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Cablegate: Terrorist Finance - Ottawa: Treasury Letter On

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

UNCLAS OTTAWA 001857

SIPDIS

SENSITIVE

STATE FOR EB/ESC/ESP (GLASS), S/CT (FOX), IO/PHO (PEREZ),
AND WHA/CAN
TREASURY FOR GENERAL COUNSEL (DAVID AUFHAUSER), OFAC
DIRECTOR (NEWCOMB), TREASURY DAS FOR TERRORISM (ZARATE),
AND TREASURY TASK FORCE ON TERRORIST FINANCING
NSC FOR PETERS

E.O. 12958: N/A
TAGS: ETTC EFIN PTER PREL CVIS KVPR CA UNSC
SUBJECT: TERRORIST FINANCE - OTTAWA: TREASURY LETTER ON
IRAQI ASSETS

REF: STATE 186972

1. (SBU) Summary: The GOC has received reftel letter and is
exploring the legal procedures necessary to complete transfer
of assets to the Iraqi government in compliance with the
expected notification from the UN 661 Committee. The frozen
Iraqi government assets are held by banks, and the GOC does
not know details of ownership or number of accounts. The
Department of Foreign Affairs raised the possibility that the
GOI might want to keep the C$20,000 in Canada to cover costs
related to its missions here. End summary.

2. (SBU) We confirmed the GOC's receipt of the letter
referred to in reftel and used the opportunity to clarify
possible procedures for release of Iraqi assets. Canada has
approximately C$20,000 in frozen Iraqi government assets and
the GOC is not aware of any assets in Canada belonging to
individuals.

Complications
-------------

3. (SBU) Although Iraqi government assets were frozen in
compliance with the UN order after Gulf War I, there was no
requirement for banks to report details of the accounts to
the GOC. Thus the GOC does not know the names of the account
holders, the exact number of accounts or the total amount in
each account. Seizure by the GOC for transfer to the
Development Fund In Iraq would require a legislative change,
a lengthy process as parliament has recessed for the summer.

Awaiting notification from the 661 Committee
--------------------------------------------

4. (SBU) The GOC is waiting for notification from the UN 661
Committee in order to finalize the details of its legal
options. A lawyer working on the issue agreed that, given
the fact that the GOC does not know details of the accounts
and does not have legal authority to transfer the funds
without legislative action, a letter from a "duly authorized"
official of the Iraqi government to the Minister of Finance
and the Minister of Foreign Affairs requesting transfer of
GOI assets to a specified account (the DFI) might do the
trick. The GOC would then issue a general certificate
authorizing banks to make the transfer. Banks would make the
decision on whether they considered the GOI requesting
official "duly authorized" but would probably follow GOC
guidance.

Does the Iraqi Government Want to Transfer the Assets?
--------------------------------------------- ---------

5. SBU) DFAIT pointed out that a request to transfer the
assets could depend on GOI plans for its missions in Canada.
Iraq has real property in Canada (consulates as well as the
embassy). DFAIT believes the diplomatic account is in
arrears, and there may be property taxes outstanding. If
Iraq plans to sell its missions, it would make sense to
transfer the funds, but if the GOI plans to maintain a
diplomatic presence in Canada it may wish to keep the funds
for use here.


CELLUCCI

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