goals, such as a common foreign minister and voting weights and other decision-making changes.

French Politics and 2007 Presidential Race

------------------------------------------

Â¶ 4. (SBU) Hollande asserted that victory in the presidential election in 2007 would go to the party that provides solutions to the problems of France. If the Socialists can't engender confidence, he stated, they risk resorting to populism and the "us against them" mentality that showed itself during the EU Constitutional debate in the guise of the Polish plumber. Hollande stated that reforms in France were difficult to effect and often the result of legislation imposed by the majority party rather than compromise among stakeholders -- a system Hollande characterized as ineffective. Hollande cited job creation as a most urgent challenge facing France, and pointed out that 70 percent of jobs in France are short term or of a fixed duration. (Note.

This is largely a result of the French employment laws that make it inordinately difficult to fire full-time employees.

End Note.) Hollande observed that the vaunted "French social model" (often invoked by President Chirac) was a recent idea, and added that he did not know what it meant. The PS, he stated, speaks of an EU social model, but the current French government touts a model no one wants to follow.

Â¶ 5. (SBU) Hollande made several predictions regarding the

2007 presidential elections, notably that Chirac would not be a candidate. Sarkozy would leave the government before the elections, likely under protest so he could criticize Chirac and Villepin. The Socialists would reunify before 2007,

unless an opposition candidate rose to challenge the official flag-bearer. Hollande foresaw the UMP candidate making the second round of elections, with the PS candidate representing the left. Ultimately, Hollande reiterated, the winner would be the candidate offering the most credible promise of change. (Paradoxically, his presentation inspired no such impression.)

Asia and Africa

---------------

Â¶ 6. (SBU) Describing Asia as a dynamic, competitive, and important region, Hollande similarly noted that it was causing economic unease in France. It was not constructive to simply tell people to work harder, he said. Hollande stated that regulations were needed to protect economic interests, but was careful to underline that he did not support protectionism, just the guarantee that all parties should play by the same rules. Touching briefly on Africa,

Hollande remarked that France had a unique responsibility to the continent. The EU is seen as the panacea to African problems and aid to Africa should be increased, he added.

Comment

-------

Â¶ 7. (C) Hollande is right that the next President of France is likely to be the candidate who offers the most credible promise of change. Hollande, however, seems unlikely to be that candidate. Hollande does not project as a leader implementing a clear program of action. He has often been criticized for his diffidence and lack of "political punch."

True to that image, he did not demonstrate the confidence or talent for galvanizing others to action that voters look for in a candidate. His comments on issues focused on general diagnoses, not concrete remedies. His vision for the party made the Socialists appear adrift. Interestingly, every positive example of Socialist leadership that Hollande outlined came under Jospin, which raises the question as to

whether Hollande is preparing Jospin's return, even if unconsciously. End Comment.

STAPLETON

Viewing cable 05PARIS6576, AMBASSADOR'S MEETING WITH NATIONAL ASSEMBLY



05PARIS6576

2005-09-26

14:02

2011-02-10

08:08

CONFIDENTIAL

Embassy

Paris




SIPDIS

DEPT ALSO FOR EUR/WE, DRL/IL, INR/EUC, EUR/ERA, EUR/PPD,

AND EB

DEPT OF COMMERCE FOR ITA

DEPT OF LABOR FOR ILAB

E.O. 12958: DECL: 04/07/2015

TAGS: PGOV ELAB EU FR GM SOCI PINR ECON

SUBJECT: AMBASSADOR'S MEETING WITH NATIONAL ASSEMBLY

PRESIDENT JEAN-LOUIS DEBRE -- AN UNRECONSTRUCTED GAULLIST

AND WRY OBSERVER OF THE CURRENT DOMESTIC POLITICAL SCENE

Classified By: Ambassador Craig Stapleton for reasons 1.4 (b) and (d)

Â¶ 1. (C) Summary: At a September 21 meeting with Ambassador

Stapleton, President of the National Assembly and leader of the Gaullist faction in the ruling Union for a Popular

Movement (UMP) party Jean-Louis Debre brushed aside assertions that U.S.-French relations are on the mend and foresaw, instead of increasing cooperation in the Middle East and Africa, growing tensions over the putative U.S. intentions -- he had in mind more U.S. corporations than the

USG -- to supplant French (and European) influence. In the same vein, he insinuated that U.S. supplanting of French economic interests in Turkey was sapping French support for

Turkish EU membership and described an enlarged EU as one that no one (in France) wanted. In general, Debre warned that French economic woes and loss of markets were reducing its political options.

Â¶ 2. (C) Turning to the recent elections in Germany, Debre suggested that the gridlocked election results were of less concern to the French than the stagnation of the German economy. He interpreted Merkel's slim victory as a rejection of "ultraliberalism" that would not be lost on the French domestic political players, while worrying that a grand coalition would produce ever more radical opposition in

Germany on the extreme left and extreme right. Debre called

France's upcoming 2007 presidential election "the end of a cycle" for the country, but cautioned that disarray and divisions across the board on the political scene made it difficult to foresee how the transition from one political era to another would play out, or who would win the next elections. He explained the bitter competition to succeed

President Chirac largely as an older generation of politicians' last and desperate chance -- given Chirac's long domination of the political scene -- to run for high office.

End Summary.

Worried about Putative U.S. Inroads

-----------------------------------

Â¶ 3. (C) The Ambassador commenced the meeting by noting that

U.S.-French relations appeared to be back on track following past differences over Iraq. Debre commented that he had studied carefully A/S Fried's recent interview in Le Monde but -- in what set the tone for the remainder of the discussion -- responded that the bilateral relationship historically had always been difficult and no doubt would be so again soon, although France had always stood by the U.S. in times of true need. It remained to be seen, he said, whether the recent terrorist attacks in the UK would also be repeated in France. He noted that terrorists were using their opposition to the Iraq war to justify their attacks, and predicted that any attack in France would make use of similar slogans, notwithstanding GOF opposition to the Iraq war.

Â¶ 4. (C) Broadening his sights, Debre posited a "struggle for influence" between the U.S. and Europe in the Mediterranean and Africa and complained that Africans were increasingly citing what the U.S. was doing to try to exact more concessions from France. Terming the Mediterranean region essential to French interests, he warned of growing

U.S.-French tensions over Morocco and Tunisia. Under questioning by a skeptical Ambassador, Debre complained in particular that U.S. businesses were supplanting their French counterparts in these two key regions, which he said was leading also to increased competition for political influence. Debre focused on Turkey in particular, stating that France had long had a privileged situation there that was being undermined by the U.S.; this partly explained declining French support for eventual Turkish EU membership.

Â¶ 5. (C) Debre cautioned that "economic competition, while natural," risked leading to serious political tensions unless kept in check. Confronted with the argument that the U.S. and France needed to work together in the Middle East and

Africa to address the larger challenges of promoting

democratization, good governance, and prosperity, and confronting the threat of terrorism, Debre responded that these were "reasonable" arguments, but that political considerations needed to take economic concerns more into account. Otherwise, he warned, politics would yield to emotionalism and demagogy.

Â¶ 6. (C) The Ambassador questioned Debre's depiction of the extent and nature of U.S. influence and wondered aloud why

Debre was more focused on the Mediterranean than on Europe, where its traditional interests lay. Debre disagreed, saying that France's future challenges were in the Mediterranean, given the demographics of the region (especially among the young) and Europe's declining energy. Europe was essential, he said, but its historical dynamism had ended with the fall of the Soviet Union. It had lost its raison d'etre and changed in essence. No one (in France) wanted the enlarged

Europe that had emerged in recent years; Europe had worked well only when its members were small in number. It was now too difficult to come to common understandings on foreign policy and other issues. Only France, Spain, Germany, and

Italy thought alike. When the Ambassador cited his experience in the Czech Republic to argue that Europe's new members were very attached to the EU, Debre complained that they had taken advantage of others' largesse only to join the ranks of France's economic competitors.

German Elections and the "End of Ideology"

------------------------------------------

Â¶ 7. (C) Asked for his assessment of the inconclusive results of the German elections, Debre described the Franco-German entente in familiar terms as of critical importance and as the indispensable engine of the European project. He viewed

CDU leader Merkel as someone perhaps less dedicated to the centrality of the France-Germany alliance, who favored a vision of Europe "closer to that of the British." That said, he judged that the ideological differences between left and

right had, as a practical matter, disappeared in Germany and in France, citing the French government's current emphasis on reducing unemployment "socially."

Â¶ 8. (C) Contending that the French were much more conscious of German economic performance than political orientation (he said the French were "obsessed" with German economic performance), Debre drew the conclusion that what will ultimately carry the day in France are German economic policies that work, not whether it is a free-market or statist oriented party that implements the policies.

However, Debre said that Merkel's failure to win a clear-cut victory represented a clear rejection of "ultra-liberalism", the importance of which would not be lost on French politicians. He expressed concern that a grand coalition between the center-left and center-right in Germany could encourage the growth of radicalism on both wings.

The Domestic Political Scene

----------------------------

Â¶ 9. (C) Asked how French politicians were interpreting the results of the German elections, Debre explained that, "we have arrived at the end of a cycle." In Debre's view, the political era dominated by Francois Mitterrand and Jacques

Chirac -- and the kind of left/right differences they stood for -- was coming to an end. Moreover, "the only important election in France is the presidential election; all the others are merely trivial commentary." This, in Debre's view, explained why so much was being invested by so many in pursuing the presidency so far ahead of time (the first round of the election is in April 2007). "Many ambitions were emerging" as a result of divisions in the political parties, a changing electorate, and what Debre called "the coming to an end" of Chirac's leading role in French politics (although he later denied that he was ruling out a third term for

Chirac). In addition, France's two-round electoral system

(the first round of which, in effect, is an election with two winners), was tempting even fairly marginal candidates to believe that under the right circumstances, they could be winners.

Â¶ 10. (C) Debre also noted that the successor generation was relatively old. The all-or-nothing intensity of rivalries on both the left (for example, Fabius vs. Strauss-Kahn) and the right (for example, Sarkozy vs. Villepin) were exacerbated by the fact that "it's their last shot, or second to the last at best". (Comment: This is particularly true on the center-left; almost all the heirs to Mitterrand (former prime minister Laurent Fabius, former Finance Minister Dominique

Strauss-Kahn, and former Culture Minister Jacques Lang) are approaching sixty. On the center-right, Villepin and Sarkozy are both only in their early fifties. Sarkozy, however, has thirty years of experience in politics and has already served three times in key ministries and sees no reason why he should have to "wait his turn" any longer. End Comment.)

Â¶ 11. (C) Finally, Debre commented that real ideological debate was a thing of the past. Returning to his theme that policy results were more important to voters than a political credo, Debre lamented the demise of ideological clarity -- left vs. right, Socialists vs. Gaullists -- that had structured French politics during the cycle now reaching its end. He said that "things were much simpler then," adding that the disintegration of this ideological structuring of the political landscape made it very difficult to foresee how the current transition would play out over the longer term.

Comment

-------

Â¶ 12. (C) We have reported Debre's remarks in detail not because they represent official GOF policy, but because they are typical of the persistence of a certain strain of

traditional French thinking and because Debre is so close to

Chirac and now PM de Villepin. That Debre would come across as an unreconstructed Gaullist, as evidenced by giant cardboard caricatures of Charles de Gaulle and Chirac standing in the corner of his office (after all, his father

-- de Gaulle's first Prime Minister, also wrote the 1958

French constitution) was hardly surprising. But his unvarnished, zero-sum portrayal of U.S.-French relations was sobering, and illustrates the difficulties the U.S. often faces in overcoming reflexive French suspicions about U.S. intentions. His focus on market share as the measure of international influence and, indeed, politics in general, was also striking.

Â¶ 13. (C) Debre might have added that his observation about

"many ambitions emerging" applies equally to himself and to his tireless behind-the-scenes efforts in support of

Villepin's goal of displacing Sarkozy as leader of center-right and the successor to Chirac in 2007. Debre seemed buoyant and energetic -- a seasoned politician who was relishing the prospect of upcoming political battles -- specifically, the factional infighting for control of the UMP between "Gaullists and "Liberals" which is the intra-party dimension of the Villepin vs. Sarkozy rivalry.


STAPLETON

Viewing cable 05PARIS8631, AMBASSADOR'S MEETING WITH FORMER EU

COMMISSION



05PARIS8631 2005-12-23 2011-02-10 CONFIDENTIAL Embassy

10:10 08:08 Paris




SIPDIS

E.O. 12958: DECL: 12/23/2015

TAGS: PREL PGOV FR EUN

SUBJECT: AMBASSADOR'S MEETING WITH FORMER EU COMMISSION

PRESIDENT JACQUES DELORS

Classified By: Acting Political Counselor Bruce I. Turner for reasons 1

.4 (b) and (d).

Â¶ 1. (C) SUMMARY: In a meeting with Ambassador Stapleton on

December 21, former EU Commission president Jacques Delors underlined his feeling that Europe is currently in a deep crisis, in part because of the lack of visionary European leadership, but also because of Europeans' hostility to EU enlargement, and disagreements among member states about foreign policy and socio-economic matters. The French people, he said, are trapped in a "schizophrenia" combining arrogance (the exaltation of France) with self-doubt. He did not see a politician on the French scene, on the left or the right, capable of leading France out of this malaise, and he refused to be drawn out about his preferences on either the left or the right. Delors nonetheless insisted that the

Socialist Party was fundamentally pro-transatlantic, adding that no matter who is the victor in 2007, U.S.-French relations would improve. He concluded with the hope that the

U.S. would pay more attention to the EU and noted the need for the U.S. and the EU to work as partners, and not rivals,

to confront the challenges of the 21st century. END SUMMARY.

The Crisis in the EU

--------------------

Â¶ 2. (C) Ambassador Stapleton met December 21 with Jacques

Delors in his office at the Council of Employment, Income, and Social Cohesion, the government-affiliated think tank that Delors, 80, now heads. Delors said he believed Europe was in a deep crisis, from which it was proving difficult to emerge. First, the Europeans did not understand or appreciate the need for the May 2004 enlargement, which he characterized several times with great emotion an "imperative of history." As a young European activist in the 1950s, he said, he would not have imagined today's EU of 25. But the events of the second half of the century made it necessary to enlarge. He welcomed the opening of accession talks with

Turkey in the optic of preventing a clash of civilizations between the West and Islam.

Â¶ 3. (C) The second cause of crisis, Delors said, was the deep disagreements among EU member states on foreign policy (as exemplifed by the break-up of Yugoslavia in the early 1990s and in the lead up to Iraq in late 2002 and early 2003) and on socio-economic policy. On the latter, Delors discerned three divergent viewpoints among European actors: to the left is the English model, followed by Sweden; to the right, the

French model; and in the middle, he said, is the path he himself advocated as commission president, but which finds few adherents today: the path of small steps. His view was that EU member states should attempt only to agree on concrete initiatives and put aside the mirage of a fully agreed foreign policy.

French Narcissism

-----------------

Â¶ 4. (C) When asked how the EU might work its way out of the crisis, Delors responded that, regrettably, Europe currently lacked the visionary leaders of the past such as Adenauer,

Schuman, Kohl, and Mitterand. The current heads of state, he said, had no real vision. He believed the new German government would play a positive role re-establishing equilibrium in Germany's relations with Europe and with the

United States. But he was dismissive of President Chirac and the current government, arguing that this would not change until new presidential elections. More generally, he complained about a French predilection to put theory before practice, often with disastrous results. Similarly, the

French system had difficulty reconciling its myth of unity with the existence of diversity.

Â¶ 5. (C) In regards to the French rejection of the EU constitutional treaty in the May 29 referendum, Delors described himself as "shocked" by the French notion that its own rejection of the constitutional treaty made it a dead letter. "What pretension!" he exclaimed. He continued that the other EU member states had the right to pronounce themselves on the treaty, and that the EU should not consider next steps until the views of all were on record. (Comment:

Delors did not address the fact that some countries, such as the UK, might prefer not to go on record. End Comment.)

France's Identity Crisis

------------------------

Â¶ 6. (C) Delors said France was now in a peculiar situation -- the French people are at once traumatised by their smaller role in the world and arrogant about their unique calling and ability to bring positive values to the world. The combination of this traumatism and arrogance, he said, made for a poisonous schizophrenia. He castigated as dangerous in particular those who "are tempted to exalt France's importance on the world scene." Unfortunately, he did not

see a leader on the French political scene who could persuade the French people to abandon this delusional mindset in the interest of playing a more pragmatic, "useful" role in coordination with others, including the U.S. On the contrary, he expressed some concern that far-right politicians, through appeals to France's "post-Napoleonic reflex," would exacerbate the problem.

Improving U.S.-French Relations

-------------------------------

Â¶ 7. (C) Further to the question of the 2007 presidential election, Delors said that no matter what the result, he believed the next French president will want to improve relations with the U.S. "It's impossible to maintain the current situation," he said. He insisted that the Socialist

Party (PS) was fundamentally pro-American and pro-European,

"pro-Atlantic" in his term, as was Francois Bayrou's centrist party UDF (Democratic Union for France), despite the decision of many PS members to vote against the constitution and the leadership's use of what could be called an anti-American rhetoric in its campaigning and public declarations.

Â¶ 8. (C) Delors insisted throughout the meeting that the U.S. and EU needed to work as partners, and not as rivals, to address the challenges of the twenty-first century, citing in particular the emergence of China. He saw a need for the

U.S. to "pay more attention" to the mood in Europe, without giving undue consideration to public opinion polls and the media. Saying that "Europe is not as ill as it appears,"

Delors also expressed the hope, while acknowledging it was difficult, that U.S. politicians would become cognizant of the EU's potential.


Stapleton

Viewing cable 06PARIS3152, LAURENT FABIUS ON EUROPE AND THE SOCIALIST

PARTY'S



06PARIS3152

2006-05-12

12:12

2011-02-10

08:08

CONFIDENTIAL

Embassy

Paris




SIPDIS

E.O. 12958: DECL: 01/01/2016

TAGS: PGOV FR PINR EUN

SUBJECT: LAURENT FABIUS ON EUROPE AND THE SOCIALIST PARTY'S

ELECTION CHANCES

Classified By: Acting DCM Josiah Rosenblatt for reasons 1.4 (B & D).

(C) 1. Summary and comment: Former prime minister,

Socialist Party heavyweight, current presidential candidate, and the EU constitutional treaty's most prominent French opponent Laurent Fabius used a May 11 meeting with several local embassy reps to call for more Europe as the solution to the failed referendum on the EU constitutional treaty and a key to the Socialist Party's 2007 presidential election chances, while offering little in the way of new ideas on how to achieve that. He judged that the Clearstream scandal currently rocking the French government, as well as memories

of the 2002 elections when many leftist voters had opted for the radical fringe over the PS mainstream, had increased the likelihood of a PS victory in the 2007 presidential elections. Ironically, his indirect disparagements of current polling leader Segolene Royal unintentionally only underscored his own lack of appeal and inability to create a sense of promise and dynamism. In sum, Fabius himself did not appear truly to believe in his own presidential prospects, and said as much by conceding he was willing to serve in any PS government. End summary and comment.

Â¶ 2. (U) Former prime minister, Socialist Party (PS) heavyweight and would-be PS presidential candidate Laurent

Fabius met May 11 with Embassy reps from the U.S., UK,

Germany, Austria, Spain, Italy, Canada and Russia to discuss his perspectives on the political challenges facing France domestically and vis-a-vis Europe in the run-up to the 2007 presidential elections.

Left's election chances improving

---------------------------------

Â¶ 3. (SBU) Commenting on the Clearstream affair involving alleged kick-backs for frigate sales used for political skullduggery which has rocked the government of Prime

Minister de Villepin and even President Chirac, Fabius said that any normal democratic government would have resigned or been forced out by now. Fabius showed no hesitation in lumping the main victim, interior minister Nicolas Sarkozy, together with alleged plot-hatchers Villepin and Chirac, calling the scandal an industrial affair that turned into a political manipulation, and was now part of a counter-manipulation. He had no insights into why his own name had made its way onto the list, nor did he appear concerned by it.

Â¶ 4. (SBU) Fabius acknowledged that the scandal would improve the left's chances in the 2007 elections, unless it fails

itself. He judged that the chances of splintering were greater on the right than on the left, adding that the experience of 2002 (when far-right Jean-Marie Le Pen made it to the second round instead of Lionel Jospin) had chastened voters against the ineffectiveness of supporting the small, radical parties. He expressed the hope that the elections would present voters with an authentic debate over competing visions, and assumed that Nicolas Sarkozy would be the candidate of the center-right UMP governing party. Fabius saw himself as the candidate best positioned to represent the united left.

I love Europe

-------------

Â¶ 5. (SBU) To the surprise of all, given Fabius' role as the first and weightiest PS opponent of the EU constitutional treaty, Fabius then focused on the European Union. He asserted that he had voted against the treaty precisely because he was so pro-European. Claiming that other countries would also have rejected the treaty had it been subjected to referendum, he asserted that voters no longer associated the EU with "protection and progress," and cited the usual litany of concerns about enlargement, illisibility, the crisis of representation, low economic growth, the inflexibility of eurozone monetary and budgetary policy.

French rejection of the treaty, he said, only reflected a pre-existing crisis, it was not the cause of the current crisis.

Â¶ 6. (SBU) Asked what he would propose to put the EU back on track, Fabius' response was equally formulaic. The EU needed an energy policy, a commercial policy, more equal competition and better social programs, but he offered no specifics.

France needed to participate more freely in internal debates and not lord it over others, in particular the small member states. Franco-German cooperation would remain essential, and Fabius called for facilitating reinforced cooperation

among smaller groups within the EU. He rejected Sarkozy's idea of closer coordination among the larger member states, but rehearsed familiar French calls for more resources devoted to technology, research, and energy. He also conceded that the Common Agricultural Program (CAP) swallowed up too much of the EU budget.

Â¶ 7. (SBU) Fabius said that Europe needed to be able to stand on its alone alongside the U.S. and China. To that end,

Europe needed to define its limits, and offer the Balkans states, Ukraine and Turkey enhanced partnerships in lieu of membership. He lashed out against the UK (and implicitly against NATO), saying that it still viewed European defense as creating tools on paper rather than using them in practice. On institutional issues, he said that European parliamentary elections of 2009 would be the key to pushing through a new treaty, added that France would need to hold a new referendum to reverse the one of last year. He concluded that the PS should make Europe a central element of its election campaign, by showing how it affects citizens' daily lives and economic growth.

Â¶ 8. (SBU) Questioned where the EU would find the economic growth and budget resources to carry out the policies he was advocating, Fabius hedged and responded with familiar platitudes. France was capable of reform, but it needed stability in order to take risks and avoid "precarity."

Other parts of the solution resided in changing the tax brackets, industrial policies, and unspecified

"extra-budgetary" means. He noted caustically that debt in

France, as well as in the U.S., had increased dramatically under so-called conservative governments. Responding to a question about why he was now more closely aligned with the far left than the pragmatic center, Fabius said that

Mitterrand too had moved steadily leftward also while in office. He described himself as a "pragmatic" who had learned from past experience.

The presidential stakes

-----------------------

Â¶ 9. (SBU) Asked about the PS selection process for its presidential candidate, Fabius offered himself indirectly as the alternative to poll-leader Segolene Royal. He asserted that all the party heavyweights except her were in favor of a series of debates, adding that the PS was a party of ideas, not personalities. While Royal was talented, he had doubts that she could appeal to the party's left wing. He equated her centrism with a sort of "prestidigitation" that might not hold up under more sustained scrutiny, suggesting that her current crest in media popularity would inevitably take a tumble. Asked however about voters' desire to vote for candidates who offer hope and change, Fabius responded by abhorring gimmicks and noting his extensive governmental experience.

Â¶ 10. (SBU) Fabius, echoing Mitterrand, identified himself as the person who could best unify the left, and predicted that the left would win as long as it stayed united. It would also be necessary to develop broader "social momentum" and a sense of inevitability, rather than focusing on interest groups and calculating the PS message accordingly, since -- again quoting Mitterrand -- in politics 2 plus 2 equals either 5 or 3, but never 4. (Comment: This would appear to be precisely Royal's strategy. End comment.) Asked if his calls for unity also applied to himself, Fabius recalled the number of ministerial positions he had held in the past and said he would be prepared to serve again.

Comment

-------

Â¶ 11. (C) Fabius was disappointing, and came across clearly as a politician of the past, notwithstanding his tanned, relaxed and still youthful appearance. All those present were struck by his tired prescriptions for moving France out of its

current malaise and his references to the positions he has held in the past rather than his plans for the future. It was odd to hear the EU constitution's most influential opponent claim it was because he loved Europe too much, and his call for the PS to make Europe a central element in the presidential campaign was unconvincing (perhaps signaling a bad conscience). Fabius appeared to disdain Segolene Royal for the very dynamism and common touch he recognizes is necessary but he himself lacks. In sum, he came across as someone who no longer truly believes what he is saying, or even in his own candidacy.


Stapleton

Viewing cable 06PARIS7795, ASSISTANT SECRETARY FRIED'S MEETING WITH

JACQUES



06PARIS7795

2006-12-14

13:01

2011-02-10

08:08

CONFIDENTIAL

Embassy

Paris


VZCZCXRO5939


DE RUEHFR #7795/01 3481337

ZNY CCCCC ZZH

P 141337Z DEC 06 ZDK

FM AMEMBASSY PARIS



RUEHLB/AMEMBASSY BEIRUT 0462


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RUCPDOC/DEPARTMENT OF COMMERCE WASHDC

RUEATRS/DEPARTMENT OF TREASURY WASHDC


SIPDIS

SIPDIS


AND EB



E.O. 12958: DECL: 04/07/2015

TAGS: PGOV ELAB EUN PINR SOCI ECON PREL FR

SUBJECT: ASSISTANT SECRETARY FRIED'S MEETING WITH JACQUES

ATTALI

PARIS 00007795 001.2 OF 003


SUMMARY

-------

Â¶ 1. (C) Assistant Secretary Fried met with recognized intellectual and long-time Segolene Royal confidant Jacques

Attali on December 6. Attali underlined that Royal, even though she is a leading contender for France's presidency in next spring's elections, has had very little experience making and implementing foreign policy. Attali said that

Royal's "worldview is still unformed," and that she is riding a steep learning curve during her current round of trips abroad. Attali repeatedly used the word "amazing" to describe what he characterized as Royal's uncanny talent for successfully braving her way through the minefields of international issues -- he cited her trip this week to

Lebanon, Israel and Palestinian Authority territory -- and, despite near-fatal missteps, and notwithstanding her inexperience, emerging unscathed. Attali pointed to Royal's visit to Israel earlier this week as an example of how deft, attentive handling of her initial, defensive hostility can be turned to sympathetic good-will. Attali recommended that the

U.S. take a cue from the Israelis' success and give Royal

"red-carpet respect" during her upcoming trip to the U.S. -- and replace her unformed, distrustful pre-disposition

(typical of the French left) with an attitude more inclined to listen to and understand U.S. views and policies.

Â¶ 2. (C) Summary, continued: A/S Fried and Attali agreed that

"Europe is at a very challenging moment" -- and Attali went so far as to say that "expansion has cost Europe its identity." A/S Fried and Attali agreed that Turkey's decreasing interest in joining Europe, along with Europe's

"slamming the door" on Turkey were leading "to a strategic disaster" that could separate Turkey from the community of

Western democracies. A/S Fried and Attali also agreed that the growing authoritarianism of Putin's rule in Russia was a grave setback for the spread of liberal democracy. End

Summary.

ATTALI'S SUGGESTION FOR GOAL OF ROYAL VISIT TO U.S.

--------------------------------------------- ------

Â¶ 3. (C) In his meeting at the Embassy with A/S Fried on

December 6, Jacques Attali characterized Socialist Party presidential front-runner Segolene Royal's world-view as

"still unformed." Attali recalled that he had "known Royal

for nearly 30 years now" and had been instrumental in recruiting her for Mitterrand's staff in 1981, just after

Mitterrand's election to his first term. Attali also said that "about seven years ago I got the idea that Royal could become president of France -- I wrote to her about it, and she didn't believe me. But later, little by little, she began to see the possibility herself." (Note: Though Attali has no official position in Royal's campaign organization nor in the Socialist Party (PS), we believe he remains one of her more influential advisors. End Note) Attali made no effort to hide his concern that Royal's lack of experience in foreign affairs could lead to a damaging performance on her part -- for example, during a hastily planned visit to the

U.S. when crossed expectations might well "set her off on the wrong foot" in connection with her still uninformed views of the U.S. But he argued that a deftly handled Royal visit to the U.S. could be a key "formative experience" for her, central to her development into a leader -- should she become president of France -- able to both understand and trust the

U.S.

Â¶ 4. (C) Attali underlined that Royal, in her personality and her politics, is instinctively combative, and has long, and successfully, defined herself by championing the underdog and defying the powers-that-be. Attali observed that many people in France, particularly those reared politically on the

French left, congenitally mistrust American capitalism and

American power, and Royal is not any different. A/S Fried and Attali agreed that Royal's experience in the U.S., should she visit in the near future, should have the effect of defusing this defensiveness, and lay the groundwork for a more instinctively sympathetic view of the U.S. Attali held out Royal's recent visit to Israel as an example of how to

PARIS 00007795 002.2 OF 003

shape successfully her perceptions to long-term advantage.

According to Attali, Royal arrived in Israel disposed to be

"pro-Palestinian and anti-Israeli," but deft "red-carpet respectful" handling by the Israelis -- including a private dinner hosted by Foreign Minister Tipi Livni -- clearly prompted Royal to question her pre-conceptions. Attali suggested that the U.S should use a similar tactic, especially given Royal's reflexive reservations about the role of American power in general, and the Bush administrations' policies in particular.

"SHE HAS LITTLE EXPERIENCE -- BUT SHE'S LEARNING FAST"

--------------------------------------------- ---------

Â¶ 5. (C) Attali underlined that Royal is the most formidable political figure in France today -- "if the election were held today, she would win, hands-down." (Note: this is a view supported by current polls. End Note.) Attali repeatedly used the word "amazing" to describe how the force of Royal's conviction carries her through -- as often as not with flying colors -- despite her inexperience, particularly in connection with foreign relations issues. As an example of this talent for unflinchingly braving her way through anything, Attali pointed to Royal's recent trip to Lebanon, and how she emerged unscathed notwithstanding some close calls with statements that required considerable clarification after the fact. It remained to be seen if this teflon quality would carry through the election and beyond, but, as Attali also stressed, Royal has persistently proved wrong all who have underestimated her. "She's leaning all the time, and learning fast," Attali concluded. Attali pressed on A/S Fried his view that the U.S. would do well pro-actively to take advantage of Royal's current, relative

"malleability" with regard to her views about the U.S.

EUROPE

------

Â¶ 6. (C) Attali called EU enlargement "a disaster." He said the extension of Europe to 25/27 member states "had cost

Europe its identity," in addition to making the union

"unmanageable" and therefore incapable of making any meaningful plans for the future. As evidence for this view,

Attali pointed to the upcoming fiftieth anniversary of the

Rome treaty next year, and "the way there's nothing on the agenda because we can't do anything." Mentioning the German presidency of the EU (January - June 2007) Attali rhetorically asked, "Do you know when Germany will hold the

Presidency again?" He then mentioned the next French presidency (January - June 2008), and asked the same question. The respective answers, 2021 and 2022, in Attali's view, speak volumes about why the EU system of governance promises to produce paralysis, not leadership.

TURKEY

------

Â¶ 7. (C) A/S Fried called Turkey's potential separation from the community of Western democracies a "strategic disaster for all of us." A/S Fried and Attali discussed how growing indifference in Turkey towards joining Europe and rejection of Turkey's inclusion in Europe among Europeans were reinforcing each other, pushing Turkey in the wrong direction. Commenting on burgeoning anti-Turkey sentiment in

European publics, Attali lamented the "shortsightedness of

Europeans," saying that "short-term political use" of the issue could easily scuttle any chance of binding Turkey, inseparably, to Europe and democracy. Referring to the role the issue of Turkey's membership in the EU is likely to play in France's upcoming presidential campaign, Attali identified

France as "being in the lead" with regard to this shortsightedness.

RUSSIA

------

Â¶ 8. (C) While pointing out that "we'll work with the Russians where we can," A/S Fried commented that Putin's growing authoritarianism was a grave setback to the spread of liberal democracy. He pointed to Vice President Cheney's speech in

Vilnius last May as a noteworthy example of the U.S. speaking

PARIS 00007795 003.2 OF 003 out against Russia's current trending toward de facto dictatorship. Attali lamented "the cowardice of the

Europeans," excoriating them for not standing up to Putin's power grab lest the Russians use the "oil and gas weapon."

Attali compared the rise of revanchist sentiment in Russia

(over the "unfair" loss of the Cold War) to analogous feeling in Weimar Germany over defeat in WWI, adding, "but the

Russians have oil -- and Hitler didn't." A/S Fried suggested a better parallel might be the USSR after America's defeat in

Vietnam, suggesting that U.S. difficulties in Iraq and with

Iran were emboldening the Russians.

Â¶ 9. (U) A/S Fried has cleared this message.


STAPLETON


JACQUES



06PARIS7795

2006-12-14

13:01

2011-02-10

08:08

CONFIDENTIAL

Embassy

Paris


VZCZCXRO5939


DE RUEHFR #7795/01 3481337

ZNY CCCCC ZZH


FM AMEMBASSY PARIS









SIPDIS

SIPDIS


AND EB



E.O. 12958: DECL: 04/07/2015



ATTALI

PARIS 00007795 001.2 OF 003


SUMMARY

-------




Lebanon, Israel and Palestinian Authority territory -- and, despite near-fatal missteps, and notwithstanding her inexperience, emerging unscathed. Attali pointed to Royal's visit to Israel earlier this week as an example of how deft, attentive handling of her initial, defensive hostility can be turned to sympathetic good-will. Attali recommended that the






"slamming the door" on Turkey were leading "to a strategic

disaster" that could separate Turkey from the community of


Summary.


--------------------------------------------- ------



"still unformed." Attali recalled that he had "known Royal for nearly 30 years now" and had been instrumental in recruiting her for Mitterrand's staff in 1981, just after

Mitterrand's election to his first term. Attali also said that "about seven years ago I got the idea that Royal could become president of France -- I wrote to her about it, and she didn't believe me. But later, little by little, she began to see the possibility herself." (Note: Though Attali has no official position in Royal's campaign organization nor in the Socialist Party (PS), we believe he remains one of her more influential advisors. End Note) Attali made no effort to hide his concern that Royal's lack of experience in foreign affairs could lead to a damaging performance on her part -- for example, during a hastily planned visit to the


U.S.

Â¶ 4. (C) Attali underlined that Royal, in her personality and her politics, is instinctively combative, and has long, and successfully, defined herself by championing the underdog and

defying the powers-that-be. Attali observed that many people in France, particularly those reared politically on the



PARIS 00007795 002.2 OF 003 shape successfully her perceptions to long-term advantage.




--------------------------------------------- ---------

Â¶ 5. (C) Attali underlined that Royal is the most formidable political figure in France today -- "if the election were held today, she would win, hands-down." (Note: this is a view supported by current polls. End Note.) Attali repeatedly used the word "amazing" to describe how the force of Royal's conviction carries her through -- as often as not with flying colors -- despite her inexperience, particularly in connection with foreign relations issues. As an example of this talent for unflinchingly braving her way through anything, Attali pointed to Royal's recent trip to Lebanon,

and how she emerged unscathed notwithstanding some close calls with statements that required considerable clarification after the fact. It remained to be seen if this teflon quality would carry through the election and beyond, but, as Attali also stressed, Royal has persistently proved wrong all who have underestimated her. "She's leaning all the time, and learning fast," Attali concluded. Attali pressed on A/S Fried his view that the U.S. would do well pro-actively to take advantage of Royal's current, relative


EUROPE

------







TURKEY

------

Â¶ 7. (C) A/S Fried called Turkey's potential separation from the community of Western democracies a "strategic disaster for all of us." A/S Fried and Attali discussed how growing indifference in Turkey towards joining Europe and rejection

of Turkey's inclusion in Europe among Europeans were reinforcing each other, pushing Turkey in the wrong direction. Commenting on burgeoning anti-Turkey sentiment in




RUSSIA

------



PARIS 00007795 003.2 OF 003 out against Russia's current trending toward de facto dictatorship. Attali lamented "the cowardice of the









STAPLETON


JACQUES



06PARIS7795

2006-12-14

13:01

2011-02-10

08:08

CONFIDENTIAL

Embassy

Paris


VZCZCXRO5939


DE RUEHFR #7795/01 3481337

ZNY CCCCC ZZH


FM AMEMBASSY PARIS









SIPDIS

SIPDIS


AND EB



E.O. 12958: DECL: 04/07/2015



ATTALI

PARIS 00007795 001.2 OF 003


SUMMARY

-------




Lebanon, Israel and Palestinian Authority territory -- and, despite near-fatal missteps, and notwithstanding her inexperience, emerging unscathed. Attali pointed to Royal's visit to Israel earlier this week as an example of how deft, attentive handling of her initial, defensive hostility can be

turned to sympathetic good-will. Attali recommended that the






"slamming the door" on Turkey were leading "to a strategic disaster" that could separate Turkey from the community of


Summary.


--------------------------------------------- ------



"still unformed." Attali recalled that he had "known Royal for nearly 30 years now" and had been instrumental in recruiting her for Mitterrand's staff in 1981, just after

Mitterrand's election to his first term. Attali also said that "about seven years ago I got the idea that Royal could become president of France -- I wrote to her about it, and she didn't believe me. But later, little by little, she began to see the possibility herself." (Note: Though Attali has no official position in Royal's campaign organization nor in the Socialist Party (PS), we believe he remains one of her more influential advisors. End Note) Attali made no effort to hide his concern that Royal's lack of experience in

foreign affairs could lead to a damaging performance on her part -- for example, during a hastily planned visit to the


U.S.

Â¶ 4. (C) Attali underlined that Royal, in her personality and her politics, is instinctively combative, and has long, and successfully, defined herself by championing the underdog and defying the powers-that-be. Attali observed that many people in France, particularly those reared politically on the



PARIS 00007795 002.2 OF 003 shape successfully her perceptions to long-term advantage.




--------------------------------------------- ---------

Â¶ 5. (C) Attali underlined that Royal is the most formidable political figure in France today -- "if the election were held today, she would win, hands-down." (Note: this is a view supported by current polls. End Note.) Attali repeatedly used the word "amazing" to describe how the force of Royal's conviction carries her through -- as often as not with flying colors -- despite her inexperience, particularly in connection with foreign relations issues. As an example of this talent for unflinchingly braving her way through anything, Attali pointed to Royal's recent trip to Lebanon, and how she emerged unscathed notwithstanding some close calls with statements that required considerable clarification after the fact. It remained to be seen if this teflon quality would carry through the election and beyond, but, as Attali also stressed, Royal has persistently proved wrong all who have underestimated her. "She's leaning all the time, and learning fast," Attali concluded. Attali pressed on A/S Fried his view that the U.S. would do well pro-actively to take advantage of Royal's current, relative


EUROPE

------







TURKEY

------

Â¶ 7. (C) A/S Fried called Turkey's potential separation from the community of Western democracies a "strategic disaster for all of us." A/S Fried and Attali discussed how growing indifference in Turkey towards joining Europe and rejection of Turkey's inclusion in Europe among Europeans were reinforcing each other, pushing Turkey in the wrong direction. Commenting on burgeoning anti-Turkey sentiment in




RUSSIA

------



PARIS 00007795 003.2 OF 003

out against Russia's current trending toward de facto dictatorship. Attali lamented "the cowardice of the









STAPLETON

Viewing cable 09LONDON970, KURDISH LEADER DISCUSSES RECENT TURKISH

ELECTIONS



09LONDON970

2009-04-27

11:11

2011-02-15

12:12

VZCZCXRO9674

PP RUEHDE RUEHKUK

DE RUEHLO #0970/01 1171143

ZNY CCCCC ZZH

P 271143Z APR 09

FM AMEMBASSY LONDON


CONFIDENTIAL

Embassy

London

INFO RUEHAK/AMEMBASSY ANKARA 0982


RUEHMD/AMEMBASSY MADRID 1232




RUEHKUK/REO KIRKUK 0001


SIPDIS

CONSULATE DUBAI FOR IRPO, CONSULATE ISTANBUL FOR IRAN

WATCHER

E.O. 12958: DECL: 04/21/2019

TAGS: PREL PGOV PINS PTER FR IZ IR SP TU UK

SUBJECT: KURDISH LEADER DISCUSSES RECENT TURKISH ELECTIONS

REF: A. ADANA 020 B. ANKARA 552

Classified By: Political Minister Counselor Greg Berry for reasons 1.4 (b) and (d).

1.(C) Summary. In an April 22 roundtable at Chatham House on Turkey's recent elections, Kurdish political leader Ahmet Turk gave prepared remarks and took questions from a mostly Turkish audience. He condemned the

Turkish government's decision to respond to his party's electoral success and the subsequent PKK declaration of a cease-fire with repression. Turk insisted that the DTP supports a peaceful solution to the Kurdish issue in

Turkey, and called for a new Turkish constitution that acknowledges the rights of minorities. End Summary.

"Turkey considers all Kurds terrorists" ----------------------------- -----

---

Â¶ 2. (C) Ahmet Turk, leader of the Democratic Society Party (DTP) -

Turkey's largest Kurdish political party spoke at Chatham House in a meeting that was open to the press on April 21. His declared topic was the recent local and provincial elections in which the DTP scored remarkable success in Kurdish dominated areas. But he also addressed the larger issue of Turkey's treatment of the Kurds; the Kurdish people's division among four modern states (Iran, Iraq and Syria as well as Turkey), which Turk blamed for "robbing" the Kurds of the same rights as other people; and his

party's proposals for a solution to the problem of the Kurds. He opened by saying that the Kurdish people want to live in harmony with the Turks; but that Turkey, under the pretext of "fighting terrorism," considers all Kurds to be terrorists, and considers political parties formed to represent minorities to be "disloyal," and until 1990 prohibited them. In 1990 Kurds began forming political parties. "Others took the path of resistance."

(Embassy note: A reference to the Kurdistan Worker's Party or PKK.)

Despite persecution, the Kurds were trying to pursue their goals of recognition, equal treatment of their culture and language via peaceful political means. He said Turkey's response was arrest, imprisonment and extra-judicial killing of Kurdish politicians. "I have been imprisoned three times," he said.

Recent election success spoiled by repression -----------------------------

---------------- -

3.(C) Turk said that Turkey's constitutional requirement that political parties gain 10 percent of the vote to be seated has made it difficult for the DTP to win elections in the past. In the most recent elections, however, the DTP decided to run its candidates as individuals (who are not subject to the 10 percent rule) and only announced their affiliation after winning elections. "The DTP gained control of 99 local authorities, up from

56, and the DTP is now the fourth largest party in the provincial parliament," he said. (Embassy note. He did not make clear which province(s) he was describing). He added, "the DTP got the largest vote total of any party in any provincial election." After the election, he said, the PKK announced a cease-fire since "the Kurdish people had chosen a peaceful political solution to Kurdish issues with Turkey over violence."

Turkey's response, he said, was to raid DTP party offices and arrest over

100 party officials and charge them with terrorist offenses (see ref A).

This underscored Turkey's unwillingness to deal with Kurds peacefully.

Who uses violence? --------------------

4.(C) The Turkish military and others, Turk said, do not want a solution because they fear a loss of power. The DTP has allies among the Turkish people, primarily intellectuals, who see that Turkey must find a peaceful solution. "I believe there is no solution (via) arms. But both sides must be peaceful. It must be asked: Who wants peace and who doesn't? The DTP has called for a peaceful solution. The PKK declared a cease-fire after elections. The response from Turkey was a crackdown." Turk concluded his prepared remarks by saying: "Kurds are just looking for security. Why doesn't Europe tell the Turkish government: you must permit the Kurds to have a separate identity within Turkey." LONDON 00000970 002 OF 003

Obama and the PKK ---------------------

Â¶ 5. (C) Turk was asked by a Turkish reporter for CNN why when President

Obama says the PKK is a terrorist organization, you don't react. But when

Turkey considers the PKK terrorists, you object. He denied that Obama called the PKK terrorists in his meeting with Turk, but acknowledged that it is official U.S. policy that the PKK are terrorists. "One has to be careful how one labels groups. The PKK is not al-Qaeda. If Turkey was fair

and open to Kurdish rights, there would be no PKK. The issue is Turkish refusal to resolve the issue peacefully."

