Cablegate: Unsc Consultations On Development Fund for Iraq

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OO RUEHWEB

DE RUCNDT #0802 2402249
ZNR UUUUU ZZH
O 282249Z AUG 09
FM USMISSION USUN NEW YORK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7130
INFO RUEHGG/UN SECURITY COUNCIL COLLECTIVE IMMEDIATE
RUEHGB/AMEMBASSY BAGHDAD IMMEDIATE 0700
RUEHKU/AMEMBASSY KUWAIT IMMEDIATE 1547

UNCLAS USUN NEW YORK 000802

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV IZ KU
SUBJECT: UNSC CONSULTATIONS ON DEVELOPMENT FUND FOR IRAQ

1. (U) Summary: In Security Council consultations on August
27, the UN Controller briefed on the recently released report
regarding activities and progress made in strengthening the
financial and administrative oversight of the Development
Fund for Iraq (DFI). The Controller highlighted the
International Advisory and Monitoring Board (IAMB)
recommendations to develop a realistic, time-bound action
plan to resolve qualifications to DFI audits and the
continued need to implement a comprehensive oil measuring
system. The Controller and most Council members noted the
need for a smooth transfer mechanism from IAMB to Committee
of Financial Experts (COFE) control of the DFI at the end of
the year, when the mandate expires. End summary.

2. (U) On August 24, the Secretary-General issued the first
semi-annual report created pursuant to paragraph three of
resolution 1859 (2008) regarding the activities and progress
made in strengthening financial and administrative oversight
of the Development Fund for Iraq (DFI). The report provides
a detailed background on the establishment of the DFI, the
role of the International Advisory and Monitoring Board
(IAMB), and the 2006 creation of the Iraqi Committee of
Financial Experts (COFE) which is poised to take over the
task of monitoring the DFI upon the expiration of the IAMB
mandate.

3. (U) In consultations on August 27, Assistant
Secretary-General Controller Jun Yamazaki briefed the Council
on the DFI. Yamazaki highlighted the need to enhance
transparency and accountability of the DFI, underscoring the
IAMB recommendations to develop a realistic, time-bound
action plan to resolve the qualifications to the DFI audits
and the implementation of a comprehensive oil metering
system. In the absence of a fully operational oil metering
system, it is not possible to reliably determine the volume
of all exports of petroleum and petroleum products for which
proceeds are to be deposited in the DFI accounts. Yamazaki
also noted the IAMB's call to intensify efforts to follow up
on frozen Iraqi assets held abroad, including consideration
of the need for a separate entity to handle such issues.
Yamazaki concluded his remarks by reminding the Council that
the IAMB mandate, including the mandate of the DFI, is due to
expire at the end of 2009, and that it will be important to
ensure that a proper succession mechanism and process be
discussed by the Council.

4. (U) All fourteen Council members who spoke during
consultations, including the U.S., voiced the need for
increased transparency and greater internal controls,
especially in relation to oil metering. (Note: Only Libya
did not speak. End note.) Most Council members noted the
need for a smooth transfer mechanism from IAMB to COFE
oversight of DFI at the end of the year, when the mandate
expires. The Austrian representative alone made brief
mention of the related immunities issue, stating they are
interested in "the future shape of the DFI, including the
immunities issue." The Russian representative proposed that
the Council invite the head of COFE to discuss the
establishment of a timeframe and plans to increase oil
metering, noting that the "Council should meet those who will
take over the fund." Controller Yamazaki agreed in his
concluding remarks that a Council meeting with COFE
representatives "could be useful".
RICE

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