VZCZCXRO0400
OO RUEHROV RUEHTRO
DE RUEHKH #1158/01 2880733
ZNR UUUUU ZZH
O 150733Z OCT 09
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4559
INFO RUCNIAD/IGAD COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RHMFISS/CJTF HOA

UNCLAS SECTION 01 OF 02 KHARTOUM 001158 
 
NSC FOR MGAVIN, LETIM 
DEPT PLS PASS USAID FOR AFR/SUDAN 
ADDIS ABABA ALSO FOR USAU 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SU
SUBJECT: CITIBANK RECOVERS ITS USD 7 MILLION TRANSACTION 
 
REF: KHARTOUM 1072 
 
1.(SBU) SUMMARY: On September 30, the Government of Southern Sudan 
(GoSS) returned to Citibank the USD 7 million dollars of funds it 
had impounded on September 9.  The shipment had been intended to pay 
salaries for United Nations - African Union Mission in Darfur 
(UNAMID) peacekeepers (reftel).  Through the active engagement of 
Special Envoy (SE) for Sudan General Scott Gration, Charge 
d'Affaires (CDA) Whitehead and S/CRS Active Response Corps detailee 
Ged Smith, the funds were returned on the eve of the arrival of a 
Citibank team to Juba.  This allowed the latter to re-direct its 
focus from cash recovery to demonstrating Citibank's long-term 
commitment to doing business in Southern Sudan.  The GoSS responded 
positively to Citibank's initiative and raised several possible 
business opportunities for the bank's consideration.  If these 
initiatives are successful, Citibank could be positioned to become 
the primary international bank for Southern Sudan, providing 
financial services to its government, the United Mission in Sudan 
(UNMIS), NGOs, and the private sector.  End summary. 
 
--------------------------------------------- ----- 
HAPPY ENDING TO A COMMERCIAL TRANSACTION GONE AWRY 
--------------------------------------------- ----- 
 
¶2. (SBU) On September 9, Citibank, as agent bank for UNAMID, shipped 
USD 7 million in cash out of Nairobi, Kenya, to pay the salaries of 
UN peacekeepers in several Darfur locations.  When the pilot made an 
unscheduled stop to re-fuel in Wau, Southern Sudan, agents from 
Southern Sudan's Ministry of Internal Affairs (MoIA) arrested the 
flight crew and seized the USD 7 million - alleging possible 
involvement in illicit arms procurement.  Strenuous protests by 
UNMIS and Citibank resulted in the release of the plane and flight 
crew within a few days; but the cash was impounded by GoSS officials 
in the vaults of the Bank of Southern Sudan (BoSS). 
 
¶3. (SBU) The Office of the Special Envoy for Sudan (S/USSES), the 
U.S. Embassy and Citibank began a vigorous campaign to get the GoSS 
to release the funds.  CDA Whitehead raised the issue directly with 
the GoSS Minister of Finance Deng and GoSS Vice President Machar. 
Ged Smith, the Treasury Department's S/CRS - Active Corps 
representative in Juba represented the US Consulate at meetings with 
BoSS and GoSS officials.  The CDA and Smith made it clear that 
Citibank was one of the few international banks that had shown an 
interest in doing business in Southern Sudan.  The GoSS's delay in 
returning the money would have negative repercussions not only for 
Citibank's willingness to work in Southern Sudan but also that of 
other international corporations.  Smith pointed out in his meetings 
that Citibank had met all regulations for importing the funds into 
Sudan through filing documents with the Central Bank of Sudan (CBoS) 
in Khartoum.  It had been only the unscheduled landing in Wau that 
had arguably been an infraction of Southern Sudan's cash importation 
rules. 
 
¶4. (SBU) S/USSES, working with OFAC, drafted a letter from SE 
Gration to GoSS President Salva Kiir stating that no U.S. sanctions 
regulations had been broken by the transfer.  Consulate Juba 
delivered this letter to President Kiir's office.  A second letter 
signed by Treasury Advisor Smith was given by the CDA to Finance 
Minister Deng.  As a result, on September 30 the money was released 
via an electronic transfer from BoSS to Citibank in Nairobi. 
 
----------------------------------- 
VISIT OF THE CITIBANK TEAM PROCEEDS 
----------------------------------- 
 
¶5. (SBU) Despite resolution of the commercial transfer issue, 
Citibank decided it was still important to send a senior-level 
delegation to Juba.  The latter was led by Kevin Fitzgerald, 
Washington-based Managing Director for North America Public Service 
Sector and regional Citibank officials from Nairobi and 
Johannesburg.  Acting CDA Mark Asquino and Consul General Ava Rogers 
accompanied Fitzgerald and his team to meetings with BoSS and GoSS. 
During the meetings, Fitzgerald underscored that Citibank wanted to 
avoid transaction problems in the future, and that it was interested 
in exploring the eventual provision of comprehensive banking 
services in Southern Sudan.  During the team's initial meeting with 
BoSS, some of the latter's officials complained that Citibank had 
"failed" to open a branch in Juba, and instead was working through 
Kenya Commercial Bank for the time being.  However, during a follow 
up meeting, the BoSS director of Banking Operations and Foreign 
Exchange asked that Citibank provide BoSS with USD cash deliveries. 
As the two sides discussed BoSS cash delivery needs, it became clear 
the latter were similar to those of the UN.  On this basis, Citibank 
asked if BoSS would object to its combining the UN and BoSS 
shipments, as there would be a savings of having both shipments 
flown into Juba on the same airplane.  BoSS responded that this was 
 
KHARTOUM 00001158  002 OF 002 
 
 
a good idea, especially if logistics costs would be reduced. 
 
¶6. (SBU) Accompanied by CG Rogers, the Citibank team's final meeting 
was with Luka Biong Deng, GoSS Minister of Presidential Affairs. 
The Minister said that despite the recent transaction problem, GoSS 
still viewed Citibank as having the potential to become Southern 
Sudan's primary international bank.  He added that there was not 
only the prospect of BoSS business, but also additional 
opportunities for Citibank to work with Multi-Donor Trust Funds 
(MDTF) and other funding vehicles that would be needed if Southern 
Sudan became independent. 
 
¶7. (SBU) Comment: Citibank's willingness to engage with the BoSS and 
GoSS after resolution of the seizure of the 7 million dollar 
shipment bodes well for the bank having a future role in Southern 
Sudan.  The GoSS's positive response to Citibank's initiative could 
result in Citibank emerging as the primary international bank for 
Southern Sudan. 
 
WHITEHEAD