DTP supports EU accession ----------------------------

6.(C) Asked about EU accession, Turk responded that the DTP is a strong supporter of the accession process. "If accession means Turkey was subject to the ECHR (European Commission on Human Rights), that would be good for the Kurdish cause. The people who oppose EU accession are the ones who want a violent solution to Kurdish concerns, because they see Turkey as a unified state, without minorities or at least without minority rights."

Erdogan ---------

7.(C) One reporter asked whether Turkish PM Recep Erdogan was better or worse than his predecessors in dealing with the Kurds. Turk responded that the Kurds' original support for Erdogan had dissolved after the prime minister "made too many compromises" with the military (including the closure case - see ref B) and other "nationalists" who want to resist the granting of Kurdish rights. "Erdogan gave a speech where he said 'Turkey: one people, one flag, one language, one nation.' This shows his true colors."

8.(C) A western reporter asked about Erdogan's speaking Kurdish on TV.

Turk said that it is unconstitutional in Turkey to broadcast in another language, but the station was a Turkish government approved station which used a loophole to allow it. While many applaud this station as a sign of progress, "the performers, the technicians, all the people, the scripts, everything must be approved by the government," he said. In the UK, France and Spain, this is not the case. In the UK, you have a Welsh station, S4C, which is funded by the government, but is not controlled by it. The same is true for Breton stations in France and Catalan stations in Spain. We need the guaranteed right to broadcast in the constitution because without this, any TV can be removed."

Voters Pressured? -------------------

9.(C) Another Turkish reporter asked about Turkish government accusations that the DTP threatened Kurds before the elections, and that is why the DTP did so well. Turk laughed. He then said that if that were the case, why did the DTP do better in cities, where a threat would be hard to carry out because people are anonymous, rather than small intimate villages where the

DTP did not do as well? He also accused the AKP (The Turkish government's party) of giving away washing machines and refrigerators just before the elections in poor communities. "That is corruption and can be proved," he said

Solution? ---------

10.(C) In summation, Turk said that the DTP wishes to see a peaceful political solution to Kurdish demands for their rights, which included the

Turkish government's recognition of the DTP as "a legitimate party that wants to work within Turkey to find a solution." He then said that the

Kurdish problem could not be solved domestically, but was an international problem, because the 40 million Kurds are divided between Turkey, Iran,

Iraq and Syria. "Anyway, the PKK is not part of the solution, the DTP is.

But Turkey does not care about the PKK in Turkey, they don't want the Kurds in Iraq to achieve anything." LONDON 00000970 003 OF 003

11.(C) Finally, he was asked what the DTP seek. Turk said, "We want a new constitution for Turkey that is based on the Universal Declaration of Human

Rights. A constitution that recognizes the Kurdish culture and languages as legitimate within the Turkish state. We seek devolution of power to the

Kurdish-controlled areas, like the Welsh, Bretons, and Catalans enjoy.

"Freedom for Kurds would also mean freedom for Turks. Because many of the restrictions in Turkish life would be lifted in a Turkey that accepted that there were many ways to be a citizen of Turkey. Also, remember that oppressors oppress none so much as themselves."

Visit London's Classified Website: XXXXXXXXXXXX LEBARON

Viewing cable 08CAIRO2221, IS THE EGYPTIAN GOVERNMENT READY FOR A

GLOBAL SLOWDOWN? Sensitive but unclassified. Please handle accordingly.



UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

Cairo

08CAIRO2221

2008-10-

20 10:10

2011-02-16

21:09

VZCZCXYZ0000

RR RUEHWEB

DE RUEHEG #2221/01 2941058

ZNR UUUUU ZZH

R 201058Z OCT 08

FM AMEMBASSY CAIRO


INFO RUEATRS/DEPT OF TREASURY WASHDC

RUCPDOC/USDOC WASHDC 0423

UNCLAS CAIRO 002221

SIPDIS

SENSITIVE

STATE FOR NEA/ELA, NEA/RA

USAID FOR ANE/MEA MCCLOUD AND RILEY

USTR FOR FRANCESKI

TREASURY FOR PARODI AND BAYLIN

COMMERCE FOR 4520/ITA/ANESA

E.O. 12958: N/A

TAGS: ECON EFIN EINV PGOV EG

SUBJECT: IS THE EGYPTIAN GOVERNMENT READY FOR A GLOBAL SLOWDOWN? Sensitive but unclassified. Please handle accordingly.

1.(SBU) Summary: Egypt's stock market, like nearly all globally, has been significantly down this year and the global financial crisis has only accelerated that decline. The index is down 50 percent from its April historic highs, and in October, the most intense period of global financial crisis, the local index shed more than 20 percent of its value. That said, just a small percentage of Egyptians are invested in the stock market,

Egyptian banks are very conservative, and Egypt enters this volatile period with strong growth, so Egypt's real economy has seen relatively little specific impacts from the financial crisis. However, the Government would probably like to believe that it is more immune than it is. President

Mubarak has held two Cabinet meetings with his economic team recently, and several members of the economic team have spoken publicly about planned reforms and other initiatives to ease the economic impact of ongoing financial turmoil, including an October 12 press conference by Prime

Minister Nazif and an October 19 speech at the AmCham by Minister of Trade

Rachid. The message has been that Egypt's financial system is safe, that the GOE is monitoring the situation, and that even in a global recession

Egypt will weather the storm better than others. While we are not aware of any comprehensive assessments done by the GOE on the specific risks Egypt faces in this global crisis, some ministers have mentioned some "new plans" and "incentives" in the press, none of which contain specificity. End

Summary.

Â¶ 2. (U) At a speech to the Amcham on October 16, Minister of Trade and

Industry Rachid warned that although the Egyptian banking sector is sound,

Egypt is nonetheless likely to suffer from the global economic crisis that he predicted would inevitably follow the current period of financial turmoil. Following the lines of the IMF's World Economic Outlook he said, that as OECD countries slow, growth in 2009 will come from emerging markets, including China, India, Indonesia and Egypt. He expressed concern, however, that a protectionist trend may emerge and said that WTO's Lamy had called him about an emergency meeting. The financial crisis, he said, is a

"hurricane that must pass" but noted that it would create opportunities for some companies and countries. On the positive side, for Egypt, the drop in commodity prices would lead to a drop in inflation, which, at 20-plus percent year-on-year, has been one of Egypt's biggest economic concerns.

Â¶ 3. (U) In the case of Egypt's banking sector, which Central Bank Governor

El Okdah publicly described last week as "highly liquid," Rachid observed deposits are safe and lending continues. This stability has meant that the

GOE's economic team has been able to focus on the looming economic slowdown which Rachid predicted would affect Egypt's exports, and other significant sources of forex, including tourism, foreign direct investment, remittances and Suez Canal revenues. Egypt has been spared the financial crisis, he said, noting that the GOE now needs to be forward thinking on sectoral initiatives to "at least minimize the damage" if not take "full opportunity of the disruption."

Â¶ 4. (U) Rachid said that under current economic conditions, the appropriate policy response in Egypt is "a higher level of engagement" on economic reform. To continue at the same pace, he said, would be to lose ground and see GDP growth rates fall to 3-5 percent. Egypt needs 7 percent

GDP growth to control unemployment and address poverty. His goal, he said, is full manufacturing utilization rates, no layoffs, and completion of the

1000 factories now under construction. To meet these goals, he said, the

GOE will design a set of reforms and measures for every sector, with an overall strategy of: ensuring adequate access to finance, continuing to attract private investment, including by Egyptians, and maintaining the government's infrastructure investment program. This will include pushing

Egyptian banks to increase their lending activities. He also suggested that he will engage more actively with emerging markets such as Turkey and

China, and maintain trade and investment flows with India and Africa.

5.(SBU) Rachid's remarks followed an October 12 press conference by Prime

Minister Nazif, Central Bank Governor El Okdah and Minister of Investment

Mohieldin in which they recited many of the statistics which indicate

Egypt's financial stability and safety. El Okdah reviewed the strong position of the Egyptian financial system, in part due to reforms begun in

2004; noting that net international reserves (NIR) are safe and are in

Treasury bonds in safe countries; the NIR is diversified; Egyptian banks have a relatively small amount invested overseas; and loan-to-deposit ratios are much lower in Egypt than in other countries.

Â¶ 6. (SBU) All of these things are true. Egypt has been relatively slow to introduce new financial products, which in the current environment, makes them appear wise. Also, the CBE's bank reform program of the last few years has contributed to the improved asset quality and the more cautious approach towards lending of most banks. While this has led to low credit availability and a slow credit growth, it leaves the banks in good stead in this environment. However, while starting from a very low base, the last several years have seen growth in some new financial instruments like mortgages, credit cards, and consumer credit. While this type of credit is still a relatively small portion of overall credit, and it is primarily concentrated in a small handful of banks, some analysts are already warning that given the lack of familiarity with a credit culture and absent better financial literacy, that even this small amount of new credit could begin to pose some system risks.

7.(U) In the period between the Nazif press conference and the Rachid speech, several sectoral ministers hinted at the kind of reforms the GOE may be contemplating. Transport Minister Mansour, for example, hopes to

attract more investment in ports and road projects. Housing Minister Al

Mahgrabi said a new plan will be announced to boost activity in the building materials sector. In addition to announcing delays in removing energy and other subsidies in the industrial zones, and eliminating the export tax on cement, Rachid has said that Egypt's Export Guarantee Company will receive additional capital. He also said new incentives could be offered to license industrial projects, and credit for industrial projects could be enhanced. Rachid told the Ambassador on the margins of the Amcham speech that he hoped to use the urgency of the crisis to accelerate additional economic reform.

Â¶ 8. (SBU) Additionally, the Ministry of Investment (MOI) will use financial crisis to push implementation of an existing plan to create a single regulator for the Capital Markets Authority, the Mortgage Finance

Authority and the Insurance Authority. MOI has been working on this key reform measure for some time. Mohieldin told us over the weekend that the ministry will cite the financial crisis when it submits the draft single regulator law to parliament in November. According to the minister's advisor, MOI will argue that the draft law is a key part of the GOE's response to the financial crisis, and ask parliament to pass the law expeditiously. MOI is targeting January 1 for passage of the new law, but the minister's advisor said it could possibly happen by the end of

November.

9.(SBU) Comment: There are few specifics of any of the "new proposals" being discussed, and given an absence of analysis about how slower global growth will affect Egypt, it is hard to know exactly where Egypt should focus any "new efforts." Clearly Egypt's economy is linked to external developments, so reductions in tourism, Suez Canal receipts, and foreign direct investment could all contribute to slower growth. Clogged credit markets have reportedly already started affecting exporters who depend on letters of credit in order to ship goods. Anecdotally, we have heard bankers mention that the L/C market has been affected, something that will impact Egypt's export-dependent growth strategy. That said, Egypt has a large domestic demand, an increasingly diversified manufacturing base, a huge government sector which continues to employ huge masses, so even if growth drops off, it will still be above historical norms. And, while oil prices are falling, and Gulf countries may have less to invest, they still are relatively well off to continue to invest in Egypt.

10.(SBU) Comment (cont): Egypt's reformers have been riding a wave of global praise in recent years, so in some ways may think of themselves as infallible. Global financial crisis or not, the economic team needs to redouble its efforts to keep Egyptian growth at a high and sustainable level and to fix the inequitable growth which has worsened with years of inefficient subsidies. While subsidy reform was a part of Mubarak's lexicon after last year's NDP party conference, it has disappeared in the current environment; Rachid refused to answer a question at the AmCham on removing subsidies. Given the declining cost of commodities and lack of political will to take on tough reforms, we expect that the GOE will continue to use subsidies as its principal way to help the poor. While this may help with public perceptions, it ignores long-awaited reforms needed for long-term economic growth in the areas of the education, land ownership, housing, the civil service and the welfare system. It is worth noting that Finance

Minister Boutros-Ghali has not yet weighed in publicly. It will be interesting to see if any "incentives" which are rolled out run counter to his goal of fighting the deficit. SCOBEY

Viewing cable 09CAIRO119, SCENESETTER FOR SPECIAL ENVOY MITCHELL'S

JANUARY 26 VISIT TO CAIRO REF: CAIRO 118 (ASSESSMENT POST-GAZA) Classified

By: Ambassador Margaret Scobey Reasons: 1.4 (B) and (D)



09CAIRO119

2009-01-23

19:07

2011-02-16

21:09

SECRET//NOFORN

Embassy

Cairo

O 231954Z JAN 09

FM AMEMBASSY CAIRO


INFO ARAB ISRAELI COLLECTIVE IMMEDIATE

S E C R E T CAIRO 000119

NOFORN

FOR SENATOR MITCHELL FROM THE AMBASSADOR

ALSO PASS TO NSC FOR SHAPIRO AND PASCUAL; NEA FOR FO

E.O. 12958: DECL: 01/23/2019

TAGS: PREL PGOV KPAL IS EG

SUBJECT: SCENESETTER FOR SPECIAL ENVOY MITCHELL'S JANUARY 26 VISIT TO CAIRO

REF: CAIRO 118 (ASSESSMENT POST-GAZA) Classified By: Ambassador Margaret

Scobey Reasons: 1.4 (B) and (D)

Â¶ 1. (S/NF) Summary and Introduction: Senator Mitchell, welcome to Egypt.

Your visit will be, we hope, the first in a regular process of dialogue and consultation with senior Egyptians on what they consider to be the primary regional political issue -- the Arab-Israeli conflict, particularly the

Palestinian track that has generated violence and tension that threatens

Egypt's national security interests.

Â¶ 2. (S/NF) We have requested meetings with President Mubarak, EGIS Chief

General Omar Soliman, Foreign Minister Ahmed Aboul Gheit and Arab League

Secretary General Amre Moussa. The Egyptian leadership will hope to see in your visit signs that the U.S. will give urgency to addressing the Israeli-

Palestinian conflict and a hope that the U.S. approach will be seen as balanced. Healing the Palestinian rift is critical, but may hinge on reestablishing a Syrian track in the peace process. Egyptian-Syrian

relations, never good, are particularly hostile at this juncture with

Mubarak seeing Syria acting aggressively as Tehran's proxy in undermining

Egyptian Arab leadership. It will be important for us to consult closely with the GOE on our approach to Syria and Lebanon because of Egypt's overriding strategic view of the Iranian threat. GOE anger over what they perceived as U.S. intervention in Iraq that did not heed the advice and interests of regional partners like Egypt has abated somewhat, but

President Mubarak believes that the post-Saddam vacuum has unleashed

Iranian regional ambitions, including now in Gaza via Hamas. End summary. -

-------------------------------------------- ------------ The Egyptian

Approach on the Israeli-Palestinian Conflict ------------------------------

--------------- ------------

Â¶ 3. (S/NF) Resolution of the Israeli-Palestinian conflict is the primary strategic political goal for the Egyptians. Over the years, the Egyptians have functioned well as an intermediary (e.g. between Arafat and the

Israelis), a role that effectively balanced Egypt's moderate stance alongside its regional image as standard-bearer for the Palestinian cause.

With the emergence of direct Israeli-Palestinian Authority communication, followed by the Hamas coup of Gaza in June, 2007, the Egyptian role shifted to a focus on intra-Palestinian reconciliation and establishment of the

Hamas-Israel ceasefire. Egyptians have welcomed signs from the Obama

Administration that the U.S. intends to engage early; Foreign Minister Abul

Ghayt warned a few days ago that "others" (Turkey, the French, Qatar to name a few) are actively jockeying to expand their role in brokering peace during a period of perceived U.S. inattention. The Egyptians have fretted, however,about the possibility that renewed U.S. engagement would devolve into endless "process." They support direct Palestinian-Israeli negotiations but want to see the U.S. using its influence with the parties more effectively.

Â¶ 4. (S/NF) EGIS Chief Omar Soliman, 72 years old and in his position since

1993, is the de facto national security advisor, and holds responsibility for the Israeli-Palestinian account, including Egyptian efforts to negotiate the release of IDF Corporal Gilad Shalit. Soliman, a retired general and veteran of the 1973 war, is a pragmatist with an extremely sharp analytical mind. He currently is hosting a series of meetings with

Israeli MOD Official Amos Gilad and Hamas representatives (from both Gaza and Damascus), with the goal of cementing the new ceasefire and advancing intra-Palestinian reconciliation. Soliman believes that Palestinian reconciliation is a prerequisite to any major next step in Gaza, as neither the Egyptians nor the international community can work with Hamas as a partner on security, political or economic reconstruction issues. That said, he has stuggled to find incentives for Hamas to cede Gaza back to the

PA, especially given Hamas' increasingly stout backing from some Arab states (e.g. Syria and Qatar) as well as Iran. Soliman will tell you he understands that Hamas needs to be "squeezed" and that limiting movement in and out of Gaza supports this end, but will urge that you impress upon the

Israelis the need to maintain adequate humanitarian inflows to Gaza. The

Egyptians will stress the point that that keeping borders open for legitimate trade and forging effective measures against smuggling go hand in hand.

5.(S/NF) Following his most recent round of discussions with Gilad, Soliman told us that he and Gilad generally agreed that they were "back where they started" in the fall -- only perhaps Hamas has gotten meaner. Together they inted to work to extend the calm and promote Palestiian reconciliation. As

long as the calm lasts, srael will proceed, as before, with limited bordr openings for legitimate goods. On counter-smugling, Soliman said he told

Gilad that Egypt has ade new "arrangements for border security" that ill involve EGIS, State Security and DMI. He pldged to Gilad that Egypt would exert maximum effor to control borders including areas of the Gulfs of Suez and Aqaba. The Egyptian Prime Minister will address compensation for Sinai

Bedouin to alleviate the impact of cutting off smuggling. He said Egypt would accept technology from the U.S., Germany and Italy and that Egypt would arrest owners of the tunnels. Gilad and Soliman reportedly agreed that Hamas knows its resupply challenges will grow but that their efforts to succeed will also increase.

6.(S/NF) The Egyptians are also in the midst of a serious intra-Arab rift, exposed by the recent Gaza crisis (for a full analysis see reftel). The

Israeli military operation, and enormous regional public outcry, appears to have buoyed Hamas' popularity for the moment. Egypt, with support primarily from Saudi Arabia, has pushed back against Arab and other states that wish to give greater political recognition to Hamas, but the fight will likely intensify in the run-up to the Arab League Annual Summit set for late March in Doha. FM Aboul Gheit, a career diplomat who has held his position since

2004, recently announced Egypt's intent to hold a ministerial level meeting on Gaza humanitarian assistance as soon as mid-February, something that he hopes will marginalize efforts from other Arab states to channel assistance to Gaza via contributions to Hamas. He will likely ask for full USG support of this initiative. Arab League Secretary General Amre Moussa (in office since 2001) is generally supportive of Egyptian primacy on the Palestinian issue and of PA President Abbas. He has struggled to regain control of intra-Arab dynamics following the Gaza crisis). Your tentatively scheduled visit will give him a needed boost.

Â¶ 7. (S/NF) Your key meeting however will be with President Mubarak who retains a firm grip on national security and strategic issues. EGIS

Director Soliman and FM Aboul Gheit take their marching orders from Mubarak and are effective to the extent that Mubarak and Egypt are still seen both in the region and on the international stage as indispensible partners in seeking Arab-Israeli peace. With Iran making inroads into the Arab world via Syria, Hezbollah, Qatar, and now Hamas, Mubarak will be most open to a

USG approach that puts our efforts on the Israeli-Palestinian conflict in that broader regional context. Reconciliation between Fatah and Hamas may be the critical piece to reestablishing a meaningful path towards the objective of a two-state solution, but in our view that is unlikely to take place without broader reconciliation within Arab ranks. Mubarak's feelings towards Syria and Bashar al-Assad are scathing, but at the same time we believe he will understand that prying Syria away from Iran and establishing a Syrian-Israeli track may be a strategic necessity. You will want to seek his views on this issue and assure him that the U.S. will consult closely with Egypt as we consider any overtures towards Syria. ----

----------- Regional Issues ---------------

Â¶ 8. (S/NF) On Iraq, although President Mubarak remains deeply suspicious that Nuri Al Maliki answers to Tehran, other GOE officials have expressed increasing confidence that Maliki, and Iraq generally, has turned a corner and may avoid civil war. Foreign Minister Aboul Gheit recently completed a successful trip to Baghdad in October and is moving forward to reopen the

Embassy in Baghdad. On Iran, Egypt is concerned by rising Iranian influence in the region, has supported UN sanctions, and is increasingly active on countering Iran, e.g. in Gaza and to some extent in Lebanon, working with

Saudi Arabia and other Arab states to support Lebanese political and territorial sovereignty.

9.(S/NF) Egypt is a steadfast ally in counter-terrorism efforts, and we maintain close cooperation on a broad range of security and law enforcement issues. We have a long-standing and productive relationship with EGIS and

SSIS, the two Egyptian agencies that cover internal and regional terrorism issues. Through the Department of State's Anti-Terrorism Assistance program, we are working with SSIS to establish an anti-terror investigative unit, and also are in the beginning stages of a USG-funded community policing program that will include needed human rights training. ----------

--------------------- Internal Politics and Economics ---------------------

----------

Â¶ 10. (C) Our fundamental political reform goal in Egypt remains democratic transformation, including the expansion of political freedom and pluralism, respect for human rights, and a stable and legitimate transition to the post-Mubarak era. Egyptian democracy and human rights efforts, however, are being suffocated, and Mubarak remains skeptical of our role in democracy promotion, lecturing us that any efforts to open up will result in empowering the Muslim Brotherhood (which currently holds 86 seats in

Egypt's parliament). Mubarak now makes scant public pretense of advancing a vision for democratic change. An ongoing challenge remains balancing our security interests with our democracy promotion efforts.

11.(S/NF) Mubarak, who is now 80, is in solid health, notwithstanding a hearing deficit in his left ear. The next presidential elections are scheduled for 2011, and if Mubarak is still alive it is likely he will run again, and, inevitably, win. Despite incessant whispered discussions, no one in Egypt has any certainty about who will eventually succeed Mubarak, nor how the succession will happen. Mubarak himself seems to be trusting to

God and the inertia of the military and civilian security services to ensure an orderly transition. The most likely contenders for next president are presidential son Gamal Mubarak (whose profile is ever-increasing at the ruling party), EGIS chief Omar Soliman, dark horse Arab League Secretary-

General Amre Moussa, another old-guard regime insider, or an as-yet unknown military officer.

Â¶ 12. (C) Economic reform has been a success story, although Egypt still suffers from widespread and so far irremediable poverty affecting upwards of 35-40% of the population. Reforms in trade and tax policy, financial reform, privatization and increased transparency have led to 7% economic growth in the last fiscal year. Foreign investment increased from around $3 billion in 2005 to $11 billion in the last year, mostly in the petroleum sector. Despite this success, significant problems remain, including 20% inflation, high levels of poverty and unemployment, and endemic corruption.

The effects of the global financial crisis on Egypt may not be as severe as elsewhere, as Egyptian banks operate very conservatively and have been spared involvement in risky financial products. The informal economy also provides a certain degree of resiliency to the economic picture.

Nevertheless, as the economic crisis worsens, Egypt remains vulnerable as exports, Suez canal revenues, tourism, and remittances will reflect global trends. SCOBEY

Viewing cable 09CAIRO163, DEVELOPMENT ISSUES IN NORTH SINAI



09CAIRO163

2009-02-01

05:05

2011-02-16

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DEPARTMENT FOR NEA/ELA

E.O. 12958: DECL: 01/28/2019

TAGS: PGOV KPAL ECON PTER SNAR EAID EAGR EG IS

SUBJECT: DEVELOPMENT ISSUES IN NORTH SINAI

REF: CAIRO 107

Classified By: Minister Counselor for Economic and Political Affairs

William R. Stewart for reasons 1.4 (b) and (d).

1.(C) Summary: Embassy officials met with local political, business, and community leaders in the North Sinai Governorate on January 19-20. Our conversations centered on the leaders' efforts to improve education, develop the agricultural sector, increase the availability of water, and create jobs. These development efforts are complicated because the Sinai

Peninsula is a "national security area" due to the sensitive nature of the

Egypt's border with Israel and Gaza, and the terrorist attacks in three

Sinai resort towns from 2004-2006. We spoke about the lack of peace in the

region, and recent Bedouin-government tensions as a result of crackdown on illegal practices such as smuggling drugs and trafficking in arms and humans, which hinder development efforts. We also discussed the leaders' ideas on the way forward for the governorate. End Summary. ----------------

-------------------------- Development and Jobs Needed in North Sinai -----

-------------------------------------

2.(C) Norh Sinai Governor Mohammed Abd al-Fadil Shousha tod us that his top priority is economic developmentof the governorate and the creation of jobs, espcially in central Sinai. Fayez Abu Harb, a Bedoun leader and the

Member of Parliament that repreents northeastern and central Sinai, praised the Government of Egypt's (GOE) efforts over the past28 years, since the

Israeli withdrawal, to developroads, hospitals, health clinics and water delivery. However, he said that more still needs to be done in the region.

Abu Harb stated that there is a national project for the development of the

Sinai, but the North Sinai Governorate must compete with other governorates for limited funding. Osama Kassas, President of the North Sinai Business

Association (NSBA), said that GOE ignored the Sinai for many years, after it was returned to Egypt in the peace treaty with Israel. Only now the GOE is attempting to address the inequality and underdevelopment of the region.

3.(C) Abu Harb stated that one of the biggest challenges is the lack of legitimate job opportunities. The lack of jobs causes people to look for other means to support their families including illegal activities such as theft and smuggling. Abu Harb stated that the capacity for large-scale agriculture projects has diminished because land plots are divided between

4-5 sons as part of the inheritance process. He hopes that there will be new projects focused on creating trade/industrial parks to create "free market" job opportunities. --------------------------------------------- -

Central Sinai: A Point of Emphasis and Concern ----------------------------

----------------- -

4.(C) The central Sinai, including the area around the villages of al-Nakhl and Hassana, which is part of the North Sinai Governorate, is the area of development focus for the GOE. All of the leaders with whom we met referenced problems such as smuggling drugs and trafficking in arms and humans, and the theft of automobiles. Abu Harb told us that in the absence of jobs, the Bedouin rely on these illegal activities to provide for their families. He noted that GOE efforts to restrict these activities have increased tensions. (Note: The central Sinai was the scene of fighting between police and Bedouins in November and early December 2008 that left

3-4 Bedouin dead and resulted in the kidnapping and eventual release of 40

Egyptian police officers. End Note.) Abu Harb told us that the Bedouin traditionally reject government interference in their lives, but when the state obstructs their livelihoods--without providing alternatives--it becomes even a more contentious issue. He opined that the solution lies in economic development, and in the concept of "duties and rights." Abu Harb explained that if the government provides the Bedouin with the "right" to obtain legitimate jobs that can provide for their families, they will see it as their "duty" to take up the jobs, and eschew more nefarious economic activities.

5.(C) Ahmed Orabi, President of the North Sinai branch of the Egyptian Red

Crescent, told us that central Sinai differs from the northern part of the peninsula. He stated the area needs immediate attention because the Bedouin population is frustrated that they are unable to sustain a living. As a

result they are involved in "illegal smuggling activities and terrorism."

Orabi stated that area is a "time bomb," and if legitimate economic opportunities are not created, the area will explode. Likewise, Osama

Kassas believes that the solution is economic development. He said the region is "virgin" territory because the area has been isolated and there is a lack of business and development opportunities. Kassas suggests microcredit and SME development projects that will give the Bedouin a "noble livelihood." He relayed an example of one of his northern Bedouin clients who was smuggling cigarettes to Gaza. The client stopped his smuggling activities after he was given a loan to expand his "legitimate" business by opening cigarette kiosks in the cities of North Sinai. --------------------

----------------- Potential in Agricultural Development -------------------

------------------

6.(C) All the leaders agreed that focusing on the agricultural sector is the best way to expand the North Sinai economy and provide jobs. Governor

Shousha is focused on developing the agricultural industry in the governorate. He stated that "a factory may employ 100 people, but agriculture has unlimited employment potential." Dr. Mohamed Nasr, an

Environmental Agricultural Sciences Professor at the El Arish branch of

Suez Canal University, and one of only twelve native Bedouins to obtain a

PhD, agrees. He told us that the economy in Sinai has always been based on agriculture, and that agricultural investment would capitalize on existing skills. Nasr stated that there are around 300,000 feddans (311,400 acres) in Sinai that can be cultivated. Osama Kassas believes that development should focus on agricultural products such as cantaloupe, tomatoes, olives, and olive oil. He said that agriculture not only capitalizes on the competencies of the local population, but it "provides real opportunities for growth and pride in their work." He opined that existing cement factories do not provide these attributes, as laborers are only seen as

"human capital." Dr. Ali El Kassas, an Agricultural Microbiology Professor at the El Arish branch of Suez Canal University advocated for foreign aid and private investment efforts. He told us that helping the small farmer will make the largest impact on people's lives and living standards. He said that past government projects concentrated on large investments, ignored the small, local farmer, and seldom got off the ground due to bureaucratic red tape.

7.(C) Both Dr. Kassas and Dr. Nasr see potential in organic farming because of the pristine nature of the local environment. They said many medicinal herbs are indigenous to the Sinai and would provide an opportunity to expand the agricultural sector. Higher prices for organic goods and medicinal herbs could help to replace the incentive to grow illegal drugs.

The professors helped to organize the Association of Organic Farming in

March 2008. However, they need more information on how to best aid local farmers in organic methods and certification, and to assess the European markets for organic products. There is also a need to educate Bedouin on the financial potential for organic and medicinal products. However, Dr.

Kassas said that advice must come from a "trusted source," given the

Bedouin distrust of outsiders. Both mentioned that previous GOE projects employed experts from Ain Shams University in Cairo, but the Bedouin didn't trust them because "they don't know anything about the area." -------------

-------------------------------- ----- Water Availability Limits

Agricultural Development --------------------------------------------- ----

-

8.(C) Governor Shousha stated that increasing the availability of water is the key to growing the local agriculture sector. According to the Governor, there is currently not enough water to meet the needs of the people of the

North Sinai governorate. He said that the al-Salaam Canal, which brings

Nile Water to the Sinai, had reached Bir al-Abd in the northwest part of the peninsula. The next phase is supposed to bring water to the center of the peninsula. Abu Harb was not optimistic about the timing of the next phase. Although the next phase could eventually lead to the cultivation of

100,000 feddans (103,800 acres) and create 40,000-50,000 jobs, it "requires billions of Egyptians pounds in funding" because the GOE must install a pumping station for the water. As a result he told us that the project is

"delayed." Osama Kassas was even more cynical, noting that it took 28 years for the canal to reach Bir al-Abd.

9.(SBU) Governor Shousha told us that the northeastern part of the peninsula did not need Nile water because there are water wells near Rafah and El Arish. However, he said that these wells were becoming and needed desalination. Dr. Kassas agrees that the quality of water is as big a problem as the quantity. He said the high salinity of most Sinai groundwater made its use in farming difficult. Abu Harb told us that the

GOE is looking to dig deep wells in central Sinai to provide water for local development in the villages of al-Nakhl and Hassana. He said the wells will provide water for the cultivation of 4,000 feddans (4,150 acres), but the estimated cost for the project is 5-6 million Egyptian pounds (USD 900,000 to USD 1.1 million). ----------------------------------

----------- -------- Processing Plants Could Increase Employment, Revenues

--------------------------------------------- --------

10.(C) Some leaders noted that although Sinai is home to valuable raw materials and grows quality fruits and vegetables, most of these primary products are refined and processed elsewhere. This reduces the amount of jobs and revenues that the region gains from its products. Osama Kassas stated that local farmers currently export olives to Spain and Italy, where the olives are pressed into oil. He said that some of this oil is returned to Sinai, where locals buy it as "imported olive oil." Kassas told us that processing plants for olive oil, sand glass and fruit and vegetable products would provide increased income and jobs for the local populace.

Governor Shousha recommended similar efforts. He said that raw materials such as marble, rock for cement, and sand for glass could be processed locally. Shousha told us that currently Sinai sand is sent to Turkey to be processed into fine glass. ------------------------------ The Role of Aid in Development ------------------------------

11.(SBU) Most local leaders emphasized the need for governmental and nongovernmental assistance to develop the region. Governor Shousha told us that he is interested in collaborating with NGOs and aid organizations to develop the agricultural sector. Ahmed Orabi stated that The Red Crescent is coordinating with 15-20 NGOs to conduct a study on Bedouin needs, which it will use to create a "coordinated vision for economic development."

Osama Kassas, who worked with USAID to provide financing for small and medium enterprises (SME) and women's micro-businesses, told us that aid funding is critical to improve lives in Sinai because it allows people to start and grow personal businesses. He said that people who participated in his projects not only increased their incomes, but kept their children in school and visited the doctor to maintain their health. Governor Shousha said special attention needs to be paid to the sustainability of development projects. He stated that some projects failed after the funding

dried up (NFI). Kassas told us that projects, undertaken by the Swiss,

Canadian and German governments, failed due to the "size of the projects and corruption in the implementation." ------------------------------------

-------- Security Status Hinders Economic Development ---------------------

-----------------------

12.(C) Gamal Selmy, a local National Democratic Party (NDP) councilman, said that while all Egyptian leaders declare the development of Sinai to be important, there is an "inherent contradiction in terms" because they also classify the entire peninsula as a "security zone." Selmy stated that the

GOE places security officials in charge of Sinai affairs, and they put too many restrictions on movement and transport of goods, discouraging investment. Sameh Ishaq, a MEPI Grant recipient, and a Fulbright candidate added that placing military and security personnel in charge of the region restricts economic development because the leaders give priority to military and security issues. Osama Kassas echoed these statements. He told us that "security issues trump economic development in the Sinai." Kassas told us that people in the Sinai cannot own land because the government has

"imminent domain" due to security concerns. He said this reduces personal incentive and restricts investment.

13.(C) All the leaders expressed their concern over the lack of peace in the region and the recent conflict in Gaza. They told us that the Gaza situation has an effect on the local population, many of whom have

Palestinian roots. Abu Harb stated that the lack of peace and stability in

Gaza, and the closure of the border also restrict legitimate trade opportunities for goods produced in North Sinai, noting that the 1.5 million people in Gaza could provide a lucrative market for the approximately 300,000 people living in northern Sinai. --------------------

------------------------- ------- Educational Development Affected by Lack of Transportation --------------------------------------------- -----------

--

14.(SBU) On a separate economic development topic, all the leaders expressed their support for developing a better primary education system in

Sinai. Governor Shousha said the biggest challenge is the transportation of children and teachers to and from the schools. He told us that the region lacks a transportation system that can collect students in rural areas and take them to school. Shousha stated that parents often have to travel 40-

100 kilometers one-way to bring their children to school. This results in the shortening of the school day to 3 hours, and leads to dropouts and no shows. Dr. Nasr told us that teachers often do not show up for school because of the distance they must travel. He said that because of the problems with the primary education system, Sinai Bedouins are not present in large numbers in Egyptian universities. Abu Harb told us that central

Sinai would experiment with a "15 days on, 15 days off" program to reduce the amount of travel for both teachers and students.

15.(C) Comment: The North Sinai Governorate is one of the least economically developed regions in Egypt. After the Sinai Peninsula was returned to Egypt in the peace treaty with Israel, the area was largely ignored by the GOE. Three terrorist attacks in the southern Sinai resort towns of Taba, Dahab and Sharm al-Shaykh, between October 2004 and April

2006, brought the increased attention of Egyptian security forces. While some attention is now being paid to the lack of economic opportunities for

the local population, economic development, especially in the tourism industry, has favored imported labor from the Nile Valley at the expense of the local Bedouin and Egyptian-born Palestinian populations. There is a need to provide economic opportunities to the local populace. The GOE repeatedly mentions the need for economic development in the region; however, its actions are more focused on security, which limits development efforts. The new governor in North Sinai is reaching out to local Bedouin leaders and is planning to develop areas in central Sinai, the least developed area of the peninsula, and the site of recent troubles between the police and Bedouin. The need to fund education, agricultural projects, and water projects in central Sinai, and desalination of water wells in both northern and central Sinai provides opportunities for the USG to assist in the development and stability of the region. Based on our conversations, it appears the most effective way to promote economic development in the Sinai may be to support numerous smaller projects rather than a few "mega" projects in order to create economic growth and development opportunities throughout a region where the relatively sparse populace is spread out over great distances. SCOBEY

Viewing cable 09CAIRO230, EGYPTIANS SEEK USG SUPPORT FOR G20 AND G8

MEETINGS



09CAIRO230

2009-02-09

15:03

2011-02-16

21:09

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SIPDIS

E.O. 12958: DECL: 02/05/2019

CONFIDENTIAL

Embassy

Cairo

TAGS: EFIN OVIP PREL PGOV ECON IT UK EG

SUBJECT: EGYPTIANS SEEK USG SUPPORT FOR G20 AND G8 MEETINGS

REF: A. ROME 1484 (2008)

Â¶ B. FM ABOUL GHEIT VERBAL MSG OF 02/05/09 Classified By: Ambassador

Margaret Scobey Reasons: 1.4 (B) and (D)

1.(C) Summary. Senior Egyptian MFA officials convoked the Ambassador on

February 5 to press for USG support of Egyptian inclusion in G20 and G8 meetings and processes, citing a verbal message that FM Aboul Gheit had sent to the Secretary earlier that day (ref b). The Egyptians presented their case for participation at the April 2 G20 London Leaders' Summit, and claimed that the British have urged them to seek American and Saudi Arabian support for Egyptian inclusion. The Egyptians also urged we support their participation at the G8 Summit (as part of the "outreach group"), per the

Heiligendamm Process, at the February 24 planning meeting in Italy. The

Ambassador said we welcome Egyptian interest in international economic fora, especially given the ongoing global economic crisis, and promised to convey Egypt's request to Washington, but made no promises. End summary.

G20 MEETING IN LONDON ---------------------

2.(C) Assistant Minister for American Affairs Shadia Farrag, joined by

Assistant Minister for Economic Affairs and International Cooperation

Mohammad El-Orabi, requested USG support for Egyptian inclusion at the

April 2 G20 London Leaders' Summit in London. Orabi said that Egypt had

French and Italian support for inclusion. However, PM Brown's advisors had been noncommittal on Egyptian participation, and Orabi claimed that the

British had recommended that Egypt first secure additional support, including from the U.S. and Saudi Arabia. Orabi said he will travel soon to

India and China to press the case in those capitals. He argued that the G20 had shown flexibility in recent meetings, having allowed the Netherlands and Spain to participate in a recent sub-ministerial meeting in London

(NFI). G8 OUTREACH GROUP -----------------

3.(C) According to Orabi and Farrag, attendance at the G20 summit would

"pave the way" for Egypt's addition to the G8 "outreach group" (currently consisting of India, China, Mexico, South Africa and Brazil). Orabi said that Italy had invited Egypt to be an "active member" in Heiligendamm process outreach activities, and had invited Egypt to "take part" in this year's G8 summit. (We understand that the Italians have invited the

Egyptians as "guests"). The French are also supportive, Orabi claimed. He noted that Turkey and Indonesia also sought to join the outreach group, but said that they were not coordinating their approaches with Egypt.

4.(C) Orabi asked that we announce USG support for Egyptian inclusion in the outreach group at the February 24 Heiligendamm process meeting in Rome.

Orabi said that he would travel to Italy on February 25 to follow up. He also has traveled to South Africa, Mexcio and Brazil, and claims to have secured their support for GOE inclusion at the G8 summit; Orabi noted that the Chinese told FM Aboul Gheit in November that they also would be supportive. Orabi and Farrag noted that Egypt's positive role in the recent

Gaza crisis further bolster Egypt's case to participate in both the G20 and

G8 meetings. In addition, we understand that the Egyptians will participate in the G8 Environmental Ministerial Meeting in Sicily April 22-24.

5.(C) The Ambassador acknowledged that few in the region match Egypt's diplomatic reach and professionalism, and this is reflected in Egypt's usual inclusion at multilateral events. In addition, the USG appreciates

Egypt's interest in helping to make progress on the global financial crisis. The Ambassador promised to convey Egypt's request for USG support for G20 and G8 inclusion, but made no promises, noting that in practice we are rarely on the side of expansion of these meetings.

6.(C) Comment. We are not aware of what other countries are doing to gain inclusion to these economic groupings. U.S. support for Egyptian inclusion could pay dividends in other areas as we seek to improve U.S.-Egyptian bilateral relations. SCOBEY

Viewing cable 09CAIRO267, UNHCR UPDATES ON REFUGEE SITUATION IN CAIRO



09CAIRO267

2009-02-12

15:03

2011-02-16

21:09

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RUEHAE/AMEMBASSY ASMARA 0189

RUEHKH/AMEMBASSY KHARTOUM 1247



SIPDIS

DEPARTMENT FOR NEA/ELA, AF/SPG, AF/E, PRM FOR LANGE

Embassy

Cairo

E.O. 12958: DECL: 02/10/2019

TAGS: PREF PREL PHUM PGOV ECON ELAB SU ER ET SO

IS, EG

SUBJECT: UNHCR UPDATES ON REFUGEE SITUATION IN CAIRO

REF: A. 08 CAIRO 1332

Â¶ B. 08 CAIRO 1231

Â¶ C. 08 CAIRO 1258

Â¶ D. 08 CAIRO 2583

Â¶ E. CAIRO 36

Â¶ F. 08 CAIRO 1762

Â¶ 1. (C) Summary: We attended the Cairo Office of the United

Nations High Commission for Refugees' (UNHCR) multilateral meeting on February 4 to discuss refugee developments and

UNHCR's plans for 2009. UNHCR partners, NGO's, and western embassies also participated. Following the meeting, UNHCR

Regional Representative Saad Al Attar told us that UNHCR's relationship with the Government of Egypt (GOE) has worsened in the past year. UNHCR no longer has unfettered access to potential refugees and asylum seekers, and is prohibited from working with Palestinians. UNHCR summarized its operations for 2008, and addressed the major factors that impinge on its ability to assist refugees including budgetary constraints, a sharp increase in irregular transitory movement, and GOE pressure to limit refugee programs. Cairo is home to one of the largest urban refugee populations in the world.

Estimates of the unofficial refugee population vary between

1-2 million. The large refugee population presents UNHCR with logistical challenges to providing assistance, and budgetary constraints limit UNHCR to providing a minimum of services. Refugees are dissatisfied with the quantity and quality of service. There is no program to provide medical procedures and refugees either go without needed services or negotiate cheap operations that only complicate their medical conditions. End Summary.

--------------------------------------

UNHCR-GOE Relations: From Bad to Worse

--------------------------------------

Â¶ 2. (SBU) Al Attar told the group that since February 2008 there has been a significant change in UNHCR's relationship with the GOE. UNHCR no longer has "automatic" access to potential refugees and asylum seekers. Al Attar stated that

UNHCR sent 82 letters to the GOE on this situation without receiving a single response. The only group to which UNHCR was granted access was a group of 149 Eritreans and

Ethiopians held in Aswan (reftel A). He said 118 Eritreans were determined to be refugees and were accepted by Canada.

However, these refugees were still being held in Aswan as there was no agreement on the part of the GOE to release them.

Â¶ 3. (C) Al Attar told us privately that the High

Commissioner's (HC) call to open the Gaza border crossings during the Gaza conflict had infuriated the GOE. As a result, the GOE will not allow UNHCR to attend any meetings on aid to Palestinians. The GOE told Al Attar on February 3 that "UNHCR is with the Doha group" (Note: This is reference to the GOE's view of the current political division in the

Middle East with Egypt, Saudi Arabia, and Jordan on one side and Qatar (Doha), Syria, and Iran on the other side.) and it is prohibited from working with Palestinians in Egypt, or on

Gaza. He stated that despite UNHCR's two memoranda of understanding with the Egyptian Red Crescent, and its provision of USD 80,000 in basic emergency needs assistance, blankets and medicine for Gaza, the GOE even prohibited UNHCR from working with a Palestinian/Iraqi family that was to be resettled in Europe. The case was turned over to

International Organization for Migration. Al Attar assessed that as a result of the HC's comment, the GOE no longer appears to be committed to adhering to the refugee conventions. He no longer has the ability to raise refugee

issues with the GOE, and for the first time in his 27-year career, he feels "suffocated." Al Attar told us that he is contemplating putting in for a transfer.

