VZCZCXYZ0001
OO RUEHWEB

DE RUCNDT #0802 2402249
ZNR UUUUU ZZH
O 282249Z AUG 09
FM USMISSION USUN NEW YORK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7130
INFO RUEHGG/UN SECURITY COUNCIL COLLECTIVE IMMEDIATE
RUEHGB/AMEMBASSY BAGHDAD IMMEDIATE 0700
RUEHKU/AMEMBASSY KUWAIT IMMEDIATE 1547

UNCLAS USUN NEW YORK 000802 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV IZ KU
SUBJECT: UNSC CONSULTATIONS ON DEVELOPMENT FUND FOR IRAQ 
 
¶1. (U) Summary:  In Security Council consultations on August 
27, the UN Controller briefed on the recently released report 
regarding activities and progress made in strengthening the 
financial and administrative oversight of the Development 
Fund for Iraq (DFI).  The Controller highlighted the 
International Advisory and Monitoring Board (IAMB) 
recommendations to develop a realistic, time-bound action 
plan to resolve qualifications to DFI audits and the 
continued need to implement a comprehensive oil measuring 
system.  The Controller and most Council members noted the 
need for a smooth transfer mechanism from IAMB to Committee 
of Financial Experts (COFE) control of the DFI at the end of 
the year, when the mandate expires.  End summary. 
 
¶2. (U) On August 24, the Secretary-General issued the first 
semi-annual report created pursuant to paragraph three of 
resolution 1859 (2008) regarding the activities and progress 
made in strengthening financial and administrative oversight 
of the Development Fund for Iraq (DFI).  The report provides 
a detailed background on the establishment of the DFI, the 
role of the International Advisory and Monitoring Board 
(IAMB), and the 2006 creation of the Iraqi Committee of 
Financial Experts (COFE) which is poised to take over the 
task of monitoring the DFI upon the expiration of the IAMB 
mandate. 
 
¶3. (U) In consultations on August 27, Assistant 
Secretary-General Controller Jun Yamazaki briefed the Council 
on the DFI.  Yamazaki highlighted the need to enhance 
transparency and accountability of the DFI,  underscoring the 
IAMB recommendations to develop a realistic, time-bound 
action plan to resolve the qualifications to the DFI audits 
and the implementation of a comprehensive oil metering 
system.  In the absence of a fully operational oil metering 
system, it is not possible to reliably determine the volume 
of all exports of petroleum and petroleum products for which 
proceeds are to be deposited in the DFI accounts.  Yamazaki 
also noted the IAMB's call to intensify efforts to follow up 
on frozen Iraqi assets held abroad, including consideration 
of the need for a separate entity to handle such issues. 
Yamazaki concluded his remarks by reminding the Council that 
the IAMB mandate, including the mandate of the DFI, is due to 
expire at the end of 2009, and that it will be important to 
ensure that a proper succession mechanism and process be 
discussed by the Council. 
 
¶4. (U) All fourteen Council members who spoke during 
consultations, including the U.S., voiced the need for 
increased transparency and greater internal controls, 
especially in relation to oil metering. (Note:  Only Libya 
did not speak.  End note.)  Most Council members noted the 
need for a smooth transfer mechanism from IAMB to COFE 
oversight of DFI at the end of the year, when the mandate 
expires.  The Austrian representative alone made brief 
mention of the related immunities issue, stating they are 
interested in "the future shape of the DFI, including the 
immunities issue."  The Russian representative proposed that 
the Council invite the head of COFE to discuss the 
establishment of a timeframe and plans to increase oil 
metering, noting that the "Council should meet those who will 
take over the fund."  Controller Yamazaki agreed in his 
concluding remarks that a Council meeting with COFE 
representatives "could be useful". 
RICE