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Cablegate: Vietnam On Oil-for-Food Program

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HANOI 000829

SIPDIS

SENSITIVE

STATE FOR PRM, USAID/FFP/EB, IO, AND EAP/BCLTV

USDA/FAS FOR C&MP AND EC

E.O. 12958: N/A
TAGS: PREL ETTC EAID EAGR ETRD IZ VM UNSC
SUBJECT: VIETNAM ON OIL-FOR-FOOD PROGRAM

REF: STATE 82506

1. (U) This is an action request -- see para 10.

2. (U) SUMMARY: Vietnam is interested in continuing its
exports of rice until the Oil for Food (OFF) Program,
especially in quickly fulfilling outstanding rice contracts,
but has concerns about insurance costs and port access. The
MFA stressed that Vietnam's participation would not/not be
affected by the expressed opposition of Iraq to UNSCR 1472.
End Summary.

3. (U) VINAFOOD 1: Agatt and AgSpec on April 1 discussed
the OFF Program with Luong The Phiet, Deputy General
Director of Vietnam Northern Food Corporation (Vinafood 1 -
- the GVN's parastatal agricultural exporting agency) and
Dinh Cong Chinh of its Foreign Economic Department. They
welcomed the clear USG statements supporting the OFF
program, and said they were eagerly awaiting shipping
information from the UN's OFF Office.

4. (U) OUTSTANDING: Phiet confirmed that Vinafood had
been a major supplier of rice to Iraq over the last 10
years, exporting more than 840,000 metric tons of rice to
Iraq in 2002 alone. He added Vinafood was eager to fulfill
the outstanding (not yet shipped) rice contracts, amounting
to another 450,000 metric tons. Vinafood is ready to ship
that rice after resolving issues of insurance and port
facilities.

5. (U) INSURANCE: Phiet expressed concern over whether
insurance could be purchased to cover both the commodity
(rice) and the vessels going to Iraq. He welcomed the
information that the U.S. Maritime Administration has war
risk insurance, but asked if that insurance would cover the
value of the commodity as well as the vessel. Furthermore,
he asked how high the premiums might be.

6. (U) PORT FACILITIES: Vietnam has routinely shipped
rice to the Iraqi port of Umm Qasr and has been in touch
with port contacts, who had expressed worries about
submerged mines damaging or destroying any large vessels
trying to berth. He was aware that one or two small vessels
had docked, but noted that larger vessels might still
confront a dangerous situation.

7. (U) OTHER ISSUES: Phiet also noted there was a host of
smaller concerns that would probably have to be addressed by
the UN's Office of the Iraq Program. Among those concerns:
-- adjustments to the outstanding contracts and letters of
credit necessitated by delays in shipping (note: some of
which stem from Vietnam's inability to ship in late 2002 due
to lack of stocks, and others due to insurance and port
access issues);
-- concerns regarding which company would be the new UN
Independent Inspection Agent (replacing, if necessary,
Cotecna);
-- who would be the buyer. In the past, the Grain Board of
Iraq had been the buyer of record.

8. (U) FUTURE: Phiet emphasized that, in addition to
fulfilling outstanding contracts, Vietnam would welcome new
oil-for-food business as well. He noted that the rice
supplies were now available (the Winter-Spring rice harvest
is underway). If vessels were willing, Vietnam could export
rice to Iraqi ports in three weeks.

9. (U) MFA: In a separate meeting on April 3, Pol/C
conveyed reftel points to MFA West Asia and Africa
Department Deputy Director General Doan Ngoc Boi. Boi
expressed appreciation for the US support for OFF, but
wondered whether this interest in humanitarian programs for
Iraq was not rather new. Pol/C reviewed briefly US support
for solutions to Iraq's humanitarian problems over the past
decade and commitment to ensuring better lives for the Iraqi
people. Boi noted that the Iraqi Government had expressed
its opposition to UNSCR 1472; when questioned, he assured
Pol/C that the GVN would not/not side with the GOI on this
and would welcome the opportunity both to complete past OFF
contracts and to compete for new ones under the new UN
arrangements. He noted over USD400 million in OFF contracts
with Vietnam in the works for 2003.
10. (U) ACTION REQUESTED: Please clarify issues regarding
insurance and port access, and provide any other additional
information of relevance.
BURGHARDT

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