-------------------------------

Increase in Irregular Migration

-------------------------------

Â¶ 4. (SBU) Al-Attar told the group that the most significant change in refugee patterns over the past year was the irregular movement of Eritreans and Ethiopians to the Israeli border. The GOE arrested and imprisoned approximately 2,000 trying to cross the border. Egypt forcibly deported many of these migrants back to Eritrea (reftels B-E). (note:

According to human rights groups, Egypt forcibly repatriated approximately 1,200 Eritrean in June 2008. Amnesty

International reported that between December 23, 2008 and

January 18, 2009 Egypt forcibly repatriated about 100

Eritreans. End Note). Al Attar thanked Ambassador Scobey for her help with Eritreans detained by Egypt and scheduled for deportation (reftels D, E).

Â¶ 5. (C) Privately, Al Attar stated that in the past two months, Egypt has not shot any African migrants at the border. According to Amnesty International however at least

28 African migrants, in 2008, were shot by Egyptian police while attempting to smuggle across the border. Al Attar said he was not aware of any Egyptian policy change on border procedures. He told us that Israeli troops recently shot and killed two African migrants after they successfully crossed the border (NFI). Al Attar said the Israeli Head of

Immigration told him that approximately 6,000 Africans crossed in Israeli in the past year. Despite a change in

Israeli Employment Law, preventing African migrants from obtaining work (NFI), UNHCR expects the irregular migration to continue because of the terrible human rights situation in the Horn of Africa, especially in Eritrea. According to Al

Attar, Human smuggling in the Sinai thrives because it pays more than drugs. Although Israel is the most popular destination, other routes through Egypt and Libya to Europe and to Europe through Jordan, Syria, and Turkey are growing in popularity. Al Attar told us that refugees say "it is better to be a beggar in Europe, than a teacher in Asmara or

Addis Ababa."

Â¶ 6. (C) Al Attar said that Egypt's solution to this phenomenon of irregular migration is to deport the migrants back to their countries of origin. He told us that those caught by

Egyptian police transiting the border who possess UNHCR identification will be imprisoned for one-year and released back to UNHCR. However, if the migrants possess no refugee documentation the GOE will imprison them and then repatriate them to their home countries. Al Attar is concerned because many Eritreans are going by boat straight from Eritrea to the

Sinai Peninsula without bothering to register as refugees.

He added that the GOE is especially keen to make sure that those avoiding military service be sent back and not given asylum. Al Attar claimed that there is "an agreement in principle between Egypt and Sudan" to return Eritrean and

Ethiopian refugees, registered in Sudan, to Sudan vice their countries of origin. He said that UNHCR's Assistant High

Commissioner Erika Feller will come to Cairo to follow up on this agreement and will seek a meeting with the U.S. Embassy.

--------------------------------------------- -----------

Refugee Services Impacted by Fixed Budget, Higher Prices

--------------------------------------------- -----------

Â¶ 7. (U) Al Attar asked what effect the financial crisis would have on future USG funding for UNHCR. He told us that UNHCR

Cairo's budget has remained unchanged since 2002, while the registered refugee population has grown by four times to

43,000. In 2008, UNHCR Cairo's budget was USD 5.5 million and

Al Attar hopes to increase this to USD 6 million for 2009.

However, Al Attar added that this budgetary increase will not account for the 30% increase in the prices of basic necessities in Cairo over the last year, which further reduces the ability of UNHCR and its partner organization to provide for refugee needs. In 2008, UNHCR provided USD 48 per year/per capita for financial and basic medical assistance. This is down from USD 648 in 2000, and Al Attar acknowledges that this amount "does not begin to cover the basic expenses that refugees incur."

Â¶ 8. (U) Despite the challenges, UNHCR and Caritas in 2008 provided pharmaceutical support for 700 chronically ill patients, and supplied medical care for 350 pregnant women, and incubation for 30 infants. UNHCR and Catholic Relief

Services provided 6,500 education grants ranging from LE

850-1550 (USD 155-280), which helped defray some costs for enrollment in private, public and refugee schools. UNHCR also funded programs to care for 180 unaccompanied minors and reduce youth violence among Sudanese refugees. Due to the lack of basic funds, UNHCR and its partners also provide self-reliance and vocational training for the refugees. In

2008, partner organizations provided vocational training for

900 refugees, and placed 73 trainees in local jobs.

--------------------------------------------- --

GOE Discouraging Refugee Self-Reliance Training

--------------------------------------------- --

Â¶ 9. (C) Al Attar stated that the GOE on February 3 expressed concern that UNHCR's self-reliance/vocational training programs enable refugees to take "Egyptian jobs." The GOE told UNHCR that it should not offer refugees vocational training programs unless the refugees have agreed to participate in the voluntary repatriation programs. UNHCR is working with International Labor Organization to conduct a survey on its self-reliance training activities. The survey results will be released in April. UNHCR and its partners

will use the survey to provide targeted training opportunities for refugees, but Al Attar noted that the training will be linked to voluntary return.

---------------------------------------

Some Progress on Voluntary Repatriation

---------------------------------------

Â¶ 10. (SBU) Al Attar said that the "positive development" for

2008 was the success of UNHCR's voluntary repatriation programs. He said that 1,800 Iraqis voluntarily returned in

2008 (reftel F). This constitutes 18 percent of the registered Iraqi refugees in Egypt. (Note: The numbers of

Iraqi refugees registered with UNHCR only declined by 500, which probably means that many Iraqis, already living in

Cairo, registered with UNHCR to obtain assistance. End Note).

Al Attar stated that the repatriation of Iraqis has slowed, but he expects it to pick up after the end of the current school year. He also told us that the UNHCR Cairo office repatriated 900 South Sudanese last year, down from 1,250 in

Â¶ 2007. Al Attar blames the reduction on the situation in South

Sudan, where he says there is "no development and no jobs."

He expects that the number repatriated to Sudan will decrease again this year.

--------------------------------

Resettlement is not the Solution

--------------------------------

Â¶ 11. (SBU) Al Attar assessed that resettlement is not the solution to the refugee situation in Cairo. He is concerned that an emphasis on resettlement will create a "pull factor" encouraging more refugees to come to Egypt. Last year, UNHCR resettled 925 refugees from Egypt to third countries, of which 425 were from Sub-Saharan Africa and the remainder mostly Iraqis. Currently, UNHCR only processes resettlement for those considered "at risk." This includes refugees that

have been tortured, suffer from life-threatening medical conditions, or those "in need of protection." UNHCR plans to resettle 900 refugees out of Egypt in 2009.

Â¶ 12. (C) Comment: Egyptian concerns about repatriation or resettlement options, economic competition between refugees and Egyptians for limited job opportunities, and discussions over UNHCR's access to potential asylum seekers in Egyptian prisons creates tension between the GOE and UNHCR. High

Commissioner Guterres' call on January 5 to open Gaza border crossing exacerbated an already tense relationship. However, the GOE does not believe the relationship is a bad as what

UNHCR believes (details coming septel). UNHCR feels pressure from the GOE and regularly approaches us about our inability to take emergency resettlement cases, the length of our resettlement process, and the absence of a DHS official with whom to coordinate on resettlement. Both Saad Al Attar and

Deputy Director Katharina Lumpp are exhausted by the bureaucracy, and new faces and a new approach may help to reinvigorate UNHCR and it relationship with the GOE.

SCOBEY

Viewing cable 09CAIRO1020, EGYPT'S ECONOMY: JUNE 4 PRESS ROUND-UP



2011-02-16

21:09

UNCLASSIFIED

Embassy

Cairo

09CAIRO1020

2009-06-04

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UNCLAS CAIRO 001020

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STATE FOR NEA/ELA

E.O. 12958: N/A

TAGS: ECON EINV EFIN ETRD ENRG PGOV EG

SUBJECT: EGYPT'S ECONOMY: JUNE 4 PRESS ROUND-UP

1.(U) The following are notable economic news stories that appeared over the past two weeks in the Egyptian press: ---------------- Telecom- MobiNil

----------------

Â¶ 2. The Egyptian Capital Market Authority (CMA) blocked France Telecom's

(FT) bid to buy outstanding shares of mobile phone service provider

Mobinil, saying the purchase offer was unfair to shareholders. This is the second time the CMA objected to the company's offer in a drawn-out dispute between FT and Orascom Telecom over Mobinil. Reports indicate FT submitted a purchase offer for all of the Egyptian Company for Mobile Services

(ECMS), Mobinil's operator, for about LE237 (USD42) per share, higher than their April offer of LE187 (USD33). An arbitration court ruled last March that FT would submit a purchase offer for all of ECMS at a price of

LE273.62 per share (USD49). (All newspapers, 5.28.2009) -------------------

-------------------- Rationing Water Usage/ Rice Cultivation --------------

-------------------------

Â¶ 3. Prime Minister Ahmed Nazif stated at a May 26 ministerial meeting that

Egypt is working on policies related to rationing water use and maintaining the ban on rice exports. In the meeting, Minister of Agriculture Amin Abaza and Minister of Irrigation Mohamed Nasreddin Allam discussed strategies for reducing water quotas for cultivation, especially for water intensive crops such as rice, bananas and sugar cane. By banning rice exports, more water is available for other crops. Cabinet spokesman Magdi Radi said Nazif supports a continue ban, and urged both ministries to establish which areas

are suitable for rice cultivation. (Ahram, 5.27.2009) ---------------------

---------- Water and Nile Basin Initiative -------------------------------

Â¶ 4. President Mubarak met with the Ministers of Irrigation, Agriculture, and Trade on the status of the Nile Basin Initiative (NBI). This comes on the heels of Egypt's refusal to sign the Nile Cooperative Framework

Agreement (CFA) which affects the Nile water usage under the NBI.

Afterwards, Minister of Irrigation Allam said Ethiopia took a positive position vis-`-vis the GOE regarding the discussion of the CFA. Nazif will visit Ethiopia in June to expand bilateral cooperation in the fields of agriculture, water management, electricity and trade. (Ahram, 5.26.2009) --

------------ Cotton Exports --------------

Â¶ 5. According to the Cotton Testing and Arbitration Committee, Egypt exported USD43.7 million worth of raw cotton to 20 countries during the

2008-2009 season. More than 60% was long staple, according to the Italian

Trade Commission (ICE) office in Cairo. Egypt exported most of its cotton

(90%) to a dozen private companies in Qatar, China, Turkey and India.

(ANSAmed, 5.22.2009) --- Oil ---

Â¶ 6. Minister of Petroleum Sameh Fahmi, visited Iraq and signed a cooperation agreement related to exploration, refineries and other downstream gas operations with his Iraqi counterpart, Minister Hussien El

Shaharstani. The agreement allows Egyptian companies to participate in oil and gas exploration/development agreements either by direct negotiations or through public tenders. (Ahram, 5.21.2009) --------------- Monetary Policy

---------------

Â¶ 7. The Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) agreed on May 14 to cut overnight deposit rates by 50 bps to 9.5% per annum and overnight lending rates by 100 bps to 11% per annum. The discount rate was also cut by 50 bps to 9.5% per annum. (CBE press release, 05/14/2009) -

--------- Investment ----------

Â¶ 8. The Industrial Development Authority will implement several reforms designed to stimulate investment starting in June 2009. They include reducing the waiting period for obtaining a license for factory construction to 15 days from the current six months; a grace period of four months for those without letters of guarantee for projects established over three years; faster renewals by the industrial registrar--within 24 hours for a six month validation; and the provision of final approvals for energy-intensive projects within one week. (Alam Al Youm, Akhbar,

05/20/2009) SCOBEY

Viewing cable 09CAIRO1410, ARAB LEAGUE COS FOLLOW-UP ON US-ARAB

COOPERATION;



09CAIRO1410

2009-07-22

10:10

2011-02-16

21:09

CONFIDENTIAL

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SIPDIS

NEA/RA FOR MIKE ADLER

E.O. 12958: DECL: 07/22/2019

TAGS: PREL PGOV KISL SCUL EG

SUBJECT: ARAB LEAGUE COS FOLLOW-UP ON US-ARAB COOPERATION;

PRESIDENT'S JUNE 4 SPEECH

REF:CAIRO 1258 Classified By: Classified By: Charge d'Affaires, a.i.

Matthew H. Tueller Reasons: 1.4 (B) and (D)

1.(C) Key points: - Arab League (AL) Chief of Staff Hisham Yousef gave Min-

Cons a well-developed list of initial ideas for U.S.-Arab cooperation on economic, media and cultural issues on July 20. Some ideas were drawn from previous AL activities in the U.S. and others were keyed to the President's

June 4 Cairo speech. - Reviewing the themes and ideas of President Obama's speech, Yousef suggested the AL would be a strong regional partner in some areas, with the Organization of the Islamic Conference (OIC) playing a similar role in others. - Yousef agreed to work with the Embassy on preliminary development of these ideas, but reiterated his desire to send a team of AL Secretariat experts to Washington, or receive a USG delegation, in the not-too-distant future. - Yousef's presentation was notable for its organization and demonstrates seriousness on the part of the AL

Secretariat. We recognize that previous AL efforts in the economic/social sphere have bogged down once member states have become involved.

Nevertheless, Yousef presented some good ideas that merit consideration

(see action request in para 8).

2.(SBU) Arab League COS Yousef briefed Min-Cons July 20 on AL Secretariat initial ideas for enhancing U.S.-Arab ties in economic, media and cultural areas. Currently there is no mechanism for dialogue with the U.S. on these

fronts, he said. Yousef noted his recent phone call with NEA Acting

Assistant Secretary Feltman on the subject, and expressed a desire to get started quickly. He outlined various frameworks the AL uses with other countries and regions (e.g. Turkey, Latin America, the European Union (EU) and the African Union), recognizing that there is not a "one size fits all" approach. Yousef also said that the OIC should also be involved when appropriate.

3.(SBU) Social development: Yousef said education was critical, and an ALsponsored regional approach for U.S. training of Arab teachers and students, as well as distance-learning courses, were possibilities. In addition, Yousef said the AL is working with the EU on accrediting and evaluating Arab universities; perhaps this is another area for U.S.-Arab educational cooperation.

4.(SBU) Media: Yousef said the "perception gap" on both sides was a problem to be addressed. There have been regional media conferences in the Gulf that could possibly be expanded to include American media, or alternatively a new forum could be established. Yousef suggested an exchange program for young journalists from Arab and American media outlets. Perhaps a U.S.-Arab prize for journalism could be established, he said. Yousef ventured that the AL and U.S. could cooperate on addressing "offensive" media coverage

(something that visiting U/S Burns expressed skepticism over in a June 6 meeting with AL SYG Moussa).

5.(SBU) Cultural issues: Yousef said that the "Arabesque" cultural program at the Kennedy Center (earlier in the year) had been very successful and the AL Secretariat wanted to build upon it. The AL is currently consulting internally on developing an "alliance of civilizations" dialogue; member states would meet to discuss in late 2009. Development of Arab youth is an

AL priority, Yousef said, citing the President's June 4 references to health care for children, illiteracy, microfinance and the idea of an entrepreneurship conference before the end of 2009. He said the AL

Secretariat was very keen for further details on these ideas. Finally,

Yousef suggested generally that the USG focus to some degree on implementation of assistance programs via a regional, rather than bilateral, approach.

6.(SBU) Min-Cons welcomed Yousef's ideas. He noted that the USG's Middle

East Partnership Initiative (MEPI) is regionally focused on some of these areas already. Yousef acknowledged this, and said he is open to USG feedback on his initial presentation.

7.(C) Comment: We recognize the AL's poor track record on economic and social projects, heightened by the fact that major initiatives require consensus of member states. This likely explains Yousef's plan to proceed with these discussions absent member-state participation (he was joined

CAIRO 00001410 002 OF 002 only by AL Secretariat Chief of Economic Affairs

Nada El-Agizy). Also, Yousef has not yet broached the issue of funding and no doubt the AL will expect the USG to bear a portion of the costs for any program or initiative. Nevertheless, Yousef appears to have some attractive ideas. At the least, we should encourage the AL Secretariat's positive attitude - Yousef made no mention at all of settlements or the Israeli-Arab conflict during our hour-long meeting.

8.(U) Action request: Please advise which of the areas enumerated by Yousef we should focus on in our next meeting, as well as any counter-proposals or ideas we can pass to him. Tueller

Viewing cable 09CAIRO1760, DEMARCHE DELIVERED: UN HUMAN RIGHTS COUNCIL



09CAIRO1760

2009-09-10

15:03

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SIPDIS

FOR IO/RHS AND DRL/MLGA

GENEVA FOR CASSAYRE AND MANSFIELD

E.O. 12958: DECL: 09/10/2029

CONFIDENTIAL

Embassy

Cairo

TAGS: PHUM PREL UN UNHRC EG

SUBJECT: DEMARCHE DELIVERED: UN HUMAN RIGHTS COUNCIL

PRIORITIES

REF:STATE 93373 Classified By: Economic-Political Minister-Counselor Donald

A. Blome for reason 1.4 (b).

1.(C) On September 10, we delivered reftel points on the September UN Human

Rights Council session to MFA Deputy Director for Human Rights Omar Shalaby who reiterated Egypt's commitment to working toward passage of the U.S.-

Egyptian freedom of expression resolution text. Shalaby said that he and

Egyptian diplomats in Geneva have urged Geneva-based Organization of the

Islamic Conference (OIC) and Africa Group diplomats to support the U.S.-

Egyptian text. He said most Islamic countries have been "helpful" so far, and have praised the GOE for its coordination with the U.S. He cited Saudi

Arabia, Turkey and Indonesia as reacting positively to the draft text.

2.(C) However, according to Shalaby, Pakistan and Algeria have been

"particularly critical" of the text for not explicitly repeating language on legal prohibition from article 20 of the International Covenant on Civil and Political Rights. Shalaby said that he is personally working to urge the Pakistani and Algerian delegations in Geneva to accept the U.S.-

Egyptian draft language, and that he will continue to do so when the attends the September 14 OIC expert-level meeting in Geneva.

3.(C) Shalaby told us the GOE will support a resolution extending the mandate of the Independent Expert for Somalia, and noted that the mandate needs to be responsive to Somalia's specific needs. Regarding Burundi,

Shalaby said the GOE "can go along" with extending the independent expert's mandate because of Burundi's failure to establish a functioning independent human rights institution. Shalaby noted that the GOE does not have a stake in the Cambodia resolution, and would therefore join the consensus.

4.(C) According to Shalaby, the GOE will not support the discriminatory laws against women resolution, calling the draft "legally problematic and arbitrary." "One Special Rapporteur or Independent Expert cannot review the laws of all countries around the world," he asserted. We urged support for this resolution as an important step for women's rights. Shalaby said Egypt

"likes" the Russian-sponsored traditional values resolution, and would support it. Shalaby asked for U.S. support, "or at least understanding" for

Non-Aligned Movement-sponsored resolutions on the right to development and on unilateral coercive measures. He also requested U.S. support for a procedural resolution on the protection civilians in armed conflict that

Egypt will sponsor. He said Egypt and Brazil will sponsor resolutions on access to medication and on convening a follow-up session on the financial crisis. Scobey

Viewing cable 09CAIRO1788,



09CAIRO1788

2009-09-15

10:10

2011-02-16

21:09

CONFIDENTIAL

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C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 001788 SIPDIS DEPARTMENT FOR

NEA/ELA, NEA/ARP, AF/SPG, NEA/I E.O. 12958: DECL: 09/14/2019 TAGS: PREL

KPAL KWBG IS IZ WEU GZ SY SU EG

SUBJECT:

ARAB LEAGUE SPOKESMAN BRIEFS ON SEPTEMBER MINISTERIAL Classified By:

Minister Counselor for Economic and Political Affairs Donald A. Blome for reasons 1.4 (b) and (d).

1.(C) Key Points: -- According to Arab League (AL) Cabinet Chief Hisham

Youssef, the key topics of discussions at the September 9-10 AL Ministerial included the Iraqi-Syrian dispute, the crises in Sudan, and the Arab-

Israeli conflict. -- The AL and Turkey are mediating the Iraq-Syria security dispute and have presented a "confidence-building proposal" that encouraged both countries to return their Ambassadors and asked them not to escalate the dispute in the media. There is a tentative follow-up meeting in Turkey on either Wednesday September 16 or Thursday September 17 --

Optimism on the Middle East peace process is "declining" due to the Israeli decision to build 500 additional housing units in the settlements. Youssef said the League is hoping for good news from S/E Mitchell's current visit, but if there is no settlement freeze, the Arab Peace Initiative (API) committee will advise Abu Mazen not to return to trilateral peace talks.

The next meeting of the API committee is scheduled for September 22. -- The ministers are "cautiously optimistic" about the improving situation in

Darfur. The Sudanese Minister of State asked AL ministers to support the

Doha process. However, Youssef said that the AL is concerned about the deteriorating situation in southern Sudan

2.(U) Briefing the diplomatic community in Cairo, Arab League Cabinet Chief

Hisham Youssef said the September 9-10 AL ministerial focused on the Iraqi-

Syrian dispute, the crises in Sudan, and the Arab-Israeli conflict. He said that the meetings on the margins of the ministerial were much more substantive than the general sessions. ------------------------------------

--------- -- Iraq and Syria Welcome AL and Turkish Mediation --------------

------------------------------- --

3.(C) Youssef said that AL SYG Amr Moussa had separate discussions with

Iraqi FM Zebari and Syrian FM Moallem to get their perspectives on the bilateral dispute over the August 19 bombings in Baghdad. These meetings were followed by a "quartet meeting" that included Moussa, Moallem, Zebari, and Turkish FM Davutoglu. Youssef categorized the discussions as "frank" and said that both Iraqi and Syrian representatives expressed their governments' desires to "ease the tensions" and "resolve the issue." The AL and Turkey presented a "confidence-building proposal" that encouraged the countries to return their Ambassadors and asked them not to escalate the dispute in the media. According to Youssef, the Syrian and Iraqi FMs welcomed the Turkish and AL mediation. Both Moallem and Zebari returned to their capitals for consultations, and there will be a follow-up meeting in

Turkey on Thursday September 17. Youssef told Poloff privately that at this meeting, Iraq will share with Turkey satellite imagery evidence to support its position. He told us that Syria was also keen to examine the satellite photos. --------------------------------------------- --- Declining

Optimism on U.S. Mideast Peace Efforts ------------------------------------

--------- ---

4.(SBU) Youssef said AL ministers condemned the Israeli decision to build

500 additional housing units in the settlements. He praised the efforts of

S/E Mitchell and said that he should be "given every chance to succeed."

However, Youssef said that optimism about the U.S. approach was "beginning to decline." He told us that the API committee will meet with Abu Mazen on

September 22 after the AL receives a readout of S/E Mitchell's current visit to the region. This will allow the committee to review "any progress" from the visit and evaluate its options. Youssef stressed that Abu Mazen asked for AL support, and unless there is a complete settlement freeze, including East Jerusalem, the API committee will advise Abu Mazen not to return to trilateral peace talks. He stated that the AL CAIRO 00001788 002

OF 002 already paid the price for an end to Israeli settlement activity when it halted the Arab boycott of Israel. Youssef said that the League is hoping for good news from the Mitchell visit, but the AL must be ready to act on both good news and bad news.

5.(SBU) Youssef said the AL was fully supportive of Egyptians efforts to reconcile the Palestinian factions. He said SYG Moussa met Khalid Meshaal

"behind the scenes" and encouraged him to cooperate with Egyptian efforts.

Youssef hoped that the next meeting of the Palestinian factions after

Ramadan would bear fruit. --------------------------------------------- ---

------ Buoyed by Progress in Darfur; Concern over South Sudan -------------

-------------------------------- ---------

6.(SBU) Youssef said there was a special September 10 meeting on Sudan. Ali

Kurti, the Sudanese Minister of State for Foreign Affairs told the group that Government of Sudan (GoS) was focused on efforts to resolve the situation in Darfur and encouraged the other ministers to support the Doha process. Youssef praised the work of S/E Gration and UN/AU Mediator Djibril

Bassole to resolve the Darfur crisis. According to Youssef, Professor

Hassan Mohamed (NFI) told the group that USD 100 million in financing had been received from Arab countries and the AL to provide food aid, health clinics and wells in Darfur. (Note: Youssef said that Saudi Arabia and

Qatar had provided USD 20 million each, Libya had given USD 10 million, and the AL had given USD 8 million. End Note). Qatari Minister of State for

Foreign Affairs Ahmed bin Abdallah Al Mahmoud praised the efforts of Libya and Egypt to unite the Darfur groups. He gave a presentation on next steps, which include a meeting of the Arab-African committee, a group of 12 Arab and 12 African countries, on September 24 in New York during the UNGA. This will be followed by discussions with rebel leaders in Doha at the end of

October that would set the stage for negotiations with the GoS. Youssef characterized the Sudan meeting as "cautiously optimistic" on Darfur.

However, Youssef expressed concerns about the deteriorating situation in southern Sudan. He said that the AL supports the S/E Gration's "trilateral mechanism" that includes the USG, NCP and SPLM. ---------------------------

----------- The NPT and the AL's Global Engagement ------------------------

--------------

7.(SBU) Youssef mentioned that the AL is "looking forward" to the UNSC's discussion of the non-proliferation treaty (NPT) on September 24 in New

York. He said that the League welcomes the reduction of strategic nuclear weapons and the "universal principle" of non-proliferation.

8.(U) Youssef told the diplomats that the AL is coordinating worldwide with numerous governments and organizations. In addition to the Arab-African committee, the League is sponsoring an Arab-Japanese forum in Japan in

December and Arab and European FMs plan to meet in late December or early

January. The AL also signed an agreement to hold an Indo-Arab forum in

India in February 2010, and the AL will organize a "China Forum" during the second quarter of 2010. Arab-Turkish, Arab-Russian, and Arab-Latin American fora will also be held in the near future. Scobey

Viewing cable 09CAIRO2195, EGYPTIAN MFA ADVISOR ON SUDAN, NILE BASIN REF:

08 CAIRO 1963 Classified By: Minister Counselor for Economic and Political Affairs

Donald A. Blome for reasons 1.4 (b) and (d).



09CAIRO2195

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C O N F I D E N T I A L SECTION 01 OF 02 CAIRO 002195

SIPDIS

DEPARTMENT FOR NEA/ELA, AF/SPG, AF/E, ADDIS ABABA FOR

BAUMAN, OES FOR SALZBERG

E.O. 12958: DECL: 11/12/2019

TAGS: PREL SU BY TZ UG EG

SUBJECT: EGYPTIAN MFA ADVISOR ON SUDAN, NILE BASIN REF: 08 CAIRO 1963

Classified By: Minister Counselor for Economic and Political Affairs Donald

A. Blome for reasons 1.4 (b) and (d).

1.(C) Key Points: -- The Egyptian MFA's cabinet advisor on African Affairs

Mohamed El Mullah said the Government of Egypt (GoE) will continue to support the unity of Sudan until the January 2011 referendum. However, he said Egypt will accept and support the South if it chooses independence. --

According to El Mullah, President Mubarak agreed with a proposal by

Sudanese President Bashir for Egypt to host a conference on Darfur reconstruction after the signing of a peace accord. Egypt also supports a

French proposal for a summit in Sharm El Sheikh to discuss how to deal with the outcome of the January 2011 referendum. -- A recent joint MFA and

Ministry of Water Resources trip to upstream Nile Basin countries to discuss the Nile Basin Initiative (NBI) did not produce any significant results, according to El Mullah. He said Egypt offered to help upstream countries develop hydro-electric power, but maintained that Egypt's quota of water must not be affected.

2.(C) Comment: Egyptian officials have emphasized the importance of preserving Sudan's unity in their public statements, even as they have carefully hedged their bets by maintaining close ties to the South

(reftel). El Mullah's comments provide some clarity to this contingency

planning. In the end, stability will be Egypt's paramount concern because it will guarantee continued access to Nile water and limit the potential flow of refugees. --------------------------------------------- -- Egypt

Prefers Unity, But Planning for Secession ---------------------------------

------------ --

3.(C) Mohamed El Mullah, Egyptian MFA Cabinet Advisor on African Affairs told us on November 10 that Egypt will continue to support the unity of

Sudan up until the January 2011 referendum. He said Egypt is concerned about the "dangerous repercussions" of Southern independence, but will accept and support the South if it chooses independence. El Mullah stated that Egypt is undertaking multiple development projects to improve the quality of life in South Sudan in the event of separation. ----------------

----------------------------- -------------- Egypt to Host Meetings on

Referendum, Darfur Reconstruction -----------------------------------------

---- --------------

4.(C) El Mullah told us that Egypt supports a proposal by French President

Sarkozy for a summit to discuss how to deal with potential outcomes of the

January 2011 referendum such as wealth sharing and institutional separation. The summit would be held on the margins of the France-Africa summit in Sharm El Sheikh in February 2010, and would include representation from Egypt, France, Sudan, U.S. and the countries bordering

Sudan. El Mullah said the President Bashir would attend and asked about the potential for the U.S. representative to meet with him.

5.(C) According to El Mullah, President Mubarak agreed to host a conference on Darfur Reconstruction proposed by Sudanese President Omar Al Bashir during a November 8 meeting. He said the conference will be co-sponsored by the Government of Turkey and the Organization of the Islamic Conference

(OIC). El Mullah stated that the conference will take place after the signing of a peace accord between Khartoum and Darfuri groups. ------------

------------------------------ Nile Basin Trip Yields No Tangible Results -

-----------------------------------------

6.(C) El Mullah said an October 25-November 5 joint MFA and Ministry of

Water Resources trip to Burundi, Tanzania, and Uganda to discuss the Nile

Basin Initiative (NBI) had not resulted in any breakthroughs. He stated that the challenge during the bilateral meetings was "trying not to quarrel" CAIRO 00002195 002 OF 002 over a resource that should be for the benefit of all the people of the Nile Basin. El Mullah said Egypt offered to help develop hydro-electric power plants in the three upstream countries, but maintained that the quantity and quality of water reaching

Egypt cannot be reduced. He said the GoE's position is that the current draft Cooperative Framework Agreement is only a basis for negotiations and no agreement can be reached or implemented unless all NBI countries agree.

He said that there would be another joint trip to Kenya and the Democratic

Republic of Congo in the near future to discuss the NBI. Scobey

Viewing cable 09CAIRO2247, EGYPTIAN TOURISM INDUSTRY REFLECTS ON

DIFFICULT YEAR AND



09CAIRO2247

2009-12-

06 14:02

2011-02-16

21:09

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

Cairo

VZCZCXYZ0000

PP RUEHWEB

DE RUEHEG #2247/01 3401420

ZNR UUUUU ZZH

P 061420Z DEC 09

FM AMEMBASSY CAIRO


UNCLAS CAIRO 002247

SENSITIVE

SIPDIS

DEPT FOR NEA/ELA

E.O. 12958: N/A


SUBJECT: EGYPTIAN TOURISM INDUSTRY REFLECTS ON DIFFICULT YEAR AND

LOOKS AHEAD TO 2010

Sensitive but Unclassified. Please handle accordingly. 1.(SBU) Key Points:

--Tourism arrivals and revenues decreased by 5.4% and 6.4% respectively through the first eight months of 2009. --Industry officials are cautiously optimistic that they have successfully weathered the global economic recession, health crises, and early start of Ramadan that contributed to these declines. --Increased tourism growth is projected to come from a stronger commitment to attracting Central and Eastern European tourists, targeting new markets in India and China, and reshaping Egypt's image as a low-budget destination.

2.(U) Econoffs met with Ahmed El-Nahas, chairman of the Egyptian Tourism

Federation (ETF), on December 2 to discuss the challenges faced by the tourism industry this year. ETF is the industry's dominant lobbying body and represents five tourism business associations. It is closely affiliated with the Ministry of Tourism (MoT). ---------------------------------------

---- Revenue and Tourist Arrivals Shrink in 2009 --------------------------

-----------------

3.(SBU) ETF and MoT project a moderate decline in the number of tourist visits and revenues for 2009, two key industry benchmarks, after steady increases in both areas over the last three years. Through the first eight months of 2009, tourist arrivals decreased by 5.4%. ETF predicts the country will receive slightly more than 12 million visitors this year, down from 12.8 in 2008 but still ahead of the 11.1 million visitors seen in

2007. American tourist arrivals also fell during the same period this year.

After reaching a three year high in 2008 with more than 319,000 Americans visitors, a 17% increase over the previous year, the number of Americans arriving in Egypt this year will drop by an estimated 5%.

4.(SBU) El-Nahas told us that tourist revenue was expected to be down 6-7% in 2009. Egypt generated USD 10.9 billion in 2008, a 23% increase over the previous year. Tourism and related industries are estimated to account more than 11% of the country's GDP. --------------------------------------- BUT

A DECLINE CAN STILL BE A GOOD THING ---------------------------------------

5.(SBU) Citing the many problems the tourism industry has faced, El-Nahas nonetheless characterized 2009 as an "excellent" year. The global economic recession, avian and swine flu concerns, and the beginning of Ramadan in mid-August led the industry to initially forecast a 20% decline in tourism arrivals, revenue, and the number of days spent in-country by visitors this year. The fact that the industry had witnessed "only minimal" declines in these areas was cause for optimism.

6.(SBU) El-Nahas did not provide any definitive reason for the limited downturn, but highlighted improved domestic airline service as one possible cause. Egypt Air purchased 12 new airplanes from Brazil in the last couple of years and dedicated them solely to significantly increasing the number of flights traveling from Cairo to resort areas along the Red Sea coast.

Simon Kitchen, an economist at EFG-Hermes - a leading regional bank - offered a more compelling explanation. European visitors, who form more than 70% of the foreign tourism market, have avoided more expensive tourism options this year - such as traveling to the Caribbean Islands - and have instead traveled to closer and more affordable options such as Turkey and

Egypt. Many of these tourists can completely bypass Cairo and fly directly to desired "luxury" destinations such as Hurghada and Marsa Allam. --------

------------- Looking Ahead to 2010 ---------------------

6.(SBU) Whether or not the Egyptian tourism industry can get growth back on track is without a doubt the "biggest question," facing the industry in

2010, El-Nahas stated. The MoT has already established a goal of attracting

14 million tourists by 2011. El-Nahas revealed several strategies the industry will be pursuing in the next few years. The MoT is planning new advertising campaigns in India and China, which Egypt sees as untapped markets with the greatest opportunities for growth. It will also focus on continuing to attract Central and Eastern European tourists (primarily

Russians), which generated more than 26% of all tourists arrivals through the first eight months of 2009. Egypt will also attempt to re-shape its image as a budget destination and instead present itself as a vacation spot with multiple high-end options to appeal to wealthy Arab tourists who spend the greatest amount on hotels and restaurants. El-Nahas joked that medical

tourism is "not an option since people would just die" in Egyptian hospitals and facilities, but told us that establishing "wellness centers and spas" near existing cultural destinations could help increase the appeal to wealthier tourist.

7.(SBU) Comment: El-Nahas, a former Hilton hotels executive for 45 years, was surprisingly upbeat both about this year and future tourism prospects.

However, despite the aggressive industry marketing plans, near term success may depend on factors beyond its control. Continued weakness in the economies of most of the countries of origin for Egyptian tourism would almost certainly weaken demand into 2010. The strengthening of the Egyptian currency versus the currencies of other tourist destinations in the region may also make it harder to compete for price-conscious customers. That said, when the global economy does turn around, Egypt's tourism sector appears well-positioned to profit and continue its strong expansion.

Tueller

Viewing cable 09CAIRO2349, EGYPT'S ECONOMY: DECEMBER 22 PRESS ROUND-UP



UNCLASSIFIED

Embassy

Cairo

09CAIRO2349

2009-12-22

13:01

2011-02-16

21:09

VZCZCXYZ0000

RR RUEHWEB

DE RUEHEG #2349 3561329

ZNR UUUUU ZZH

R 221329Z DEC 09

FM AMEMBASSY CAIRO


INFO RUCPDOC/DEPT OF COMMERCE WASHDC


RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS CAIRO 002349

SIPDIS

STATE FOR NEA/ELA

E.O. 12958: N/A

TAGS: ECON EINV EPET ETRD ENRG PGOV EG

SUBJECT: EGYPT'S ECONOMY: DECEMBER 22 PRESS ROUND-UP

1.(U) The following are notable economic news stories that appeared over the past week in the Egyptian press: --------------------------------------

------- GOE to Offer Global Tender for Oil Production ---------------------

------------------------

2.(U) A source in the state-owned Egyptian General Petroleum Company (EGPC) told Al Masry Al Youm newspaper that the company will offer a global public tender for oil production for 2011-2017. Al Masry Al Youm writes that the

EGPC is planning to offer the tender because it badly needs to raise cash to pay its debts of at least LE 3 billion (US$547 million) to foreign oil and gas companies (Al Masry Al Youm, 12/15/09). ---------------------------

-------------- PM Nazif Speaks to Cairo Investment Forum ------------------

-----------------------

3.(U) In a speech to the Cairo Investment Forum, Prime Minister Ahmed Nazif said that Egypt would not resort to protectionism to deal with the economic crisis, and would instead focus on attracting foreign investment. Nazif also called for government support for small and medium enterprises and new infrastructure projects (Al Mal, Al Alam Al Youm 12/15/09). ---------------

------------------------------ Shura Council Approves Nuclear Regulation

Law ---------------------------------------------

4.(U) The Egyptian Shura Council approved a new draft law for the regulation of nuclear activities, which lays out the guidelines for the construction of nuclear power plants and provides for the establishment of a nuclear regulatory commission. The draft law will be sent to the People's

Assembly and the President's office for approval before it is enacted (All newspapers, 12/14/09). -------------------------------------------- Turkey

Plans to Increase Investment in Egypt -------------------------------------

-------

5.(U) Minister of Trade and Industry Rachid M. Rachid said that President

Mubarak's meeting with Turkish President Abdullah Gul led to an agreement to enhance transportation between the two countries to facilitate trade.

Rachid noted that Turkish investments in Egypt are over $2 billion, with

260 factories employing 40,000 workers. Mubarak and Gul announced plans to establish another 250 new Turkish factories in Egypt, and to increase

Turkish investments in Egypt to $5 billion. (Al Ahram, Al Akhbar,

12/17/09). SCOBEY

Viewing cable 09CAIRO2356, EGYPTIAN MFA DISCUSSES SUDAN AND SOMALIA



09CAIRO2356

2009-12-23

10:10

2011-02-16

21:09

CONFIDENTIAL

Embassy

Cairo

VZCZCXYZ0003

PP RUEHWEB

DE RUEHEG #2356/01 3571041

ZNY CCCCC ZZH

P 231041Z DEC 09

FM AMEMBASSY CAIRO


INFO RUEHAE/AMEMBASSY ASMARA 0222


RUEHNR/AMEMBASSY NAIROBI 0003


SIPDIS

DEPARTMENT FOR NEA/ELA, AF/SPG, AF/E

E.O. 12958: DECL: 12/20/2019

TAGS: PREL SU SO EG

SUBJECT: EGYPTIAN MFA DISCUSSES SUDAN AND SOMALIA

REF: A. STATE 128084

Â¶ B. CAIRO 2129

Â¶ C. CAIRO 2130 Classified By: Counselor for Economic and Political

Affairs Stephen P. O'Dowd for reasons 1.4 (b) and (d).

1.(C) Key Points: -- According to Mohamed El Mullah, the Egyptian MFA cabinet advisor on African Affairs, Egypt and France agreed to postpone the

France-Africa summit until late May 2010 and move the summit from Sharm El

Sheikh to France. However, El Mullah said the decision would exacerbate tensions between Khartoum and Paris. -- El Mullah said Egypt will host a

Darfur Reconstruction Conference during the second half of March 2010 for donor and member countries of the Organization of the Islamic Conference

(OIC) will be invited. The event is to raise funds to reconstruct villages in "areas of calm" in Darfur and facilitate voluntary repatriation of IDPs.

-- El Mullah expressed concern that the activities of S/E Gration, UN/AU

Representative Djibril Bassole, Former South African President Thabo Mbeki,

and the Libyan Government are not coordinated. -- El Mullah said the

Government of Egypt (GoE) supports the Somali Transitional Federal

Government (TFG) and the Djibouti Peace Process. However, it sees no contradiction in outreach efforts to Shaykh Dahir Aweys or the Eritrean

Government because these efforts may help bring peace and stability to

Somalia and the Horn of Africa.

2.(C) Comment: The GoE feels left out of the USG initiatives on Darfur and

Somalia and would like to be included in multi-lateral efforts on these areas of mutual interest and concern. Egypt's efforts to host a conference with the French on these issues reflect its interest and desire for influence in these areas. Cairo values its relationship with Asmara because it gives it an additional lever of influence in the Horn, most notably in

Somalia and with Ethiopia. ------------------------------------- French-

Africa Summit Moved, Postponed -------------------------------------

3.(C) A clearly frustrated Mohamed El Mullah, Egyptian MFA cabinet advisor on African Affairs, told us on December 17 that Egypt and France agreed to postpone the France-Africa summit until late May 2010 and move the summit from Sharm El Sheikh to France. He claimed Egypt was not upset that it would not host the event as "Egypt was tired and had recently hosted multiple international fora." El Mullah said the bigger issue was the

French slight to Sudanese President Bashir. He stated that the French action would exacerbate tensions between Khartoum and Paris and lead many

African Presidents to object to the French position. El Mullah believed the

French decision was based solely on Sarkozy's need for increased domestic political support. --------------------------------------------- - Egypt to

Host Darfur Reconstruction Conference -------------------------------------

-------- -

4.(C) El Mullah said Egypt will host a Darfur Reconstruction Conference during the second half of March 2010, which will be co-sponsored by Turkey and the Organization of the Islamic Conference (OIC). Donor and member countries of the OIC will be invited to the conference. The aim of the event is to raise funds to reconstruct villages in "areas of calm" and facilitate voluntary repatriation of IDPs, according to El Mullah. He said the GoE plans on holding a larger and more comprehensive reconstruction conference once a peace accord is signed by the Sudanese Government and the

Darfuri groups. ---------------------------- Darfur Efforts Uncoordinated -

---------------------------

5.(C) El Mullah said the GoE endorsed the work of S/E Gration, but is concerned that the current lack of coordination among key players on Darfur will not lead to peace or stability. He said Gration, UN/AU Representative

Djibril Bassole, Former South African President Thabo Mbeki, and the Libyan

Government all were staging their own events, none of which are coordinated. El Mullah added that Bassole and Mbeki are not friendly and do not want to work together. He encouraged the USG to reevaluate whether unification of Darfuri groups was needed and encouraged the use of "sticks" to bring Darfuri groups to the peace table. -------------------------------

-------------- ------------- GoE Supports Djibouti Process; Advocates

Outreach to Aweys --------------------------------------------- -----------

--

6.(C) Poloff delivered reftel A demarche on support for the Djibouti Peace

Process and the Somali Transitional Federal Government (TFG). El Mullah assured us that the GoE fully supports the Djibouti process and the TFG.

However, he disagreed that outreach to Shaykh Dahir Aweys would lead to a reopening of the Djibouti process. (Note: The GoE expressed this view to

A/S Carson during his October visit to Cairo in reftels B-C. End Note). El

Mullah believes that outreach to Aweys constitutes a broadening of the

Djibouti agreement. He said there are only three credible forces in

Somalia; the TFG, Al Shibaab and Aweys' Hizb al-Islam and he Egyptian proposal is meant to bring peace by aligning two of the parties under the

TFG. He stated that the provision of weapons will only extend the fighting between the parties. -------------------------------- Eritrea Sanctions Not the Answer --------------------------------

7.(C) El Mullah said Egypt is not "pro-Eritrea", but outreach to Eritrea was necessary to manage the "delicate equation" in the Horn of Africa. He said Eritrean President Isaias Afworki could play a role in bringing peace and stability to Somalia. El Mullah assessed that sanctions, proposed by

Uganda, will not bring peace or stability to Somalia and will eliminate all avenues of dialogue with Eritrea. Scobey

Viewing cable 10CAIRO60, RAFAH BORDER: GUARD KILLED BY PALESTINIAN

SNIPER;



10CAIRO60 2010-01-11 13:01 2011-02-16 21:09 SECRET Embassy Cairo

VZCZCXYZ0000

OO RUEHWEB

DE RUEHEG #0060/01 0111327

ZNY SSSSS ZZH

O 111327Z JAN 10

FM AMEMBASSY CAIRO








S E C R E T CAIRO 000060

SIPDIS

NSC FOR AGUIRRE

E.O. 12958: DECL: 01/20/2020

TAGS: PREL PGOV MARR KPAL TU EG

SUBJECT: RAFAH BORDER: GUARD KILLED BY PALESTINIAN SNIPER;

LIFELINE 3 ENTERS/EXITS GAZA; BTADS ON HOLD

REF: A. CAIRO 2397 (2009) B. IIR 6 899 0140 10 C. CAIRO 2394 (2009)

Classified By: DEPUTY CHIEF OF MISSION MATTHEW TUELLER FOR REASONS 1.4 (B) and (D)

1.(S) Summary. An Egyptian border guard was killed by a "Palestinian sniper" Jan 6 during protests against Egypt's steel wall on the Gaza/Egypt border. Separately, the Viva Palestine/Lifeline 3 convoy traveled to Gaza via Egypt Jan 6-8 with approximately 500 people and 198 vehicles. FM Aboul

Gheit expressed displeasure with Turkey over the convoy to visiting Codel

Hastings Jan 10; it was unclear if this has been communicated directly to

Ankara. Installation of an FMF-funded tunnel activity detection system along the Egypt-Gaza border is currently on-hold given the protests and ongoing security concerns. End summary.

