This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 04 COLOMBO 001724 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR SA, SA/INS 
PLEASE PASS TO USAID/ANE/AA, GORDON WEST; 
USAID/ANE/ESA, BERNADETTE BUNDY, USAID/ANE/SA, 
CHARLES UPHAUS, AND USAID/DCHA/OTI, RACHEL WAX. 
 
E.O. 12958:  N/A 
TAGS: EAID PTER CE LTTE
SUBJECT: USAID STAFF DISCUSS WORKING LEVEL ISSUES WITH LTTE 
 
REF:  STATE 256563 
 
SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY. 
 
     SUMMARY 
     ------- 
 
     ¶1.  (SBU) Per recent State Department guidance 
     approving operational/working level discussions with 
     counterpart LTTE representatives (reftel) and based 
     on a September 18 meeting between the Embassy's front 
     office and USAID Sri Lanka staff, on September 29 and 
     30 two USAID staff held meetings with LTTE officials 
     in Jaffna and Kilinochchi to discuss specific issues 
     related to USAID grant implementation in Jaffna.  The 
     meetings were cordial, did not stray from the 
     specific operational issues at hand, and resulted in 
     a clear understanding about how USAID's Office of 
     Transition Initiatives (OTI) will move forward on 
     grant implementation in Jaffna.  USAID also tried to 
     schedule an appointment with the LTTE in Trincomalee 
     to introduce the OTI head of office there to local 
     LTTE representatives.  This meeting did not happen, 
     however, due to the absence of the designated LTTE 
     official in Trincomalee.  END SUMMARY. 
 
     BACKGROUND 
     ---------- 
 
     ¶2.  (SBU) To date OTI has been constrained from 
     implementing grants in Jaffna due to the LTTE's 
     direct taxation of local Jaffna businesses and an 
     existing tariff system on goods being transported on 
     the A9 highway through the Vanni.  This is an LTTE- 
     controlled area that links the Jaffna Peninsula with 
     government-controlled areas to the south.  USAID has 
     been aware of the existence of a tax-exempt system 
     for donors and other international organizations 
     routing goods up the A9.  Until the recent State 
     Department guidance, USAID was unable to talk 
     directly with the LTTE to get this needed tax-exempt 
     status.  USAID attempted to obtain such a waiver via 
     the GSL government agent (GA) in Jaffna, but this 
     process proved to be opaque and slow. 
 
     JAFFNA FIRST 
     ------------ 
 
     ¶3.  (SBU) With Embassy clearance, the USAID/OTI Sri 
     Lanka country representative and the USAID Sri Lanka 
     special projects officer, joined by a local staff who 
     handles Jaffna for OTI, flew to Jaffna on September 
     29 for a scheduled meeting with the LTTE.  The team 
     first visited the GA in Jaffna to thank him for his 
     attempts to expedite the movement of USAID goods up 
     the A9 highway and to inform him about the planned 
     meeting with the LTTE.  The USAID staff then drove to 
     the LTTE office in Jaffna in a clearly marked 
     diplomatic vehicle. 
 
     ¶4.  (SBU) The USAID staff were met by Mr. Emayavan, 
     who introduced himself in English as the office's 
     "liaison officer."  [note: the USAID staff had been 
     told the previous week, when setting up a meeting 
     over the phone from Colombo, that Mr. Emayavan is 
     affiliated with the Jaffna NGO consortium and would 
     join the scheduled meeting with Mr. Eelampadavi, head 
     of the LTTE's Jaffna representative office.  End 
     note].  Though Mr. Emayavan offered his services as a 
     translator, the USAID special projects officer, who 
     speaks Tamil, led the conversation at the OTI country 
     representative's request. 
 
     ¶5.  (SBU) For the official meeting, Mr. Chemanan, the 
     deputy LTTE representative for Jaffna district, led 
     from the LTTE side.  He explained in Tamil that Mr. 
     Eelampadavi had been called to Kilinochchi for an 
     urgent meeting and sent his apologies for being 
     absent.  USAID staff introduced themselves by 
     presenting business cards and describing USAID as a 
     U.S. government organization with a program in Sri 
     Lanka supporting rehabilitation and development 
     projects in various parts of the island, including 
     Jaffna.  The USAID staff mentioned a few of the 
     activities USAID has funded in Jaffna such as 
     rebuilding war-damaged schools in Chavakachcheri, 
     rehabilitating a chicken farm in Varani, and 
     providing boats and nets to fishermen in Karainager 
     Island. 
 
