VZCZCXRO3131
OO RUEHTRO
DE RUCNDT #0082 0281555
ZNR UUUUU ZZH
O 281555Z JAN 08
FM USMISSION USUN NEW YORK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3618
INFO RUEHGG/UN SECURITY COUNCIL COLLECTIVE IMMEDIATE
RUEHGB/AMEMBASSY BAGHDAD IMMEDIATE 0667
UNCLAS USUN NEW YORK 000082
SIPDIS
SENSITIVE
SIPDIS
EMBASSY BAGHDAD FOR AMB CHARLIE RIES
E.O. 12958: N/A
TAGS: PREL ECON UNSC IZ
SUBJECT: UN PROPOSALS TO SHUT DOWN OFF
REF: A. USUN-IO/NEA E-MAIL 11 DECEMBER
B. USUN-IO/NEA E-MAIL 18 JANUARY
C. USUN-IO/NEA E-MAIL 24 JANUARY
1. (SBU) On January 23, Security Council members received a
letter from Secretary-General Ban Ki-moon following up on
Ban's December 7 letter detailing "arrangements for
terminating the operations relating to the letters of credit
raised against the United Nations Iraq Account under Security
Council resolution 1483 (2003)." In other words, the letters
propose procedures to resolve the outstanding letters of
credit in the UN's Oil-for-Food program in order to permit
termination of the program. Both letters and annexes have
been forwarded to IO/UNP and NEA/I/ASSIST (see ref e-mails).
The UK, which has the lead in the Council on Oil-for-Food
issues, is preparing to circulate a draft response to these
two letters. ACTION REQUEST: USUN requests Department
guidance on a draft response by 1 Feb, including how to
address the UN's proposed dispute mechanism. END ACTION
REQUEST.
2. (SBU) On January 23, poloff consulted with UKUN expert Ian
Collard, who said the UK is preparing a draft response to the
UN's proposal and two letters, and observed that the Security
Council owed a reply to Ban. He suggested that the letter
provide an interim response to the Secretary-General, noting
the Council's receipt of the letters and encouraging
continued progress between the UN and Iraq on resolving the
outstanding LOCs, including successful action by the UN-GOI
Working Group. But Collard proposed that in this interim
response the Security Council delay pronouncing on the UN's
suggestion to establish an elaborate dispute mechanism in the
event the Working Group does not resolve the outstanding LOCs
by the Working Group's deadline of 1 April 2008. Collard has
heard informally from the Secretariat that the UN believes
the prospect of an elaborate dispute mechanism will act as a
spur to encourage the Iraqis to come to agreement on all
outstanding contracts by 1 April, thus making it unnecessary
to implement such a mechanism. He suggested the Council
await further action by the Working Group of UN and Iraqi
officials before opining on the utility of a dispute
mechanism. The Belgian and French experts agree with this
approach. The Russian expert has indicated that Russia is
uncomfortable with the proposed dispute mechanism.
3. (SBU) Comment: While USUN welcomes the UK proposal, we
note that the proposed dispute mechanism would run counter to
longstanding USG efforts to terminate OFF. End Comment.
WOLFF