2.(C) On January 6 MFA and MOD contacts confirmed that a "Palestinian sniper" killed an Egyptian border guard during protests along the

Philadelphi strip south of Rafah crossing near the Salah el Din area. MFA

Director for Palestinian Affairs Hisham Seif el Din told poloff Jan 6 that the shooting occurred as 600-800 protesters on the Gaza side of the border demonstrated against the steel wall (ref a). GOE contacts told emboff Jan

11 that the incident may have been the result of an escalation from rock throwing on the Palestinian side, followed by Egyptian warning shots, and ultimately gunfire from the Palestinian side. Reuters reported Egyptian forces killed two Palestinians but MOD contacts denied this (ref b). It was unclear to what extent border breaches by Palestinians into Egypt had occurred. Media reported Jan 9 that Hamas leadership had offered condolences to Egypt over the border guard. On Jan 11 Seif el Din told poloff the border was quiet for the moment. LIFELINE 3 CONVOY -------------

----

3.(C) Separately, Viva Palestine's "Lifelife 3" convoy (which included

British MP George Galloway and a convoy of vehicles carrying aid) arrived at Rafah crossing from al Arish on January 6, entered Gaza, and departed

Cairo Jan

8.Turkish CDA Sadi Altinok told poloff Jan 11 he had been in constant communication with the MFA and Ankara over the convoy, which had included

240 Turks (out of 500 demonstrators total) and 198 vehicles. The group had an assortment of approximately 140 mini-busses, ambulances and pickup trucks from Turkey and Britain (arriving at Arish from Latakia, Syria), and had added an additional 48 sedans (arriving separately from Turkey) to the convoy in Arish.

4.(C) Altinok said 7 demonstrators were "detained" briefly by the GOE following confrontations with security forces on Jan

Â¶ 6. He said the detainees had scuffled with police when the group was told it would be restricted to the Arish airport until their entire convoy had been assembled; Altinok said the demonstrators had "detained" two Egyptian police officers in return. Turkish MP Murat Mercan (one of 5 Turkish MPs traveling with the convoy) had mediated a release of the demonstrators and police after a couple of hours, according to Altinok. (Note: Altinok said one of the 7 detained demonstrators had been an Amcit - NFI. End note).

5.(C) FM Aboul Gheit told visiting Codel Hastings Jan 10 (septel) that

Egypt was upset with Turkey's role in "facilitating" the convoy. He said he would formally convey Egypt's unhappiness, noting (the Turks) "had better be careful." Altinok made no mention of receiving any such complaint during his Jan 11 meeting with poloff. He said although the MFA had expressed displeasure with the Lifeline 3 convoy, the Egyptians had not objected to

Ankara's handling of the situation. Nevertheless, Altinok said he had warned Anakara Jan 9 of the potential for ruffled Egyptian feathers, and

Turkish FM Davutoglu had sent a note Jan 10 to Aboul Gheit thanking Egypt for its cooperation and assistance in handling the delicate issue of the convoy. BTADS ON HOLD -------------

6.(S) Installation of an FMF-funded tunnel activity detection system along the Egypt-Gaza border is currently on hold given the protests and ongoing security concerns (ref C). OMC plans on meeting with MOD officials soon to discuss the security situation before redeploying the U.S. Army Corps of

Engineers to the border. As the installation was previously running ahead of schedule, the delay has not changed the anticipated April 2010 completion date. SCOBEY

Viewing cable 10CAIRO65, TURKISH INVESTMENTS IN EGYPT GROWING FAST


Reference

ID


UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

Cairo

10CAIRO65

2010-01-12

09:09

2011-02-16

21:09

VZCZCXYZ0000

PP RUEHWEB

DE RUEHEG #0065/01 0120928

ZNR UUUUU ZZH

P 120928Z JAN 10

FM AMEMBASSY CAIRO


INFO RUEHAK/AMEMBASSY ANKARA PRIORITY 0705


UNCLAS CAIRO 000065

SENSITIVE

SIPDIS

DEPT FOR NEA/ELA

E.O. 12958: N/A

TAGS: ECON EG ETRD TU EINV

SUBJECT: TURKISH INVESTMENTS IN EGYPT GROWING FAST

1.(SBU) Key points: -Turkish investment in Egypt has more than tripled in recent years, and is expected to continue growing in the coming years. -The favorable outlook by Turkish investors is driven by lower costs of doing business and Egypt's solid market access to the European Union, the United

States, and countries in Africa and the Middle East. -Despite issues with the Egyptian Customs Authority and a publicized dispute over Turkish steel imports, bilateral trade continues to grow at a rapid pace. -The GOE's practice of providing highly subsidized energy and strong support for the textile industry conflicts with the GOE's long-term goals of moving beyond garment exports and removing subsidies. -----------------------------------

-------- A Fast-Growing Market for Turkish Investors ----------------------

---------------------

2.(U) Turkish-Egyptian commercial relations have expanded rapidly over the past few years, and indications are that this trend is likely to continue.

In a January 5 meeting, XXXXXXXXXXXX told EconOffs that roughly 250 Turkish companies are operating in Egypt, with investments of $1.5 billion. Turkish investment has more than tripled in the past five years; nearly 85% of

Turkish companies operating in Egypt have been established since 2004, according to the Egyptian Ministry of Trade and Industry (MOTI). Sahin estimates that 40,000 Egyptians are employed in Turkish-owned factories around Cairo and Alexandria. Sahin said he expects Turkish investment to triple again soon, reaching $5 billion in the next three years.

3.(U) Since the Turkey-Egypt free trade agreement (FTA) entered into force in 2007, bilateral trade volume has more than doubled, reaching its current

level of $3 billion. In a November 2009 conference on Turkish-Egyptian economic relations in Cairo, both Egypt's Minister of Trade and Industry

Rachid M. Rachid and Turkish Foreign Trade Minister Zafer Caglayan expressed interest in tripling bilateral trade to $10 billion in the next three years. --------------------------------------------- --------- Low

Costs and Solid Market Access Attracting Investors ------------------------

--------------------- ---------

4.(U) XXXXXXXXXXXX says that Turkish investors are attracted to Egypt in part because of low labor costs and subsidized energy prices. Even with labor inefficiency, Sahin estimates that low wages (about $100/month on average for factory workers in Egypt) save Turkish companies at least 30% in total production costs.

5.(U) Another major factor in spurring investment is Egypt's strong dutyfree market access, such as that provided by its Association Agreement with the EU, the Qualifying Industrial Zones (QIZ) protocol with the United

States, and the COMESA and Agadir agreements. Much of the Turkish investment in Egypt is concentrated in the textile and ready-made garments

(RMG) sector. Sahin says that large American garment importers like Gap and

Target have recommended that their Turkish suppliers consider relocating to

Egypt to take advantage of both market access and lower costs.

6.(U) XXXXXXXXXXXX says that 11-12 Turkish-owned garment factories in Egypt are currently exporting to the U.S. through the QIZ program. XXXXXXXXXXXX said, however, that she does not think Turkish investments in RMG will increase, but that Turkish investors are looking for other sectors in which to invest, such as durable goods. Sahin also mentioned that some Turkish companies are looking to invest in glass and electronics factories. -------

-------------------------------------- ----- Trade and Customs Disputes Not

Deterring Investors --------------------------------------------- -----

7.(SBU) According to Sahin, Turkish businesses have reported problems with the Egyptian Customs Authority, including long clearance delays, inconsistent treatment of imports under the FTA, and a general problem of unskilled government workers. Despite this, Sahin says these problems are manageable and that customs issues have not dissuaded Turkish businessmen from investing in Egypt.

8.(SBU) Turkey's estimated $2.2 billion in exports to Egypt in 2009 was driven by steel, leading to calls in Egypt to impose anti-dumping duties on

Turkish steel imports. While the GOE's MOTI has announced it will study imposing such a measure, Sahin says that the high demand for steel in

Egypt's booming real estate sector and the strong Turkish-Egyptian political relationship make the adoption of anti-dumping duties very unlikely. ------- Comment -------

9.(SBU) The rapid expansion in Turkish investment marks progress for the

GOE towards its goals of increasing investment and trade ties with nontraditional partners outside of the EU and U.S. The attitude of Turkish investors on the economic potential of Egypt reflects positive strides made by the GOE in terms of increasing export market access and improving the investment climate. However, since much of the current investment

attractiveness is driven by subsidized energy and the strength of the ready-made garments (RMG) industry, the GOE may struggle in the coming years to reconcile attracting foreign investors with its stated goals of reducing subsidies and broadening manufacturing exports beyond RMG. SCOBEY

Viewing cable 10CAIRO84, SCIENCE ENVOY ZEWAIL CONCLUDES SUCCESSFUL

FIRST VISIT TO CAIRO


Reference

ID


10CAIRO84

2010-01-18

05:05

2011-02-16

21:09

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

Cairo

VZCZCXYZ0006

PP RUEHWEB

DE RUEHEG #0084/01 0180532

ZNR UUUUU ZZH

P 180532Z JAN 10

FM AMEMBASSY CAIRO


INFO RHEHNSC/NSC WASHDC


UNCLAS CAIRO 000084

SENSITIVE

SIPDIS

DEPT FOR NEA/RA, NEA/ELA, OES/STC (WILLIAM LAWRENCE)

WHITE HOUSE FOR OSTP (JASON RAO)

E.O. 12958: N/A

TAGS: PREL PGOV KPAO OVIP TSPL EG

SUBJECT: SCIENCE ENVOY ZEWAIL CONCLUDES SUCCESSFUL FIRST VISIT TO CAIRO

Sensitive but Unclassified. Please handle accordingly. 1.(SBU) Key Points:

--In his inaugural trip to Egypt as U.S. Science Envoy, Dr. Ahmed Zewail

met with senior government officials, business leaders, and the academic community to discuss ways in which the U.S. can collaborate with Egypt to bolster science and technology cooperation. -- At a January 10 meeting of the Supreme Council for Science and Technology (SCST), Egyptian Prime

Minister Ahmed Nazif pledged to create a task force to identify key national science and technology challenges and determine how Egypt can contribute to future partnerships. --Public diplomacy events with the

American Chamber of Commerce in Egypt (AMCHAM) and a 10 year old child prodigy dubbed "the next Zewail" focused on the need to improve the education system to strengthen Egypt's position in the global scientific community. -- Zewail will return to Egypt on January 24 to reassume his envoy role in a follow-up meeting with PM Nazif about the future direction of the task force and a speech to a student audience at the Cairo Opera

House.

2.(U) Dr. Ahmed Zewail, one of three U.S. Science Envoys announced by

Secretary Clinton in November 2009 visited Cairo from January 10-12 and met with Egyptian Prime Minister Ahmed Nazif, the Supreme Council for Science and Technology (SCST), and Minister of Defense Mohamed Tantawi to determine how the U.S. can support Egypt in implementing science and technology initiatives. ----------------------------------- EGYPTIAN GOVERNMENT

PLEDGES SUPPORT -----------------------------------

3.(SBU) In a January 10 meeting, Zewail briefed PM Nazif about the purpose of President Obama's envoy program, highlighting the desire to identify opportunities for new partnerships in science and technology - including math, engineering, health, energy, climate change research, and green technologies. Nazif welcomed Zewail's appointment and noted that science and technology programs can serve as important diplomacy and development tools to engage Muslim-majority countries, such as Egypt and across the

Middle East region. Nazif also urged Zewail to act quickly in determining the best methods to "move ahead" and expressed a desire to have demonstrable results as soon as possible. "We don't want to wait for another June," Nazif explained, referencing President Obama's Cairo

University speech in June 2009.

4.(SBU) Zewail also met with members of the SCST to listen to their concerns about challenges facing the country's education, science, and technology infrastructure. The council, a PM-chaired advisory body that meets quarterly to establish national science and technology priorities, was specially convened for Zewail's visit and hosted eight ministers

(Higher Education and Scientific Research; Telecommunication; Electricity;

International Cooperation; Economic Development; Agriculture; Irrigation; and Military Production) as well as prominent individuals from the academic and business communities. Different ministers noted the many problems facing Egypt: an increasing population, a struggling education system, and the lack of a skilled workforce. The council warmly received Zewail's proposal to work together on new initiatives focusing on education, science, and technology. He also discussed the concept of centers of excellence and encouraged the council to pursue this idea. Concluding the meeting, Nazif promised to form an inter-ministerial task force to investigate key science and technology priorities as well as study how

Egypt can contribute to joint projects. He also invited Zewail to return to provide support to the task force.

5.(SBU) During a January 11 meeting with Minister of Defense Mohamed

Tantawi, Zewail noted the important role U.S. military research plays in providing technology and knowledge for civilian use. Zewail thanked Tantawi for his leadership and asked him to participate in the SCST's task force to identify areas for potential cooperation. Tantawi, a member of the council, agreed and stated that he would do so to the long-existing and successful relationship between the American and Egyptian militaries. ----------------

----------------------------- ---- Reaching out to the Business Community and Beyond --------------------------------------------- ----

6.(U) At a January 12 breakfast hosted by the American Chamber of Commerce in Egypt (AMCHAM) and attended by more than 550 people, Zewail spoke about the role the private sector can play in both leading and supporting science and technology partnerships between Egypt and the U.S. He explained that the core issue facing Egypt is the improvement of the country's public education system - especially at the primary and secondary level. Zewail emphasized the importance of creating an environment that rewards risk taking and academic innovation; he noted that his home university, the

California Institute of Technology (Cal Tech), had provided him with exactly these conditions and credited Cal Tech as a "major reason" for his accomplishments. Egypt did not necessarily need new buildings and organizations to achieve scientific and intellectual success, Zewail stated. More important was creating the right intellectual atmosphere, coupled with a significant increase in the country's pool of scientists and engineers, to improve the overall science and technology capacity. This would also lead to the development of greater innovation and entrepreneurial skills among university graduates.

7.(U) Zewail also met with a 10 year old American University of Cairo student, featured in a local publication the week before the visit and dubbed "the next Zewail." Zewail paid tribute to the boy's industriousness and determination to become a Nobel Prize winner and credited his parents in keeping him focused on academic pursuits. He explained that while Egypt welcomes foreign support, it is critical that Egyptians themselves determine how to solve the country's problems, chief among them the education system. ------------------------ Zewail's Return to Egypt -------

-----------------

8.(SBU) Following visits to Turkey, Lebanon, and Jordan, Zewail will return to Egypt on January 24 for a series of events to build upon his inaugural envoy trip to Egypt. He will again meet with PM Nazif to learn what steps the task force has taken in determining science and technology alliances with the U.S. Zewail is also scheduled to address a student audience in a

February 14th speech at the Cairo Opera House. During his first envoy trip,

Zewail's personal popularity was evident in the extensive press coverage and high-level attendance at all of his events. Post looks forward to welcoming him back to Cairo and further engaging Egyptian counterparts in conversations about future collaborative projects. Scobey

Viewing cable 10CAIRO262, Tourism is the "driving force" in the Egyptian Economy



10CAIRO262

2010-02-08

13:01

2011-02-16

21:09

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Embassy

Cairo

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SENSITIVE

SIPDIS

DEPT FOR NEA/ELA

E.O. 12958: N/A


SUBJECT: Tourism is the "driving force" in the Egyptian Economy

REF: 09 CAIRO 2247

Â¶ 1. (SBU) Key Points:

--The Ministry of Tourism (MoT) projects a 5-7% increase in tourism revenues and arrivals for 2010 over last year.

--New growth opportunities are expected in Egypt's Mediterranean north shore area and MoT is overseeing plans to increase hotel capacity for the region.

-- MoT plans to pilot a zero emissions resort town in a bid to lure foreign tourists interested in environmental issues.

--Over the last two years, MoT has initiated comprehensive employee training programs in order to build a managerial workforce for the tourism industry.

Â¶ 2. (U) On January 27, Econoff met with Senior Assistant Minister for Tourism Hisham Zaazou, a former tourism executive who serves as a key advisor to Minister Mohamed Zoheir Garana. He also oversees new initiatives such as "green tourism" and improved training programs.

Â¶ 3. (U) After a slight decline in 2009 attributed primarily to the global financial crisis, both tourism revenues and arrivals - two key industry benchmarks - are expected to increase on the order of

5-7%- for 2010 (Ref A). According to the Ministry of Tourism (MoT),

Egypt remains on track to reach its long-stated target of 14 million tourist visits annually by 2011 - a number set out in

President Mubarak's 2005 presidential campaign platform. Egypt's

"national tourism plan" targets an annual level of more than 25 million tourists by 2020.

--------------------

Growth Areas

--------------------

Â¶ 4. (SBU) Egypt's Red Sea coastal region should remain the country's most popular destination for foreign tourists but Zaazou advised that the MoT is looking to the country's Mediterranean north coast as a key location for new growth opportunities. The area stretching westward from the city of El Alamein (150 miles northwest of Cairo) to the summer resort town of Marsa Matrouh, comprises approximately 300 miles of coastline. MoT is working with real estate developers to triple the number of available hotel

rooms in the area, from 7,000 to more than 22,000 in the next 5-10 years. The focus, Zaazou stated, will be on luring European tourists - who make up more than 70% of Egypt's foreign tourist market. The government is currently upgrading four airports in the north shore area (Alexandria, Marsa Matrouh, El-Alamein, and Borg

El Arab) with an eye towards eventually allowing low-cost European airlines to service the area and bypass Cairo.

Â¶ 5. (SBU) This potential new growth is crucial to MoT's plan to generate new jobs in the tourism sector. Zaazou noted that for every 1 million new tourism visitors, Egypt generates 200,000 new jobs - listing hotels and tourism companies as the most obvious recipients but also pointing out the rise in demand for skilled tradesmen such as electricians, plumbers, and carpenters. He explained that government economic plans call for the creation of

600,000 new jobs annually. If growth continues as expected, tourism could provide one-third of new employment. "The tourism industry should be the main driving force for the economy," Zaazou said.

---------------------------------------------

Piloting Zero Emission Tourism

---------------------------------------------

Â¶ 6. (SBU) MoT plans to introduce what it labels "zero emission tourism" in highly visited tourist destinations, starting with the

Sinai city of Sharm el-Sheikh. Zaazou asserted that MoT will seek to lower carbon emission by 90% in Sharm el-Sheikh by 2020 by improving water conservation and sanitary systems, increasing dependency on renewable energy sources, and upgrading the city's public transportation system. By 2030, MoT predicts that Sharm el-Sheikh will become a zero emissions resort area. Zaazou explained Egypt is seeking an advantage over its Mediterranean

neighbors (notably Turkey) and a future emphasis towards "green environment tourism" may provide that edge. If MoT is successful with the Sharm el-Sheikh project, Zaazou indicated that Egypt will expand the program to other areas along the Red Sea coastal area but did not identify any specific locations.

-----------------------------------------

Employee Training is Pivotal

-----------------------------------------

Â¶ 7. (SBU) In the last two years, MoT has begun comprehensive training for current tourism employees as well as youth seeking employment in the industry. Led by the Ministry-controlled Higher

Council for Tourism, the program has initially targeted popular resort areas along the Red Sea Coastal area and will train rank and file employees as well as middle and senior managers - primarily for private Egyptian hotels. MoT is not working with foreign hotels since they maintain their own training programs. Zaazou said the goal is to build an Egyptian managerial class that currently lacks sufficient numbers. Zaazou also couched the need for training as a "social impact force." Egypt has problems with people holding "radical Islamist views," he confided. Employee training problems present the opportunity to moderate these views, noting that "exposure to new ideas and education" will allow for improved social interactions between Egyptians and foreigners. (Note:

According to press accounts, Minister Garana reaffirmed this training commitment at a World Tourism Organization meeting in

Spain on February 1, 2010 where he pledged to upgrade national employee training programs. End Note)

Â¶ 8. (SBU) Comment: MoT's projections for tourism arrivals, revenues, and job creation appear overly optimistic given the difficulties faced by the global tourism market. The intense pace of infrastructure development - especially in the country's north shore - is a major concern if tourism visits do not increase according to MoT's stated 2020 goal. However, the key element in

Zaazou's overview of MoT's plans is a newfound commitment to training, a surprising yet welcome development. Contacts in nearly all of the government's ministries repeatedly discuss Egypt's desperate need for a skilled managerial class. If MoT is to meet its ambitious targets, it is critical that it develops a well-trained tourism workforce to convince the foreign tourist market to regularly return to Egypt.

SCOBEY

Viewing cable 10CAIRO255, TPT Blanket Approval for Non-technology Transfer

Requests



10CAIRO255

2010-02-28

13:01

2011-02-16

21:09


Embassy

Cairo

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RHMFISS/HQ USCENTCOM MACDILL AFB FL

RHMFISS/JOINT STAFF WASHINGTON DC

RUEHEG/AMEMBASSY CAIRO



SIPDIS

NOFORN

E.O. 12958: DECL: 2020/02/28

TAGS: PREL PARM MASS EG MARR

SUBJECT: TPT Blanket Approval for Non-technology Transfer Requests

REF: SECDEF 122723; CAIRO IIR 6 899 0148 10; CAIRO IIR 6 899 0149 10 2009

CAIRO 2394; 2009 CAIRO 491

CLASSIFIED BY: Margaret Scobey, Ambassador, DOS, EXO; REASON: 1.4(B), (D)

Â¶ 1. (C) Post continues its efforts to improve Egypt's End Use Monitoring

(EUM) performance and to simplify the Third Party Transfer (TPT) request process in an effort to streamline the process and provide timely responses to the Government of Egypt (GOE). We recommend implementation of a responsive, streamlined process to address basic requests, while at the same time safeguarding U.S. interests and technology. These topics were major points of discussion during the last U.S.-Egypt bilateral Military

Cooperation Conference (MCC) held in Washington, DC, in November 2009.

During the MCC, the GOE agreed to designate the Egyptian Armament Authority as the single point of contact for EUM issues and to conduct continuous EUM training; and the U.S. delegation agreed to explore ways to expedite the

TPT request process.

Â¶ 2. (C) Since the MCC, Embassy Cairo has seen a significant increase in the number of TPT requests from the Egyptian Armament Authority, which we view as a positive indication of the GOE's attempt to comply with TPT regulations. The nature and complexity of these requests varies widely from queries regarding major arms transfers to approval for routine visits or disposition of obsolete equipment. OMC anticipates the volume of these requests will only increase over time as the GOE seeks to dispose of or transfer some of the USD 40 billion worth of U.S. military equipment it has purchased over the last 30 years. The sheer volume of U.S. origin equipment in Egypt after 30+ years of FMF, coupled with Egypt's desire to develop an export arms industry, will most likely result in a continuing stream of TPT requests from GOE for the foreseeable future. We assess that an enhanced

TPT clearance process that provides protection for U.S. interests, but at the same time permits expedited approval in those cases where unauthorized technology transfer is not a possibility, will reduce workload, enhance relations with allies, and encourage Egyptian cooperation and compliance.

Â¶ 3. (C) An example of a basic request is the recent GOE request to allow the Chief of Staff of the Turkish military to visit and tour the

U.S./Egyptian M1A1 Co-production facility at Factory 200. Embassy Cairo understands that the majority of requests will require PM approval.

However, Embassy Cairo would like to establish a system to quickly respond to non-controversial request as outlined in the below blanket approval.

Specifically, we propose that PM grant blanket approval for certain agreedupon, routine cases which Post would then monitor on an individual basis while keeping PM informed. These blanket approval cases would be limited to those that cannot be reasonably expected to result in a transfer of technology. Likely candidates include tours of the M1A1 Coproduction facility by representatives of countries which operate the Abrams tank, static displays or familiarization flights in U.S.-origin aircraft for representatives of countries who operate similar equipment, and tours of

Egyptian Navy frigates by foreign attaches. The GOE would still be required to submit a TPT request for such activities, but Embassy Cairo would be able to give approval while simultaneously forwarding details of the request to PM. In addition, we suggest yearly OMC/PM review of approvals exercised under blanket authority in order to provide additional oversight.

Â¶ 4. (C) Embassy Cairo specifically requests blanket approval for the following activities: A. EGYPTIAN TANK PLANT (Factory 200):

1.Tour requests for officials of any government currently operating the

M1A1.

2.Tour requests for officials of any government scheduled to receive the

M1A1.

3.Tour requests for any NATO ally.

4.Tour requests for any member of the GCC+3. B. ACCESS TO U.S. ORIGIN

EQUIPMENT:

1.Static displays to be viewed by officials of any NATO government.

2.Static displays to be viewed by officials of any government currently operating or scheduled to receive similar U.S. equipment.

3.Orientation flights/cruises/rides for government officials of any country currently operating the U.S. equipment in question.

Â¶ 5. (C) Embassy Cairo also would like to reinforce the GOE's good behavior with regards to submitting the requests by providing timely answers, even if the request is disapproved. In our view this would reinforce the emphasis we have been placing on the need for the GOE to shoulder its end use monitoring responsibilities. The following TPT requests remaining pending: 105MM Ammunition transfer to Saudi Arabia; EG Hawk Missile technical support to Turkey; EG F-16 back seat training ride for Italian AF personnel; EG request to allow Turkey to refurbish F-4 aircraft; and EG request to sell M1A1 tanks to Iraq. We appreciate PM's consideration of the blanket approval request and look forward to working with PM to effectively streamline the TPT request process. SCOBEY

Viewing cable 06BERN1971, EUR A/S FRIED AND SWISS STATE SECRETARY

AMBUHL \



06BERN1971 2006-10-23 08:08 2011-02-18 21:09 CONFIDENTIAL Embassy Bern

Appears in these articles: www.letemps.ch/swiss_papers

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82783 2006-10-23 08:56:00 06BERN1971 Embassy Bern CONFIDENTIAL 06BELGRADE1566|06BERN1867|06BERN1876|06PRISTINA833 VZCZCXRO7014\

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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE\

C O N F I D E N T I A L SECTION 01 OF 05 BERN RUCNIRA/IRAN COLLECTIVE

001971 \

\

SIPDIS \

\

SIPDIS \

\

E.O. 12958: DECL: 10/22/2016 \

TAGS: PREL PTER KNNP EAID SZ

SUBJECT: EUR A/S FRIED AND SWISS STATE SECRETARY AMBUHL \

LAUNCH COMPREHENSIVE POLITICAL DIALOGUE -- MULTIPLE \

DELIVERABLES \

\

REF: A. BELGRADE 1566 \

Â¶ B. PRISTINA 833 \

Â¶ C. BERN 1867 \

Â¶ D. BERN 1876 \

\

Classified By: DCM Carol Urban, Reasons 1.4 b/d \

\

1.(C) Summary: In the first round of official political level \ talks under the recently inaugurated Framework for Enhanced \

Political Cooperation, EUR A/S Dan Fried and Swiss State \

Secretary Michael Ambuehl identified a number of specific \

\

SIPDIS \ areas for closer cooperation. Areas discussed included \ regional stabilization in the Balkans, Middle East, and \

Sudan; security and counter-terror cooperation; promotion of \ mutual economic interests; disaster relief; educational \ exchanges; and UN reform. The Swiss offered specific \ proposals for cooperation. For Ambuehl, a formal Framework \ is important in that it regularizes bilateral consultations \ and, as much as getting the USG's attention, it serves as a \ means to ensure that Ambuehl's boss -- Foreign Minister \

Calmy-Rey -- and their Swiss colleagues get into the habit of \ thinking about cooperating with Washington. End summary. \

\

2.(C) Assistant Secretary Fried conducted the first \ high-level dialogue on enhanced bilateral political \ cooperation with Ambuehl on September 29. Participants \ included officials from the Swiss Departments of Foreign \

Affairs, Economic Affairs, Finance, and Defense, along with \

Ambassador Coneway, DCM, Pol/Econ officers, and visiting \

EUR/AGS desk officer. \

\

------------------------------- \

Pre-Meeting: Iran & the Balkans \

------------------------------- \

\

3.(C) In a meeting A/S Fried and Ambassador Coneway prior to \ the plenary session, Ambuehl offered his views on the Iran \ situation and reiterated Switzerland's standing offer to \ facilitate talks with Tehran. A/S Fried thanked Ambuehl for \

Switzerland's efforts as Protecting Power for the United \

States in Tehran and emphasized the need for the \ international community to show solidarity against Iranian \ intransigence on the nuclear issue. \

\

4.(C) During this pre-meeting, Foreign Minister Micheline \

Calmy-Rey dropped by to welcome A/S Fried. Noting that she \ was one of the first European leaders to call for Kosovo's \ independence, Calmy-Rey expressed particular interest in A/S \

Fried's just-completed visit to Serbia and Kosovo. Fried \ reviewed his message to Serbian and Kosovar leaders, adding \ that KFOR members, including the U.S. and Switzerland, should \ be prepared to beef up their presence during the first part \ of the transition in 2007. Calmy-Rey explained that \

Switzerland currently deployed about 200 troops out of the \

250 currently authorized for peace operations abroad, but was \ in the process of enlarging deployable forces to 500 by 2008. \

(Comment: The Swiss Parliament has authorized a maximum of \

220 for SwissCoy in Kosovo; any increase would require \

Parliamentary approval, usually a time-consuming process. \

End comment.) \

\

-------------------------------------------- \

Framework for Enhanced Bilateral Cooperation \

-------------------------------------------- \

\

5.(C) Ambuehl opened the plenary with a statement hailing the \

Framework Agreement for Enhanced Political Cooperation (the \

U.S.-Swiss MOU signed in May 2005) as providing a "legal \ basis" under Swiss law for closer cooperation between the two \ countries. He said that both sides had exhibited excellent \ cooperation in the adoption of the Third Additional Protocol \ to the Geneva Conventions and the acceptance of the Israeli \

Magan David Adom in the International Red Cross, Red Crescent \

Movement. Ambuehl also noted that the U.S. and Switzerland \ share "mostly the same objectives," though often with \ different strategies, due to the distinct global roles \ played: the U.S. as sole superpower and Switzerland as \

(almost) sole neutral. \

\

------------------------------------------- \

Balkans: Swiss Program Proposals for Kosovo \

------------------------------------------- \

\

6.(C) A/S Fried provided a detailed report of his visit \ earlier that week to Belgrade, Pristina, and Mitrovica \

(reftels a and b): The next few weeks were going to be \ difficult; the situation in Kosovo will only deteriorate \ unless action is taken. Thus, the USG and the Quint \ concluded that the status issue must be finalized and the \ final status must be independence. According to A/S Fried, \

\

BERN 00001971 002 OF 005 \

\

\ both ethnic Serbs and Albanians realize this, however \ unenthusiastic the Serb leadership felt. Encouragingly, Serb \ students in Belgrade and even moderate Serb community leaders \ in Mitrovica seemed prepared to move on. To hold-outs, such \ as President Kostunica and Foreign Minister Draskovic, A/S \

Fried's message was that their reluctance must not translate \ into obstructionism or violence, or else Belgrade's European \ ambitions would be drastically set back. \

\

7.(SBU) Addressing Switzerland as a participant in KFOR, A/S \

Fried emphasized his hope that when KFOR needed more troops, \

Switzerland would be there. State Secretary Ambuehl advised \ that Switzerland's analysis of Kosovo was completely in line \ with that of the U.S. Switzerland supported independence \ soon, under the right conditions. He described the Balkans \ as a prime place for U.S.-Swiss cooperation in areas of good \ governance and "transitional justice." Swiss DFA Human \

Security director Thomas Greminger described Swiss thinking \ on decentralization and transitional justice and noted that \ the Swiss had presented a menu of maximal and minimal program \ proposals to Kosovo Coordinator Ahtisaari and the European \

Commission (EC) and would be interested in USG views (paper \ handed to EUR/AGS desk officer). A/S Fried and Ambuehl \ agreed to that an expert level group would review the Swiss \ proposal and meet in either Washington or Bern to define \ areas of bilateral cooperation on transitional justice and \ other good-governance issues. \

\

----- \

Sudan \

----- \

\

8.(SBU) Moving on to Sudan, Ambuehl recalled that \

Switzerland and the United States had worked together in 2002 \ to mediate the North-South Agreement. Ambuehl laid out three \ areas of current Swiss activity: demarcating the north/south \ boundary; assisting the regional government of southern Sudan \ in mediation with the Lords Resistance Army; and helping the \

SPLA militia transition into a civil force. A/S Fried \ replied that he was aware that the Swiss had discussed with \

EUCOM officers the idea of bilateral cooperation. He said he \ would take the Swiss ideas to State's AF Bureau and would \ speak with EUCOM Combatant Commander General Jones about the \

Swiss proposal and potential for cooperation. \

\

--------- \

Detainees \

--------- \

\

9.(SBU) A/S Fried opened the discussion of the \ detainee/renditions issue by recommending to the Swiss the \ recent Financial Times article by State Department Legal \

Advisor Bellinger. A/S Fried stressed the fundamental \ points: terrorists want to kill civilians in our countries, \ and the Geneva Conventions -- while adequate for conventional \ war -- were not designed for the current threat. On \ renditions, A/S Fried noted that several countries had used \ this method to bring criminals to justice -- for example, \

France with Carlos the Jackal, and Turkey with PKK leader \

Abdullah Ocalan. Those insisting on treating terror suspects \ as POWs are not factoring in that, under Geneva, detainees \ should be held until the end of hostilities; indeed the \ closest parallel to terrorists in the Geneva Conventions \ would be "spies and saboteurs," who do not merit POW \ protection. A/S Fried stressed that the United States was \ not trying to "bend the rules," rather trying to "get it \ right." \

\

10.(SBU) Christine Schraner, DFA deputy chief for \ international public law, stressed that Switzerland took the \ fight against terrorism seriously. Switzerland was seeking \ the proper balance between counterterrorism and human rights. \

She welcomed progress in the UN 1267 Committee on \ de-listing, citing recent UN discussions and a well-received \

Swiss co-sponsored study conducted with the Watson Institute \ at Brown University. Ambuehl asked that the USG understand \

Switzerland's role as guardians of international law. He \ suggested that Ambassador Bellinger agree to meet with his \

Swiss counterpart, Ambassador Paul Seger, to discuss the \ issues of detainees and renditions, as well as the listing \ and delisting of terrorist entities. A/S Fried said he would \ pass the request on to Ambassador Bellinger. \

\

------------------------------- \

Property Rights as Human Rights \

------------------------------- \

\

11.(SBU) State Secretary Ambuehl presented A/S Fried with a \ copy of a Swiss-sponsored book "Realizing Property Rights," \ co-authored by Peruvian economist Hernando DeSoto. The \

\

BERN 00001971 003 OF 005 \

\

\

Swiss, Ambuehl said, would like to co-sponsor with the U.S. a \ workshop on the subject. The issue was particularly \ pertinent in the developing world. A/S Fried replied that he \ would want to see how the notion of property rights as \ fundamental human rights conformed to the need to seize \ terrorist and criminal assets and fight kleptocracy, but \ agreed to raise the proposal with Under Secretary Paula \

Dobriansky. \

\

-------------------- \

Intelligence Sharing \

-------------------- \

\

12.(C) Additional areas where traditional structures were \ challenged by terrorism were law enforcement cooperation and \ intelligence sharing, according to A/S Fried. Reviewing the \ message delivered by S/CT Crumpton on September 7 (reftel c), \

A/S Fried emphasized that the updated U.S.-Swiss operative \ working agreement on counter-terrorism cooperation would only \ be as valuable as the cooperation it fostered. The Swiss \ needed to share more broadly the intelligence they develop. \

Swiss DFA Security Policy Director Jacques Pitteloud pointed \ out that September 11 had found Switzerland even less \ prepared than the U.S. to face the new threat. In \

Switzerland, counterterrorism had traditionally been a purely \ law enforcement matter. The key to producing more \

intelligence information was first to develop better \ intelligence services. Both sides agreed on the importance \ of ensuring the success of intelligence and law enforcement \ cooperation. \

\

13.(SBU) In the broader area of bilateral counterterrorism \ cooperation, Ambuehl and Pitteloud both praised the \

U.S.-Swiss sponsored "Black Ice" bioterrorism exercise held \

September 7-8 in Montreux, which brought senior leaders of \ international organizations together for the first time on \ this issue. Pitteloud expressed strong support for a \ follow-up conference. A/S Fried and Embassy Bern agreed to \ pursue the idea with Black Ice Conference organizers. \

\

--------------- \

Disaster Relief \

--------------- \

\

14.(SBU) Describing an ongoing Swiss Development Agency \ project to assess hazards and risks. Ambuehl promised to \ provide the USG a copy of the "risk mapping" exercise \ identified areas of potential flooding, landslides, \ avalanches, desertification, soil erosion, and other risks. \

A/S Fried recommended that, in assessing the potential risks, \ the Swiss also incorporate a data base of the PfP assets \ available. A/S Fried asserted that Switzerland was in an \ optimal position among NATO partners to develop a data base \ of partner assets to respond to such natural disasters as the \

Kashmir earthquake or a tsunami. The upcoming Riga NATO \

Summit would be addressing "NATO in the World;" Swiss efforts \ targeting humanitarian disasters could sell well within the \ neutrality-conscious Swiss public. Ambuehl agreed. \

\

---------------------------------------- \

Financial Sanctions Implementation Group \

---------------------------------------- \

\

15.(SBU) Turning to economic relations, Ambuehl regretted \ that the "time had seemed not to be right" on a full Free \

Trade Agreement, but hoped that the proposal could be revived \ some day. Monica Ruehl, Director of Bilateral Relations at \ the Swiss Secretariat for Economic Affairs (SECO), described \ the U.S.-Swiss Trade and Investment Cooperation Forum (the \

"Forum"), inaugurated by USTR and SECO in May. While still \ in its infancy, the Forum already has as possible agenda \ items intellectual property rights, a wine agreement based on \ the U.S.-EU model, and recognition of organic products \ standards. The Forum had passed its first hurdle in \ providing a platform to head off a potential U.S.-Swiss \ collision regarding drastic restrictions on U.S. beef exports \ to Switzerland. \

\

16.(SBU) Ruehl raised the issue of sanctions implementation. \

Reiterating Swiss points to Treasury Under Secretary Stuart \

Levey on September 14 (ref d), Ruehl described the Financial \

Sanctions Implementation Experts Group that had operated \ during the 1990s. Switzerland hosted the last meeting in \

November 2001. The USG was supposed to host the next, but \ never had. Ruehl stressed that Switzerland and others would \ be more successful in enforcing international sanctions if \ the actual implementers -- OFAC in the USG's case -- would \ meet regularly to discuss the mechanics of sanctions \ enforcement. Welcoming the proposal to revive the experts \ group, A/S Fried hoped that its scope be broad enough to \

\

BERN 00001971 004 OF 005 \

\

\ encompass organized crime and kleptocracy and agreed to \ contact Treasury to encourage revival of the Sanctions \

Implementation Experts Group. Embassy Bern also agreed to \ push the idea with visiting Treasury officials. \

\

--------------------- \

United Nations Reform \

--------------------- \

\

17.(SBU) State Secretary Ambuehl laid out Switzerland's three \ priorities within the United Nations: strengthen the overall \

UN system; promote reform in the budget and "cohesion" of UN \ agencies; and invigorate Geneva as a UN host city. Mindful \ of U.S.-Swiss common goals with regard to management reform, \

Ambuehl suggested that the two governments should introduce \ a proposal for outsourcing oversight functions (auditing, \ etc.) at smaller UN agencies, including the Bern-based \

Universal Postal Union. A/S Fried agreed that it was \ interesting and offered to run it by UN specialists. The \

Swiss agreed to provide the USG with a paper, which EUR will \ discuss proposal with IO and USUN. \

\

------------------ \

Muslim Integration \

------------------ \

\

18.(SBU) Addressing the challenge of Muslim integration, A/S \

Fried regretted that the prevailing radical character in the \

Muslim world was drowning out other voices. He recalled his \ visit to Denmark in the wake of the so-called "cartoon \ crisis." Initially, the West was as ill-equipped to deal \ with Muslim realities in Europe and the Greater Middle East \ as they had been with the communist threat following the \

Second World War. Ambuehl underscored Switzerland's relative \ success with Muslim integration, due to the country's status \ as a secular state with a highly decentralized system and \ republican, egalitarian structures. The Swiss population is \

22 percent foreign born; of this, about 20 percent is Balkan \ and 5 percent Islamic, he said. The Swiss Government was \ working on two projects with regard to integration: the \

Montreux Initiative on transparent charitable best practices; \ and "Chantier Islamisme" involving the mapping of Islamist \ organizations and parties. A/S Fried recommended that both \

sides meet at the expert level to share information on \ outreach activities and to include Muslim integration as a \ regular topic in Framework discussions. \

\

-------------------- \

Forum for the Future \

-------------------- \

\

19.(SBU) Welcoming Switzerland's participation in the Forum \ and the Foundation for the Future, A/S Fried noted that the \

Foundation, designed to promote and subsidize civil society \ in the BMENA region, had had a slow first year, in part due \ to the Russian G-8 presidency. However, the Germans were \ promising to do more during their dual G-8/EU presidency. \

A/S Fried commended President Bush's recent UN speech on the \ importance coupling democracy with outreach. \

\

Â¶ 20. (SBU) Ambuehl shared the concerns of Foundation board \ member (and former Swiss diplomat and ICRC chief) Cornelio \

Sommaruga that the Foundation was not sufficiently light \

(agile) or transparent. A/S Fried agreed to look into it. \

When A/S Fried emphasized the need for Western unity \ vis-a-vis Hamas and Syria, Ambuehl countered that -- however \ difficult to deal with they were -- they remained a factor in \ the region. A/S Fried pushed back and urged the Swiss to \ allow pressure on Hamas to work. Ambuehl said he would send \ a DFA regional expert to Washington to talk about Syria and \ other regional concerns. \

\

--------------------- \

Russia & Central Asia \

--------------------- \

\

21.(C) A/S Fried also discussed Russia (particularly the \ energy-security nexus) and its neighbors. The arrest the \ previous day of several Russian "spies" by the Government of \

Georgia had not been handled well by either side, but \

illustrated our difficulties with Moscow; Russia seemed to \ want all of its neighbors to adopt the posture of Finland \ during the Cold War. Swiss DFA Deputy Poldir Anton Thalmann \ agreed that dealing with the Russians required firmness, \ expressing admiration for the performance of Alexander \

Vershbow and Nicholas Burns as NATO ambassadors. In response \ to Ruehl's question about Russian WTO membership, A/S Fried \ replied that President Bush would have loved to welcome the \

Russians in, but he was not willing to compromise the WTO's \ criteria. \

\

BERN 00001971 005 OF 005 \

\

\

\

------------ \

Next Meeting \

------------ \

\

22.(SBU) A/S Fried and State Secretary Ambuehl agreed that \ working-level discussions should continue under the bilateral \ framework and that they would meet in Washington during 2007. \

\

------- \

Comment \

------- \

\

23.(SBU) Swiss offers of specific proposals for cooperation \ made the talks were more successful than anticipated. For \

State Secretary Ambuehl, a formal Framework is important in \ that it regularizes bilateral consultations and, as much as \ getting the USG's attention, it is a means to ensure that \

Ambuehl's boss -- Foreign Minister Calmy-Rey -- and their DFA \ colleagues get into the habit of thinking about cooperating \ with Washington. The Framework is also a way for the Swiss \

Department of Foreign Affairs to keep pace with the \

Department of Economic Affairs and its TIC Forum and Joint \

Economic Commission. We will continue to use the Framework \ to steer Swiss engagement into areas of mutual interest. \

\

24.(U) This telegram was cleared by EUR Assistant Secretary \

Dan Fried. \

CONEWAY \

Viewing cable 07MANAMA1010, IRAQ - AMBASSADOR CROCKER'S MEETINGS WITH

BAHRAINI LEADERSHIP



07MANAMA1010

2007-11-06

10:10

2011-02-18

21:09

CONFIDENTIAL

Embassy

Manama

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C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 001010

SIPDIS

C O R R E C T E D COPY

SIPDIS

E.O. 12958: DECL: 11/06/2017

TAGS: PREL PGOV KPAL IS IZ IR BA

SUBJECT: IRAQ - AMBASSADOR CROCKER'S MEETINGS WITH BAHRAINI LEADERSHIP

MANAMA 00001010 001.2 OF 002 Classified by: Ambassador Adam J Ereli for reason 1.4 (b) (d)

1.(C) SUMMARY: Crown Prince Salman took the lead for the GOB in pledging

Bahrain's continued support for U.S. efforts in Iraq. It would examine positively the possibility of returning an ambassador if security concerns could be accommodated. But he also asked that the U.S. listen to the advice of its friends in the Arab world, and expressed concern over the direction of U.S. policies, whether on Iraq, the Israeli-Palestinian conflict, or democracy promotion in Iraq and the region. FM Shaikh Khalid suggested further discussion in Istanbul of a possible new initiative of Arab states and Turkey in support of Iraq. End summary.