     ¶6.  (SBU) Mr. Chemanan was attentive to the 
     conversation and responded by saying that USAID's 
     work, as described, was "very important for the 
     people of Jaffna.we are glad you are here."  He 
     continued by saying that the LTTE would make every 
     effort to cooperate and support USAID in any way 
     possible. With that invitation, the conversation 
     shifted to the subject of taxation, specifically as 
     it applied to the supplies USAID needs for projects 
     in Jaffna.  After USAID staff laid out the need to 
     have a tax-free arrangement for moving goods up the 
     A9, Mr. Chemanan said emphatically that the LTTE 
     would not tax any of USAID's projects in Jaffna, "no 
     matter how many hundreds of thousands of rupees" were 
     involved.  This response was in line with USAID's 
     understanding of the LTTE's current policy regarding 
     supplies moved into Jaffna for rehabilitation and 
     development work by any international agency. 
 
     ¶7.  (SBU) The hour-long meeting ended with Mr. 
     Chemanan suggesting that the USAID staff meet with 
     the LTTE's NGO coordinator in Kilinochchi, Mr. 
     Thiyagarajah, to make arrangements for tax-free 
     transport of supplies to Jaffna.  He agreed to call 
     ahead to schedule a meeting early in the afternoon. 
     Furthermore, he suggested that USAID return to Jaffna 
     some time in the future to talk with Mr. Eelampadavi. 
     No firm commitments were made, but USAID staff 
     expressed their interest in continuing the 
     conversation regarding operational issues related to 
     USAID programming in Jaffna. 
 
     ONWARDS TO KILINOCHCHI 
     ---------------------- 
 
     ¶8.  (SBU) USAID staff left Jaffna and proceeded to 
     Kilinochchi along the A9 highway, a two-hour journey. 
     The LTTE political wing and civil administration 
     complex there is a series of mostly new, one-story 
     buildings along a dirt road on the east side of the 
     A9 highway just north of the Kilinochchi town center. 
     A fence of barbed wire and metal sheeting, well over 
     head high, obstructs the view from the road. 
 
     ¶9.  (SBU) The USAID vehicle stopped in front of the 
     political wing headquarters, where an unarmed young 
     man in what seemed to be a gunmetal blue LTTE police 
     uniform was posted near an alley.  USAID staff 
     greeted him in Tamil, introduced themselves with 
     business cards and asked for Mr. Thiyagarajah.  With 
     a smile, the man escorted the USAID staff down an 
     alley to a civil administration office.  At that 
     office the USAID staff were greeted by another 
     English-speaking "liaison officer," a retired civil 
     servant from the department of health in Trincomalee. 
 
     ¶10.  (SBU) Mr. Thiyagarajah soon joined the group and 
     was extremely cordial from the outset.  With the 
     USAID special projects officer facilitating the 
     meeting in Tamil, USAID staff gave the same cursory 
     introduction and explanation of USAID as given in 
     Jaffna. As in Jaffna, there was no mention of USAID's 
     inability to work in LTTE-controlled areas, and Mr. 
     Thiyagarajah did not ask.  He explained that he was 
     the head of the LTTE's "INGO coordination office," 
     which is part of the organization's civil 
     administration.  His job is to interface with 
     representatives from INGOs, which it appeared he 
     assumed us to be, and handle matters like the one 
     being discussed - taxation of goods for 
     rehabilitation and development projects. 
 
     ¶11.  (SBU) USAID staff gave him a brief overview of 
     current projects in Jaffna and explained that USAID 
     did not pay taxes to the Sri Lankan government for 
     supplies procured as part of its assistance 
     activities, and it could not by U.S. law pay such 
     taxes for supplies being transported through the 
     Vanni.  USAID staff did not offer any more details, 
     and Mr. Thiyagarajah never pushed the issue.  "I 
     understand," he said, smiling.  In terms of a system 
     for waiving LTTE taxes, Mr. Thiyagarajah said that it 
     would be possible to get such a waiver but that it 
     would have to be on a shipment-by-shipment basis, as 
     is the case with other INGOs and international 
     agencies.  He explained exactly how the system works 
     and clarified a number of questions asked by the 
     USAID staff.  Essentially the INGO coordination 
     office clears a list of items for individual grants 
     and then routes the list to the LTTE customs officer 
     for a signature.  The process is straightforward 
     though it requires someone on the USAID side to walk 
     the paperwork through the system.  It can be done in 
     one day. 
 
