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Viewing cable 06ANKARA6487, TURKISH FUEL FLOWING TO IRAQ

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Reference ID Created Released Classification Origin
06ANKARA6487 2006-11-22 15:20 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Ankara
VZCZCXRO6655
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHAK #6487/01 3261520
ZNR UUUUU ZZH
R 221520Z NOV 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC 0039
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEHIT/AMCONSUL ISTANBUL 1672
RUEHDA/AMCONSUL ADANA 1361
RUEKDAI/DIA WASHDC
RUEHAK/USDAO ANKARA TU
RUEAIIA/CIA WASHDC
RUEKJCS/SECDEF WASHDC//USDP:PDUSDP/ISA:EUR/ISA:NESA//
RHEHAAA/NSC WASHDC
RUEUITH/ODC ANKARA TU
RUEKJCS/JOINT STAFF WASHDC//J-3/J-5//
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFIUU/HQ USEUCOM VAIHINGEN GE
RHMFISS/HQ USCENTCOM MACDILL AFB FL
RHMFIUU/425ABS IZMIR TU//CC//
RHMFIUU/39ABG INCIRLIK AB TU
RUEPGAB/MNF-I C2X BAGHDAD IZ
UNCLAS SECTION 01 OF 02 ANKARA 006487 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG ETRD IZ TU
SUBJECT:  TURKISH FUEL FLOWING TO IRAQ 
 
 
ANKARA 00006487  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED. 
 
1.  (SBU)  Summary.  Turkish exports of fuel products to Iraq have 
resumed and should accelerate following another round of meetings in 
Ankara in which SOMO and the Turkish government agreed to intensify 
cooperation against fuel smuggling.  Otherwise, SOMO payments to 
Turkish companies under the September 27 MOU are on track.  Turkey's 
Foreign Trade Undersecretariat remains appreciative of its improved 
cooperation with SOMO's new management, and recommends that SOMO 
enter into longer-term contracts with a smaller number of Turkish 
companies so as to ensure fewer interruptions in shipments.  End 
Summary. 
 
-------------------------- 
SMUGGLING IS THE NEW ISSUE 
-------------------------- 
 
2.  (SBU)  In a November 22 meeting, Foreign Trade Undersecretariat 
Director General Sevket Ilgac, who is responsible fr relations with 
Iraq, updated us on the SOMOfuel supply saga.  He said SOMO was 
meeting pyments-related obligations under the September 7 MOU.  He 
explained, however, that soon after September 27, a new set of 
issues emerged related to petroleum smuggling. 
 
3.  (SBU)  As per the MOU section on cooperation against illegal 
activity, shortly after signing SOMO provided FTU with a list of 
drivers and companies involved in fuel smuggling activities in Iraq. 
 FTU then proceeded to cancel these companies' export licenses and 
to put in place a system for issuing new export licenses that 
required certification that companies and drivers are not involved 
in smuggling.  In order to implement this, FTU asked companies to 
provide additional information, such as driver namechecks and proof 
from SOMO that delivery was being made. 
 
4.  (SBU)  The wait for SOMO and the companies to provide this 
information delayed the resumption of shipments for about three 
weeks.  Over the past two weeks, after receiving information from 
SOMO and the companies, FTU has been reissuing licenses and fuel has 
begun to flow.  The flow should accelerate as new licenses are 
approved this week.  Ilgac said that Turkish companies would then be 
in a position to meet all of SOMO's needs, including for kerosene. 
 
5.  (SBU)  Ilgac blamed SOMO for not responding more quickly with 
the requested additional information and for continuing to work with 
some of the smaller, more dubious companies -- which appear to be 
well-connected in Baghdad.  Instead of providing the information, 
SOMO started bad-mouthing FTU, which did not help.  In FTU's 
defense, Ilgac pointed to the intense criticism Trade Minister 
Tuzmen has been under in the press and parliament for allegedly 
turning a blind eye to fuel smuggling.  Thus, FTU must be 
super-careful.  In meetings in Ankara last week, SOMO DG Faleh 
al-Amari told Ilgac he understood this and would work to cooperate 
better. 
 
------- 
Comment 
------- 
 
6.  (SBU)  Ilgac made two other points: 
 
--The system is broken. He recommends that SOMO work with fewer, 
more dependable suppliers under longer term contracts.  The current 
contracts are for one month, requiring frequent renewals of L/C's 
and other delays.  Six month contract make much more sense. 
 
--FTU is part of the solution, not the problem.  The Turkish 
government only stepped in to help SOMO rescue this trade when it 
became apparent that SOMO's non-payment of suppliers threatened to 
ruin the companies financially.  FTU cannot order Turkish companies 
to sell to SOMO, but once relations with companies are on a normal 
footing (including limiting illegal trade), FTU will be only too 
happy to step back and let trade flow freely, as it does in other 
sectors.  Indeed, as a sign of its goodwill, FTU directly guaranteed 
SOMO's L/C's during the Eid/Bayram holiday when the company was 
unable to do so itself. 
 
ANKARA 00006487  002.2 OF 002 
 
 
 
WILSON