2.(U) Bahrain's King Hamad, his son Crown Prince Salman, and Foreign

Minister Khalid bin Ahmad al Khalifa received visiting Ambassador to Iraq

Crocker in Manama October 30 in separate meetings. Accompanying Crocker were Ambassador Ereli and Embassy Baghdad Senior Adviser Pearce. General

Petraeus, in Bahrain to host the Iraq Coalition Conference, joined the meeting with the Crown Prince.

3.(C) Crocker and Petraeus thanked Bahrain's leadership for hosting the

Coalition Conference. In each meeting, Crocker explained that he was visiting key partners in the region in preparation for the upcoming

Istanbul Neighbors Conference. He reviewed recent developments in Iraq, pointing out that violence was down in many parts of the country, and that more Sunni and Shi'a leaders were working to repair sectarian divisions. A

Shi'a backlash against the Jaysh al-Mahdi was growing. While there was still much to be done, the improved situation presented a key opportunity for shaping Iraq's future. Now was the time, he stressed, for Arab neighbors to step up their engagement with Iraq, and to offset Iran's influence there. Crown Prince: "I've received the message" on Iraq --------

------------------------------------- -----

5.(C) The Crown Prince praised the strong positive relationship between the

U.S. and Bahrain, and Bahrain's continued support for a robust U.S. presence in the Gulf. He also stressed the importance of the U.S.

Department of Defense school in Bahrain, which he himself had attended, calling it America's most effective long-term ambassador.

6.(C) On Iraq, the CP expressed strong doubts about the Maliki government, calling it closely linked to Iran. The CP said the GOB had invited Maliki to visit Bahrain, but had received no response. The CP agreed that an independent Iraq was essential to counterbalance Iran and was indispensable if the region were to remain stable. He asked "what specifically do we need to do?"

7.(C) Ambassador Crocker responded that Arab governments must take the longer view; they should focus not on Iraqi personalities, which will change, but on Iraqi institutions. Everyone must help the Iraqis build governing capacity and institutions. Withholding support at this critical time only opened the door to Iran's malign influence. This was the time for

Arab governments to establish a positive presence in Iraq and Arab ambassadors should return. He urged Iraq's Arab neighbors to host Iraqi official visitors. Both Petraeus and Crocker stressed that Gulf states and

Iraq's neighbors needed to help more to limit the access to Iraq of

Islamist extremists.

8.(C) The Crown Prince agreed that an Arab counterweight to Iranian influence in Iraq was very important. The Arabs must seek to contain Iran's drive for hegemony. Iran was a "clear and present danger" because of its activities in Iraq and its nuclear program. Iraq must be secured as a stabilizing power, but Iraqis must take responsibility for their own government. The coalition could not prop up individuals - they inevitably fall. He endorsed U.S. activities at the local level and praised Coalition

Forces work with the tribes and in limiting the activities of al Qaeda.

9.(C) The Crown Prince replied "I've received the message." He would press other Arabs to do more in support of stability in Iraq, but he stressed the need to back elements in Iraq that work "for stability" and not for Iran.

If the U.S. wanted to "win the war in Iraq by using the democracy ticket," he said, "that requires rallying Iraq and regional opinion, which in turn requires resolving the Israeli-Palestinian question." If this was not possible, then the U.S. should drop democracy promotion as the main element of its strategy in Iraq and the region and rely instead on traditional power politics - i.e., identify strong groups that would support U.S. policies, and stand by them. "You did it in the Cold War," he said "and you can do it now." The Crown Prince complained that U.S. allies in the MANAMA

00001010 002.2 OF 002 Classified by: Ambassador Adam Ereli for reason 1.4

(b) (d) Arab world kept" sticking their necks out" for the U.S., while ever-rising popular frustration with U.S. policies put U.S. allies in an increasingly difficult position. Bahrain would rise to the challenge, but unless there is "a fundamental change, a rebalancing of power in Iraq," it would be difficult both to support U.S. policies and at the same time maintain current democratic openings; these would only provide opportunities for Iran to work further mischief. Meetings with King and

Foreign Minister ---------------------------------------

10.(C) With King Hamad, Ambassador Crocker made the same points. The King expressed appreciation for Crocker's visit and his update, but offered little substantive comment. In a separate meeting, FM Shaikh Khalid reiterated the CP's concerns about the Maliki government and Iran's role in

Iraq. He said Bahrain wanted to help, but must consider its own interests too. He wanted to re-establish a full-fledged Bahraini embassy in Baghdad and would examine this positively, but was limited by security concerns.

(Bahrain currently maintains an Embassy in Baghdad staffed by local employees. Bahrain's previous Ambassador to Iraq, Hussain al Ansari, was shot and severely wounded in 2005. He joined the Foreign Minister's meeting with Ambassador Crocker.) Crocker welcomed Bahrain's intention to reexamine this issue, and offered to help in any way it can, e.g. moving it to the International Zone, and locating a suitable property in the

International Zone.

11.(C) Shaikh Khalid suggested that the GCC, Jordan, Yemen and Turkey should coordinate action on Iraq and proposed a meeting for this purpose on the margins of the Istanbul Neighbors' Conference. The FM also said that the U.S. has Bahrain's full support for the expanded UNAMI mandate. He commented that, "Some neighbors are more capable than others" and

specifically called on Abu Dhabi and Qatar to provide resources in support of UNAMI. ********************************************* ******** Visit

Embassy Manama's Classified

XXXXXXXXXXXX********************************************* ********

Website:

ERELI

Viewing cable 07MANAMA1021, IRAQ - AMBASSADOR CROCKER'S MEETINGS WITH

BAHRAINI



07MANAMA1021

2007-11-12

12:12

2011-02-18

21:09

CONFIDENTIAL

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SIPDIS

SIPDIS

E.O. 12958: DECL: 11/06/2017

TAGS: PREL PGOV KPAL IS IZ IR BA

SUBJECT: IRAQ - AMBASSADOR CROCKER'S MEETINGS WITH BAHRAINI

LEADERSHIP

Classified By: Ambassador Adam Ereli for reasons 1.4 (b) and (d)

Embassy

Manama

1.(C) SUMMARY: Crown Prince Salman took the lead for the GOB in pledging

Bahrain's continued support for U.S. efforts in Iraq. It would examine positively the possibility of returning an ambassador if security concerns could be accommodated. But he also asked that the U.S. listen to the advice of its friends in the Arab world, and expressed concern over the direction of U.S. policies, whether on Iraq, the Israeli-Palestinian conflict, or democracy promotion in Iraq and the region. FM Shaikh Khalid suggested further discussion in Istanbul of a possible new initiative of Arab states and Turkey in support of Iraq. End summary.

2.(U) Bahrain's King Hamad, his son Crown Prince Salman, and Foreign

Minister Khalid bin Ahmad al Khalifa received visiting Ambassador to Iraq

Crocker in Manama October 30 in separate meetings. Accompanying Crocker were Ambassador Ereli and Embassy Baghdad Senior Adviser Pearce. General

Petraeus, in Bahrain to host the Iraq Coalition Conference, joined the meeting with the Crown Prince.

3.(C) Crocker and Petraeus thanked Bahrain's leadership for hosting the

Coalition Conference. In each meeting, Crocker explained that he was visiting key partners in the region in preparation for the upcoming

Istanbul Neighbors Conference. He reviewed recent developments in Iraq, pointing out that violence was down in many parts of the country, and that more Sunni and Shi'a leaders were working to repair sectarian divisions. A

Shi'a backlash against the Jaysh al-Mahdi was growing. While there was still much to be done, the improved situation presented a key opportunity for shaping Iraq's future. Now was the time, he stressed, for Arab neighbors to step up their engagement with Iraq, and to offset Iran's influence there. Crown Prince: "I've received the message" on Iraq --------

------------------------------------- -----

5.(C) The Crown Prince praised the strong positive relationship between the

U.S. and Bahrain, and Bahrain's continued support for a robust U.S. presence in the Gulf. He also stressed the importance of the U.S.

Department of Defense school in Bahrain, which he himself had attended, calling it America's most effective long-term ambassador.

6.(C) On Iraq, the CP expressed strong doubts about the Maliki government, calling it closely linked to Iran. The CP said the GOB had invited Maliki to visit Bahrain, but had received no response. The CP agreed that an independent Iraq was essential to counterbalance Iran and was indispensable if the region were to remain stable. He asked "what specifically do we need to do?"

7.(C) Ambassador Crocker responded that Arab governments must take the longer view; they should focus not on Iraqi personalities, which will change, but on Iraqi institutions. Everyone must help the Iraqis build governing capacity and institutions. Withholding support at this critical time only opened the door to Iran's malign influence. This was the time for

Arab governments to establish a positive presence in Iraq and Arab ambassadors should return. He urged Iraq's Arab neighbors to host Iraqi official visitors. Both Petraeus and Crocker stressed that Gulf states and

Iraq's neighbors needed to help more to limit the access to Iraq of

Islamist extremists.

8.(C) The Crown Prince agreed that an Arab counterweight to Iranian influence in Iraq was very important. The Arabs must seek to contain Iran's drive for hegemony. Iran was a "clear and present danger" because of its activities in Iraq and its nuclear program. Iraq must be secured as a stabilizing power, but Iraqis must take responsibility for their own government. The coalition could not prop up individuals - they inevitably fall. He endorsed U.S. activities at the local level and praised Coalition

Forces work with the tribes and in limiting the activities of al Qaeda.

9.(C) The Crown Prince replied "I've received the message." He would press other Arabs to do more in support of stability in Iraq, but he stressed the need to back elements in Iraq that work "for stability" and not for Iran.

If the U.S. wanted to "win the war in Iraq by using the democracy ticket," he said, "that requires rallying Iraq and regional opinion, which in turn requires resolving the Israeli-Palestinian question." If this was not possible, then the U.S. should drop democracy promotion as the main element of its strategy in Iraq and the region and rely instead on traditional power politics - i.e., identify strong groups that would support U.S. policies, and stand by them. MANAMA 00001021 002 OF 002 "You did it in the

Cold War," he said "and you can do it now." The Crown Prince complained that U.S. allies in the Arab world kept" sticking their necks out" for the

U.S., while ever-rising popular frustration with U.S. policies put U.S. allies in an increasingly difficult position. Bahrain would rise to the challenge, but unless there is "a fundamental change, a rebalancing of power in Iraq," it would be difficult both to support U.S. policies and at the same time maintain current democratic openings; these would only provide opportunities for Iran to work further mischief. Meetings with King and Foreign Minister ---------------------------------------

10.(C) With King Hamad, Ambassador Crocker made the same points. The King expressed appreciation for Crocker's visit and his update, but offered little substantive comment. In a separate meeting, FM Shaikh Khalid reiterated the CP's concerns about the Maliki government and Iran's role in

Iraq. He said Bahrain wanted to help, but must consider its own interests too. He wanted to re-establish a full-fledged Bahraini embassy in Baghdad and would examine this positively, but was limited by security concerns.

(Bahrain currently maintains an Embassy in Baghdad staffed by local employees. Bahrain's previous Ambassador to Iraq, Hussain al Ansari, was shot and severely wounded in 2005. He joined the Foreign Minister's meeting with Ambassador Crocker.) Crocker welcomed Bahrain's intention to reexamine this issue, and offered to help in any way it can, e.g. moving it to the International Zone, and locating a suitable property in the

International Zone.

11.(C) Shaikh Khalid suggested that the GCC, Jordan, Yemen and Turkey should coordinate action on Iraq and proposed a meeting for this purpose on the margins of the Istanbul Neighbors' Conference. The FM also said that the U.S. has Bahrain's full support for the expanded UNAMI mandate. He commented that, "Some neighbors are more capable than others" and specifically called on Abu Dhabi and Qatar to provide resources in support of UNAMI. ********************************************* ******** Visit

Embassy Manama's Classified Website:

XXXXXXXXXXXX********************************************* ********

ERELI

Viewing cable 08MANAMA565, SAUDI CEMENT RESTRICTIONS RIPPLING THROUGH



08MANAMA565

2008-08-25

11:11

2011-02-18

21:09

CONFIDENTIAL

Embassy

Manama

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RHBVAKS/COMUSNAVCENT PRIORITY



SIPDIS

BAGHDAD FOR AMBASSADOR ERELI

E.O. 12958: DECL: 08/25/2018

TAGS: ECON SA BA

SUBJECT: SAUDI CEMENT RESTRICTIONS RIPPLING THROUGH

BAHRAINI ECONOMY

Classified By: CDA Christopher Henzel for reasons 1.4 (b) and (d)

1.(C) Summary: Saudi restrictions on the export of cement reduced Bahrain's available supply of cement by one-third, and drove prices up by 60 percent since June. As a result, the Bahraini construction sector is facing chronic

delays and is losing an estimated $1.2 million per day. Real estate markets have also been affected, with both residential and commercial sectors reporting rent increases of more than 10 percent in July. The shortage will take between one and two years to be fully resolved and may have delivered a shock to Bahrain,s overheated real-estate boom. End summary.

2.(C) Background: Saudi Arabia reportedly subsidizes cement production, and for years much of this subsidized cement was exported to Bahrain. During the first week of June Saudi Arabia implemented restrictions on the export of cement. Most Bahraini contractors believe that the export restrictions were a sign that the SAG was tired of subsidizing Bahrain's construction industry. However, Bahrain Finance Asst. Undersecretary Yousif Humood told econoff August 20 that the GOB believes the export restrictions were not targeted at Bahrain, but were put in place to remove foreign demand from

Saudi Arabia,s domestic cement market and thus suppress domestic prices.

3.(U) Prior to the restrictions, Bahrain was importing

2.3 million tons per year, or about 70 percent of its annual demand for

3.3 million tons of cement, from Saudi Arabia. The sole Bahraini cement company, Star Cement, only has the capacity to produce 400,000 tons per year with future plans to expand to 500,000 tons. Bahrain has no raw materials to produce its own cement and Star Cement imports all of its source materials from either the UAE, Turkey, or India. A second domestic cement company, Falcon Cement, has announced plans to build a 370,000 ton/year plant, but has had its plans put on hold due to local opposition to the proposed location. End background. Cement Supplies Uncertain --

Disruptions Certain --------------------------------------------- ---

4.(C) In June, following a temporary Saudi cessation of cement exports,

Bahraini concrete plants shut down completely due to lack of cement supplies, prompting Bahrain PM Khalifa bin Salman Al Khalifa and FM Khalid

Al Khalifa to petition Saudi FM Saud Al-Faisal and Interior Minister Nayef bin Abdul Aziz to release cement exports to Bahrain. Saudi Arabia subsequently modified its export controls, setting an export quota of

25,000 tons per week for Bahrain -- about one-half of previous levels.

5.(C) In Bahrain, cement prices surged by 60 percent between June 1 and

August 20 as the market reacted to the reduction in supply. Perhaps even more damaging than the price increase are the costs associated with construction delays. Dr. Jassim Hussein -) an opposition MP, economist, and one-time writer for The Economist, told econoff Aug 12 that he had just completed a case study showing that the Bahraini construction sector was losing $1.2 million per day as a result of construction delays.

Additionally he showed real estate data indicating both residential and commercial rent increases of more than 10 percent in Manama since the cement crisis began.

6.(C) Public construction projects are suffering from the same shortages that affect the private sector. On August 23, local daily Al-Ayam reported that the Ministry of Works has placed a significant number of public

projects on hold due to shortages of both cement and funds. The escalation in cement prices has reportedly caused severe budget shortfalls at the

Ministry, and the Works Minister is negotiating with the Ministry of

Finance to make emergency funds available in order to prevent existing projects coming to a halt. Finance Asst U/S Yousif Humood told econoff that the Ministry of Commerce has successfully negotiated new contracts for cement from the UAE and Turkey, but that it will likely be one to two years before the market finds a new equilibrium and supplies can fully meet current demand.

7.(C) Comment: The Bahraini construction boom is partly due to the availability of artificially low-priced materials and an influx of foreign investment from oil producing neighbors. With many of the projects being built on spec, heavily leveraged, and contracted under assumptions of readily availabile and low-priced steel and cement, there will likely need to be a significant restructuring of construction-related debt as construction companies face MANAMA 00000565 002 OF 002 increasingly large materials bills and late penalties. Already the Ministry of Labor has reported a surge in complaints of unpaid wages, and the local banks have adjusted construction loan rates upward to reflect the increase in risk.

Additionally, the cement shortage may have exposed the lack of market fundamentals in the hot real estate sector and could lead to the local bursting of what many have called an oil-funded bubble.

********************************************* ******** Visit Embassy

Manama's Classified Website:

XXXXXXXXXXXX********************************************* ******** HENZEL

Viewing cable 08MANAMA795, U) SCENESETTER FOR THE MANAMA DIALOGUE,

DECEMBER 12-14 REF: A. MANAMA 759 B. STATE 123514 C. MANAMA 773



08MANAMA795

2008-12-02

10:10

2011-02-18

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INFO GULF COOPERATION COUNCIL COLLECTIVE PRIORITY

AMEMBASSY ANKARA PRIORITY


AMEMBASSY BEIJING PRIORITY

Embassy

Manama

AMEMBASSY MOSCOW PRIORITY

AMEMBASSY NEW DELHI PRIORITY

COMUSNAVCENT PRIORITY

S E C R E T MANAMA 000795

NOFORN

DEFENSE FOR OSD

STATE FOR P

JCS FOR CHAIRMAN MULLEN

CENTCOM FOR GENERAL PETREAUS

FROM AMBASSADOR ADAM ERELI

E.O. 12958: DECL: 12/02/2038

TAGS: PREL MARR KDEM IR IZ RS CH IN BA

SUBJECT: (U) SCENESETTER FOR THE MANAMA DIALOGUE, DECEMBER 12-14 REF: A.

MANAMA 759 B. STATE 123514 C. MANAMA 773

Classified By: CDA Christopher Henzel for reasons 1.4 (b) and (d)

Â¶ 1. (S/NF) Mr. Secretary, Ambassador Burns, Chairman Mullen, General

Petraeus - Embassy Manama is delighted to welcome you all back to Bahrain.

King Hamad and his leadership team value your friendship and appreciate your visit. We and they will want to use this visit to advance greater GCC defense cooperation and a more integrated regional security architecture.

2.(S/NF) In bilateral discussions Bahraini leaders will focus, as always, on Iran and the need for continued American leadership. In addition to reviewing the Gulf states' collective security efforts, we should express continued support for King Hamad's reforms, especially efforts to give

Shi'a Bahrainis a greater sense of inclusion in society and politics.

Â¶ 3. (C) This year's Manama Dialogue will be the fifth organized here by the London-based International Institute for Strategic Studies (IISS).

Among the more notable participants IISS expects are Qatari Prime Minister

Hamad bin Jassim, Chinese FM Yang Jiechi, Iraq's Deputy Prime Minister

Barham Saleh and National Security Advisor Mowaffaq Rubai'e, and Iranian

Supreme National Security Council SecGen Saeed Jalili (although Iran has a history of last-minute cancellations at Manama Dialogues). Post understands

Turkey's defense minister and a senior Russian MFA delegation might also attend.

Iran ----

Â¶ 4. (S/NF) There is no love lost between the Bahraini leadership and the

Iranian regime. The King and Crown Prince see Iran as the most serious long-term threat to Bahrain and the region. In their view, it is thanks to the U.S. Navy that the Gulf has been protected from this threat and has been able to prosper. In October, Majles Speaker Ali Larijani visited

(along with the deputy chief of staff of Iran's armed forces) to lecture the King about his close relationship with the U.S. Navy and to warm him about the delicate position in which that places Bahrain. The Iranians also asked to assign a military attach to their Embassy in Manama. We don't expect the answer to be positive. The Sunni ruling family remains extremely sensitive to potential Iranian support for dissident Shi'a in Bahrain, and will be loath to provide any opportunities for outside meddling. (Despite the GOB's periodic claims that there are Hezbollah or Iranian-connected sleeper cells in Bahrain, they have never offered hard evidence of such a presence and our reporting has been unable to substantiate it.)

5.(S) Bahrain views its defense needs through the prism of the Iranian threat. As the smallest GCC state, lacking the oil wealth of its neighbors, it looks to the U.S. and an enhanced GCC security architecture as its most effective defense. Since the meetings with Secretary Gates and regional

CHODs on the margins of last year's IISS, the United States has deployed one Patriot battery and an Aegis cruiser to Bahrain. A second Patriot battery is scheduled for arrival in 2009. At the November 15 U.S.-Bahrain

Gulf Security Dialogue (GSD) meeting (ref A), and at Secretary of the Navy

Donald Winter's audience with King Hamad November 24 (septel), the GOB made clear that it appreciates the deployment of these important assets. The

King, Crown Prince and Foreign Minister all strongly believe that there needs to be a greater political will among GCC members in favor of collective self-defense against the Iranian threat, and they are willing to act on this conviction.

Iraq ----

Â¶ 6. (S) King Hamad has been forward-leaning in recognizing Iraq and working to reintegrate it with the Arab world. He sent an Ambassador to

Baghdad in September and dispatched his Foreign Minister Sheikh Khalid to

Baghdad on an official visit in October. During that visit, Sheikh Khalid delivered an invitation from the King and Prime Minister for President

Talabani and Prime Minister Maliki to visit Bahrain. Bahrain has also taken a leadership role in support of efforts to bring Iraq back into the Arab fold. With our encouragement, Bahrain invited Iraq to join the GCC Plus Two forum, and FM Hoshyar Zebari attended the group's ministerial in Manama last April, thereby transforming it into the GCC Plus Three.

Â¶ 7. (S) We have also prodded Bahrain's leaders to think about integrating

Iraq into the region's security architecture. Given the changed strategic reality on the ground, it makes sense to take a fresh look at the mission and structure of the GCC, with a view to including Iraqi assets and

capabilities. The Bahrainis understand and accept the logic of this approach, but are sensitive to intra-GCC politics, and particularly the need to resolve Iraqi-Kuwaiti disputes over borders and other issues. That said, we believe the Bahrainis can be counted on to support new thinking on this score.

Israel, and a Proposed New Regional Organization --------------------------

------------------- ---

Â¶ 8. (S/NF) Bahrain has no formal relations with Israel but has long had unofficial contacts with Israel's MFA. Sheikh Khalid's most recent meeting with Tzipi Livni was on the margins of the recent interfaith conference in

New York.

Â¶ 9. (S) In a September 27 speech to the UNGA, FM Shaikh Khalid proposed a new regional organization that would include Israel, Iran, Turkey and the

Arab states. A senior aide to the Foreign Minister reiterated to CDA

November 24 that Bahrain did not foresee any preconditions to Israeli's participation. King Hamad has told us that the idea for the proposal grew from a brainstorming session he had earlier this year with President Gul of

Turkey. The idea is unpopular with the Islamist majority elected to

Bahrain's parliament, and no Arab leaders, aside from Arab League SecGen

Amre Mousa, have spoken publicly in favor of the idea yet. Nevertheless we may see Shaikh Khalid make another public push for the organization during the Manama Dialogue.

Russia, China and India -----------------------

Â¶ 10. (S/NF) King Hamad visited Russia for the first time this month, on

December 2. At her meeting with Shaikh Khalid November 18 (ref B) ,

Secretary Rice urged that the King use this opportunity to raise Bahrain's concern about Iran, and emphasize that Russian arms sales to countries in the Middle East are counterproductive to regional stability.

Â¶ 11. (S) The King has expressed concern to us on two occasions that

China's role in the Gulf might one day expand beyond trade and into security; he welcomed improved U.S.-India relations as a balance to China in the region. The King recently received the Chinese defense minister and a member of the political bureau.

Internal Dissent ----------------

Â¶ 12. (C) King Hamad's reforms -- revival of an elected lower house of parliament, press liberalization, and a more transparent justice system -- have had the unintended consequence of bringing Sunni-Shi'a tensions out into the open. Sunni Islamists make up the government's majority in the elected lower house, helped, Shi'a say, by Royal Court funding and gerrymandering.

Â¶ 13. (C) Wifaq, the party that dominates Bahrain's Shi'a majority, advocates for redress of Shi'a grievances through electoral politics. The

Shi'a Haq Movement and other more radical factions reject the current electoral system, and inspire the small bands of youths who frequently skirmish with riot police.

Â¶ 14. (C) Bahraini leaders are becoming increasingly impatient with sectarianism and with Shi'a street violence. We should urge the GOB to stick with the reform strategy, and to find ways to give a greater sense of inclusion to the Shi'a -- especially to the moderates -- in the interest of

Bahrain's long-term stability.

Â¶ 15. (C) Some Bahraini Sunnis, in and out of government, suggest to foreigners (and may even believe themselves) that Iran is behind Shi'a discontent here. In post's view, there is not convincing evidence of

Iranian involvement here since at least the mid-1990s. Shi'a discontent stems chiefly from their lower standard of living, unofficial exclusion from sensitive government positions, and Sunni domination of parliament.

About a third of Shi'a here look to Iranian clerics for religious guidance; the rest follow clerics in Iraq and Lebanon.

Â¶ 16. (S) Staff for Congressman Frank Wolf invited two Haq leaders last month to speak at a public briefing on Capitol Hill on human rights. Many

Sunnis were outraged, and accused Shi'a in general of disloyalty. The

Interior Minister warned that unauthorized contacts with foreign governments and NGOs are technically illegal. Both Wifaq and Haq responded with defiant pledges to continue and expand such contacts. Shaikh Khalid raised the Wolf briefing with Secretary Rice November 18 (ref A), and

Bahraini leaders are likely to do so again during bilateral meetings.

Economy -------

Â¶ 17. (C) Bahrain's liberalized economy has been growing at 6-7 percent in recent years. We expect that growth to slow to about 5 percent. The financial services sector accounts for 22 percent of Bahrain's GDP, and so far appears to be weathering the financial crisis. Two Bahrain-based investment banks backed by consortia of Arab governments needed to be recapitalized by their government backers. No private investment banks have yet admitted to seeking government help, though there are rumors some may need it. Bahrain's real estate and construction booms, though never as wild as those in Dubai or Doha, are already visibly slowing. Bahrain's central bank expects a 30 percent downward real estate price adjustment here.

Â¶ 18. (C) Bahrain's demand for oil and natural gas will exceed its supply in the next few years, and the GOB is casting about for new sources of the cheap energy to which Bahrain's industry is addicted. Qatar, Bahrain's preferred source, says it cannot offer gas to Bahrain for technical reasons. As a result, Bahrain has been engaged for two years in negotiations to buy natural gas from Iran. In a worst-case scenario, the

Bahrainis might close a deal with Iran in the coming year, but the negotiations may also be a GOB attempt to pressure Qatar and Saudi Arabia to step in and help.

Counterterrorism ----------------

Â¶ 19. (S/NF) Bahrain's Sunni extremist scene is small and watched closely by the authorities. Bahrain's security services collaborate closely with the USG on counterterrorism.

Regional Air and Missile Defense --------------------------------

Â¶ 20. (S) At a meeting earlier this year with CENTAF commander Gen Gary

North, Bahraini Crown Prince Salman confirmed that Bahrain is eager to see the long-discussed regional U.S.-GCC air defense system become a reality.

He said that while Bahrain could not afford to provide significant resources for the system, it would try to compensate with political support. He said, for example, that Bahrain would have no objections if other GCC states needed to station radars on Bahrain's territory or share data.

Â¶ 21. (S) Bahrain eagerly hosted General North's June, 2008 meeting of GCC air chiefs, and continues to support his follow-up efforts to improve technical cooperation. At the November 15 GSD meeting, Bahrain's Minister of State for Defense responded enthusiastically when Centcom Deputy J-5

Admiral Franken spoke of the U.S. goal of a "netted air and missile defense from Oman to Turkey."

Patriots and Aegis ------------------

Â¶ 22. (S/NF) Given its worries about Iranian pressure, the Bahraini government deeply appreciates the U.S. Patriot battery that was recently deployed at Riffa airbase, as well as the deployment of an Aegis cruiser to the area. In line with U.S. and Bahraini military assessments that a second

Patriot battery is needed to adequately defend the island, the Bahrainis will likely inquire about plans to deploy the second battery.

Maritime Picture ----------------

Â¶ 23. (S) NAVCENT continues efforts to develop a shared maritime picture among its partners in the region to counter criminals and terrorists.

Boosted by Secretary Gates' discussions on this subject during the 2007

Manama Dialogue, several governments increased their cooperation with

Navcent's Maritime Domain Awareness Program. Through the Maritime Safety and Security Information System (MSSIS), links throughout the region enable governments to share information.

Â¶ 24. (C) Bahrain's outdated coastal radar is a potential vulnerability for a Bahraini government concerned about ongoing drug smuggling and, if Iran chose to change its strategy, subversion - a potential concern for NAVCENT headquarters as well. Both Embassy Manama and NAVCENT support using about

$20 million in section 1206 counterterrorism funds to upgrade Bahrain's coastal radar; our request for the funds (ref C) is currently under consideration. Bahrain is beginning the upgrade on its own and has budgeted

$8 million.

Conclusion ----------

Â¶ 25. (C) Bahrain's leaders are supportive of the American presence in the region, and will be receptive to requests that they continue to engage with their GCC neighbors in support of our policies on regional defense cooperation, Iran, and re-integration of Iraq into the Arab world.

********************************************* ******** Visit Embassy

Manama's Classified Website: http://www.state.sgov.gov/p/nea/manama/

********************************************* ******** HENZEL NNNN End

Cable Text

Viewing cable 09MANAMA715, BAHRAINI FOREIGN MINISTER MEETS A/S FELTMAN

AND



Embassy

Manama

09MANAMA715

2009-12-16

14:02

2011-02-18

21:09

CONFIDENTIAL

VZCZCXRO7831

PP RUEHBC RUEHDE RUEHDIR RUEHKUK RUEHROV RUEHTRO

DE RUEHMK #0715 3501442

ZNY CCCCC ZZH

P 161442Z DEC 09

FM AMEMBASSY MANAMA


INFO RUEHXK/ARAB ISRAELI COLLECTIVE


RHBVAKS/COMUSNAVCENT

RHMFISS/HQ USCENTCOM MACDILL AFB FL

C O N F I D E N T I A L MANAMA 000715

SIPDIS

E.O. 12958: DECL: 12/16/2019

TAGS: PREL KPAL KWBG MARR UNGA IS PA IZ IR TU BA

SUBJECT: BAHRAINI FOREIGN MINISTER MEETS A/S FELTMAN AND

A/S SHAPIRO, DECEMBER 13

Classified By: Ambassador Adam Ereli for reasons 1.4 (b) and (d).

1.(C) Summary: Bahrain's Foreign Minister expressed concern for the P5 1 process and suggested including regional partners in further talks with

Iran. He said that his Iranian counterpart pressed him to vote against the

Iran human rights resolution in the UN General Assembly, but he affirmed

Bahrain would maintain its abstention. The FM agreed on the importance of incorporating Iraq in regional fora, but said it would not be possible to include it in the GCC given Kuwaiti and Saudi objections. The FM confirmed

Bahrain's readiness to resume Gulf Security Dialogue (GSD) talks in early

2010. End summary.

2.(C) NEA A/S Feltman and PM A/S Shapiro met with Foreign Minister Khalid bin Ahmed Al Khalifa on December 13 on the margins of the IISS Manama

Dialogue. Sheikh Khalid asked whether recent developments meant that the P5

1 process had failed and noted that there was regional support for a tough stance on Iran, but that the absence of regional partners in the P5 1 talks allowed Iran room to maneuver. He made a strong pitch for more direct involvement in the talks by at least some of the states from the region. He appreciated GCC 3 consultations and read-outs from P5 1 meetings, but added that there were not enough regular meetings and first-hand participation by the states in the region. "It would help us to support you," the Foreign

Minister stressed. Turkey, he said, was looking to play a constructive role and suggested that we find a way to include it, Saudi Arabia, and Egypt in the process. He also said that the GCC should not allow Omani and Qatari foot-dragging on Iran to hold back the rest of its members. "We don't need to wait for others," he emphasized.

3.(C) A/S Feltman thanked the FM for Bahrain's abstention on the Iran human rights resolution in the UN Third Committee, and noted that the Saudis have indicated they will vote in favor in the General Assembly. Sheikh Khalid said that Iranian FM Mottaki had pressed him the previous evening to vote against the resolution in the UNGA, but he assured Feltman that Bahrain would maintain its position.

4.(C) The FM agreed that we must find ways to include Iraq as a partner in the regional architecture, but that the Kuwaitis and Saudis would block any attempt to bring it into the GCC. He noted that Iran had proposed an Iran-

Iraq-GCC-Yemen mechanism at the same time "they're trying to take Yemen!"

He said that the way to convince the Saudis - particularly Prince Saud - to take a more active role was to show them that everyone else is playing a role in Iraq and that they need to get in the game or be left out.

5.(C) A/S Shapiro outlined plans to resume GSD talks in late February or early March in a smaller, more informal setting that would facilitate discussion of broad strategic issues. The FM confirmed that those dates

sounded good and that he would chair the GSD for Bahrain. He committed to pass along one or two suggested points of discussion in January.

6.(U) A/S Feltman and A/S Shapiro have cleared this message. ERELI

Viewing cable 04BRUSSELS4944, COMMISSION AND COUNCIL RESPONSES ON NOV.

22 GAERC



04BRUSSELS4944

2004-11-19

15:03

2011-02-18

00:12

CONFIDENTIAL

Embassy

Brussels

Appears in these articles: http://naviny.by/rubrics/politic/2011/01/07/ic_articles_112_171961/


C O N F I D E N T I A L BRUSSELS 004944

SIPDIS

E.O. 12958: DECL: 11/19/2014

TAGS: PREL EAID MASS MARR IR CH BO EUN USEU BRUSSELS

SUBJECT: COMMISSION AND COUNCIL RESPONSES ON NOV. 22 GAERC

DEMARCHE

REF: A. STATE 244333

Â¶ B. US...

23064 11/19/2004 15:41 04BRUSSELS4944 C O N F I D E N T I A L BRUSSELS

004944 SIPDIS E.O. 12958: DECL: 11/19/2014 TAGS: PREL EAID MASS MARR IR CH

BO EUN USEU BRUSSELS

SUBJECT: COMMISSION AND COUNCIL RESPONSES ON NOV. 22 GAERC DEMARCHE REF: A.

STATE 244333 B. USEU BRUSSELS 4936 Classified By: Rick Holtzapple, PolOff,

Reasons 1.4 B/D

Â¶ 1. (U) PolOffs have delivered Ref A points to contacts in the Council

Secretariat and the personal staff of new External Relations Commissioner

Ferrero-Waldner (who will be attending her first GAERC as a Commissioner on

Monday).

MIDDLE EAST PEACE PROCESS ------------------------- 2. (C) XXXXXXXXXXX

XXXXXXXXXXX of the Council Secretariat said the EU looked forward to continued engagement with the US on this, but there is a strengthening view of Member States in the Council that the US and EU should be talking more about the details of what a final status solution could look like. She noted that the Dutch Presidency had raised this point in the November 16

Middle East (COMEP) troika meeting, but had received a cool reaction from

NEA DAS Liz Dibble (REF B). Dutch contacts have told us Conclusions are nearly agreed, after lengthy debates over the precise tone, and should call for immediate action in three main areas: support for presidential elections preparations; efforts to improve the security situation; and financial support for the Palestinian Administration. At the Commission,

Ferrero-Waldner's staff only commented that they were not familiar with the

IFC Facility.

CHINA ----- 3. (C) The Commission commented that the China agenda item

(including preparations for the December 8 EU-China Summit) had been moved to the GAERC's restricted lunch discussion. Ferrero-Waldner's staff understood this was done because there is little chance the EU could reach agreement on November 26 to take a decision on the arms embargo issue.

Dutch Presidency diplomats tell us they expect this discussion to "take the temperature" rather than achieve formal agreement.

BELARUS ------- 4. (C) Ferrero-Waldner's staffer said the Commissioner would support existing EU measures such as travel restrictions against

Belarus, but that Ferrero-Waldner would make a strong push that any measures considered should be carefully targeted not to harm the general public, and in fact could be accompanied by measures to "send a message to the people that they are not forgotten." The Council's Belarus desk told us the GAERC Conclusions would include a reference to visa bans on two groups of people: human rights violators, and individuals engaged in electoral abuse. But the EU might not have agreement on specific names to add to the list.

ESDP ---- 5. (SBU) Lengthy Conclusions have been agreed (as is traditionally the case for the "jumbo" GAERC each Presidency that includes

DefMins). From the Commission's point of view, the most notable aspect is that Commissioner Ferrero-Waldner plans to exercise a privilege they understand Patten never did, and attend the DefMins separate meeting for at least a short period of time to emphasize to DefMins that the Commission is also interested in ESDP developments. At the EU's Military Capabilities

Commitment Conference on 22 November on the margins of the GAERC, member states are expected to announce their intended commitments to Battlegroups.

USEU anticipates enough national offers for the EU to form at least nine national and multinational battlegroups.

IRAN AND OTHER ISSUES --------------------- 6. (SBU) Council sources have confirmed that Iran will be on the agenda, and the GAERC will likely issue

Conclusions welcoming the EU-3 agreement, and calling on Iran to fulfill its obligations. They did not expect that either Cyprus or Turkey would see much discussion on November 26, and Balkans have been dropped from the

agenda (although the side meeting of the EU-Western Balkans Forum will still take place).

MCKINLEY

Viewing cable 05ANKARA82, SCENESETTER FOR JAN. 11 U.S.-TURKEY-IRAQ TALKS

ON



05ANKARA82 2005-01-06 13:01 2011-02-18 00:12 SECRET Embassy Ankara

Appears in these articles: http://rusrep.ru/article/2011/02/03/kurdistan/

P 061331Z JAN 05

FM AMEMBASSY ANKARA


INFO IRAQ COLLECTIVE PRIORITY


AMCONSUL ISTANBUL PRIORITY

HQ USEUCOM VAIHINGEN GE PRIORITY

JOINT STAFF WASHDC//J-3/J-5// PRIORITY

NSC WASHDC PRIORITY

ODC ANKARA TU PRIORITY

SECDEF WASHDC//USDP:PDUSDP/ISP:EUR/ISP:NESA// PRIORITY

39ABG INCIRLIK AB TU//CC// PRIORITY

425ABS IZMIR TU//CC// PRIORITY

HQ USCENTCOM MACDILL AFB FL PRIORITY


E.O. 12958: DECL: 01/05/2025

TAGS: MOPS PTER PREL PREF IZ TU EUN AM CY RS

SUBJECT: SCENESETTER FOR JAN. 11 U.S.-TURKEY-IRAQ TALKS ON

PKK/KONGRA-GEL

REF: A. 04 STATE 201785 (NOTAL)

Â¶ B. 04 STATE 2084...

S E C R E T ANKARA 000082 E.O. 12958: DECL: 01/05/2025 TAGS: MOPS PTER PREL

PREF IZ TU EUN AM CY RS

SUBJECT: SCENESETTER FOR JAN. 11 U.S.-TURKEY-IRAQ TALKS ON PKK/KONGRA-GEL

REF: A. 04 STATE 201785 (NOTAL) B. 04 STATE 208448 (NOTAL) C. 03 ANKARA

6231 (NOTAL) D. 04 ANKARA 509 (NOTAL) Classified By: Ambassador Eric S.

Edelman for reasons 1.4 (b) and (d).

Summary

Â¶ 1. (C) Embassy appreciates the participation of our colleagues from

Washington, Baghdad, and EUCOM in Jan. 11 trilateral (U.S.-Turkey-Iraq) talks on the PKK/Kongra-Gel. On. Jan. 5, Turkish MFA provided us with a rough outline for the talks themselves. In this message we hope to lay out what we believe are issues the U.S. side may want to consider, or perhaps propose as action items at the talks. While Kongra-Gel's command and control structure is located in northern Iraq, we should acknowledge that they use other countries for logistical and financial support. We should address these items as well, if only to point out to the Turks and the

Iraqis that the issue goes beyond just their two countries. End summary.

Â¶ 2. (C) MFA Iraq Desk Director Avni Botsali told PolMilOff Jan. 5 that the

GOT will not submit a written agenda for the talks. Instead, the Turkish

HOD, Special Coordinator for Iraq Koruturk, will briefly introduce a TGS presentation on PKK/Kongra-Gel. The three HODs will then make opening remarks, followed by an open discussion of the issues. The Turks then hope for a set of agreed minutes. He added that the GOT hopes that at the talks the U.S. side will demonstrate serious intent to "help alleviate the frustration" many official Turks feel regarding PKK/Kongra-Gel's continuing presence in northern Iraq. He also expressed concern that--according to the

Turkish Embassy in Baghdad--the IIG only seemed to be sending MFA officials to these talks. Botsali said that if the U.S. side can share any information on our plans for the talks, the Turks would be most appreciative. He believes the talks will begin between 1030 and 1100 on

Jan. 11. Koruturk will offer a lunch at the appropriate time, followed by further discussion as needed. Botsali did not believe the talks would last until COB Jan. 11. The Turks will host the talks in a hotel conference room in an Ankara suburb.

Â¶ 3. (C) Turkish officials acknowledge that the insurgency has made it difficult for both MNF-I and the IIG to take kinetic action against

PKK/Kongra-Gel. However, faced with a constant stream of soldiers being killed in renewed anti-PKK operations in Turkey's southeast and the deep concern among intelligence officials that the PKK has infiltrated major

Turkish cities in order to open a new terrorism front, the Turks insist that we make good on our word--delivered at the highest levels--that we will act. Although the handover of sovereignty to the Iraqis more than six months ago means that the IIG is in the driver's seat on policy towards terrorists on Iraqi soil, our Turkish interlocutors still expect U.S. participation in anti-PKK actions.

PKK/Kongra-Gel in Iraq

Â¶ 4. (S) Given the apparent lack of Kongra-Gel terrorist action inside

Iraq, the political challenges faced by the IIG and the security situation

that has stretched the Iraqi Security Forces, it is not surprising that the

IIG is reluctant to take action now. Per ref a instructions, however, we can attempt to persuade the Iraqis to take certain minimal steps to show the Turks that the IIG takes the issue seriously. Per reftel, these include: --Close the offices of the Kurdistan Democratic Solutions Party in

Iraq, and declare this "party," a front for the PKK terrorist organization, illegal. --Issue arrest warrants for PKK/Kongra Gel terrorists and leaders who may be in Iraq and, when they are arrested, either return them to

Turkey for prosecution or prosecute them under Iraqi law. --Join the

Kurdish Regional Government in high level public statements that the IIG will not permit the PKK to operate or have safehaven in Iraq. --Begin patrolling around Makhmour camp to discourage PKK/Kongra-Gel activity in the camp.

Â¶ 5. (S) Additionally, the cable instructed Embassy Baghdad to tell the

IIG: "The U.S. and MNF-I will work with you on ways to implement such actions." We need to be prepared to discuss what we are prepared to do--and when--to help operationalize this. Finally, the IIG and IECI seem prepared to permit two PKK/Kongra-Gel front parties, including the Kurdistan

Democratic Solutions Party, to participate in Jan. 30 elections. This is surprising and steps to prevent it would still be appropriate.

