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