CONFIDENTIAL UK COMMS ONLY
041741
MDADAN 8208
CATEGORIES OF TRADING ACTIVITY, I.E. COMMERCIAL, INDUSTRIAL OR PUBLIC UTILITY' COULD SUPPORT THE ARGUMENT THAT THERE ARE OTHER
ACTIVITIES OF A COMMERCIAL/TRADING NATURE IN RESPECT OF WHICH FUNDING IS NOT PROHIBITED, E.G. AGRICULTURE, MINING, FISHERIES, ETC. ARE THERE ANY SPECIFIC DEFINITIONS TO WHICH THE SECURITY
COUNCIL WAS REFERRING? WE WOULD HOPE THAT SUCH MATTERS ARE MADE CLEAR IN THE DRAFTING OF THE ORDER.
(F) IT CAN BE ARGUED THAT THE TERMS ANY FUNDS OR ANY OTHER
FUNDING OR ECONOMIC RESOURCES' USED IN RELATION TO ANY COMMERCIAL, INDUSTRIAL OR PUBLIC UTILITY UNDERTAKING' AND 'ANY OTHER FUNDS' (USED IN RELATION TO PERSONS OR BODIES WITHIN IRAQ OR KUWAIT) REPRESENT TWO CATEGORIES OF FUNDS THAT ARE MUTUALLY EXCLUSIVE. IS
THIS INTENDED?
(G) ALL TRANSACTIONS, IT APPEARS, ARE INTENDED TO BE PROHIBITED UNDER POINT 4 CAND INDEED ALSO IN POINT 3) NORMALLY REQUIRE THE MAKING OF PAYMENT. GIVEN THAT, AS FAR AS WE ARE CONCERNED, THE HONG KONG CONTROL OF GOLD, SECURITIES, PAYMENTS AND CREDITS: REPUBLIC OF IRAQ) ORDER 1990 IS IN FORCE, MOST SUCH PAYMENTS CANNOT BE EFFECTED WITHOUT CONTRAVENTION OF THAT ORDER. IT WILL THEREFORE BE
USEFUL IF THE ORDER IN COUNCIL ON ECONOMIC SANCTIONS CAN BE MADE CONTERMINOUS WITH THE EXISTING ORDERS IN DUE COURSE.
(H) GIVEN THAT THE RESOLUTION ENVISAGES EXEMPTIONS, WE SUGGEST THAT, CONSISTENT WITH THE APPROACH IN THE EXISTING ORDER, THE FINANCIAL SECRETARY IS VESTED WITH THE DISCRETION TO DETERMINE APPROPRIATE EXEMPTIONS. PRESUMABLY, YOU WOULD KEEP US INFORMED OF EXEMPTIONS IN EXISTENCE IN THE UNITED KINGDOM.
(I) PENALTIES FOR BREACHES OF THE ORDER SHOULD BE SPECIFICALLY
PROVIDED FOR.
3. WE SHOULD ALSO BE GRATEFUL IF YOU WOULD CLARIFY THE POSITION OF KUWAIT PETROLEUM INTERNATIONAL AVIATION CORP. (KPIAC) BASED IN STAINES, MIDDLESEX. KPIAC SUPPLIES MAJOR AIRLINES HERE SUCH AS BA, CPA, SWISSAIR AND ALITALIA, USING THE TERMINALLING FACILITIES OF CALTEX OIL HK LTD. PAYMENTS ARE NORMALLY MADE TO LONDON. KPIAC OWNS A ONE SIXTH SHARE IN THE LOCAL TANK FARM AND A ONE FIFTH SHARE IN THE AVIATION BARGE CONSORTIUM. RECENT PRESIDENTIAL ORDERS PROHIBITING TRANSACTIONS WITH KUWAIT APPEAR TO GIVE PROBLEMS TO AMERICAN OIL COMPANIES HERE AND THERE IS PRESSURE TO STOP SUPPLYING KPIAC. ON OUR PART WE CANNOT AFFORD TO HAVE PLANES STALLED AT KAI TAK BECAUSE THEY CANNOT BE REFUELLED. OUR VIEW IS THAT CURRENT
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CONFIDENTIAL UK COMMS ONLY