Â¶ 6. (S) Discouraging PKK/Kongra-Gel activity around Makhmour Camp is not something to be done in a vacuum. Most residents of the camp are Turkish citizens who fled to Iraq in the 1990s during the worst of the fighting with PKK/Kongra-Gel within Turkey. While the Turks want to close the camp and bring its citizens home, it is concerned that PKK/Kongra-Gel routinely infiltrates Makhmour. In Jan. 2004, Turkey, UNHCR, and the IGC (with CPA support) negotiated an agreement to close the camp and voluntarily repatriate its residents to Turkey (ref d). The deal fell through, however, because the Turks insisted that Secretary Powell sign a letter of guarantee, including a commitment to take the steps necessary to stop

PKK/Kongra-Gel infiltration. We were not then (and likely are still not) in a position to provide such a guarantee to the Turks. If the Iraqis were to provide this security (perhaps with MNF-I support), it could finally lead to the long-overdue closure of this camp and an orderly, voluntary repatriation process under UNHCR auspices.

PKK/Kongra-Gel Outside of Iraq

Â¶ 7. (S) While northern Iraq may be PKK/Kongra-Gel's main command and control center (and Turkey its main target), this terrorist organization is active in other countries. We defer to Washington's expertise, but based on our information we believe we need to be prepared to address--or perhaps offer an action plan--for dealing with the following: --PKK/Kongra-Gel presence in and utilization of Cyprus and Armenia --Russia as a transit hub or support for PKK --Ref b indicates that DoD was to provide additional information to State regarding television stations that are likely

PKK/Kongra-Gel fronts, with an eye toward demarching the Belgians and

Danes. Can we report progress on this issue? France closed a forerunner of

Roj TV; is there information there that can help persuade the Danes? --PKK financing operations in Europe, as well as PKK front offices there --We understand that a PKK training camp was raided by the Dutch not long after the Van Gogh murder. Do we have info to share on PKK methodology and other intel we can share with Turkey and/or Iraq? --Previous U.S.-Turkish talks on the PKK (ref c) discussed the full range of tools of statecraft to be deployed against the PKK/Kongra-Gel. Any further progress we have made outside Iraq in providing intelligence and law enforcement assets per that undertaking (that we can share) would be helpful. The lists above are by no means exhaustive or complete. We hope they will be useful food for thought for addressees.

Â¶ 8. (U) Baghdad minimize considered.

EDELMAN

Viewing cable 05ISTANBUL38, ISTANBUL POLICE ON TIP AND MURDER OF

BELARUSIAN



05ISTANBUL38

2005-01-

11 07:07

2011-02-18

00:12

UNCLASSIFIED//FOR

OFFICIAL USE ONLY

Consulate

Istanbul

Appears in these articles: http://naviny.by/rubrics/abroad/2011/01/27/ic_articles_118_172210/


UNCLAS SECTION 01 OF 02 ISTANBUL 000038

SIPDIS

SENSITIVE

E.O. 12958: N/A

TAGS: TU BO MD KCRM PGOV BO MD KCRM PGOV KJUS

SUBJECT: ISTANBUL POLICE ON TIP AND MURDER OF BELARUSIAN

WOMAN

REF: A. MINSK 1721

Â¶ B. ANKAR...

Â¶ 1. (SBU) Summary: On December 27, poloff met with XXXXXXXXXXXX,

XXXXXXXXXXXXX of the Foreigners Unit of the Istanbul Police Department, to follow up on trafficking in persons issues raised during the visit of a

Moldavan anti-TIP government delegation (ref B) and the murder of a

Belarusian woman in Istanbul (ref c). XXXXXXXXXXXX said there is a growing awareness about the TIP problem in Turkey, and that in November five traffickers were apprehended in Istanbul, of whom three are in jail. He shared documents about the Belarusian case; four men have been arrested and jailed in connection with the death. XXXXXXXXXXXX clarified the different situations of women described as trafficked; some come voluntarily, and some are tricked; many are unwilling to testify against traffickers.

XXXXXXXXXXXX complained that the Moldovan delegation accused the Turkish

Police of cooperating with the traffickers, increasing tension in the meeting. End summary.

Â¶ 2. (SBU) Poloff and pol specialist met December 27 with XXXXXXXXXXXX,

XXXXXXXXXXXXX of the Foreigners Unit of the Istanbul Police Department, to follow up on trafficking in persons issues raised during the visit of a

Moldavan anti-TIP government delegation (ref B) and the murder of a

Belarusian woman in Istanbul in the fall. XXXXXXXXXXXX underlined that he was unable to provide information to U.S. diplomats in Istanbul on cases involving nationals from third countries â€“ such as Moldova or Belarus â€“ without official permission from the Ankara Headquarters of the Foreigners

Unit. However, XXXXXXXXXXXX shared information both about the growing TIP problem in Turkey and the Belarusian case.

Â¶ 3. (SBU) XXXXXXXXXXXX said there is a growing awareness about the TIP problem in Turkey, adding that more serious measures have been taken to address TIP after the 2002 amendment to the Turkish Penal Code, which specified the definition of human trafficking. As an example, XXXXXXXXXXXX confirmed that in November 2004 five traffickers were apprehended and sent to court; three of the traffickers are already in jail.

Â¶ 4. (SBU) XXXXXXXXXXXX stressed that women who may come under the definition of trafficked come to Turkey for many different reasons. Some come voluntarily to make money; a woman, for example, can make USD 100 a night in Istanbul, versus USD 30-50 a month in Moldova or Belarus. Another group of women are cheated by traffickers. He gave an example of a Moldovan woman who came to Turkey years ago and married a Turkish man; she is now a

Turkish citizen. She frequently travels to Moldova to recruit young women by promising them various jobs, such as dancing or babysitting, and forces them into prostitution once they are in Turkey. XXXXXXXXXXXX noted that the women are fearful of being sold. He added that the Istanbul police have found that in most cases, the women are often unwilling to testify against the traffickers both because they are afraid of reprisal, and because they want to be able to return to Turkey.

Â¶ 5. (SBU) On the murder of the Belarusian woman, XXXXXXXXXXXX showed copies both of the police report and a November 3 article describing the case, in which a 27-year old Belarusian woman, XXXXXXXXXXXXX, was tricked into coming to Istanbul by two Turkish men with promise of a job. The two men took her passport, locked her in a house in Bakirkoy and forced her into prostitution. According to the documentation XXXXXXXXXXXX shared,

XXXXXXXXXXXXX and another Russian woman were then sent to the apartment of two businessmen, where she committed suicide by throwing herself out of the sixth-floor bathroom window in order to avoid being a prostitute.

XXXXXXXXXXXX confirmed that the police arrested and sent to prison four

Turkish men in connection with XXXXXXXXXXXXX death: the two men who brought

XXXXXXXXXXXXX to Turkey to force her into prostitution, and the two businessmen.

Â¶ 6. (SBU) Turning to the November meeting of the Moldovan TIP delegation with the Istanbul police (ref c), XXXXXXXXXXXX complained about the attitude of the Moldovan authorities, calling their approach unprofessional. XXXXXXXXXXXX claimed that the Moldovan delegation accused the Turkish Police of cooperating with the traffickers, increasing tension in the meeting. He had to warn the interpreter not to interpret all the

statements of the Moldovans, in order to prevent the Foreigners Unit director from leaving the meeting. XXXXXXXXXXXX added that the GOT has problems with the Moldovans entering the country. For example, it is easy to change passports and names in Moldova, making it very easy for a

Moldovan to return to Turkey even though his or her entry is banned.

SNSITIVE TAGS: TU BO MD KCRM PGOV BO MD KCRM PGOV KJUS

Â¶ 7. (SBU) XXXXXXXXXXXX complained about the heavy work load and lack of resources, both personnel and fiancal inth Foreigners' Unit, where te rng ofisue icludes work permits to illegal immgraio, TP,and visa violations.

XXXXXXXXXXXX stated that in November, 1000 foreigners were deported from

Istanbul. He believes that a separate Immigration Office is needed to ease the burden on the Foreigners' Unit.

Â¶ 8. (SBU) Bio Note:

XXXXXXXXXXXXXXXXXXXXXXXXX in

XXXXXXXXXXXX,

XXXXXXXXXXXX, who spent graduated from

XXXXXXXXXXXXĞ¥

XXXXXXXXXXXXĞ¥ XXXXXXXXXXXXĞ¥ XXXXXXXXXXXXĞ¥ XXXXXXXXXXXXĞ¥ XXXXXXXXXXXXĞ¥




XXXXXXXXXXXXĞ¥ XXXXXXXXXXXXĞ¥ Ğ¥Ğ¥Ğ¥.

ARNETT

Viewing cable 06YEREVAN1019, A PROSTITUTE'S STORY: SEX AND TRAFFICKING IN



06YEREVAN1019

2006-07-28

12:12

2011-02-18

00:12

CONFIDENTIAL

Embassy

Yerevan

Appears in these articles: http://rusrep.ru/article/2011/02/07/trafficking/

VZCZCXRO3935

RR RUEHDBU

DE RUEHYE #1019/01 2091232

ZNY CCCCC ZZH

R 281232Z JUL 06

FM AMEMBASSY YEREVAN







C O N F I D E N T I A L SECTION 01 OF 03 YEREVAN 001019

SIPDIS

SIPDIS

DEPT FOR EUR/CARC, DRL, G/TIP

E.O. 12958: DECL: 07/28/2016

TAGS: HSTC KTIP KWMN KCRM PHUM PREL PGOV AM

SUBJECT: A PROSTITUTE'S STORY: SEX AND TRAFFICKING IN

...C O N F I D E N T I A L SECTION 01 OF 03 YEREVAN 001019 SIPDIS SIPDIS

DEPT FOR EUR/CARC, DRL, G/TIP E.O. 12958: DECL: 07/28/2016 TAGS: HSTC KTIP

KWMN KCRM PHUM PREL PGOV AM

SUMMARY

Â¶ 1. (C) Poverty and desperation are the largest factors contributing to trafficking in persons in Armenia, according to prostitutes, police and

NGOs in Vanadzor, Armenia's third-largest city. We met them during a July

14 trip to the city, where prostitutes gather after dusk in the traffic circle outside a central church to begin the day's work. To each we posed the question, "What can be done to eradicate trafficking in persons in

Armenia?" No one had an answer, but all agreed that lack of jobs drove women to sell themselves both in Armenia and overseas, where the money was better, but where they often didn't actually get paid. They told us that girls as young as 11 and 12 have started walking the streets. A police officer told us that parents send their daughters to Turkey fully understanding the cost at which remittances will be sent home. We visited a decrepit shanty town, where prostitutes work for bread and rice, to see first-hand the conditions in which many of them live. We left Vanadzor convinced that, while stricter laws and harsher sentencing are needed in

Armenia, prostitutes work in large part because they have to put food on the table, and they go to Turkey and the UAE because they believe the money is better there. End Summary.

AIDA

Â¶ 2. (SBU) We met Aida at the Vanadzor office of Hope and Help, a World

Vision-funded NGO that provides medical care and condoms to Vanadzor's

large prostitute population. In 1998, someone offered Aida a job as a dishwasher in Dubai, earning USD 500 per month. Like many other women the world over, she took it, hoping for a brighter future. What followed sounds like a story heard on Oprah or the subject of a television movie: Her passport was taken away on arrival, and she was locked in a hotel with dozens of other girls, forced to service as many as 20 customers a day.

Aida was deported a year later, thanks to a law-enforcement raid. She returned to the poor economic conditions of Vanadzor, and set about making a living for herself and her then-7-year-old daughter the only way available to her: prostitution. After she was deported, the pimp in Dubai offered Aida a job as a recruiter who would find Vanadzor girls and entice them to take jobs in Dubai. Aida, now 36, said she turned her down because she knew the recruiters always cheated the women they recruited.

Â¶ 3. (SBU) Aida earns about USD 10 per customer, averaging about USD 300 per month. She drinks to make the work easier. "It's the social condition," she said. "We realize that it is very bad, but we have to do it." Aida told us the USG should give money to the recruiters who convince women to go to

Turkey and the United Arab Emirates, so that they could open a factory and the women could work there instead of having sex for money. Her younger sister, 22-year-old Suzy, just joined the profession two months ago, after her husband divorced her, leaving her with two young children and no income. While Aida was boisterous, laughing and joking, Suzy looked sad and scared. Aida seems accustomed to her lot, and she says there are many others just like her.

A DIFFERENT KIND OF TRAFFICKING

Â¶ 4. (SBU) We went to Vanadzor expecting to hear stories of illicit smuggling across borders and of girls lured into prostitution under false pretenses. What we heard was significantly more pedestrian. According to

Aida and Suzy, very few Vanadzor women are tricked into working in Dubai or

Istanbul brothels these days. They go knowingly, on legal passports, with legal visas, and for the most part without having to bribe border guards to let them through. They share buses and airplanes with underwear salesgirls traveling to buy more inventory and the odd middle-class family going on holiday. Pre-teenage girls ride buses to Turkey carrying permission letters signed by their parents, who for the most part have dispatched their daughters themselves, and who understand exactly how young Anahit or Armine will earn the several hundred dollars she will send home each month. And while the prostitutes and the NGO employees we met said YEREVAN 00001019

002.2 OF 003 sometimes women are abused in the brothels, or aren't paid in full, they said the greater part of women generally understand what they are getting themselves into, and may already have worked as prostitutes for years. Far from being the pursuit of violent smuggling rings who kidnap women and sell them into slavery, trafficking in Armenia is largely a result of the poor economy, they said, and has mostly to do with opportunistic pimps taking advantage of women who are already willing to prostitute themselves.

Â¶ 5. (SBU) And there are a lot of willing women in Vanadzor. Hope and

Help's Satik Grigoryan told us the NGO has registered more than 200 prostitutes. Aida estimated that 70 percent of women in Vanadzor are prostitutes, drawing laughs from the Hope and Help employees. While her figure was inflated, the statement outlined how pervasive prostitution is in Vanadzor. Prostitutes come to the clinic for regular check-ups and to

replenish their condom stocks. Grigoryan told us that most of the prostitutes had never seen or heard of such contraceptives before they came to Hope and Help. She gave Aida and Suzy a couple of chocolates and a fistful of condoms each before they went home.

VANADZOR SLUMS: BREEDING DISEASE AND DESPERATION

Â¶ 6. (SBU) Next, we visited the "domik" village on the outskirts of

Vanadzor that many prostitutes call home. Domiks are shanties made of pieces of rusty metal that have been roughly soldered together to resemble a cottage. Sometimes they have limited electricity and running water. They rent for 2000 dram a month, or a little less than USD 5. They were built in the late 1980s to house homeless earthquake victims, but the day we visited, the domik residents weren't any closer to moving out than they had been the day they moved in. The encampment looked like a very rundown trailer park, though trailers would have been significant steps up for its residents.

Â¶ 7. (SBU) We entered a domik about 20 feet by 6 feet, divided into two rooms. A small cracked sink piled with dirty plastic dishes jutted out of one wall, which was lined with peeling corrugated cardboard and dirty rags.

Our heels sank into the ground under the bits of cloth that served as a carpet. Each room contained two small cots; when we responded to an invitation to sit on one, the damp mattress sank almost to the floor. The air was fetid, smelling of urine and rotting food. Three-year-old Mariam, born with a heart condition, lay listlessly in one of the other cots. She made no effort to swat away the fly that crawled across her face, but responded with a wide grin when we smiled and talked to her in Armenian.

Mariam was small and thin for a three-year-old, and her mother told us that she ate, but just didn't grow. Mariam lives with 11 other people, including a pregnant sister who looks scarcely old enough to be pregnant. There was no toilet, no stove, and no refrigerator, but Mariam's mother and her friend, a prostitute, sat watching soaps on the television. A lace curtain fluttered over open containers of leftover food on the windowsill, a free lunch for the flies until Mariam grabbed a container and began eating its contents.

Â¶ 8. (C) The only male we saw in the domik was Mariam's brother, an ablebodied young man in his mid- to late teens who begs for money on the street. While we were there, his mother asked Grigoryan whether she had any work for him. Before we left, Grigoryan pulled another fistful of condoms out of her purse, and handed them to Mariam's mother and her prostitute friend, who proceeded to fight over them. Mariam's mother wanted them so that she would stop getting pregnant; she appears to be into her 40s, and miscarried twins last year. As we walked out of the domik, the local staff member who accompanied Poloff said she was shocked at the conditions in which Mariam and her family lived.

POLICE: ARMENIAN TIP VICTIMS GO TO TURKEY MORE THAN UAE

Â¶ 9. (C) Seeing little Mariam in that domik was made more heart-wrenching by our new understanding of just how young some prostitutes who travel to

Turkey are. Rudik Varosyan, head of the department on minors in the

Vanadzor police department, told us trafficking in minors is an emerging problem in Vanadzor. He said most Vanadzor women -- and YEREVAN 00001019

003.2 OF 003 girls -- who go to Turkey to engage in prostitution are not being lured under false pretenses. More and more underage girls are being sent by their families to go and earn a little money, Varosyan said, adding that he has never heard of a case in which a minor went without parental permission. "Some parents are proud that their kids are there making money," he told us. He said the women and girls who went to Turkey usually were not held prisoner, and they were usually paid, though not necessarily in full. After the women were deported, Varosyan said, they often became recruiters for the pimps in Turkey. Varosyan said it was hard to fight the trafficking organizations because the pimps usually operate through intermediaries who never actually meet them. When police bring a case to court, the intermediary gets nailed, and the pimp continues her business, having suffered only minor inconvenience.

Â¶ 10. (C) Though Varosyan clearly took to heart the plight of pre-teen and teenage prostitutes, local NGO staff told us that the police actually help facilitate prostitution. Artur Sakunts of the Helsinki Citizens' Assembly told us his organization wanted to look into allegations by locals that the

Vanadzor police protected pimps and threatened prostitutes who wanted to quit their jobs. (Note: Aida told us police hindered her work by forcing her to undergo annual medical check-ups. End Note.) Other NGO staff told us about cases of police patronizing the prostitutes. Sakunts corroborated

Varosyan's story about parents forcing their daughters to become prostitutes. Sakunts also noted that the domik village was a prostitution hub: home to a large percentage of the Vanadzor sex trade workforce while also serving as their workplace. Aida told us prostitutes there often work for a bag of rice or a few pieces of bread.

COMMENT

Â¶ 11. (C) Many visitors to Armenia who see only Yerevan -- with its pretty main square and shiny Hummers and BMW X5s -- and leave thinking the country is doing well economically. Armenians and seasoned expats often tell these visitors that there are two Armenias: Yerevan, and the rest of the country.

Our trip to Vanadzor was like a spin on the focus dial of a pair of binoculars; afterwards, the distinction was clear to us, and in sharp relief. It is easy, sitting in the relatively well-to-do capital city, to put the problem squarely in the laps of lawmakers and law enforcement, and to bang our fists on the government's coffee tables to demand that they work harder to stop the crimes. But fist-banging won't change the fact that many prostitutes work simply to get food on the table, and that they believe they will be paid better in Turkey or the UAE. The Armenian government cannot improve a bad economy with stricter laws and harsher sentencing. While both are needed here, Armenia has to offer these women an alternative to turning tricks if it is to eradicate trafficking.

EVANS

Viewing cable 06YEREVAN1091, AMBASSADOR PUSHES PROSECUTOR GENERAL

ON TRAFFICKING CORRUPTION ALLEGATIONS



06YEREVAN1091

2006-08-09

13:01

2011-02-18

00:12

CONFIDENTIAL

Embassy

Yerevan

Appears in these articles: http://rusrep.ru/article/2011/02/07/trafficking/

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E.O. 12958: DECL: 08/09/2016

TAGS: KTIP KWMN KCRM PREL PGOV PHUM HSTC AM TU

SUBJECT: AMBASSADOR PUSHES PROSECUTOR GENERAL ON TRAFFICKING CORRUPTION

ALLEGATIONS

REF: A) YEREVAN 484 B) YEREVAN 836 C) YEREVAN 840 YEREVAN 00001091 001.2 OF

003

Classified By: Amb. John M. Evans for reasons 1.4 (b, d).

SUMMARY

Â¶ 1. (C) Ambassador, DCM and Poloff met with Armenian Prosecutor General

(PG) Aghvan Hovsepyan August 8 about allegations of investigative misconduct and abuse in connection with a human trafficking case. The underlying case involves three prostitutes who allege they were trafficked from Armenia to Turkey via Georgia with fraudulent documents, and coerced and deprived of payment under threat of arrest. Hovsepyan began by saying he was familiar with the case and rejecting the allegations out of hand; however, he eventually committed to investigating the allegations. The PG first defamed the victims, and volunteered that he had asked the National

Security Service (NSS) to investigate the NGO that had aided them. After a long discussion, he came around to a more responsive approach. End Summary.

PROSTITUTES ALLEGE CORRUPTION IN PG'S OFFICE

Â¶ 2. (C) On July 28, three alleged trafficking victims from Gyumri,

Armenia's second-largest city, were interviewed by investigators from the

PG's office. After their interview, they stormed fuming into the Yerevan branch of "Hope and Help," an NGO that assists prostitutes and trafficking victims, to complain about the conduct of investigators Armen Gasparyan and

Aristakes Yeremyan. (COMMENT: Yeremyan has been accused of complicity with traffickers before (ref A). The PG's office opened what we believe was a cursory investigation into those allegations in February. END COMMENT.)

Â¶ 3. (SBU) We met the women at the Hope and Help office, and spoke at length to two of the three prostitutes, Karine Mkrtchyan and Karine

Madoyan. Mkrtchyan said she and Madoyan had gone to Turkey in 2005, knowing they would be working as prostitutes for a pimp named Marianush

Harutyunyan. Mkrtchyan said that, shortly after the women arrived in

Turkey, they were deported to Batumi, on Georgia's Black Sea coast. She said the pimp had connections to a trafficking ring at the Georgian-Turkish border. The ring smuggled the women back into Turkey one at a time, pasting each woman,s photo into a Georgian passport, then bringing the passport back across the border into Georgia once the woman was through, and repeating the process with the next one. The prostitutes said that, once they were back in Turkey, the pimp told them they could not leave, as they would be arrested if border guards saw the deportation stamps in their

Armenian passports.

Â¶ 4. (SBU) Both Madoyan and Mkrtchyan said they had been paid only a fraction of what was owed to them. Mkrtchyan, who worked for the pimp for four months, said she had received only about USD 1,000 of the USD 10,000 the pimp owed her, while Madoyan said she was still owed USD 30,000 from her year's employment.

Â¶ 5. (SBU) The trafficker was reported to the Shirak regional police, who opened a case against her and qualified it under the trafficking statute

(which carries a higher penalty than the pimping statute). On July 19, the police transferred the case to the PG,s office, which reclassified it under the pimping statute.

Â¶ 6. (SBU) Mkrtchyan and Madoyan claimed PG office investigators Gasparyan and Yeremyan told them to recant the testimonies they had given to the police. Madoyan also claimed Yeremyan struck her in the face during a July

31 meeting. Among their complaints were that the investigators told them to say the trafficker owed them less money than she actually did, and accused them of filing police statements in order to blackmail the alleged trafficker. (NOTE: Under the Armenian system, criminal investigators are an arm of the PG's office, and thus of the judicial branch. Police services are separate, and fall under the purview of the executive branch. END

NOTE.)

Â¶ 7. (SBU) COMMENT: There were some discrepancies in the victims' stories.

We also have some questions about the YEREVAN 00001091 002.2 OF 003 mental competence of one of the victims. The complete circumstances of the matter are therefore legitimately open to some question. We are persuaded, however, that the basic facts of the case are accurate. Investigating authorities must take such allegations seriously, and not dismiss them out of hand because they find the victims distasteful. END COMMENT.

THERE IS AN OLD ARMENIAN SAYING

Â¶ 8. (C) Ambassador, DCM and Poloff met together with the PG to underline the seriousness of the case, both in its own right and as a bellwether for

Armenian authorities' handling of TIP cases. The Ambassador discussed in detail several of the allegations, and stressed that they presented an opportunity for the PG's office to demonstrate its commitment to anti-TIP efforts.

Â¶ 9. (C) Prosecutor General Aghvan Hovsepyan was aware of the reason for our call. He smirked unmistakeably as the Ambassador raised our points.

Hovsepyan spent a few minutes listing the GOAM's achievements on trafficking, before addressing the case at hand. He then told us he had heard about these allegations a week earlier from the National Security

Service (NSS), adding that he had then asked the NSS to investigate both the victims and the NGO that had reported the allegations to the government. (NOTE: The Ambassador did not mention the NGO specifically, but when the prosecutor did so, he confirmed that an NGO had been involved. END

NOTE.)

Â¶ 10. (C) Hovsepyan said he had personally investigated the allegations, and said that the case notes made it clear that the prostitutes had been lying. He characterized them as "unconscientious and non-compliant," saying derisively that they were "governed by different interests in their daily lives." He kept repeating that the prostitutes were angry that the investigators were not helping them recover their unpaid salaries from the pimp, and that money had motivated the allegations. He robustly defended

Yeremyan. (NOTE: This is not surprising, given information we have received from Anti-TIP Unit Senior Prosecutor Armen Boshnaghyan (please protect) that the investigator has Hovsepyan's full support (ref B). END NOTE.)

During his impassioned defense of Yeremyan, Hovsepyan cited an Armenian proverb which, roughly translated, means "May God keep us from the evil that comes from prostitutes."

PG AGREES TO INVESTIGATE

Â¶ 11. (C) The Ambassador said he disagreed with the proverb, and that the shared Christian heritage of our countries compelled us to "hate the crime, but love the victim." He told Hovsepyan that he was troubled to hear that the prosecutor general had asked the NSS to investigate the prostitutes and the NGO, rather than investigate the allegations. Hovsepyan said there must have been a translation error, and that he actually had said that he asked the NSS to investigate the allegations, since it would not do to have the

PG's office investigate itself. (NOTE: There was no translation error. END

NOTE.) A few minutes later, Hovsepyan said his office had in fact been investigating the complaints for a week, and that it would continue to do so.

Â¶ 12. (C) Finally, Hovsepyan agreed to launch an internal investigation of the allegations. He said he would solicit the NGO's input. But he continued to sing Yeremyan's praises and to accuse the prostitutes of lying. He also mentioned that Yeremyan had asked repeatedly to be moved out of the Anti-

TIP Unit, and that he would consider granting that request.

COMMENT: MUCH CAUSE FOR CONCERN, BUT ALL IS NOT LOST

Â¶ 13. (C) Hovsepyan's performance was in character and betrayed the PG's apparent personal attitude toward trafficking victims and cases. We think we have at least ensured a more serious investigation of this case. We intend to pursue this matter further, and are optimistic that bringing pressure to bear on the MFA will achieve results, given President YEREVAN

00001091 003.2 OF 003 Kocharian's interest in Armenia's TIP rating (ref C).

We will make the point that the next Interim Assessment is coming up.

EVANS

Viewing cable 08TBILISI1343, GEORGIA: SOUTH OSSETIA--SITREP 3: RUSSIAN

BOMBS



08TBILISI1343

2008-08-09

07:07

2011-02-18

00:12

CONFIDENTIAL

Appears in these articles: http://rusrep.ru/article/2010/11/29/wikileaks_docs_02/

Embassy

Tbilisi

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C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 001343

SIPDIS

DEPT FOR EUR/CARC

E.O. 12958: DECL: 08/09/2018

TAGS: PGOV PREL PHUM RU GG

SUBJECT: GEORGIA: SOUTH OSSETIA--SITREP 3: RUSSIAN BOMBS

FALL THROUGHOUT GEORGIA

REF: TBILISI 1341

Classified By: AMBASSADOR JOHN F. TEFFT FOR REASONS 1.4 (B) AND (D)

Â¶ 1. (C) Begin Summary and Comment: Multiple bases, airports, and Georgia's port of Poti were all bombed overnight by Russian aircraft, with bombing continuing in the daylight hours of August 9, with bombs hitting civilian targets in the Georgian city of Gori. Reports of casualties continue to come in, most still unreliable and unverifiable, but it is clear that casualty numbers are growing. There were reportedly dozens killed in Senaki and Poti. The government of Georgia has not declared a state of emergency, but is limiting news being aired on TV and has evacuated some key government buildings in Tbilisi. The bombing is causing widespread fear in the Georgian population. In South

Ossetia, OSCE confirms that artillery fire continued into the morning hours near Tskhinvali. The MFA has released no new

statements, and the Ministry of Reintegration has said the

Abkhaz de-facto authorities have asked UNOMIG to immediately withdraw from Kodori. This sitrep covers events that have transpired overnight on August 8-9 in Georgia (reftel). End

Summary and comment.

Â¶ 2. (C) President Saakashvili told the Ambassador in a late morning phone call that the Russians are out to take over

Georgia and install a new regime. They will not stop at retaking South Ossetia, but will move on Tbilisi. He fears the Russians will never agree to a ceasefire. Saakashvili and the Georgian leadership now believe that this entire

Russian military operation is all part of a grand design by

Putin to take Georgia and change the regime. Saakashvili said that the Russian forces are now attacking Tskhinvali and the Georgian forces are resisting. We believe the Georgians are out of air defense supplies, which makes them vulnerable to Russian air attacks. He also believes the Russians will soon attack and try to seize the upper Kodori valley.

Ominously, the Abkhaz formally asked UNOMIG this morning to withdraw their detachment in the Upper Kodori.

Â¶ 3. (C) OSCE observers report that beginning at 0600 on

August 9 Georgian artillery began shelling Tskhinvali and becoming heavy after 0900 to the Southwest of the city. The

JPFK commander reported that ten of his Russian peacekeepers were dead, and others were wounded. OSCE observers said that

Georgian aircraft were bombing the city at 1100 on August 8.

According to OSCE, there has been no visible presence of

Georgian forces in the city since 1500 on August 8 when they withdrew. No accurate numbers of casualties are available and no international organizations such as Red Cross are present to assist with casualties.

Â¶ 4. (C) Poloff called the MFA and was told that there are no new statements since August 8, but confirmed that the

Government has not/not called a state of emergency. The MFA

website: www.mfa.gov.ge appears to have been hacked.

Â¶ 5. (C) Deputy Minister of Reintegration Ruslan Abashidze told

Poloff that the situation in South Ossetia is the same as

August 8, with shelling coming from Java, but he believes

Georgian forces control the nearby villages. He said that

Georgian forces are in control of Tskhinvali and are inside the city. Turning to the Abkhaz conflict he reported that the

Abkhaz side has asked UNOMIG to withdraw immediately from

Kodori (note: we have been unable to confirm request this with UNOMIG but such a move indicated intended hostilities).

Â¶ 6. (C) UNOMIG observers reported that all was quiet in the

Zugdidi on the evening of August 8, aside from Abkhaz moving

9 T-55 (1960,s Soviet era) tanks toward the cease-fire line.

Â¶ 7. (C) Confirmed overnight (August 8-9) bombings include:

-- Vaziani, again. This former Soviet military base, which is usually home to 4th Brigade is being used as a mobilization site for reservists. It lies only a few kilometers east of Tbilisi. Buildings were reportedly hit this time.

-- Senaki military base in west Georgia. This base is home to the 2nd Brigade. Unconfirmed reports indicate 20 killed there.

-- The Port of Poti. Georgia's deepest port outside of

Ochamchire in Abkhazia. Several "flat racks" where ships are loaded and unloaded were bombed, as was the nearby Coast

Guard station. Press reports indicate at least 15 people were killed.

TBILISI 00001343 002 OF 002

-- Kopinari Airport near Kutaisi. This joint civilian and

military airport was also bombed. It is home to Su-25 fighters and AN-2 Colt resupply aircraft.

-- Marneuli Airbase, approximately 40 km south of Tbilisi, was bombed for the third time.

-- The city of Gori. Apparently, one attempt by Russian jets to bomb an artillery position near Gori missed. A bomb landed in town destroying some stores and abandoned buildings. No casualties were reported in this attack.

Georgian radio later reported that Russian bombers attacked

Gori early August 9, attempting to knock out the last bridge linking the road crossing Georgia from east to west as well as a communications tower. President Saakashvili reported that at mid-day August 9, Russian planes had begun bombing housing blocks in Gori, with hundreds of casualties, calling this "pure terror."

-- Upper Kodori was also bombed. Details are sketchy.

Â¶ 8. (C) Additional unconfirmed reports include:

-- Sections of the railroad running from Poti toward Kutaisi may have been bombed.

-- Dozens of police in Mestia (north west Georgia) have mobilized and are moving toward the Russian border.

-- The Zugdidi road is open, and Georgian troops are moving north toward Kodori.

Â¶ 9. (C) On the economic front, the Government has been undertaking contingency planning in case of a prolonged conflict. During an August 8 meeting with the Ambassador,

Prime Minister Gurgenidze talked about his efforts to calm investors during the current crisis. He noted that the economy had been remarkably calm. There had been no change

in the currency and the stock exchange was working normally.

Georgia had not touched its Eurobond money, and natural gas and electricity supplies were in good shape. The PM noted that the Georgians were considering contingencies, especially with regard to energy supplies, should the conflict continue.

For example, one major power plant had already shifted over to natural gas from electricity and there are plans to import gas from Turkey. The Georgians are also planning to stop exports of electricity to Russia and have made arrangements to purchase "off-peak" energy from Azerbaijan. Although investors were nervous, the PM noted that there was no panic buying among the population.

TEFFT

Viewing cable 08ANKARA1423, TFGG01: TURKEY'S REACTION TO GEORGIA/SOUTH

OSSETIA



08ANKARA1423

2008-08-11

12:12

2011-02-18

00:12

CONFIDENTIAL

Embassy

Ankara


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SUBJECT: TFGG01: TURKEY'S REACTION TO GEORGIA/SOUTH OSSETIA

CRISIS

Classified By: CDA Doug Silliman, Reasons 1.4...

C O N F I D E N T I A L ANKARA 001423 SIPDIS EUR/SE, EUR/CARC E.O. 12958:

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Viewing cable 08ANKARA1426, TURKEY: NAC STATEMENT ON GEORGIA DEMARCHE

DELIVERED



08ANKARA1426

2008-08-11

15:03

2011-02-18

00:12

CONFIDENTIAL


Embassy

Ankara

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TAGS: PREL NATO KCFE PARM GG RU TU

SUBJECT: TURKEY: NAC STATEMENT ON GEORGIA DEMARCHE DELIVERED

REF: A. STATE 85678

Â¶ B. ANKARA 1423

...

C O N F I D E N T I A L ANKARA 001426 SIPDIS EUR/SE, EUR/RPM E.O. 12958:

DECL: 08/11/2018 TAGS: PREL NATO KCFE PARM GG RU TU

Viewing cable 08USNATO281, NATO ALLIES LACK COHESION DURING FIRST

MEETING ON



08USNATO281

2008-08-11

18:06

2011-02-18

00:12

SECRET//NOFORN

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SUBJECT: NATO ALLIES LACK COHESION DURING FIRST MEETING ON

GEORGIA CRISIS

REF: A. STATE 85678

Â¶ B. USNATO 279

Â¶ C. U...

S E C R E T USNATO 000281 NOFORN SIPDIS E.O. 12958: DECL: 08/08/2018 TAGS:

PREL MARR NATO MOPS PINR GG RS

SUBJECT: NATO ALLIES LACK COHESION DURING FIRST MEETING ON GEORGIA CRISIS

REF: A. STATE 85678 B. USNATO 279 C. USNATO 278 D. USNATO 277 E. USNATO 274

F. USNATO 275 G. USNATO 276 Classified By: Acting DCM Walter S. Reid III for reasons 1.4 (b) and (d)

Â¶ 1. (C) SUMMARY: At the August 11 NATO Political Committee meeting on the fighting in Georgia, Allies unanimously deplored the Aug 8-11 developments but differed on how these events should affect NATO's relations with

Russia. The Balts and Poland would like to suspend the NATO-Russia Council, but Germany, France, and other traditionally cautious Allies argued that this channel of communication should be kept open to help bring an end to the fighting. The NAC will meet August 12 to examine the crisis in Georgia, immediately before meeting with the Georgian Foreign Minister (since cancelled - now with the Georgian Ambassador). While most Allies seem inclined to issue a North Atlantic Council (NAC) Statement on the crisis, there are divisions along traditional lines on whether that statement should contain strong criticism of Russia or simply be "balanced." Many

European Allies are concerned that a NAC statement not diverge from the

EU's internal consensus-building efforts to be undertaken in Brussels April

12-13. France is also concerned that a NATO statement would undermine

President Sarkozy's August 12 trip to Moscow. END SUMMARY 2. (C) NATO

Allies met August 11 to discuss Georgia, the first such discussion at NATO since the outbreak of major military operations. The Chairman opened discussions by sharing that on August 8 the Russian Charge had admitted that Moscow had instructed him not to request a NATO Russia Council (NRC) meeting to discuss Georgia. The Russian Charge had also threatened that if the NAC goes through with its planned September visit to Georgia, this would significantly impact the NATO-Russia relationship. (Note: According to the NATO International Staff Russian Ambassador Rogozin has requested to meet with the Deputy Secretary General late on August 11. End note). 3. (C)

At the Chair's invitation France briefed on FM Kouchner's efforts on behalf of the EU. Belgium had little detail to share on events under its chairmanship of the UN Security Council. All Allies condemned the ongoing violence, and the Russian violations of the territorial integrity of

Georgia. All speakers also hoped that a ceasefire would soon take place.

However, Allies were divided on the issue of what political steps NATO can take in order to encourage a speedy end to the fighting and what policy measures NATO should take vis-a-vis Russia as a result of its aggressive conduct in Georgia. Several called for frequent NATO meetings to assess developments. 4. (C) The U.S. shared that Washington views these developments very seriously, and announced the early arrival of Ambassador

Volker in order to attend the August 12 NAC meeting on Georgia. The U.S. criticized Russia's disproportionate military operations and assured Allies that, should events develop according to current trends, they could have serious effects on the U.S.-Russia bilateral relationship. After indicating that Washington would like a strong statement, the U.S. distributed points

(Ref A) that the U.S. believes NATO must make in order to credibly deal with the Russians on this issue. Finally the U.S. listed many of the ways that Moscow is breaching the commitments it made when NATO and Russia

agreed to set up the NATO Russia Council. In response to suggestions from the Balts about suspending the NRC (below), the U.S. said consequences for the NRC are worth further considering, and Washington would examine its options further. --------------------------------------------- ----

APPORTIONING BLAME - SOME WANT TO BLAME THEM BOTH -------------------------

-------------------- ---- 5. (C) While most Allies agreed that Russia is using excessive force, Hungary and Slovakia called for NATO to take into account the role Georgia played at the beginning of this recent conflict, suggesting that Georgia invaded South Ossetia without provocation. Germany asserted Russia "has crossed the red line" by conducting airstrikes within

Georgia, but went on to criticize the (allegedly unprovoked) Georgian invasion of South Ossetia. ------------------------------------- NATO

RUSSIA COUNCIL - DIVISION OVER ITS POSSIBLE SUSPENSION --------------------

----------------- 6. (C) Latvia, echoed by Estonia, Lithuania, and Poland highlighted their Presidents' joint statement on the crisis and invited

Allies to support that declaration. Each of these Allies expressed that

Russian violence should "not serve the aggressor's purpose" and that NATO should respond by suspending all NRC activity with the exception of any discussion aimed at bringing an end to the conflict. Bulgaria liked the idea immediately. Estonia underlined that NATO must show Moscow that

Russia's aggression has larger consequences, while Lithuania underscored that Russian actions will have security implications for the EuroAtlantic

Area. Canada, the Czech Republic, the UK and Denmark, found the idea of suspending the NRC "interesting" and agreed to send it back to capitals.

Germany argued that there is no mechanism for NATO Allies to suspend the

NRC ("this is a very useful body") and called for more consultations with

Russia. Norway and France agreed that the NRC should not be suspended.

Germany, joined by Norway and France, also argued that the NRC consultation mechanism was needed now more than ever. ----------------------------------

--- NAC VISIT TO GEORGIA - ISSUE DEFERRED ---------------------------------

---- 7. (C) Latvia, Estonia, Lithuania, Poland and Canada all asserted that the scheduled NAC visit to Georgia in September should go ahead. Germany the Netherlands, Spain, Italy, and Turkey said it was too early to decide.

Denmark's representative said she would have to ask Copenhagen. -----------

---------------------------------- --------------- AUGUST 12 NAC - POSSIBLE

JOINT STATEMENT EXPOSES MORE CRACKS ---------------------------------------

------ --------------- 8. (C) Poland called for a very strong NAC statement, and expressed concern that NATO and EU statements on the crisis must be consistent and reinforce each other in order to strongly communicate the level of international condemnation of Russia's actions.

The Balts, the Czech Republic, Bulgaria, and the UK also wanted a strong statement. Germany countered, hoping for harmony between EU, OSCE and NATO messages and cautioning that any statement by the NAC should "help in defusing tensions." This German perspective was backed by France, Turkey,

Greece, Luxembourg, Norway, Spain, Italy and Slovakia. Denmark said it needed to take the U.S. points back to capital. France also expressed concern that a NATO statement might undermine France's attempts to negotiate a settlement in its role as president of the EU. ----------------

------------ CONCLUSION: UNITED IN PRINCIPLE BUT DIFFICULT TO AGREE ON

ACTION ---------------------------- 9. (C) The Chairman, summarizing the meeting, concluded that Allies: -- Generally agree that Russia now bears the burden of responsibility to halt the fighting -- Support the EU and

OSCE efforts to end hostilities -- Want the humanitarian situation monitored closely However he also highlighted the lack of unity within the

Alliance on the potential content of any NAC statement that would result from their 12 August meeting. ------- COMMENT ------- 10. (C) A number of

Allies - especially Germany - are parroting Russian points on Georgian culpability for the crisis. Intelligence releasable to NATO Allies on this point might be a useful tool. 11. (C) All would like an immediate end to the fighting, but some believe that the best way to bring this about is to avoid confronting Moscow by adopting highly critical language. It is clear

that many Allies fear a NAC statement could be perceptibly different in tone to the language that will emerge from the EU's PSC on August 12, and the ministerial-level GAERC to be held in Brussels on August 13. 12. (C) In the aftermath of this Political Committee meeting USNATO held a Quad meeting April 11 to try to iron out consensus with the UK, France and

Germany (results to be reported septel). WEINROD

Viewing cable 08STATE86156, TFGG01: GEORGIA TASK FORCE SITUATION REPORT



08STATE86156

2008-08-12

04:04

2011-02-18

00:12

SECRET//NOFORN

Secretary of

State

Appears in these articles:

TFGG01:

GEORGIA

TASK

FORCE

SITUATION

REPORT

NO.

7

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S E C R E T SECTION 01 OF 03 STATE 086156

NOFORN, SIPDIS

E.O. 12958: DECL: 25X1

TAGS: AEMR ASEC CASC KFLO MARR PREL PINR AMGT

GG

SUBJECT: TFGG01: GEORGIA TASK FORCE SITUATION REPORT

NO. 7

Classified by Senior Watch Officer Debor...

S E C R E T SECTION 01 OF 03 STATE 086156 NOFORN, SIPDIS E.O. 12958: DECL:

25X1 TAGS: AEMR ASEC CASC KFLO MARR PREL PINR AMGT

SUBJECT: TFGG01: GEORGIA TASK FORCE SITUATION REPORT NO. 7 Classified by

Senior Watch Officer Deborah Schneider for reasons 1.4 (B and D). RUSSIAN

GROUND FORCES PUSH TOWARDS TBILISI ----------------------------------------

-- 1. (SBU) Embassy Tbilisi reports Russian troops have taken Gori and OSCE observers confirm the troops are moving in the direction of Tbilisi.

Georgia fears an imminent attack on Tbilisi and has appealed for immediate international intervention to defend the capital, according to its embassy in Washington. (TF/Embassy Tbilisi telcon) 2. (SBU) Embassy Tbilisi reports

Russian ground troops occupied the western Georgian towns of Zugdidi,

Khobi, and Senaki. They also occupied the central Georgian town of Kareli, severing the east-west highway and essentially splitting Georgia in half.