     NO MEETING IN TRINCOMALEE 
     ------------------------- 
 
     ¶12.  (SBU) On September 30 the USAID/OTI Sri Lanka 
     country representative, the USAID Sri Lanka special 
     projects officer, and the USAID/OTI head of office in 
     Trincomalee went to the LTTE Trinco office for a 
     meeting that had been requested by letter after much 
     difficulty in getting any commitment over the phone. 
     While the Jaffna and Kilinochchi meetings revolved 
     around a clear discussion on a particular operational 
     issue, the Trincomalee meeting was deemed necessary 
     in order to brief the local LTTE office about 
     USAID/OTI's new office in Trincomalee and planned 
     activities in the area.  The meeting was also 
     intended as a way to introduce the USAID/OTI Trinco 
     head of office to the LTTE and to clearly state that 
     issues related to the OTI program in Trincomalee 
     should be addressed to her as opposed to any of OTI's 
     local staff. 
 
     ¶12.  (SBU) Despite numerous efforts to confirm the 
     Trinco meeting, upon arrival at the LTTE office the 
     USAID staff were informed that the LTTE 
     representative, Mr. Thilak, was not in town and that 
     no one else in the office was authorized to meet with 
     official visitors.  The USAID staff left business 
     cards and stated that the meeting could be arranged 
     at a later date. 
 
     ¶13.  (SBU) It turned out that Mr. Thilak was in fact 
     in Trincomalee, and shortly after the USAID staff 
     left to return for Colombo he called the USAID/OTI 
     Trincomalee office to say that he was available to 
     meet immediately.  He was extremely apologetic about 
     any miscommunication over the planned meeting and 
     offered to come to the USAID/OTI office immediately 
     to meet.  Unfortunately by the time the USAID/OTI 
     office staff was able to inform the USAID Sri Lanka 
     staff via mobile phone, they were too far out of 
     Trinco to return.  USAID/OTI Trincomalee informed Mr. 
     Thilak that the meeting would need to be rescheduled. 
     In all likelihood the meeting will take place 
     sometime during the week of October 6. 
 
     COMMENT 
     ------- 
 
     ¶15.  (SBU) The most lasting impression from the 
     exchanges at several LTTE offices was that the LTTE 
     was open to the type of working-level discussions 
     directly related to projects in government-controlled 
     areas of the north and east that USAID initiated 
     through this trip.  People were extremely cordial and 
     welcoming, probably partly due to the fact that from 
     the onset the meetings were conducted in Tamil and on 
     the USAID side there was an American Tamil speaker 
     who has long years of experience in different parts 
     of Sri Lanka.  It also seemed clear that the LTTE 
     interlocutors were not fully aware of the 
     significance of these conversations for USAID Sri 
     Lanka and the larger USG presence in the country - 
     i.e. the first operational level engagement since the 
     LTTE was placed on the list of FTOs. 
 
     ¶16.  (SBU) Contributing to this impression was the 
     likelihood that the LTTE interlocutors, despite 
     seeing a vehicle with diplomatic plates and being 
     presented with official business cards, mistook the 
     USAID staff to be INGO personnel.  The substance of 
     the conversations were strictly work related and 
     never pushed or pulled into the political arena.  The 
     USAID staff did nothing to disabuse them of this 
     notion. 
 
     ¶17.  (SBU) The USAID special projects officer, who 
     had worked in the north of Sri Lanka with 
     international agencies from early 1994 through mid- 
     2002, was struck by the relaxed security atmosphere 
     of the LTTE political office in Jaffna and the 
     political-civil administration compound in 
     Kilinochchi.  In stark contrast to the past, there 
     were almost no armed guards or sentries visible. 
     Civilian access to these places, particularly in 
     Jaffna, seemed much less restricted.  This could 
     reflect a growing distinction between the military, 
     political and civil administration arms of the LTTE, 
     or at least the desire to have such boundaries 
     perceived, whether real or imagined. 
 
LUNSTEAD