VZCZCXRO6920
PP RUEHDE RUEHDIR RUEHROV
DE RUEHKU #0306/01 0771416
ZNR UUUUU ZZH
P 171416Z MAR 08
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 1013
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 KUWAIT 000306 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ARP AND NEA/RA; DOC FOR BIS/OAC FDAVIDSON AND 
EWEANT 
 
E.O. 12958: N/A 
TAGS: KBCT PREL ECON ETRD AL KU
SUBJECT: DOC ANTI-BOYCOTT COMPLIANCE OFFICE COMMENDS GOK 
PROGRESS ON ARAB LEAGUE BOYCOTT ISSUES 
 
REF: KUWAIT 153 
 
¶1.  (SBU) Summary: In separate meetings with the Ministry of 
Commerce and Industry (MOCI), Customs and Kuwaiti Chamber of 
Commerce and Industry (KCCI), officials from the Department 
of Commerce (DOC) Anti-boycott Compliance Office commended 
the progress the GOK has made in eliminating barriers related 
to Arab League secondary and tertiary boycott of Israel.  The 
delegation highlighted the small number of recent cases of 
secondary and tertiary boycott language that were found in 
Kuwaiti contract documents.  They offered technical 
assistance to clean up the language in all tendering and 
contract documents to fully eliminate the secondary and 
tertiary boycott in Kuwaiti transactions.  GOK officials 
denied the existence of secondary or tertiary boycott in any 
GOK contract or tender document.  MOCI and KCCI agreed to 
investigate existing cases and consider alternative text 
provided by the DOC team.  End Summary. 
 
¶2.  (U) The Director and Deputy Director of the DOC Office of 
Anti-boycott Compliance, and the Anti-boycott Coordinator 
from NEA/RA visited Kuwait from March 10-12 to discuss Arab 
League boycott issues with the Kuwaiti government and private 
sector entities.  In addition to meetings with KCCI, MOCI and 
Customs, the delegation met with several private sector 
companies and experts that provided anecdotal support for the 
progress made by the GOK and Kuwaiti companies.  Some 
companies expressed concerns over existing GOK perceptions 
regarding interactions with Israel that may be detrimental to 
some companies bidding on government projects. 
 
¶3.  (SBU) MOCI Assistant Under Secretary for Foreign Trade 
Abdulaziz Al-Khaldi told the delegation that the GOK has 
taken all necessary steps to eliminate prohibited language 
from all contract and tender documents dealing with the 
secondary and tertiary boycott.  The delegation assured him 
that GOK progress has been noticeable and the DOC has 
received only eight complaints against Kuwaiti entities from 
U.S. companies in the last year.  The goal of the DOC team is 
to bring that number down to zero, the Director of the 
Anti-boycott Compliance Office told the Assistant U/S. 
Al-Khaldi pointed out that the eight documents presented were 
from private Kuwaiti companies and not related to the GOK. 
This proves that all GOK documents have been brought into 
compliance, he argued.  The delegation offered technical 
assistance and expertise to the GOK and Kuwaiti private 
companies to bring all relevant documents into compliance 
with USG requirements.  Al-Khaldi promised to look into 
existing complaints and to notify companies of the 
recommended changes in language. 
 
¶4.  (U) The delegation met with KCCI Deputy Director Rabah 
Al-Rabah to discuss working with the Chamber to harmonize 
private sector contract documents, especially of those 
companies that are members of the Chamber.  Al-Rabah pointed 
out that most problems with Kuwaiti non-compliance stem from 
of a lack of understanding about the technical language 
requirements under U.S. law.  Al-Rabah assured the delegation 
that he will meet with KCCI legal experts and present the 
recommendations provided by the delegation.  He also promised 
to work with the Anti-boycott compliance office, through the 
Embassy, to further clarify technical language requirements. 
 