(TF/Embassy Tbilisi telcon) 3. (C) Embassy Tbilisi reports Georgian troops have fallen back to Mtskheta, 10 miles northwest of Tbilisi. Georgian officials told the Embassy they are uncertain if their troops will be able to form a defense. OSCE observers confirm reports that Georgian forces are out of the zone of conflict. (TF/Embassy Tbilisi telcon, Tbilisi 1356) 4.

(SBU) The last of the USAF C-17 flights bringing Georgian troops from Iraq landed in Tbilisi, according to Embassy Tbilisi. (TF/Embassy Tbilisi telcon) 5. (S/NF) The Russian DATT contacted Embassy Tbilisi to request the removal of all U.S. C-17 aircraft from the airport immediately as Moscow is considering bombing the airport in the near future. (TF/Embassy Tbilisi email) DIPLOMATIC EFFORTS INTENSIFY ---------------------------- 6. (SBU)

EUR DAS Bryza landed in Tbilisi and, for security reasons, has moved from the city center to the Embassy. (TF/Embassy Tbilisi telcon) 7. (SBU)

Embassy Warsaw reports President Kaczynski plans to pick up the presidents of Ukraine and the three Baltic states en route to Tbilisi for meetings.

The Latvia desk reports Latvian PM Godmanis will leave for Tbilisi late

August 11. (TF/Warsaw desk e-mail, TF/Latvia desk telcon) 8. (C) President

Sarkozy will travel to Moscow August 12 to meet with President Medvedev, according to STATE 00086156 002 OF 003 SUBJECT: TFGG01: GEORGIA TASK FORCE

SITUATION REPORT NO. media. The French MFA has announced a three-part proposal to end the ongoing hostilities, including an immediate cease-fire, a return to August 6 troop positions with international support, and respect for Georgia's sovereignty. (TF/France desk e-mail) 9. (C) Embassy

Berlin confirms Chancellor Merkel plans to travel to Sochi August 15 to meet in a previously-scheduled meeting with President Medvedev. (Berlin

1095) HUMANITARIAN UPDATE ------------------- 10. (C) Embassy Tbilisi reports an initial estimate of 3,000 IDPs from the conflict, but notes the numbers could climb into the tens of thousands. (Tbilisi 1356) 11. (C)

Embassy Tbilisi received an initial request of emergency supplies for hospitals and IDPs from the Georgian Ministries of Health and Refugees.

USAID has $250,000 in new emergency spending authority to support such procurement. (Tbilisi 1356) 12. (C) Embassy Tbilisi notes key potential problems in meeting needs include the security situation, the lack of international transportation due to the Russian blockade, and difficulties with the internal distribution of aid. (Tbilisi 1356) 13. (SBU) The Turkey desk notes Turkish concern over an influx of refugees from Georgia.

(TF/Turkey desk telcon) 14. (C) Embassy Yerevan reports Armenia is concerned about imports given that a majority of its food and fuel consumption is imported via Georgia. (TF/Turkey desk telcon, Yerevan 639)

PANIC IN TBILISI, IDPs FLOW INTO CITY, AIRPORT OPEN -----------------------

---------------------- ------ 15. (SBU) Embassy Tbilisi describes Tbilisi residents as in a "state of panic" and has requested that Mission personnel stand fast and review their security status. (TF/Embassy Tbilisi e-mail)

16. (SBU) Embassy Tbilisi reports a group of Georgian IDPs entered a housing cluster occupied by USG personnel. The cluster was cleared without incident but the IDPs threatened to return. Post comments the continuing influx of IDPs raises the possibility of confrontations and possible criminal activity directed against Americans. (TF/DSCC e-mail) 17. (SBU)

Embassy Tbilisi reports the international airport is open, although only

Georgian airlines continue to operate. (TF/Embassy Tbilisi e-mail) STATE

00086156 003 OF 003 18. (SBU) Embassy Yerevan reports the convoy comprised of 20 USG family members and over 100 private AmCits has arrived in

Armenia. The Embassy continues to receive requests for departure assistance; a third convoy is planned for August 13. (TF/Yerevan e-mail,

TF/Tbilisi telcon) 19. (SBU) Sixty-four USG employees, nine spouses and three children - in addition to several TDYers, - remain at post and are standing. (TF/Embassy Tbilisi telcon) 20. (SBU) A convoy of 87 Peace Corps volunteers and trainees crossed into Armenia. They will remain in reserved lodging in the town of Tsaghkadzor. (TF/Peace Corps e-mail) 21. (SBU)

Embassy Tbilisi held a town hall meeting which nearly all mission personnel attended, and continues to respond to a large number of inquiries from concerned Americans. (TF/Embassy Tbilisi e-mail) 22. (U) MINIMIZE

CONSIDERED. RICE

Viewing cable 08BAKU761, AZERBAIJAN SCALES BACK PRODUCTION, LOOKS FOR





VZCZCXYZ0000

PP RUEHWEB

DE RUEHKB #0761/01 2250443

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FM AMEMBASSY BAKU



RUEKDIA/DIA WASHDC



C O N F I D E N T I A L BAKU 000761

SIPDIS

DOE FOR INTERNATIONAL/LANA EKIMOFF

E.O. 12958: DECL: 08/10/2018

TAGS: PREL PGOV ENRG AJ GG TU

SUBJECT: AZERBAIJAN SCALES BACK PRODUCTION, LOOKS FOR

ALTERNATE OIL EXPORT ROUTES

Classified...

C O N F I D E N T I A L BAKU 000761 SIPDIS DOE FOR INTERNATIONAL/LANA

EKIMOFF E.O. 12958: DECL: 08/10/2018 TAGS: PREL PGOV ENRG AJ GG TU

SUBJECT: AZERBAIJAN SCALES BACK PRODUCTION, LOOKS FOR ALTERNATE OIL EXPORT

ROUTES

Classified By: Acting DCM Rob Garverick, Reasons 1.4 (b) (d) 1. (C)

Summary: BP and SOCAR acknowledged sharp declines in offshore oil and gas production at the ACG and Shah Deniz fields. BP Azerbaijan expects BTC repair work in Turkey to begin as soon as tomorrow, but cannot yet estimate how long repairs might take. AIOC consortium is weighing options for alternative export routes, but Russia-Georgia conflict is making matters difficult. Baku-Supsa is operating at reduced capacity; some AIOC oil has been rerouted to Novorossiysk. Exports via Iran (swaps) are unlikely. Shah

Deniz natural gas is currently unavailable for Georgia; SOCAR may supply

Georgia with other gas, depending on storage needs and demand. End Summary

BP Unsure of Extent of Damage to BTC ------------------------------------

2. (SBU) In a conversation on August 11, British Petroleum's Security

Manager for Azerbaijan Eldar Nurizade told the Embassy that the fire caused by the explosion last week on the Baku-Tbilisi-Ceyhan pipeline in a remote area of Turkey is still not fully extinguished, although the fire is greatly diminished. Nurizade expressed his confidence that the fire would die out in the next 24 hours. (Note: Press as of August 11 18:00 Baku time is reporting that the fire is completely out). He reported that once the fire is extinguished and the area has time to cool, teams of experts, led by Turkey's Botas, could begin examining the damaged area to determine the cause of the fire and the timeframe for repairing the pipeline. Nurizade told the Embassy that until the initial assessments from the experts come in, he is unable to provide any information on how long it will take to have the BTC pipeline fully functional. Conflict in Georgia Complicates

Things -------------------------------------- 3. (SBU) Switching his attention to the conflict in Georgia, Nurizade told the Embassy that approximately 45,000 barrels per day (bpd) are now moving through the recently refurbished Baku-Supsa pipeline, carrying AIOC (consortium) oil

from Azerbaijan's ACG field to the Georgian Black Sea Coast. BP, which acts as the operator for this pipeline, has moved into its highest level of alert in Georgia, but it has not evacuated its employees there. Nurizade confirmed that tankers are remaining in "neutral waters" near the port of

Supsa. Referring to reports of a Russian naval blockade of Georgia, he said that there are enough tankers near the port to hold up to eight days of pipeline throughput and expressed confidence that within that period ankers would be free cross the Black Sea. SOCAR Less Optimistic ------------------

--- 4. (C) Murat Heydarov, who serves as Advisor to the President at the

State Oil Company of Azerbaijan (SOCAR), sounded more somber in his separate assessment of the situation. Heydarov said that ACG production fell today to 125,000 barrels per day; production had peaked before the BTC fire and Russia-Georgia conflict at nearly 900,000 barrels per day. Embassy received reports last week that production, because of export constraints, had been rolled back to 300,000 b/d and then 200,000 b/d. Heydarov confirmed that Baku-Supsa is taking 45,000 b/d and noted that some AIOC oil

(up to 80,000 b/d) had been rerouted to Novorossiysk. That option, however, is limited, Heydarov explained, because SOCAR is also using that route for non-consortium oil exports, and "technical limitations" within Russia put further restraints on additional volumes. Iran Maybe, Probably Not --------

---------------- 5. (C) Heydarov said that rail exports via Georgia are limited to ExxonMobil at this point, and that the AIOC consortium did not have plans, perhaps for security reasons, to begin shipments of oil by rail to Batumi. Embassy officer asked if other routes, perhaps to the South, were being considered. Heydarov reluctantly reported that there had been some discussion of a swap deal with Iran, but nothing had been proposed.

The arrangement would allow AIOC oil to be sent to the Iranian Caspian port of Niko; in turn, Iran would export oil from its South through the Gulf in

Azerbaijan's name. Heydarov doubted that such a swap arrangement would b initiated, as volumes would be severely limited Shah Deniz Production Also

Down ------------------------------- 6. (C) Heydarov said that Shah Deniz production had declined from 16-17 million cubic meters per day (mcm/d) to

10 mcm/d. (On an annual basis, these numbers would represent a decline from about 6 bcm to 3.65 bcm.) Shah Deniz gas exports, accordingly, are being shipped to Turkey in accordance with sales contracts. No Shah Deniz gas is currently available for Georgia. SOCAR produces other gas -- aside from

Shah Deniz -- which could be sent to Georgia. Heydarov said, however, that

Azerbaijan is keen to use that gas to fill storage ahead of winter.

Heydarov does not expect a natural gas crisis to emerge near-term in

Georgia, as demand is not great in summer and early fall. Comment -------

7. (C) SOCAR seems to be more concerned about declines in oil and gas production than BP Azerbaijan at this moment. Losses for now appear be economic only, as investors are not reporting damages to the ACG or Shah

Deniz fields. Conflicting stories about the cause of the BTC explosion/fire in Turkey and Russian attacks on the BTC pipeline in Georgia are adding to the uncertainty. Embassy understands that as long as BTC pipeline and

Russia-Georgia conflict do not disrupt oil shipments over the long term,

SOCAR, BP and other AIOC partners are not likely to pursue export contracts or swaps with Iran. LU

Viewing cable 08ATHENS1156, TFGG01: GREEKS WILL FOLLOW FRENCH LEAD ON

GEORGIA



08ATHENS1156

2008-08-12

15:03

2011-02-18

00:12

CONFIDENTIAL

Embassy

Athens


VZCZCXYZ0000

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FM AMEMBASSY ATHENS


INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY



C O N F I D E N T I A L ATHENS 001156

SIPDIS

E.O. 12958: DECL: 08/12/2018

TAGS: PGOV PREL GG GR

SUBJECT: TFGG01: GREEKS WILL FOLLOW FRENCH LEAD ON GEORGIA

CRISIS


Â¶ B. ATHENS 1152

Â¶ C. SECSTATE 85678

C...

C O N F I D E N T I A L ATHENS 001156 SIPDIS E.O. 12958: DECL: 08/12/2018

TAGS: PGOV PREL GG GR

SUBJECT: TFGG01: GREEKS WILL FOLLOW FRENCH LEAD ON GEORGIA CRISIS REF: A.

SECSTATE 86108 B. ATHENS 1152 C. SECSTATE 85678 Classified By: CHARGE

D'AFFAIRES DEBORAH MCCARTHY. REASONS 1.4 (B) and (D).

Â¶ 1. (C) SUMMARY: The GOG has still not announced an official position on the crisis in Georgia, probably due to its concerns about alienating either the Russians or Georgians, with both of whom Greece maintains close ties.

But our conversations with MFA and other high-placed interlocutors indicate

Greece will closely follow the lead of French President Sarkozy and support the common EU position. The GOG is preparing humanitarian supplies, which may be directly airlifted by the Hellenic Air Force or folded into the collective EU humanitarian response. The Greek press has generally stuck to the facts in its reporting of the crisis, though editorial opinions are divided between pro-Russian and pro-Georgian positions. END SUMMARY. GOG

POSITION: SUPPORT SAKOZY ----------------------------

Â¶ 2. (SBU) On August 12, A/DCM conveyed ref A points on the GAERC discussion on Georgia and information on USAID humanitarian assistance efforts to the office of MFA Secretary General for International Economic

Affairs Skylakakis. Skylakakis' policy advisor, Christian Argyropoulou, noted that Greece was now in the process of considering how to provide similar assistance to Georgia.

Â¶ 3. (C) Minister of Interior Prokopis Pavlopoulos -- who is close to PM

Karamanlis and plays a larger role in the GOG than his title suggests -- told us that Greece would follow the French lead. According to Pavlopoulos,

FM Bakoyannis had been instructed to support the position of President

Sarkozy and adhere to the common EU position. On humanitarian aid, the

Interior Minister confirmed the GOG was preparing a package, which would be folded into the collective EU response.

Â¶ 4. (C) A/Polcouns delivered ref A points to Stella Bezirtzoglou, head of the Georgia Desk at the MFA A5 Directorate for CIS Countries, and to

European Correspondent Antonia Katzourou. Bezirtzoglou will accompany FM

Bakoyannis to Brussels for the GAERC discussion Wednesday and said she had already provided our points on a NATO Georgia statement (ref C) to

Bakoyannis. Bezirtzoglou was still unable to provide an official Greek position on Russia's aggressive military action against Georgia but noted that Greece supported Sarkozy's efforts and would support whatever common

EU position emerged from the upcoming discussions. She did, however, reiterate Greece's support for Georgia's territorial integrity and noted that Greece had prepared four tons of humanitarian assistance (blankets, tents, medicines, etc.) for shipment to Georgia as soon as practicable.

Katzourou also said Greece was expecting to follow Sarkozy's lead and supported his efforts. She said Greece was committed to the principles of respect for territorial integrity of Georgia and respect of international borders. At the same time, Greece was in a "delicate position" because of its traditional good relations with both Russia and Georgia.

Â¶ 5. (C) A/DATT met with RADM Lainas, Director of A Branch of the Hellenic

National Defense General Staff (HNDGS), which has overall responsibility for military operations. Lainas said the HNDGS had received guidance from the MFA to be ready to conduct possible humanitarian assistance missions to

Georgia, specifically, the delivery of medical supplies and medications. He was unprepared to offer further details, such as when the mission might be executed, means of delivery, or quantities of materiel. He said the HNDGS was standing by and would be ready to respond to guidance from the MFA.

OPPOSITION PASOK LEADER CALLS FOR CEASEFIRE -------------------------------

------------ 6. (C) On August 9, opposition PASOK leader George Papandreou published a statement on the crisis in Georgia in which he called for an immediate cessation of hostilities and swift resumption of negotiations, deplored the loss of life, and joined the calls for an "Olympic truce."

Papandreou's foreign policy advisor Demitris Droutsas subsequently told us

-- after the extent of Russian military actions became clearer -- that it was "obvious" that Greece needed to join the international community's condemnation of Russia's "unilateral disregard of the law." Droutsas added that the situation in Georgia had special resonance with Greeks because of rience with Turkey's o#prus under the pretext power. (NOTE: The ` the situation in GeorgQa touchstone for Greek viQs. The more pro-Russi!TO's actions in Kosovo s actions in Georgia; more pro-Georgia or, at least, more neutral Greeks often cite the analogy with the situation in Cyprus. END

NOTE.) U

PDATES FROM FRENCH, BALTIC, UKRAINIAN EMBASSIES ---------------------------

------------------ --- 7. (C) Charge discussed the crisis with the French

Charge, who stressed the need to consider the best forum in developing the mechanisms for international involvement in any eventual agreement between the parties -- this was the longer-term challenge, he added. 8. (SBU)

Poloffs also spoke with representatives from the Lithuanian, Estonian, and

Ukrainian embassies in Athens. All three representatives said their presidents were en route and not expected to arrive to Tbilisi until the evening of the August 12. They said the visit's purpose was to show unity and support for the president of Georgia. Ambassador Yahilo from Estonia added that the situation was in a state of flux but that his country supported Saakashvili. Estonia, Lithuania, and Ukraine were monitoring the humanitarian situation and had sent aircraft to Georgia with medical supplies, including personnel, medicine, and ambulances. The Lithuanian embassy stated there were preparations for more medical equipment to be sent tomorrow. GREECE PRESS DIVIDED OVER CRISIS ---------------------------

----- 9. (SBU) Greek media extensively reported on the Caucasus crisis.

News reports generally stuck to the facts, stressing that Georgia started the operation, that Russia responded with heavy force, and that there was intensive propaganda from both sides. Editorials were more partisan. Some media linked the crisis with the recognition of Kosovo (some fron-page headlines called the Caucasus a "New Kosoo") and reminded their audiences that Russia hd warned the U.S. and the international community that Kosovo was going to be used as a potential precedent in cases like South Ossetia,

Abkhazia, and others. MEGA Channel highlighted in its August 10 evening prime-time news program the crossfire between the U.S. and Russian permreps in the UNSC, noting a State Department official's comments that the USG was

"cynically" more interested in Russia's positive stance on the Iranian nuclear program and that it was not intending to dispatch U.S. or NATO troops to the Caucasus. The unnamed State Department representative also reportedly "admitted" that during the debate over Kosovo's independence

Russian FM Lavrov had warned Secretary Rice "not even to think of intervening" in case of a future crisis in South Ossetia. Media also generally noted that the Greek government had not come out with a strong position on the crisis, to the chagrin of both sides in the conflict both of which were expecting more Greek support. A dominant theme throughout was that the crisis could represent a resurgence of the cold war between Russia and the U.S. SMALL DEMONSTRATIONS SUPPORT GEORGIA -------------------------

------- 10. (SBU) On August 10 at 1630 hours, approximately 400-500 peaceful demonstrators marched past the Embassy then moved to the Russian

Embassy in the suburb of Paleo Psychiko. The demonstration started at

Syntagma Square in central Athens with the group carrying Georgian flags and dressed in red and white. The demonstrators paused in front of the U.S.

Embassy for a few minutes chanting for the U.S. to help Georgia. The

Hellenic Police provided one anti-riot bus and 20 officers to secure the

Embassy. The Russian Embassy was heavily guarded. 11. (SBU) In Thessaloniki on August 12, about 200 people, apparently Georgians, participated in a peaceful march in the downtown area stopping at the Russian consulate. In addition to loud anti-Russian chanting, speakers voiced concern for relatives and friends in Georgia and grief and anger over the crisis. Longtime residents noted that this was the first anti-Russian demonstration in

Thessaloniki they could recall. MCCARTHY

Viewing cable 08STATE86603,



08STATE86603

2008-08-13

00:12

2011-02-18

00:12

CONFIDENTIAL

Secretary of

State


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RHHJJAA/JICPAC HONOLULU HI IMMEDIATE

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RHMFISS/CDR USSOCOM MACDILL AFB FL IMMEDIATE

RHMFISS/CDR USCENTCOM MACDILL AFB FL IMMEDIATE

RHMFISS/CDR USJFCOM NORFOLK VA IMMEDIATE

RHMFISS/CDR USEUCOM VAIHINGEN GE IMMEDIATE

RUEADWD/DA WASHINGTON DC//DAPE:PRO/DAPE-PRR-C/DAPE:MO// IMMEDIATE

RUEADWD/DA WASHINGTON DC//DAMO-AOC-CAT//PCC// IMMEDIATE

RHMFISS/CDR USSTRATCOM OFFUTT AFB NE IMMEDIATE


RHEFDIA/DIA WASHINGTON DC//TWC// IMMEDIATE


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RHMFISS/HQ USSOUTHCOM J3 MIAMI FL IMMEDIATE

RUEAIIA/CIA WASHINGTON DC IMMEDIATE 6359

RHMCSUU/FBI WASHINGTON DC IMMEDIATE 0731

RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC IMMEDIATE

C O N F I D E N T I A L SECTION 01 OF 02 STATE 086603

SIPDIS

E.O. 12958: DECL: 08/11/2018

TAGS: AEMR ASEC CASC KFLO MARR PREL PINR AMGT GG

CLASSIFIED BY THOMAS T. JUNG, SENIOR WATCH OFFICER, S/ES-O, FOR REASONS

1.4(B) AND (D) MILITARY SITUATION ON THE GROUND ---------------------------

---------------

Â¶ 1. (C) Embassy Tbilisi confirms that Russian aircraft bombed Gori on the morning of August 12, targeting Gori University, the Post Office, and the military hospital. Two blasts were reported in Tbilisi, including one at the SU-25 factory near the airport. (Tbilisi 1362)

Â¶ 2. (C) OSCE reports Russian troops pulled out of Gori toward South

Ossetia. UNOMIG confirms Russian troops left Senaki military base after destroying its infrastructure. Russian troops remain in Zugdidi. (Tbilisi

1362)

Â¶ 3. (SBU) The port of Poti is open, but Russian naval vessels are turning ships away. (TF/Embassy Tbilisi telcon)

Â¶ 4. (SBU) The Georgian Embassy reports Russian and South Ossetian forces are arresting ethnic Georgians in the village of Mereti in South Ossetia.

(TF/Georgian Embassy telcon)

Â¶ 5. (U) Georgia filed a lawsuit alleging ethnic cleansing by Russia at the

International Court of Justice. (Reuters)

Â¶ 6. (U) British Petroleum shut the Baku-Supsa pipeline as a precaution.

(Reuters)

DIPLOMATIC EFFORTS

-------------------

Â¶ 7. (U) Russian and French presidents announced a six- point plan:

1) Russian agreement to conclude military operations;

2) the return of Russian armed forces to the line preceding the beginning of operations;

3) a no- first-use- of-force pledge in Georgia;

4) a return of Georgian armed forces to their pre-conflict locations;

5) free access for humanitarian assistance; and

6) international consideration of the South Ossetia and Abkhazia issues.

(CNN)

HUMANITARIAN ASSISTANCE -----------------

Â¶ 8. (SBU) PM Gurgenidze presented a reconstruction package to Embassy

Tbilisi. The proposal seeks $1 billion to create a five-year loan facility for the National Bank of Georgia to rehabilitate the port of Poti, roads, and agribusiness, and to develop a settlement facility for internally displaced persons (IDPs). (Tbilisi 1367)

Â¶ 9. (SBU) The Minister of Health stated he must personally approve all humanitarian shipments; flight clearance will be tied to his authorization.

(TF/Embassy Tbilisi telcon) STATE 00086603 002 OF 002

Â¶ 10. (SBU) Embassy Tbilisi will submit a formal request for a Disaster

Assistance Response Team on August 13; 60,000 IDPs are expected from the conflict. (TF/Embassy Tbilisi telcon)

Â¶ 11. (SBU) Two C-17s and two C-130s with an ESAT team and humanitarian assistance will arrive in Tbilisi within the next couple of days. Embassy

Moscow demarched the Russian MFA on the flights. (TF/Embassy Moscow e-mail)

Â¶ 12. (SBU) One French-sponsored EU humanitarian flight arrived August 11, delivering bedding and medical supplies, and removing 300 EU nationals. A second flight is expected August

Â¶ 13. (TF/Embassy Tbilisi telcon) 13. (SBU) UNHCR will request $12-$15 million to protect and assist IDPs. (Geneva 688)

Â¶ 14. (SBU) The Red Cross briefed Geneva missions on its $7.4 million preliminary appeal for South Ossetia. Sweden contributed $740,000 to the appeal. (Geneva 687)

Â¶ 15. (C) Embassy Ankara reports Turkey has provided humanitarian assistance through the Turkish Red Crescent Society, including 150 tents, bedding, and drinking water, and is considering a request for a field hospital in Gori. (Ankara 1442) STATUS OF AMCITS ----------------- 16.

(SBU) Embassy Tbilisi reports more than 100 AmCits registered for the

August 13 convoy to Yerevan. Embassy Yerevan reports shortages of hotel rooms and seats on flights from Yerevan. (TF/Embassy Tbilisi/Yerevan telcon)

Â¶ 17. (U) Minimize considered.

RICE

Viewing cable 08BERLIN1108, German Out-Of-Area Deployment Update



Embassy

Berlin

08BERLIN1108

2008-08-

13 09:09

2011-02-18

00:12

UNCLASSIFIED//FOR

OFFICIAL USE ONLY


VZCZCXRO9355

PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN

RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG

DE RUEHRL #1108/01 2260913

ZNR UUUUU ZZH

P 130913Z AUG 08

FM AMEMBASSY BERLIN




RHMFIUU/COMSOCEUR VAIHINGEN GE

RHMFISS/CDRUSAREUR HEIDELBERG GE

RHMFIUU/HQ USAFE RAMSTEIN AB GE




RUEHRL/USDAO BERLIN GE

UNCLAS SECTION 01 OF 05 BERLIN 001108

SENSITIVE

SIPDIS

E.O. 12958: N/A

TAGS: MOPS PREL MARR NATO EUN GM AF SU KV BK LE GG ET

SUBJECT: German Out-Of-Area Deployment Update

REF: A) Berlin 250

B) Berlin 620

C) Berlin 1045

...

UNCLAS SECTION 01 OF 05 BERLIN 001108 SENSITIVE SIPDIS E.O. 12958: N/A

TAGS: MOPS PREL MARR NATO EUN GM AF SU KV BK LE GG ET

------------------ The Deployment Law ------------------ 2. (SBU) According to a landmark 1994 Constitutional Court decision and a subsequent 2005

Deployment Law, the Bundestag must preapprove the deployment of any German armed forces outside of Germany. The Deployment Law does provide for urgent armed deployments to go forward without the prior approval of the

Bundestag, but most German officials view this exception as applicable only

in the most exigent of circumstances, e.g. when there is literally no time to obtain Bundestag approval between the outbreak of a crisis and the need to respond militarily. Even in these circumstances, the Deployment Law requires the government to seek Bundestag approval as soon as possible. If approval is not granted, the deployment must be terminated.

Â¶ 3. (SBU) In a decision that is likely to make it even more cumbersome for the government to deploy German armed forces overseas, the German

Constitutional Court ruled May 7 that the government's decision to allow

German air crews to participate in the NATO AWACS mission in Turkey in

2003, on the eve of the war in Iraq, without first seeking approval of the

Bundestag, was unconstitutional. The Court dismissed the assertion of the then-Social Democratic/Green coalition government that the AWACS deployment was just a "routine," unarmed reconnaissance mission, holding that there were "tangible, factual indicators" that the German AWACS air crews could have been drawn into armed conflict. The Court reaffirmed the Bundeswehr as a "parliamentary army," underscoring that the German Basic Law

(Constitution) "entrusted the decision about peace and war to the German

Bundestag as the representative body of the people." The Court emphasized that when in doubt about whether it is necessary to obtain Bundestag approval, the government should err on the side of seeking parliamentary permission. (See Ref B for further reporting and analysis on this

Constitutional Court decision.)

--------------------------------------------- - International Security

Assistance Force (ISAF) --------------------------------------------- - 4.

(SBU) The Bundeswehr currently has 3,520 military personnel (3,446 in May) operating under ISAF in Afghanistan. These personnel are deployed under a one-year combined mandate approved by the Bundestag October 12, 2007. This combined mandate includes the deployment of six Tornado reconnaissance aircraft, which were previously covered by a separate mandate. Due to force rotation, Germany as of July 31 had more than the 3,500 soldiers authorized in Afghanistan; the mandate provides for temporarily exceeding the ceiling during troop rotations. 5. (SBU) Germany has been active in ISAF since the operation's inception in January 2002, and was the first country to volunteer to lead an ISAF Provincial Reconstruction Team (PRT) outside of

Kabul. Germany currently commands ISAF's northern region (RC-North), where it leads two of the five PRTs (Kunduz and Feyzabad) as well as the Forward

Support Base in Mazar-E-Sharif. On February 23, 2008 Germany inaugurated a

Provincial Advisory Team (PAT), a mini-PRT in Takhar province with around

50 civilian and military personnel total. 6. (SBU) The Bundeswehr has taken on, or has committed to take on, a number of additional tasks in recent months, which will soon bring it right up against the current troop ceiling of 3,500: -- Germany has taken over the Regional Command-North Quick

Reaction BERLIN 00001108 002 OF 005 Force (QRF) company on July 1. This is the first time Germany has had a force (consisting of about 200 troops) that can be quickly deployed around the country on short notice and that is authorized to conduct combat missions. This constitutes a significant new aspect of the Bundeswehr deployment in Afghanistan, whose forces up to now have been focused almost solely on stabilization and force protection missions. German officials point out that the primary mission of the QRF is to respond to emergencies in RC-North, but they also have said that Germany will come to the aid of Allies (i.e., outside RC-North) when required. Such exceptions are explicitly allowed by the ISAF mandate (see para 10 below).

-- Germany is tripling the number of troops (from 100 to 300) devoted to the training of the Afghan National Army (ANA). Besides fielding additional

Operational Mentoring and Liaison Teams (OMLTs), up to a total of seven,

Germany also plans to expand a drivers and mechanics school in Kabul into a

logisticians' training center, set up a combat engineering school in Kabul and establish an infantry training center in Mazar-e-Sharif. -- Germany has increased the number of military policemen devoted to the training of the

Afghan National Police (ANP) in Mazar-e Sharif from 30 to 45. -- In the wake of numerous rocket attacks against PRT Kunduz, in February Germany deployed a company of 200 airborne infantry soldiers to do regular patrolling in the immediate area around the PRT. 7. (SBU) On June 26,

DefMin Jung and German Chief of Defense Gen. Schneiderhan announced the intention to increase the troop ceiling. The troop ceiling increase is designed to create enough headroom and flexibility for the Bundeswehr to respond to an unexpected crisis. Political reactions to the announced increase were fairly moderate, although some speculated that the increase in the troop ceiling might hurt the state election prospects of Bavaria's

Christian Social Union, which holds an absolute majority in the state parliament. 8. (SBU) When the ISAF mandate comes up for renewal in October, the current expectation is that the government will seek a renewed mandate through December 2009, which would avoid the need to vote on a mandate in the heat of the campaign for the September 2009 Bundestag election. The new mandate will also include some language that puts the deployment of German radio operators in Kandahar on firm legal grounds. 9. (SBU) Following

COMISAF's request for NATO-AWACS for ISAF, there has been public discussion about whether Germany should support such a deployment. (For further detail on the debate, see Berlin 1045). Depending on the status of discussions at

NATO on the deployment of NATO AWACS aircraft to ISAF, the mandate could address deployment of German aircrews on NATO AWACS. A decision on this has not been made yet by the German government. 10. (SBU) Germany currently provides OMLTs for ANA maneuver battalions based in Kunduz and Feyzabad. It also contributes to two multinational OMLTs -- one for the HQ of the 209th

Corps and the other for the HQ of the 1st Brigade of the 209th Corps. Both

HQs are located in Mazar-E-Sharif. Germany plans to contribute three additional OMLTs as a new ANA brigade (2nd Brigade, 209th Corps) and its subordinate battalions are fielded in the north over the next year. Germany also plans to build garrisons for the new brigade in the north. 11. (SBU)

The German ISAF mandate defines their area of operations as the northern region and Kabul. Nevertheless, an exception in the mandate allows for temporary, limited deployments to other parts of the country on a case-bycase basis if deemed "absolutely necessary" to the overall ISAF mission.

Case in point, German radio operators have provided communication support to Regional Command South in Kandahar for several months. 12. (SBU) In the fall of 2007 and again in May 2008, DefMin Jung approved the temporary deployment of a small number of Bundeswehr soldiers outside the north to provide medical and intelligence support to combat operations against insurgents in Region West. None of the German soldiers, however, were directly involved in combat operations. For the May 2008 operation, German members of the multinational OMLT for the 209th Corps HQ were part of a group authorized to deploy, the first time that German OMLT members were allowed to deploy outside the north (albeit for a Corps HQ and not a fighting unit). MOD has thus far not allowed German OMLTs assigned BERLIN

00001108 003 OF 005 to infantry ANA battalions to deploy outside the north.

13. (SBU) Meanwhile, the ISAF mandate allows the Tornado reconnaissance aircraft to operate throughout Afghanistan, but restricts the resulting information from being distributed outside of ISAF channels. The information can only be passed to OEF in instances where doing so directly supports ISAF operations. Since the end of January 2008, Germany has provided an additional two C-160 Transall aircraft in Afghanistan to ISAF, for a total of eight. --------------------------------- Operation Enduring

Freedom (OEF) --------------------------------- 14. (SBU) The parliamentary mandate for OEF, which allows for the deployment of up to 1,400 personnel, expires on November 15. Currently, Germany has deployed 90 sailors (263 in

May) and the Bundeswehr has P3-Orion Reconnaissance Aircraft stationed at the Horn of Africa. At this point, Germany has no frigates under OEF

operating around the Horn of Africa. In June 2008 there was a controversial debate on whether German navy ships deployed under OEF have the authority to act against pirates. Germany is currently considering support for an

ESDP mission on the Horn of Africa that would act against pirates. The structure of the ESDP mission remains unclear at this point. 15. (SBU) The

OEF mandate includes an authorization for the deployment of up to 100

German Special Forces (KSK) to Afghanistan. Reportedly, no KSK have been deployed to Afghanistan under OEF since 2005, which led some politicians to question the utility of maintaining this part of the mandate during last fall's debate over its renewal. The Afghanistan portion of the OEF has become a "virtual mandate," the main purpose of which is to demonstrate solidarity with the United States. There is little parliamentary support for actually deploying the KSK to Afghanistan under OEF. 16. (SBU) Despite parliamentary approval, OEF remains unpopular in Germany due to misperceptions of the mission as a strictly combat operation and its association with civilian casualties. OEF is an especially divisive issue within the Social Democratic Party (SPD), the junior party in the Grand

Coalition government. Some 42 SPD parliamentarians -- about 20% of the caucus -- voted against extending the OEF mandate this past year. While significantly higher than in 2006, when only 13 opposed OEF, the number of defections is significantly below what the SPD suffered in March 2007, when

69 voted against the original deployment of Tornado reconnaissance aircraft to Afghanistan. 17. (SBU) During the parliamentary debate on OEF, FM

Steinmeier called for evaluating whether OEF could be mandated in the future through a UNSCR, rather than continuing to rely on the self-defense provisions of Article 51 of the UN Charter. He also called for examining the possibility of transferring the ANA training mission from OEF to ISAF, thereby continuing the trend toward an ever larger ISAF and smaller OEF.

Finally, he proposed holding an international conference in the coming months to take stock of the progress made towards achieving the goals of the Afghanistan Compact. 18. (SBU) Given the upcoming 2009 national parliamentary election and the fact that public support for the operation remains very low, renewal of the OEF mandate this coming fall could be difficult. Nonetheless, the government is still likely to seek renewal of the mandate, believing that failing to do so could send a negative signal about Germany's commitment to the fight against terrorism. On June 26,

DefMin Jung announced that he intends to cut the OEF mandate by 600 military personnel, which would mean that only 800 soldiers would be authorized after November 2008. ------------------- Kosovo Force (KFOR) ---

---------------- 19. (SBU) Germany currently has 2,240 military personnel

(compared to 2,645 in May) in KFOR, far below the authorized troop ceiling of 8,500 military personnel. There is a German Operational Reserve Force

(ORF) battalion on stand-by in Germany to reinforce KFOR as necessary. The mandate is extended automatically each year unless there is a change to the

UNSC Resolution framework for the Kosovo Force. Germany formally recognized

Kosovo's independence on February 20 in a letter from President Koehler.

The government made BERLIN 00001108 004 OF 005 clear that it still considers UNSCR 1244 as the legal basis for KFOR, a position that all parties in the Bundestag, except the small Left Party (roughly 12% support nationally), support. ----------------------------------- European Union

Force (EUFOR) Bosnia ----------------------------------- 20. (SBU) Germany currently has around 130 soldiers (same as in May) in Bosnia as part of the

EU's Operation ALTHEA. Most of the German soldiers are deployed as liaison and observer teams. The mandate, amended December 1, allows the deployment of up to 2,400 military personnel. This operation extends automatically unless there is a change to its underlying UNSC resolution. In 2007,

Germany reduced its military presence in Bosnia by more than 700 military personnel in coordination with other allies. Germany is relying more on home-based reserve forces and less on deployed troops to provide the necessary security support for the implementation of reform measures mandated by the Dayton Peace agreement. -----------------------------------

---------- --- United Nations Interim Force in Lebanon (UNIFIL) -----------

---------------------------------- --- 21. (SBU) Since March 2008, Germany no longer leads UNIFIL's naval component, but still has 460 military personnel deployed (compared to 464 in May). The current mandate, authorizing up to 1,400 military personnel, expires on September 12. On

February 29, Germany handed over the command of UNIFIL's naval component to

EUROMARFOR, a joint, non-permanent fleet including Portugal, Spain, France and Italy. An Italian officer assumed command. ------------------------

Sudan (UNAMID and UNMIS) ------------------------ 22. (SBU) Germany currently has 39 military observers taking part in the UN Mission in Sudan

(UNMIS). These observers monitor the implementation of the Comprehensive

Peace Agreement. The parliament imposed a caveat barring military observers from going to Darfur without prior consultation with the Bundestag Foreign

Relations Committee's chairman and ranking members. The mandate, which was extended for an additional year on November 15, 2007, allows for the participation of up to 75 German military observers. 23. (SBU) Replacing its old AMIS mandate, the Bundestag approved a new mandate in support of the UN/AU hybrid mission in Darfur (UN Assistance Mission in Darfur,

UNAMID) on November 15. It authorizes the Bundeswehr to deploy transport aircraft and up to 200 troops in support of the UN/AU hybrid mission. -----

----------- Georgia (UNOMIG) ---------------- 24. (SBU) Germany has been part of the UN Observer Mission in the Abkhazian region of Georgia (UNOMIG) since 1998 and currently has 12 personnel stationed there, most of whom are medical personnel and military observers. To meet a UN request for additional medical personnel, the German cabinet decided last August to raise the personnel ceiling for this mission from 13 to 20. Despite the conflict currently raging in Georgia, German observers are remaining. -----

------------------ Other minor deployments ----------------------- 25.

(SBU) One military observer serves in the United Nations Mission in

Ethiopia and Eritrea (UNMEE). One German military observer is seconded to the United Nation Assistance Mission in Afghanistan (UNAMA). The Bundeswehr has seconded 41 military personnel to Strategic Medical Evacuation

(STRATAIRMEDEVAC), for which no parliamentary mandate is required, since it is not an armed deployment and the stand-by aircraft are stationed in

Germany. ----------------------- Other force commitments ------------------

----- 26. (SBU) The Bundeswehr currently has 2,500 soldiers committed for the twelfth rotation of the NATO Response Force (NRF). There are currently

1,000 Bundeswehr soldiers assigned to EU Battle Groups in BERLIN 00001108

005 OF 005 the second half of 2008. ------------------------- Bundeswehr transformation ------------------------- 27. (SBU) The Bundeswehr is currently undergoing a transformation process, the goal of which is to be able to send up to 14,000 soldiers to as many as five different theaters for stabilization missions by 2010. The Bundeswehr will be reduced from its pre-transformation level of 270,000 to a final strength of 250,000 (162,300

Army, 62,700 Air Force and 25,000 Navy). The new Bundeswehr will be composed of three different groups: 35,000 for intervention forces, 70,000 for stabilization forces and 147,000 for support forces. Part of the

Bundeswehr's transformation is a comprehensive rebasing program, which is also intended to be completed by 2010. Moreover, transformation includes the procurement of new equipment to fill capability gaps, mainly in the fields of strategic air lift, network centric warfare and armored vehicles.

Due to limited funding (Germany spends just 1.3 percent of its GDP on defense, with few prospects of significant increases in the future) and defense industry delays (mainly EADS), the equipment side of the transformation is behind schedule.

Viewing cable 08TBILISI1372, GEORGIA: SITREP 9: RUSSIAN TROOPS REMAIN IN



08TBILISI1372

2008-08-13

11:11

2011-02-18

00:12

CONFIDENTIAL

Embassy

Tbilisi


VZCZCXRO9486


DE RUEHSI #1372/01 2261118

ZNY CCCCC ZZH

P 131118Z AUG 08





SIPDIS

DEPT FOR EUR/CARC AND TASKFORCE-1

E.O. 12958: DECL: 08/12/2018

TAGS: GG RS PGOV PHUM PREL

SUBJECT: GEORGIA: SITREP 9: RUSSIAN TROOPS REMAIN IN

GEORGIA; SAAKASHVILI, ALLIE...

C O N F I D E N T I A L SECTION 01 OF 03 TBILISI 001372 SIPDIS DEPT FOR

EUR/CARC AND TASKFORCE-1 E.O. 12958: DECL: 08/12/2018 TAGS: GG RS PGOV PHUM

PREL

SUBJECT: GEORGIA: SITREP 9: RUSSIAN TROOPS REMAIN IN GEORGIA; SAAKASHVILI,

ALLIES DEFIANT REF: TBILISI 1362 1. (SBU)

Begin Summary: As of mid-afternoon August 13, Georgian officials report that Russians destroyed the Georgian military base in Gori and that there is shooting in the streets between Russian troops in APCs and Georgians in civilian clothing; embassy officers on the scene in Gori early August 13 confirmed these reports. Russian troops are also maintaining a heavy

presence in Zugdidi; both areas are outside of the conflict zones. The GOG has also reported looting and executions of ethnic Georgians taking place in Gori and Georgian villages near Tskhinvali in the conflict zone. There are reports accusing Russian Cossacks of these crimes. UNOMIG confirms that

Abkhaz militia are present in Ganmukhuri and other Georgian villages near

Zugdidi. Armed Abkhaz stole cars at gun point in Rukhi during the night. On

August 12, Parliament convened a special session, and President Saakashvili led two rallies in front of Parliament, attracting 50,000 to 60,000 people each. At the second rally, the Presidents of Lithuania, Latvia, Poland,

Ukraine, and the PM of Estonia called for Georgians to unite, and expressed solidarity with the country in its bid for freedom and democracy. They jointly demanded strong EU and UN action to defend Georgia's sovereignty, democracy, and territorial integrity. French President Sarkozy made a quick late evening stop in Tbilisi August 13 to discuss cease-fire terms with

President Saakashvili and carried an agreed paper for consideration of EU

Foreign Ministers.

Â¶ 2. (C) The Georgian Government confirms Russian tanks are in Poti and have occupied the Coast Guard station, seized three Coast Guard cutters, and reportedly ordered personnel to leave. Embassy observers in Poti said that local contacts reported that the Russians warned the mayor to evacuate the port so that they could destroy military vessels there. Embassy observers departed Poti after hearing large explosions and seeing black smoke over the port. Conflicting reports indicate that the Port of Poti is open, but cannot store cargo. Despite Russian President Medvedev's order to halt combat operations on the ground, subsequent bombings were reported in the afternoon of August 12 in Gori, Kaspi, and Khashuri region, all outside the zone of conflict. BP confirmed reports that they have shut down their

Baku-Supsa pipeline, which runs north of Gori. The New Rightists opposition party issued a statement denouncing Russia's actions, and appealing for international assistance and MAP in NATO. This sitrep covers events of

August 12 after the previous sitrep (reftel) through mid-day August 13. End

Summary.

Â¶ 3. (C) Comment: No new aerial bombings were reported overnight, August

12-13. Saakashvili's and Machavariani's speeches yesterday announcing the cease-fire (below) were heavily laced with an overtone of victory for

Georgia against Russia and personal accusations that Russian Prime Minister

Putin was responsible for the operation. Some Tbilisians have expressed significant disappointment with the aggressive tone of the messages (and singing at the rallies), given the crushing defeat and devastation visited upon the country. A three-day mourning period was announced, beginning

August 13, which may help soften yesterday's tone in the capital. End comment.

