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Cablegate: Waiver Requested -- Section 565 Waiver of Prohibition

VZCZCXRO4804
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #0042 0041425
ZNR UUUUU ZZH
R 041425Z JAN 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 5122
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS BAGHDAD 000042

SIPDIS

SIPDIS
SENSITIVE

DEPT for NEA/RA

E.O. 12958: N/A
TAGS: KBCT ABLD PHUM AL ECON AMGT ASUP AFIN IZ
SUBJECT: WAIVER REQUESTED -- Section 565 Waiver of Prohibition
against Contracting with Firms that comply with the Arab League
Boycott or Discriminate in the Basis of Religion

REF: STATE 166398

1. (SBU) Section 565 of Title V, Part C of the Foreign Relations
Authorization Act, Fiscal Years 1994 and 1995 (PL 103-236, 22 USC
2679c) prohibits the Department of State from entering into any
contract, except real estate leases and contracts below the small
purchase threshold (currently $100,000), that expends funds
appropriated to the Department of State with a foreign person that
complies with the Arab League boycott of Israel, or with any foreign
or United States person that discriminates in the award of
subcontracts on the basis of religion.

2. (SBU) Reftel requested that Posts that will not be able to carry
on diplomatic functions while meeting either or both of the
requirements of Section 565 send a cable requesting a waiver of the
relevant requirement(s) and justifying the request.

3. (SBU) Post's request for waiver for 2007 stated, "Iraq does not
maintain diplomatic relations with Israel. The U.S. Embassy in
Baghdad has reported instances in which Iraqi agencies have sought
to enforce compliance with boycott requirements. The current
requirements of Iraqi law in this regard are not clear, and this has
been the subject of ongoing discussions between the USG and the GOI.
The Embassy believes that local firms would generally be unable to
provide the certification necessary under Section 565. Therefore,
without a waiver, the Embassy would potentially be unable to obtain
essential supplies and services in-country."

4. (SBU) Post's experience over the contracting year has indicated
that, despite previous presumptions to the contrary, local firms
contracting with Post's GSO Contracting Officer have in all cases
been able to provide the certification necessary under Section 565.
The Embassy's ability to obtain essential supplies and services, to
the extent that these are procured in-country, has not been
hampered. Nonetheless, not all agencies at Post have been able to
obtain the necessary certification.

5. (SBU) Iraq does not maintain diplomatic relations with Israel.
While, the Department of State has included the boycott
noncompliance clause outlined under Section 565 in all
GSO-originated contracts in 2007, the current requirements of Iraqi
law remain unclear. Post therefore must request a waiver because of
ambiguities under Iraqi law and potential compliance with the
boycott by subcontracting entities.

6. (SBU) For the reasons stated in para 5 above, Post requests a
waiver of the relevant requirement(s) of Section 565.

CROCKER

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