UNCLAS BAGHDAD 000972
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EFIN, ECON, KTFN, KCRM, IZ
SUBJECT: ENGAGING THE CENTRAL BANK OF IRAQ (CBI) GOVERNOR
1. (SBU) Summary: In a meeting on March 12 the Ambassador
complimented Central Bank Governor Dr. Sinan Shabibi for
stabilizing Iraq's currency and helping Iraq get an IMF
standby arrangement last year. The Ambassador also noted the
importance of continuing to fight terrorist financing. Dr.
Sinan asked for help in the CBI's money laundering reporting
office unit. The IRS-CI attache urged Dr. Sinan to work with
the USG to implement a CPA order to allow the Government of
Iraq to seize former regime elements (FREs) and their assets.
End Summary.
2. (SBU) The Ambassador complimented Dr. Sinan Shabibi for
the many achievements he has contributed to on behalf of
Iraq, particularly his work to maintain exchange rate
stability and with the IMF and Paris Club. The Ambassador
discussed the political situation with Dr. Sinan, commenting
that the current hurdle to finalizing the government in Iraq
is the selection of the Prime Minister. He asked Dr. Sinan
for his opinion on who would be a good candidate for the
position. Dr. Sinan said the candidate should be someone who
is strong politically but also a liberal. Dr. Sinan demurred
from naming anyone in particular at this time, but said he
would think about the matter and get back with the Ambassador.
3. (SBU) The Ambassador and Dr. Sinan agreed that politics
needs to be kept out of the CBI. The Ambassador also urged
the Governor to keep making progress on regulatory and money
laundering issues.
4. (SBU) The Governor stressed that the CBI is striving to
get the country's banking system moving away from being
cash-based. The implementation of the payment system will be
one of the keys to accomplishing this goal. He added that
they also need help to develop further their banking
supervision. Dr. Sinan expressed his gratitude to the
Treasury Attache/IRMO Financial and Fiscal Affairs Director
for all of his assistance and advice.
5. (SBU) Dr. Sinan asked the Ambassador for more help and
technical advice for the Money Laundering Reporting Office
(MLRO). He said they need to concentrate on the money
laundering issue and asked for training on how to get their
unit up and running. The IRS-CI Attache noted the State
Department's Terrorism Finance Working Group (TFWG) was
poised to provide assistance. The TFWG is waiting to send a
Financial Systems Assessment Team (FSAT) to Iraq.
6. (SBU) IRS-CI Attache Crowe raised the topic of FREs and
their assets. Attache Crowe noted that Article 6.2 of CPA
Order 93 mirrored the language in the United Nations Security
Resolution (UNSCR). Crowe asked if Dr. Shabibi would be
willing to implement the CPA Order, should he be presented
with information about FRE assets. Dr. Shabibi answered
positively, noting that he would work with the Ministry of
Finance to process the information for the approval of the
Council of Ministers. Upon the Council's approval, the
assets could be repatriated to the Iraqi government's
Developmental Fund for Iraq.
KHALILZAD