Trouble In, Outside Gori ------------------------

Â¶ 4. (SBU) GOG officials report that Russians destroyed the Georgian military base in Gori, well outside of the conflict zone. The GOG has also reported looting and executions taking place in Gori and villages near

Tskhinvali. GOG claims local sources tell of Ossetian separatists taking

Georgians hostage in the villages of Nikozi, Dzveri, Tkviavi, and Karaleti

(north of Gori). Additional reports indicate Russian Cossacks are shooting local Georgians and raping women/girls in the villages from South Ossetia to Gori. Post is unable to confirm these reports due to the inaccessibility of the region; however they have been increasing in number and tempo. An

Embassy contact told us Russian Cossacks shot a relative in Gori as the relative tried to stop them from looting.

Russians in Zugdidi, Abkhaz also in Georgia -------------------------------

------------

Â¶ 5. (SBU) UNOMIG confirms that Russian troops maintain a heavy presence, with tanks, in Zugdidi. Abkhaz militia are present in Ganmukhuri and other

Georgian villages near Zugdidi. They have taken over three Georgian

Ministry of Internal Affairs observation posts. Armed Abkhaz stole cars at gun point in Rukhi during the night (the last village north of Zugdidi, before you reach the Inguri river crossing). GOG claims that Abkhaz militia are entering these villages, and possibly other Georgian villages in the area, with the likely intent of looting and violence. As of August 12, the

Russian troops in Zugdidi had reportedly been mostly civil toward the population.

Parliament, Saakashvili Denounce Russia -----------------------------------

----

Â¶ 6. (SBU) On August 12, Parliament convened a special session, and

President Saakashvili led a rally at 1500 in front of Parliament on

Rustaveli. (Note: A famous Georgian poet's funeral took place at the same time across the street from Parliament. End note.) The Parliamentary session saw multiple MPs, including Speaker David Bakradze, Vice Speaker

Machavariani, and opposition leader Giorgi Targamadze denounce Russia's attacks and call for unity in restoring the country. Post estimates more than 50,000 people attended. Many were waving Georgian flags and, notably, had driven themselves there (rather than being driven to the rally by

Saakashvili's political supporters). The group was quite diverse, with many young people. Although many were Saakashvili supporters, many attendees told embassy officers that they were there to support the troops and the country, but not the President. After verbally personally attacking Putin and calling for Georgian victory (in traditional Georgian style),

Saakashvili denounced Russia's attacks on Georgia's democratic sovereignty.

Saakashvili compared the current situation to David and Goliath and the

April 9, 1989 killing of peaceful demonstrators by USSR spetznaz.

Saakashvili pointed out that the country is united, and thanked the opposition and world community for their support. At the end of his speech,

Saakashvili announced Georgia will leave the CIS, in a final "good-bye to the Soviet Union." Eastern

Europeans Support Georgia, Saakashvili ------------------------------------

--------- -

Â¶ 7. (U) At the rally, Saakashvili invited the crowd to return later the same evening and meet the Presidents of Lithuania, Latvia, Poland, Ukraine, and the PM of Estonia. A smaller, but enthusiastic crowd still numbering in the tens of thousands, met the group. Broadcast live, and singing and waving flags from the various countries (including one large U.S. flag), the crowd was appreciative of the foreign dignitaries. At approximately

2300, the Presidents each addressed the crowd and called for Georgians to unite in the face of Russia. Each also expressed solidarity with the

country in its bid for freedom and democracy. The group (minus Ukraine's

President Yuschenko, who had already left Georgia to return to Kyiv) held a press brief on August 13 at 1215. They demanded the EU and UN adopt a real decision on the solution to the conflict, that would hold Russia accountable for its actions and recognize and support Georgia's territorial integrity.

After the Cease-Fire, Clashes Persist -------------------------------------

Â¶ 8. (U) Despite Russian President Medvedev's order to halt combat operations ground at 1345 August 12, subsequent bombings were reported on the afternoon of August 12 in Gori, Kaspi, Ruisi village, and Khashuri region, all outside the zone of conflict. The GOG issued a press release

(emailed to EUR/CARC) in which they confirmed Russian troops' presence in

Zugdidi, additional bombings, a blockade of the port in Poti, forced detention of ethnic Georgians in a camp near Kurta, targeted killings of ethnic Georgians elsewhere in the South Ossetian zone of conflict, and economic warfare including bombing of the railroad and station in Kaspi

(last point confirmed). Post has not verified all of these instances; however, most appear credible. There were no bombings reported overnight

August 12-13.

Coast Guard Cutters Seized at Poti ----------------------------------

Â¶ 9. (C) The GOG reports that at least two Russian tank crews are in Poti now. They have occupied the Coast Guard station, seized three Coast Guard cutters (two 24-meter and one 44-meter), and reportedly ordered personnel to leave. Post's GOG contact told us that the three cutters may likely be sunk (media reports claimed they already were). The crews that remain are not resisting, and are reportedly being treated respectfully. (Note: Post's

GBSLE-program has donated over USD 1.5 mil to the three vessels. Five other

Coast Guard vessels have apparently not yet been seized, but their location unknown. End note.) Conflicting reports indicate that the Port of Poti is open and operable (including one from our cargo handler), but cannot store cargo due to bomb damage to its storage facilities. Other reports say

Russian naval vessels are still blocking ships from entering. A container vessel from Turkey was refused landing by a Russian naval vessel on August

12. Post heard another unconfirmed report that any ship wishing to use the port must file first with the Russian embassy in Tbilisi.

BP Shuts Down Pipeline Near Gori --------------------------------

Â¶ 10. (U) BP confirmed reports that they have shut down their Baku-Supsa pipeline, which runs north of Gori, as a precautionary measure. The pipeline was only operating at about one-third of its capacity, and is fully operational. However, with the loss of shipping capacity at Poti, and having been targeted by bombs (which apparently have not harmed the pipeline) near Gori, BP decided to shut down the pipeline for the time being.

New Rightists Issue Statement -----------------------------

Â¶ 11. (U) The New Rightists opposition party issued a statement denouncing

Russia's attacks on Georgia's sovereignty. They also appealed for continued international assistance and support, and strongly called for NATO to approve Georgia's request for a MAP.

Viewing cable 08YEREVAN649, TFGG01: ARMENIAN PM RAISES ALARM ON FUEL,

GRAIN



08YEREVAN649

2008-08-14

15:03

2011-02-18

00:12

CONFIDENTIAL


VZCZCXRO0655


DE RUEHYE #0649/01 2271525

ZNY CCCCC ZZH

O 141525Z AUG 08






RHMFISS/CDR USEUCOM VAIHINGEN GE// PRIORITY


SIPDIS

E.O. 12958: DECL: 08/13/2018

TAGS: ECON ELTN PREL EWWT ENRG EAGR RU GG AM

SUBJECT: TFGG01: ARMENIAN PM RAISES ALARM ON FUEL, GRAIN

SHIPMENTS THROUGH GEORGIA

Embassy

Yerevan

REF: A) Y...

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000649 SIPDIS E.O. 12958:

DECL: 08/13/2018 TAGS: ECON ELTN PREL EWWT ENRG EAGR RU GG AM

SUBJECT: TFGG01: ARMENIAN PM RAISES ALARM ON FUEL, GRAIN SHIPMENTS THROUGH

GEORGIA REF: A) YEREVAN 646 B) YEREVAN 639 Classified By: CDA JOSEPH

PENNINGTON, REASONS 1.5(B)(D) ------- SUMMARY ------- 1. (C) The Prime

Minister convoked the Charge August 14 to express his urgent concerns

(despite the GOAM's public reassurances) about continuing problems in the transport of critical goods, especially fuel and grains, to Armenia through

Georgia. Georgian transport companies that ship to Armenia from Georgian ports announced two weeks ago a huge increase (more than three-fold) in transport fees. The PM then contacted his Georgian counterpart, who agreed to meet at the end of August to discuss the price issue. The problem was compounded by the outbreak of hostilities in Georgia, which temporarily cut off all shipments to Armenia. The PM complained that while Georgian authorities denied clearance for critical goods already at the Georgia-

Armenia border to enter Armenia once the conflict was underway, Georgian shipments to Azerbaijan continued without disruption. Although ministeriallevel contacts with the GOG and a slight easing of the situation in Georgia have helped restart limited shipments, the PM claimed that Armenia could experience severe shortages of key commodities within 30 days. The PM said the situation with jet fuel is especially precarious given the expected increase in the number of European humanitarian assistance and charter flights expected to come to Yerevan in coming weeks. He reiterated, however, Armenia's willingness to serve as a humanitarian corridor for supplies to Georgia. CDA stressed that the first step toward resolving

Armenia's supply problem is for the Russians to end their military activity in Georgia and abide by the agreed cease-fire. He urged Armenia to use its influence in that direction. End Summary. ---------------------------------

---- HUGE PRICE HIKES PRECEDED HOSTILITIES --------------------------------

----- 2. (C) Prime Minister Tigran Sargsian (joined by FM Nalbandian) called in the CDA for an urgent meeting on the morning of August 14 to discuss what he called "the very serious problems" Armenia is facing because of the difficulty in getting shipments of critical commodities through its traditional supply routes through Georgia. (Note: Due to closed borders with Turkey and Azerbaijan, well over 70 percent of Armenia's imports -- including nearly all of its fuel and grain supplies -- comes via transit through Georgia. End note.) Sargsian explained that nearly two weeks ago, the two Georgian firms that provide transport services for freight to Armenia from the Georgian ports of Poti and Batumi announced simultaneously an enormous price increase (more than three-fold) for their services. The two firms are reported to be an effective duopoly, with one monopolizing shipments from the port of Poti, and the other doing the same from Batumi. 3. (C) When Armenia's largest importers complained to the GOAM that such an increase was unsustainable, the PM contacted his Georgian counterpart for an explanation. After several days, the Georgian Prime

Minister reportedly contacted Sargsian to say that the increases were necessary from the standpoint of "risk management." Sargsian said he wasn't sure exactly what this meant, but added that Armenian importers attribute the price hike to a "political decision" in Tbilisi. He further claimed that both of the transport companies have strong official ties and are

"subject to influence" by the Georgian Government. In any event, Sargsian said he and the Georgian Prime Minister had agreed to meet at the end of

August in Tbilisi to address the issue. -----------------------------------

---------- --------- CONFLICT STOPS ALL SHIPMENTS, BUT NOT TO AZERBAIJAN...

--------------------------------------------- --------- 4. (C) According to

Sargsian, the outbreak of Georgian-Russian hostilities on August 8 resulted in a total shutdown of Armenian imports through Georgia. This would have been understandable, the PM said, except for the fact that "we knew that similar shipments to Azerbaijan were moving without disruption." Sargsian recounted how a Georgian Government official at the Georgia-Armenia border soon after the start of the conflict refused to clear more than 30 rail cars of fuel and wheat bound for Armenia on the grounds that Georgia "may have need of the cargo for itself." (This tracks with what we were told by

Deputy Foreign YEREVAN 00000649 002 OF 002 Minister Gharibjanian earlier in the week -- Ref B.) After a call by the Armenian Transport Minister to his

Georgian counterpart, the GOG agreed to release 19 of the rail cars.

According to the PM, the remaining 15 were moved back to Tbilisi. 5. (C)

Although the PM acknowledged that the situation has marginally improved over the past several days, and that limited shipments have started to reach Armenia, he insisted that most cargo destined for Armenia remains blocked at Georgian ports. The PM said that what little freight is entering

Armenia now is being paid at the previous transport rates, as agreed with the Georgian Prime Minister. He added, however, that the Georgians could demand retroactive payment of the higher rates depending on the outcome of the prime ministers' discussions scheduled for later this month. Sargsian complained that the Georgian Prime Minister "is no longer taking my calls," and hinted that Georgia may be punishing Armenia for its close relations with Russia. "We have not made this into a public issue," the PM insisted,

"because we are trying to protect the good relationship we have with

Georgia." He added, however, that Armenia could face serious shortages of critical commodities -- especially fuel and grain -- within 30 days if the current situation does not improve. ---------------------------------------

------ ------ HUMANITARIAN FLIGHTS COULD EXACERBATE FUEL SHORTAGE ---------

------------------------------------ ------ 6. (C) PM Sargsian also noted that the GOAM had accepted a proposal by the European Union that Armenia serve as a humanitarian corridor for relief supplies bound for Georgia. A survey team from the Estonian Government visited Yerevan several days ago to plan logistics for relief flights, and the PM indicated that several such flights had already taken place. When pressed, Sargsian said he did not have the details of these flights at hand, but promised to have his staff provide full information soon. He noted that while Armenia is eager to contribute to humanitarian relief efforts in Georgia, the expected increase in unscheduled charter and humanitarian flights in coming weeks will further strain Armenia's already precarious supply of jet fuel.

According to Sargsian, the GOAM as a matter of policy maintains an emergency 30-day reserve stock of jet fuel, but has already started requesting all inbound flights to carry as much fuel as possible in order to minimize refueling requirements at Yerevan's Zvartnots airport. 7. (C)

CDA welcomed Armenia's willingness to play a role in humanitarian efforts, recognized the urgency of Armenia's supply problems, and promised to pass on the PM's concerns to Washington and Embassy Tbilisi. But he also stressed that the most immediate priority was for Russian forces to end military activity in Georgia and abide by the terms of the cease-fire, and he urged that the GOAM use its influence in that direction. He added that the Georgian Government will be in a much better position to engage on the supply issues once a semblance of stability has been reestablished. -------

COMMENT ------- 8. (C) Despite the urgency with which the Prime Minister made his case, we remain unconvinced that Armenia is on the brink of an economic emergency. As we reported in Ref A, the lack of panic buying by

Armenian consumers or large price increases by retailers suggest that significant shortages, while certainly possible, remain some ways off.

Armenian officials' public statements have been entirely contradictory to their private message, as they seek to avoid creating an economic panic or

enflaming public anger against Georgia. We have no insight into the large price hikes announced by the Georgian freight companies, so are not in a position to say whether that is a long-term problem or a passing phase.

Nevertheless, given Armenia's lack of supply alternatives, imports through

Georgia remain critically important and the Government's near-panic on the issue is at least understandable. We will watch the situation closely and continue to encourage the GOAM to address their concerns directly with

Georgian counterparts, taking into consideration that the GOG is necessarily distracted at the moment by more immediate problems. PENNINGTON

Viewing cable 08ANKARA1472, TFGG01: GOT URGED TO DEMAND RUSSIAN

WITHDRAWAL



08ANKARA1472

2008-08-14

16:04

2011-02-18

00:12

CONFIDENTIAL

Embassy

Ankara


VZCZCXRO0755


DE RUEHAK #1472 2271640

ZNY CCCCC ZZH

P 141640Z AUG 08

FM AMEMBASSY ANKARA



RHMFISS/EUCOM POLAD VAIHINGEN GE PRIORITY

RUEKJCS/JOINT STAFF WASHDC//J-3/J-5// PRIORITY




RHEFDIA/DIA WASHDC PRIORITY



SIPDIS

E.O. 12958: DECL: 08/14/2018

TAGS: MOPS NATO OSCE PHUM PREL GG RS TU UN

SUBJECT: TFGG01: GOT URGED TO DEMAND RUSSIAN WITHDRAWAL

FROM GORI; ERDOGAN GOES TO MOSCOW AND TBILISI

REF: SECST...

C O N F I D E N T I A L ANKARA 001472 SIPDIS E.O. 12958: DECL: 08/14/2018

TAGS: MOPS NATO OSCE PHUM PREL GG RS TU UN

UN

SUBJECT: TFGG01: GOT URGED TO DEMAND RUSSIAN WITHDRAWAL FROM GORI; ERDOGAN

GOES TO MOSCOW AND TBILISI REF: SECSTATE 87254 Classified By: CDA Doug

Silliman, reasons 1.4 (b,d)

Â¶ 1. (C) CDA delivered reftel points August 14 to MFA Deputy U/S for

Americas Berk and DDG for Maritime and Aviation Affairs Ozturk. Berk agreed that Russia should fulfill the commitments it made in the agreement with

President Sarkozy and that OSCE observers should have immediate access to areas currently under Russian control. 2. (C) Berk noted that PM Erdogan traveled from Moscow to Tbilisi overnight, along with MFA Deputy U/S for

Russia, Central Asia and the South Caucasus Cevikoz. Based on only a preliminary readout, Berk said that in Moscow Erdogan met with Medvedev privately, and the two were joined by Putin for a working lunch. Russian protocol was "impressive," with Russian authorities closing the Moscow airport road to facilitate Erdogan's short-notice travel. 3. (C) According to the latest GOT information, Poti port is under effective Russian naval control, though Georgian authorities are still operating the port's commercial operations. In the last 48 hours, two Turkish commercial vessels have unloaded cargo at Poti and left safely, Ozturk said. Turkish authorities have observed four Georgian patrol boats anchored directly adjacent to Turkish territorial waters, near Batumi (where there is usually only one patrol boat anchored). Georgia might have moved the vessels to the area to ensure their safety, Ozturk surmised. 4. (C) A ten-truck Turkish

Red Crescent (Kizilay) team has delivered humanitarian aid to Georgia.

Turkey is prepared to provide additional humanitarian aid, but Tbilisi has not requested any more assistance so far. Turkish Airlines (THY) has not resumed commercial flights to Georgia, Ozturk said, because of the prohibitive cost of insurance. Ozturk underscored that Turkey has approved overflight permission for all humanitarian flights to Georgia; in addition,

Turkish airspace is open to all flights to Armenia, including Moscow-

Yerevan flights. Visit Ankara's Classified Web Site at http://www.intelink.sgov.gov/wiki/Portal:Turk ey SILLIMAN

Viewing cable 08ANKARA1478, PM ERDOGAN VISITS MOSCOW AND TBILISI;

SUPPORT FOR


Reference ID Created

08ANKARA1478

2008-08-15

14:02

Released

2011-02-18

00:12

Classification

CONFIDENTIAL

Origin

Embassy

Ankara


VZCZCXRO1805


DE RUEHAK #1478/01 2281454

ZNY CCCCC ZZH

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FM AMEMBASSY ANKARA



RHMFISS/EUCOM POLAD VAIHINGEN GE PRIORITY

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RHEFDIA/DIA WASHDC PRIORITY


C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001478

SIPDIS

DEPT FOR EUR/SE, EUR/CARC

E.O. 12958: DECL: 08/15/2018

TAGS: PREL PGOV PHUM MOPS GG RS TU ZJ

SUBJECT: PM ERDOGAN VISITS MOSCOW AND TBILISI; SUPPORT FOR

GEORGIA'S TERRIT...

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 001478 SIPDIS DEPT FOR

EUR/SE, EUR/CARC E.O. 12958: DECL: 08/15/2018 TAGS: PREL PGOV PHUM MOPS GG

RS TU ZJ

SUBJECT: PM ERDOGAN VISITS MOSCOW AND TBILISI; SUPPORT FOR GEORGIA'S

TERRITORIAL INTEGRITY Classified By: CDA Doug Silliman, reasons 1.4 (b,d)

Â¶ 1. (C) SUMMARY. PM Erdogan received a warm reception from Russian leaders in Moscow, where he conveyed Turkey's clear support for Georgia's sovereignty, independence and territorial integrity. The Russians responded they have no intention of entering Tbilisi or occupying Georgia, but that

Georgia was responsible for the deaths of 2,000 civilians that sparked the current crisis. The Russians agreed to work with Turkey to develop Turkey's

"Caucasus Stability and Cooperation Platform" concept. Receiving Erdogan in

Tbilisi, President Saakashvili blamed Russia for the crisis and rejected parts of the Sarkozy cease-fire plan, but said his government would engage in a Caucasus stability pact once the current crisis is over. The Turks believe Saakashvili will face significant, and perhaps insurmountable, political opposition at home when the crisis passes. END SUMMARY.

WARM RECEPTION IN MOSCOW ------------------------ 2. (C) The atmosphere was collegial during PM Erdogan's August 13 visit to Moscow, MFA Deputy U/S for

Russia, Eastern Europe, Caucasus and Central Asia Cevikoz told CDA August

15. Erdogan met privately with both President Medvedev and PM Putin, who then hosted him for a working dinner, joined by FMs Babacan and Lavrov. The

Russians described President Saakashvili as directly and personally responsible for the military conflict by ordering military action that they claim took 2,000 civilian lives. The Russians told the Turks they do not intend to enter Tbilisi or to occupy Georgia proper, but do not trust

Saakashvili to implement a credible cease-fire. They indicated to the Turks an intention to establish "buffer zones" around South Ossetia and Abkhazia to protect their peacekeepers but it was not clear to Cevikoz whether such zones would be established inside Georgia proper or in the territory of the breakaway provinces.

RUSSIANS RECEPTIVE TO TURKISH CAUCASUS STABILITY PACT PROPOSAL ------------

-------------------- 3. (C) The Russians responded positively to Turkey's proposal for a "Caucasus Stability and Cooperation Platform," Cevikoz said.

The proposal is intended to include the five Caucasus countries: Armenia,

Azerbaijan, Georgia, Russia and Turkey, and would be based on OSCE principles (to exclude Iran, Cevikoz quipped). Turkey wants the platform to have a mechanism for conflict resolution and crisis management, as well as elements to discuss economic cooperation, tourism, energy security and related issues. Cevikoz emphasized Turkey's view that Armenia must play an important role in any such mechanism; Erdogan will travel next week to Baku to sound out the Azerbaijanis and the Turks will soon pulse the Armenians

(informally) as well. Medvedev and Erdogan tasked their Foreign Ministers with further developing the stability pact concept. 4. (C) Cevikoz said that no decision has been made yet on President Gul attending the September

6 World Cup qualifier in Yerevan. MFA DDG for Americas Ercin told CDA separately that the MFA is currently engaged in a debate on the pros and cons of Gul's attendance, with the chief negative the likely very negative

Azerbaijani reaction. CDA encouraged Gul's attendance as a powerful symbol of Turkish-Armenian reconciliation.

TURKEY SUPPORTS GEORGIA'S TERRITORIAL INTEGRITY ---------------------------

------------------ -- 5. (C) Erdogan expressed clearly, according to

Cevikoz, Turkey's support for Georgia's sovereignty, independence and territorial integrity, as defined by international law; the Russians committed to sovereignty and independence, but did not comment on territorial integrity. Cevikoz noted Turkey's alarm over subsequent public statements by Russian Defense Minister Ivanov and FM Lavrov dismissing the importance of Georgia's territorial integrity.

FEAR AND LOATHING IN TBILISI ---------------------------- 6. (C) In

Erdogan's subsequent August 14 stop in Tbilisi, Saakashvili accused Russia of starting the conflict and preparing for it for months. He denounced

Russian claims of ANKARA 00001478 002 OF 002 2,000 South Ossetian civilians dead as a gross exaggeration. Saakashvili told Erdogan that Russia intends to occupy Georgia and remove him from office. He described the French provisional cease-fire proposal as a "Russian plan." He rejected point six, insisting to Erdogan that Georgia will not discuss the final status of

Abkhazia or South Ossetia at the international level, and said he could not accept the wording in point five on the "additional measures" Russian peacekeepers would be authorized to take. Cevikoz said Saakashvili told

Erdogan that if Babacan and Lavrov successfully launch a Caucasus stability initiative, he would ask his FM to attend, but only after the current crisis is over. 7. (C) Erdogan emphasized to Saakashvili in a one-on-one meeting the importance of remaining calm and maintaining a softer rhetoric.

It is not the time for further escalation, Erdogan argued, but rather for establishing a peaceful environment, conducive to the withdrawal of Russian forces. 8. (C) Cevikoz observed that political groups in Georgia are united presently against Russia, but that such unity will likely break down once the crisis is over. Georgia's civilian infrastructure has been badly damaged and it will be a tough autumn and winter for the Georgian people.

Saakashvili will be the political target.

GRATITUDE FOR TURKEY'S HUMANITARIAN ASSISTANCE ----------------------------

----------------- - 9. (SBU) The Turks were pleased by Saakashvili's sincere expression of gratitude for Turkey's swift humanitarian response to the crisis. He told Erdogan that Georgia does not need any additional emergency aid, but asked for Turkish assistance with the reconstruction of central Gori, where the Georgians said a ten-block area of apartment blocks had been destroyed and the hospital damaged. Erdogan responded favorably and said he would direct Turkish government agencies to determine how to initiate the reconstruction process. Visit Ankara's Classified Web Site at http://www.intelink.sgov.gov/wiki/Portal:Turk ey SILLIMAN

Viewing cable 08TBILISI1379, GEORGIA: SITREP 10: RUSSIANS ON MOVE, IN

GEORGIAN



08TBILISI1379

2008-08-16

15:03

2011-02-18

00:12

CONFIDENTIAL


VZCZCXRO2287


DE RUEHSI #1379/01 2291543

Embassy

Tbilisi

ZNY CCCCC ZZH

P 161543Z AUG 08





SIPDIS

DEPT FOR EUR/CARC AND TASKFORCE-1

E.O. 12958: DECL: 08/16/2018

TAGS: PGOV PREL PHUM RU GG

SUBJECT: GEORGIA: SITREP 10: RUSSIANS ON MOVE, IN GEORGIAN

TANKS?

REF: TBILIS...

C O N F I D E N T I A L SECTION 01 OF 02 TBILISI 001379 SIPDIS DEPT FOR

EUR/CARC AND TASKFORCE-1 E.O. 12958: DECL: 08/16/2018 TAGS: PGOV PREL PHUM

RU GG

SUBJECT: GEORGIA: SITREP 10: RUSSIANS ON MOVE, IN GEORGIAN TANKS? REF:

TBILISI 1372 Classified By: AMBASSADOR JOHN F. TEFFT FOR REASONS 1.4 (B)

AND (D) 1. (SBU) Begin Summary: OSCE and Georgian officials confirmed a large convoy of Russian troops, including Ossetians, was headed east toward

Tbilisi as of 1700 hours, August 16, but then OSCE reported that the convoy had turned back around toward Gori. OSCE fears further violence against civilians is likely. The main highway (M-27) remains closed, and OSCE was not allowed to enter Gori. There were reports of Russian troops and

Georgian tanks observed traveling through Khashuri the morning of August

16. Media reported ongoing looting and rapes in the town. On August 15, the

Georgian MOIA confirmed that Russian helicopters were dropping flares on the Borjomi national forest to start fires. The same day, Georgian TV showed Russian CIS PKF-marked trucks towing multiple Georgian coast guard boats out of the Port of Poti. Various other reports of looting and violence dominate the Georgian news. Relief efforts continue. Stores of grain and fuel are adequate for now, and relief efforts are focused on the immediate basic needs of food, clothes, and shelter. Recent estimates of

IDPs put the total number around 100,000 with 60,000 officially registered in Tbilisi. The Patriarch visited Gori on August 15, and Tbilisi hospitals continue to treat wounded. Despite severe shocks, Georgia's economy remains stable. This sitrep covers events since the evening of August 14 (reftel).

End Summary. 2. (SBU) OSCE and Georgian officials confirmed a large convoy of Russian troops and BMPs, including Ossetians, was headed east from

Igoeti as of 1700 hours on August 16. The convoy's direction was unclear, as it could have been going to either Akhalgori (a majority Georgian area

near the southeast border of Ossetia) or Tbilisi. A later call from the

OSCE confirmed that the convoy had turned around. OSCE fears further violence against civilians is likely, as Akhalgori is highly populated. The main highway (M-27) remains closed, and continuing Russian presence in and around Gori, Khashuri-Agara, and Samtredia-Kutaisi has brought transit to a virtual standstill. OSCE was not allowed to enter Gori on August 16, and access to the city by the police is still unclear. BP officials observed

Russian troops and Georgian tanks (presumably driven by Russians) traveling through Khashuri the morning of August 16. The troops were asking local residents for food, and traveling west toward Kharagauli. Earlier, press reports indicated violence, rapes, and looting in Khashuri as well. 3.

(SBU) On August 15, the Deputy Minister of the MOIA Eka Zguladze confirmed that Russian helicopters were dropping flares on the Borjomi national forest to start wildfires. She urged cameramen to take as much footage as possible of the destruction. (Earlier she had urged the media not to circulate unconfirmed information which incites panic.) On August 16, the

Government said more than 50 hectares are on fire. In addition, on August

15, Georgian TV showed Russian CIS PKF-marked trucks towing multiple

Georgian coast guard boats out of the Port of Poti. 4. (SBU) In spite of widespread press coverage of Russian President Medvedev's signature and expectations that the Russians would immediately withdraw, there were few signs of this happening. Reports of Russian troop movements around Georgia persist as do reports of widespread and systematic looting. It is unclear if this is being orchestrated by Russian troops or irregulars. Video of soldiers in Russian uniforms robbing a Bank of Georgia has made its way to the internet. Government Coordination of Assistance -----------------------

-------------- 5. (C) During an assistance review meeting hosted by the PM,

Government ministers reported to us on the relief situation. They assessed that the country was virtually divided in two. So, they are seeking goods and materials from Azerbaijan and Turkey to supply both East and West. They were confident they had enough stores of goods such as medicines, food, and fuel to supply the general public for the time being. They also report enough necessities for which there is no local market (tents, cots, personal hygiene kits, etc.) Grain/cereal stores were at approximately 20 days, as are fuel supplies. Both Turkey and Azerbaijan are exporting to

Georgia freely. Poti port is still a major problem as freight forwarders will not insure delivery. BP confirmed that its ship, which was blocked by the Russian Navy two days ago, had been supplied and departed. Officials had heard reports that ships with Armenian-bound goods were allowed to deliver at Poti with relative ease, while ships delivering TBILISI 00001379

002 OF 002 goods for Georgia were being turned away or had to pay bribes to deliver. The Ministers did not have enough information at the time to determine if this was a deliberate policy, but a trend is noticeable.

Members of the cabinet believe the only reason the Russians did not destroy the railroad is because it is the lifeline to Armenia and its destruction would punish the Armenians more than the Georgians. 6. (C) The PM is concerned about controls over the distribution process of humanitarian assistance. Lessons learned from the past show that NGOs, while meaning well, offer no coordination and lose control over the goods they distribute. This creates market distortions when recipients create a gray market by reselling the goods. As such, CabMin proposed that only the GOG and USG would control the wholesale distribution of goods to keep control over the situation and make it systematic and sustainable. The GOG also says it is actively trying to cool off the NGO flood in order to reduce a sense of panic and maintain calm and order among the IDPs. PM would like to centralize IDPs in larger collection points, but is of the opinion that it is not possible to do so. IDPs are already spread out over hundreds of places in Tbilisi and will not move voluntarily. The last image the GOG wants is forcibly moving IDPs to other collection points. The GOG said

August 15 that 60,000 IDPs have officially registered in Tbilisi, and estimate total numbers of at least 100,000 so far. 7. (SBU) The Patriarch

visited Gori on August 15, and met with IDPs there and in Nikozi. He delivered aid and helped facilitate evacuation of some wounded. Embassy humanitarian assistance units visited Republican and Gudushauri Hospitals in Tbilisi on August 10. Both hospitals had reported approximately 400 casualties each arriving from the conflict zone. In a follow up from August

15, Gudushauri Medical Center reported 600 wounded arrivals (total), including 50 civilians. Republican Hospital reported 450 wounded, one-third of whom are civilians. Republican reported significantly fewer casualties after Sunday. One death was reported at Gudushauri, though there were four

DOAs. Gudushauri reported five amputations, Republican six. Economic Update

--------------- 8. (SBU) Despite severe shocks, Georgia's economy remains stable so far. The National Bank of Georgia has intervened to not allow exchange rate fluctuations. Overseas transfers of more than 50,000 GEL

(35,714 USD) and internet banking have been restricted. Major pipelines running through Georgia have suspended oil and gas delivery. In the case of

BTC, it is due to the fire in Turkey. In Georgia, BP needs to examine the

Baku-Supsa pipeline near Gori before it can resume operations. Electricity supplies are stable, and no imports are required at this time, although integration of Eastern and Western Georgia's power grids is not yet repaired. Communication infrastructure, though targeted by the Russians, continues to function. Some cell towers are powered by independent generators, with some reportedly running low on fuel. There are no signs of any food or gasoline shortages. TEFFT

Viewing cable 09STOCKHOLM266, SWEDISH FOREIGN MINISTER BILDT'S

WASHINGTON AGENDA



Embassy

Stockholm

09STOCKHOLM266

2009-04-29

15:03

2011-02-18

00:12

SECRET

Appears in these articles: http://rt.com/news/sweden-us-information-swedish/

VZCZCXRO2245

OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV

DE RUEHSM #0266/01 1191514

ZNY SSSSS ZZH

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FM AMEMBASSY STOCKHOLM




S E C R E T SECTION 01 OF 03 STOCKHOLM 000266

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TAGS: PREL PGOV EUN SW

SUBJECT: SWEDISH FOREIGN MINISTER BILDT'S WASHINGTON AGENDA

REF: A. STOCKHOLM 259

Â¶ B. BRUSSELS 537

Â¶ C. STOCKHOLM 192

Â¶ D. STOCKHOLM 65

Classified By: CDA Robert Silverman for reasons 1.4 (B) & (D).

Â¶ 1. (S) Summary: For Bildt's May 4 visit to Washington, we recommend the following top three issues: additional contributions in Afghanistan, resettlement of Guantanamo detainees, and leadership in the EU on autonomous sanctions on Iran. Given Sweden's upcoming EU Presidency, July-

December 2009, early action now on these topics could spur other EU Member

States. Other issues he is coming with include security relations with

Russia, Turkish EU accession, the deteriorating situation in Bosnia, and support for Ukraine and the Baltics. During his meeting with the Secretary,

Bildt will extend an invitation for her to meet with EU ministers on the margins of the September 4-5 Gymnich in Stockholm, and he will inquire about the possibility of Prime Minister Reinfeldt visiting the White House before Sweden's EU Presidency commences on July 1 (Ref D). End Summary.

Carl Bildt: Medium Size Dog with Big Dog Attitude

--------------------------------------------- ----

Â¶ 2. (S) Bildt represents a medium-size country (9.5 million, $350 billion annual GDP) that has some major power ambitions and capabilities, and which looks forward to working closely with us on its upcoming EU Presidency.

Sweden has the world's 7th largest foreign aid program (nearly $5 billion), focused on Africa and the Middle East. The largest Nordic country, with the legacy of a Baltic empire, it often takes regional leadership roles (e.g., leading a PRT in Afghanistan with Finland and Norway). It also has a tradition of international civil servants including Jan Eliasson (Darfur),

Rolf Ekeus and Hans Blix (Iraq) and Bildt himself (Bosnia). Bildt, formerly a prime minister from 1991-1994, made a surprise come-back as foreign minister under the Moderate Party-led alliance government elected in 2006.

He is widely respected in Sweden as an elder statesman (he is 60 while

Prime Minister Reinfeldt is 42), and has a free hand in running foreign policy at present. But he is not close to Reinfeldt and has limited political skills (often seen as a haughty member of the nobility, not the image which Reinfeldt and the new Moderates seek to project). Some rumors in Stockholm have him moving on after Sweden's EU Presidency finishes in

December, perhaps to a senior job in Brussels. But for many European observers, he is seen as too close to the British and the Americans to get

full French or German backing to replace Solana in the High Representative role.

Afghanistan

-----------

Â¶ 3. (C) Sweden has some 400 troops based in four provinces in Regional

Command-North, joined by an additional 200 Norwegians and Finns. The Swedes will expand to 500 troops by the end of 2009, including a second OMLT at brigade level, plus a C-130 at ISAF HQ's disposal and medevac helicopters coming in 2010-2011. Recent security incidents in and around the Swedish

PRT in Mazar-e Sharif involved the ambush and killing of ten Afghan police officers, and firing on Swedish troops. Given the rising threat level,

Sweden deployed 40 special operations troops to the PRT on April 20. Bildt will be interested in U.S. thinking on security trends, and should be asked about funding Afghanistan National Army training.

Â¶ 4. (C) On the civilian side, Sweden could -- and should -- do more. It currently has three officers in EUPOL and three more in training, but the head of the joint MoD/MFA-run training academy tells us that several dozen more Swedish policemen want to go to Afghanistan. We recommend USG interlocutors stress to Bildt the importance of Sweden doing more on EUPOL quickly, and then using its EU Presidency to lead EU-wide efforts to fully staff EUPOL.

Guantanamo

----------

Â¶ 5. (S) Sweden's Minister for Migration Tobias Billstrom has the lead on detainee resettlement, but FM Bildt is directly involved through his stewardship of the bilateral relationship. For the past few months, Swedish officials have told us they are considering accepting one or more detainees and the Swedish security service vetted and cleared five Uighurs and two non-Uighurs for possible resettlement. An independent agency, the Swedish

Migration Board, makes the resettlement decisions, but the government has the ability to consult with the Board on groups of individuals of

"particular interest." We recommend raising this with Bildt

STOCKHOLM 00000266 002 OF 003 during each of his Washington meetings, noting general UNHCR support for resettlement (which is important in Swedish refugee resettlement), and asking for Swedish leadership in the lead-up to its EU Presidency.

Iran

-----

Â¶ 6. (S) Sweden continues to lead efforts by a small number of EU members to raise concerns with EU autonomous sanctions on Iran (Ref B). Bildt is directing these efforts, for several reasons. For economic reasons, Sweden is generally skeptical about the effectiveness of sanctions and in

particular with Iran, where Ericsson and Volvo Trucks, among other Swedish companies, have significant exports. Bildt may also hope to play a mediating role with Iran and may thus be trying to keep relations with

Tehran warm. MFA POL Director Lyrvall recently told us he expects more discussion within the EU on why the Americans would be calling for sanctions now, before enough time has been given to the Iranians to respond to recent overtures (Ref A). Perhaps in a few months, possibly September, if Tehran has not responded, it might be time for Washington to "use the considerable political capital" it has built up to bring Russia and China along on a new UNSC resolution, he continued. We have urged the Swedes to focus on the existing UNSCRs, especially the enhanced vigilance language of

UNSCR 1803, to give the EU3 the tools they are asking for, including support for additional designations.

Other Topics: Russia, Balkans, Turkey, Ukraine ----------------------------

----------------- -

Â¶ 7. (S) Russia: Last summer's Georgia crisis rattled Swedish security planning, causing a delay in the planned publication of the long-term defense bill. Given what the Swedes see as Russia's more threatening posture in the Baltic and High North, Bildt would like to compare views on threat analysis, engaging Russia militarily (Sweden stopped all mil-mil exchanges with the Russians last August) and the Medvedev security proposal. Bildt is reportedly worried about Greek plans for an informal

OSCE ministerial in Corfu, and the possibility that Athens will unwisely push for a deal at any cost. Our intelligence cooperation with Sweden on

Russia is excellent; DIA Director LTGEN Burgess will be here next week for exchanges with the Swedes on Russia and other topics.

Â¶ 8. (C) On the Balkans, Bildt will likely raise his concerns about Bosnia and the worrisome trends he sees there. We have asked the Swedes to continue supporting the EUPOL/Althea mission (even though they no longer have troops involved), but interlocutors here have increasingly been pushing the view that there is no longer a military mission requiring the presence of European troops. Bildt may raise his concerns about both

"enlargement fatigue" and the growing unwillingness of other member states to move forward on deeper integration for the Western Balkans.

Â¶ 9. (C) On Turkey, the Swedes are leading the push in the EU to open new chapters for Turkey's accession talks. PM Reinfeldt, who normally defers to

Bildt on foreign policy issues, is especially concerned about this issue;

Reinfeldt visited Turkey after President Obama and echoed his message about support for Turkey's EU accession. Reinfeldt's staff tell us the Swedes are unhappy over what they perceive as a weakening of the British position on

Turkish accession, and EU Minister Cecilia Malmstrom traveled to London

April 28 to consult on Turkey with UK EU Minister Caroline Flynt. Bildt traveled to Cyprus in late April, and hosted northern Cypriot leader Talat in Stockholm as well, as part of the Swedish strategy of moving forward on

Turkey's accession. Bildt will want to coordinate on ways ahead, possibly asking for more U.S. pressure on Ankara to allow Greek Cypriot fishing vessels into Turkish ports.

Â¶ 10. (C) Ukraine and the Baltics are of special interest given Sweden's traditional focus on countries that -- like it -- lie on Russia's periphery. Sweden's ambassador in Kyiv thinks a second tranche of IMF loans

will keep the economy afloat for some months and that President Yushchenko and Prime Minister Tymoshenko seem to be working together on the IMF, if not on anything else. But they see Yushchenko losing power and assess that

Tymoshenko would win a second-round runoff of the presidential election likely to be held this autumn. Bildt is worried that the closer Ukraine-EU ties envisioned by the Eastern Partnership are under threat. Sweden's support for the Baltics (e.g., it convened a meeting with other Nordics and the IMF to bail out Latvia in December) is motivated partly by a desire to prevent Baltic currency devaluations that could bankrupt Swedish banks, but also by Sweden's concern that these countries not slip back into the

Russian economic sphere. Sweden just concluded a deal to build an undersea electrical cable to Lithuania, STOCKHOLM 00000266 003 OF 003 called

Swedlink, that will provide 700-1,000 megawatts to the Baltics by 2016.

Â¶ 11. (C) Bildt will ask about the Israeli-Palestinian peace process. He has focused his public remarks on humanitarian issues, urging that the Gaza border crossings be opened immediately. POL Director Lyrvall recently stressed to us that the international community cannot ignore Hamas;

"Fatah-only elections would mean the end of the Palestinian state." On the possibility of an EU association agreement with Syria, Sweden has been in favor but is willing to wait to see the results of the elections in

Lebanon. It has promised to consult with us before pushing for closer ties with Syria within the EU. SILVERMAN

Viewing cable 06LIMA1406, FUJIMORISTAS DELIGHTED WITH ELECTION RESULTS

AND



06LIMA1406 2006-04-11 19:07 2011-02-20 12:12 CONFIDENTIAL Embassy Lima

Appears in these articles: http://elcomercio.pe/

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REF: 05 LIMA 5396

Classified By: Political Counselor Alexander Margulies. Reason: 1.4(d)

.

Â¶ 1. (C) Jaime Yoshiyama, former Minister and President of

Congress under Alberto Fujimori and top advisor to Santiago

Fujimori, Alberto's brother and the Fujimorista Alliance for the Future (AF) party's candidate for First Vice President and Congress, was jubilant over the election results during a

4/11 breakfast with Polcouns. Yoshiyama said that the AF expected to win at least 15 seats in the new legislature, which would give it bargaining power with the two candidates in the second-round run-off to exchange AF's support in

return for "guarantees" that Fujimori and former officials of his regime would receive "just treatment."

Â¶ 2. (C) According to Yoshiyama:

-- Alberto Fujimori has communicated from his detention in

Chile that he is "very pleased" with the election results.

-- In addition to AF's strong showing in the congressional races, the Fujimoristas were delighted to see that their principle political enemies, Fernando Olivera's Independent

Moralizing Front (FIM) party and Valentin Paniagua's Centrist

Front, did so poorly (the FIM does not look like it will qualify for congressional representation, while Paniagua is on track to receive less than six percent of the vote and the

Centrist Front legislative slate no more than a handful seats).

-- AF will also have a highly competent legislative bloc, headed Keiko Fujimori (Alberto's daughter and former First

Lady), with the brains supplied by Santiago Fujimori, former

Congress President Martha Hildebrandt, and Alberto Fujimori's lawyer, Rolando Sousa.

-- Santiago Fujimori will request permission to depart the country (he is being tried on corruption charges) to visit his brother and seek specific guidance on how AF should conduct its negotiations with the two candidates in the second-round presidential run-off vote, whom the Fujimoristas expect will be Union por el Peru's Ollanta Humala and APRA's

Alan Garcia.

-- The Fujimoristas currently plan to negotiate principally with APRA, whose leaders they view as capable and responsible, as well as people with whom they feel they can

"do business."

-- The Fujimoristas will also keep the door open to Humala, both as an incentive for APRA to negotiate in good faith, and as an insurance policy. While the Fujimoristas question the

UPP candidate's economic policies and ability to govern, they do not/not demonize him.

Â¶ 3. (C) COMMENT: The election results to date are everything the Fujimoristas hoped for (Reftel): a significant congressional bloc (at least the fourth largest in the next legislature), the most voted for congressional candidate (Keiko Fujimori), affirmation of large popular support for Alberto Fujimori, and the defeat of their most inveterate political opponents. While Yoshiyama stated that the Fujimoristas would prefer to swing a deal with Alan

Garcia for the second round, he was also clear that they are prepared to talk turkey with Humala should the negotiations with APRA prove unproductive. END COMMENT.

POWERS

=======================CABLE ENDS============================

Viewing cable 10BAKU127, AZERBAIJAN: WHO OWNS

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