¶5.  (SBU) Director General of Customs Ibrahim Al-Ghanim 
briefed the delegation on the actions taken by Customs in the 
last several years to eliminate secondary and tertiary 
boycott from all GOK transactions.  He said that the Customs 
Anti-boycott Office has been inactive for several years and 
the staff of the office has been reduced from fourteen in 
2000 to the current staffing level of two.  He told us that 
he is tired of USG officials, including embassy officers, 
visiting his office to question him about secondary and 
tertiary boycott repeatedly.  "You came a few weeks ago and I 
gave you all the answers you needed, I have nothing new for 
you," he said.  (Note: Embassy econoff met with the DG on 
February 7 regarding secondary and tertiary boycott, at which 
time the DG, a cooperative interlocutor on other issues, 
emphasized that he did not want to receive any more USG 
visitors regarding boycott issues.  See reftel.) 
 
¶6.  (SBU) Regarding attendance at the April 21-24 Arab League 
Boycott meeting in Damascus, Al-Ghanim repeated that Kuwait 
will participate but not at high levels.  "GOK participation 
is merely symbolic, we don't actively participate in the 
discussions," he added.  He went on to say the only instances 
of active Kuwaiti participation have been calls for positive 
 
KUWAIT 00000306  002 OF 002 
 
 
change in the Arab League boycott rules.  The Customs DG 
reviewed documents that the delegation provided regarding 
prohibited language in Kuwaiti contract documents.  Al-Ghanim 
expressed frustration that USG continues to contact him 
regarding violations in private sector contracts.  He 
dismissed these complaints by adding that USG should contact 
the private companies directly or work with KCCI to educate 
the private sector. 
 
¶7.  (SBU) He continued that Customs has disseminated 
instructional materials to all private companies and 
associations regarding the elimination of secondary and 
tertiary boycott.  "We have done our part, now any violations 
that exist are outside our control," he added.  He challenged 
the delegation to present evidence that there have been any 
violations in GOK tender documents or contracts.  The GOK 
does not even issue certificates of origin anymore, he 
emphasized.  The USG will not find prohibited language in any 
GOK contracts, he asserted. 
 
¶8.  (U) In addition to GOK meetings, the delegation also met 
with private companies and a legal expert to gain a private 
sector perspective on this issue.  Most of the companies 
acknowledged that GOK has made significant progress in the 
area of the secondary and tertiary boycott.  None of the 
companies had encountered prohibited text in GOK tender 
documents or contracts.  Some companies complained, however, 
that in some large government tenders, competing bidders use 
rumors of alleged business relations with Israeli companies 
as a means to scare the GOK away from picking a particular 
bidder. (Comment: Although such rumors may be used as tactics 
by competitors to gain an advantage over another bidder, it 
is highly improbable that legitimate bidders have lost a 
tender solely on the basis of such allegations.  Post has not 
heard of any such cases in recent years. End Comment.) 
 
¶9.  (SBU) Comment: This DOC visit, part of a regional visit, 
was a useful opportunity to address specific cases of 
secondary and tertiary boycott language in Kuwaiti contracts. 
 In prior meetings with the Embassy, GOK officials have 
repeatedly asked for examples of such contracts or tenders. 
DOC provided copies of eight separate private contracts that 
included inadmissible text.  According to the DOC team, 
complaints against Kuwait were among the least in the region. 
 This trip served as a first step towards identifying 
working-level GOK and private sector points of contact on 
boycott issues, specifically within MOCI and KCCI.  The GOK 
remains jittery about discussing boycott issues and most 
officials abdicate responsibility on this issue to the 
Kuwaiti political leadership.  The Embassy requested a 
meeting for the delegation with the Central Tendering 
Committee (CTC).  Upon clarification that the agenda would be 
boycott issues, the CTC Director quickly canceled the 
meeting.  Several attempts through the Ministry of Finance 
and Ministry of Foreign Affairs failed to convince the CTC to 
meet with the delegation.  Despite progress on secondary and 
tertiary boycott, the GOK remains fearful of any public 
discussions of this topic.  End Comment. 
 
********************************************* * 
For more reporting from Embassy Kuwait, visit: 
http://www.state.sgov.gov/p/nea/kuwait/?cable s 
 
Visit Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
********************************************* * 
Misenheimer