CONFIDENTIAL
HKB 020/26
201
024315
MDLOAN 6700
ра
INA Q /KwaniT.
CONFIDENTIAL
FM FCO
TO PRIORITY RIYADH
TELNO 949
OF 171845Z DECEMBER 90
AND TO PRIORITY OTHER GULF POSTS, AMMAN, BAGHDAD, DAMASCUS AND TO PRIORITY SANA'A, TEL AVIV, TEHRAN, ANKARA, JEDDA
IRAQ/KUWAIT: ADVICE TO BRITISH COMPANIES
1.
AFTER THE IRAQI INVASION OF KUWAIT, A NUMBER OF BRITISH COMPANIES AND TRADE ASSOCIATIONS (PARTICULARLY COMET) WERE CONCERNED THAT WE HAD ALL BEEN CAUGHT UNPREPARED. THERE HAVE BEEN MANY DEMANDS FOR COMPENSATION. THIS EXPERIENCE RAISES THE QUESTION OF WHETHER WE SHOULD NOW BE ADVISING BRITISH COMPANIES TO CONSIDER THE PRECAUTIONS THEY SHOULD BE TAKING TO MINIMISE THE CONSEQUENCES TO THEIR BUSINESS OF WAR IN THE GULF AND TO INSURE AGAINST RISKS WHICH THEY CANNOT, OR DECIDE NOT TO, AVOID.
2.
THE MOST IMPORTANT RISK TO COMPANIES' INTERESTS IS THE THREAT TO THE SAFETY OF THEIR PERSONNEL AND DEPENDANTS IN THE REGION. THIS IS BEING ADDRESSED BY OUR CONSULAR ADVICE. FOR THE REST, HOWEVER, WE BELIEVE THAT THERE IS A FUNDAMENTAL DIFFERENCE BETWEEN THE APPARENTLY STABLE TRADING SITUATION IN KUWAIT ON 1 AUGUST AND THE UNCERTAINTY IN THE GULF TODAY. BUSINESSES MUST BE AWARE OF THE RISKS (AND OPPORTUNITIES) OF OPERATING IN THE GULF AND SURROUNDING AREA. THEY SHOULD MAKE THEIR OWN ASSESSMENTS AND DECISIONS. IT IS NOT FOR THE GOVERNMENT TO MAKE THESE COMMERCIAL DECISIONS FOR THEM. MOREOVER, IF WE WERE TO GO SO FAR AS TO DISCOURAGE THEM FROM PURSUING BUSINESS IN THE REGION, WE WOULD RUN THE RISK OF GIVING PREMATURE ADVICE FOR WHICH WE COULD BE HELD ACCOUNTABLE. THERE WOULD ALSO BE THE MORE GENERAL PENALTIES OF CAUSING ALARM, ANNOYANCE TO HOST GOVERNMENTS AND POSSIBLE DISRUPTION TO ESSENTIAL SERVICES. SHORT OF THAT, WITH THE EXPERIENCE OF KUWAIT IN THEIR MINDS, COMPANIES COULD FAIRLY BE EXPECTED TO TAKE STEPS OF THEIR OWN VOLITION TO MINIMISE AND INSURE AGAINST POLITICAL AND WAR RISKS. THE 15 JANUARY 1991 DEADLINE FOR IRAQI COMPLIANCE WITH UN RESOLUTIONS SET IN SCR 678 SHOULD HAVE CONCENTRATED THE COLLECTIVE MINDS OF COMPANY MANAGEMENT. THEY SHOULD HAVE ENSURED THAT THEY HAVE ECGD COVER OR COMMERCIAL INSURANCE. THEY SHOULD ALSO CONSIDER WHAT ALTERNATIVE SEA, ROAD AND AIR ROUTES (AND TELECOMMUNICATIONS) THEY COULD USE IF NORMAL SERVICES WERE TO BE DISRUPTED BY FIGHTING. THEY COULD USEFULLY BE GIVING THOUGHT TO ALTERNATIVE MARKETS TO WHICH EXPORTS COULD BE DIVERTED, AT LEAST FOR A SHORT
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