VZCZCXRO9011
RR RUEHBC RUEHDE RUEHDH RUEHKUK RUEHROV
DE RUEHGB #3152/01 3410627
ZNR UUUUU ZZH
R 070627Z DEC 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 5646
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 BAGHDAD 003152 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR NEA/RA FOR MARK KELLY 
DEPT PLEASE PASS TO USTR, TREASURY AND COMMERCE/BIS/OIC 
 
E.O. 12958: N/A 
TAGS: KBCT ECON ETRD XF IZ
SUBJECT: RESPONDING TO ARAB LEAGUE BOYCOTT REPORTING 
REQUIREMENTS: IRAQ 
 
REF: A. STATE 120272 
     ¶B. BAGHDAD 2527 
     ¶C. 08 BAGHDAD 764 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY. 
 
¶1. (SBU) Summary and Comment:  Post regularly engages GOI 
officials at all levels to encourage de facto non-compliance 
with the Arab League Boycott of Israel (ALB).  Senior GOI 
officials repeatedly tell us that Iraq is not pursuing the 
boycott, but a tangled web of conflicting laws, regulations 
and CPA orders -- applied differently by each Ministry -- 
has, in the past, resulted in reports of ALB compliance 
requests prohibited under U.S. law.  While the GOI's slow 
review of ALB-specific regulations continues, the changing 
business environment and pressure by Post consistent with our 
ALB action plan (ref C) have resulted in a significant drop 
in prohibited requests.  In fact, there have been no reports 
of prohibited requests in 2009 in accordance with reporting 
regulations under 15 CFR Parts 730-774, though at least one 
possible case is under review by the Embassy's Foreign 
Commercial Service.  End Summary and Comment 
 
¶2. (SBU) Post's responses are keyed to ref A questions.  For 
a more detailed review of Arab League Boycott compliance 
activities in Iraq, please see ref B, et al. 
 
-- Whether the host government requires participation in or 
cooperation with any of the three forms of the ALB or other 
international boycotts, for example by requiring that U.S. 
firms complete boycott compliance questionnaires or furnish 
boycott-clearance certificates as a prerequisite to 
licensing, trademark or company registration, bidding on 
contracts, or as part of a contract, or refrain from doing 
business with companies headquartered in Israel? 
 
U.S. companies have filed no official reports in 2009 
regarding Iraqi authorities requesting ALB compliance in 
contracts, business registration requests, and/or patent or 
trademark applications.  U.S. persons reported 33 such 
boycott requests to USDOC in 2006, 21 in 2007, and 7 in 2008, 
in accordance with reporting regulations under 15 CFR Parts 
730-774.  Nearly all past cases of prohibited requests in 
Iraq (ref C) originated with four GOI entities: the Ministry 
of Trade (MOT), the Ministry of Health (MOH), the Patent and 
Trademark Office (PTO), and the South Oil Company (SOC). 
 
-- Whether the host government, as a matter of policy, 
practice, or contract, requests that U.S. firms comply with 
boycott requirements or provides information regarding such 
compliance? 
 
Please see above. 
 
-- Whether a host government's formal or informal boycott 
practices have had an identifiable impact on U.S. businesses. 
 
We are unaware of any U.S. businesses that have abandoned 
operations in Iraq because of ALB compliance requirements in 
¶2009.  In the past, following Embassy intervention, GOI 
officials have replaced ALB compliance requirements with 
alternate language that does not appear to violate U.S. law. 
 
-- Whether the country has legislation or regulations 
covering aspects of the ALB?  If so, comment on steps the 
host government has taken to change domestic legislation or 
regulations with respect to either strengthening or 
eliminating any form of the boycott. 
 
Conflicting requirements imposed before, during, and after 
the Coalition Provisional Authority administration of Iraq 
appear to be complicating efforts to harmonize a national 
position on the Arab League Boycott.  Differing Iraqi legal 
opinions about these current requirements have slowed efforts 
Qopinions about these current requirements have slowed efforts 
by some Ministries (and accelerated efforts by others) to 
remove ALB language from registration and licensing 
regulations. 
 
For example, Ministerial Instruction No. 196, issued March 
15, 2004, by the Ministry of Trade, implemented certain 
amendments to Iraq's 1997 Companies Law No. 21.  Among other 
provisions, the Ministerial Order prohibited discrimination 
(based on national origin) against persons who seek to 
register a company in Iraq.  A separate registration 
regulation, promulgated on August 30, 1989 under the 
authority of the GOI's 1983 Companies Law No. 36, requires 
 
BAGHDAD 00003152  002 OF 002 
 
 
certification of compliance with the ALB as a condition of 
registration.  The Ministry of Trade has taken the position 
that Ministerial Order No. 196 remains in effect and 
supersedes the 1989 registrations regulation for foreign 
companies seeking to register to conduct business in Iraq. 
(Comment:  Under this interpretation, there does not appear 
to be an ALB-compliance requirement.  End Comment)  The MOH 
has taken the position that the ALB non-compliant Ministerial 
Order was revoked by subsequent legislation, and the MOH has 
reverted to the 1989 boycott-compliant registration 
regulation (Comment:  Under this interpretation, there 
appears to be an ALB-compliance requirement.  Ironically, the 
Ministry of Health asserts that the National Investment Law 
of 2006, the drafting and passage of which the USG supported 
with technical assistance, triggered the reversion to the 
1989 ALB-compliant law. End Comment) 
 
-- Whether a host government maintains an ALB Office, and if 
so, what are its duties.  Does the government send 
representatives to meetings of the Central Boycott Office in 
Damascus? 
 
The Government of Iraq maintains a general Arab League office 
located at the Ministry of Foreign Affairs.  The office is 
headed by relatively low-ranking bureaucrats, who appear to 
have informally abdicated their responsibilities for ensuring 
that Government Ministries implement policies and measures 
consistent with the ALB. 
 
-- Whether a host government, when apprised of instances of 
attempted boycott enforcement by government agencies or 
compliance requests by private entities, has taken corrective 
steps.  Please provide details of any positive measures taken 
by host governments? 
 
GOI officials have been willing -- once aware of a problem -- 
to replace ALB provisions with alternate language that does 
not violate U.S. law.  A Senior Advisor at the Ministry of 
Health has reportedly rewritten MOH registration regulations 
removing ALB-compliance requirements.  Officials at the 
Ministries of Health and Trade are reportedly reviewing the 
draft registration regulations now.  Any progress will be 
reported septel. 
 
-- Whether ALB outreach efforts have been undertaken by 
Embassy officials during FY09 and whether these efforts have 
elicited either positive or negative stances by host 
government officials? 
The Embassy raises ALB compliance issues in formal and 
informal discussions within the context of the U.S.-Iraq 
Strategic Framework Agreement working groups with our primary 
interlocutors:  Senior Advisor to the Minister of Trade Dr. 
Abdulhadi al-Hamiri, Senior Advisor to the Minister of Health 
Dr. Salah Shubber, and advisor to Deputy Prime Minister Rafi 
al-Essawi, Dr. Jaber al Jaberi. 
HILL