CONFIDENTIAL

066642

MDHOAN 8138

WILL IT CARRY ANY IMPLICATION THAT HMG INTENDS TO TAKE OVER OR QUOTE ESPOUSE UNQUOTE CLAIMS BY UK COMPANIES OR INDIVIDUALS. IT IS TOO EARLY TO DECIDE HOW CLAIMS RESULTING FROM THE INVASION CAN BEST BE HANDLED. ESPOUSAL, LARGELY BECAUSE OF THE EXPENSIVE AND LENGTHY LEGAL PROCESSES INVOLVED, IS A LAST RESORT. LOSSES TO FIRMS OR INDIVIDUALS RESULTING FROM THE OPERATION OF SANCTIONS WILL NOT (NOT) BE INCLUDED IN THIS EXERCISE.

5. WE HOPE THE EC PRESIDENCY WILL BE PREPARED TO TAKE ACTION WITH THE IRAQIS ON BEHALF OF THE TWELVE ALONG THE LINES OF PARAGRAPH 2 ABOVE, AND EC PARTNERS TO MAKE BILATERAL DEMARCHES ON THE LINES OF PARAGRAPHS 2 AND 3. WE INTEND TO CIRCULATE THE TEXT OF OUR PROPOSED DEMARCHE BY COREU NEXT WEEK.

6. WE ARE CONSIDERING WHETHER TO ENCOURAGE OTHER MAJOR COUNTRIES, EG THE UNITED STATES, FRANCE, FRG, JAPAN AND THE SOVIET UNION, TO MAKE SIMILAR REPRESENTATIONS. CAN BAGHDAD PLEASE ADVISE WHETHER THERE ARE OTHER DEVELOPED COUNTRIES WITH SIGNIFICANT INTERESTS IN IRAQ WHO MIGHT ADD THEIR WEIGHT TO THESE PROTESTS. WOULD THERE BE ADVANTAGE IN TRYING TO PERSUADE ASIAN COUNTRIES WITH SIGNIFICANT NUMBERS OF NATIONALS IN IRAQ

AND PRE-INVASION KUWAIT TO JOIN IN?

THE MORE COUNTRIES THAT DO SO, THE GREATER THE PRESSURE ON THE IRAQIS TO TAKE ACCOUNT OF THE CONSEQUENCES OF THEIR ACTIONS.

·

7 OUR PRESENT VIEW IS THAT DEMARCHES MIGHT BEST BE MADE IN BAGHDAD, REINFORCED BY ACTION WITH IRAQI EMBASSIES IN CAPITALS. WE ARE ALSO CONSIDERING WHETHER TO CIRCULATE OUR LETTER IN THE

UN.

8.

GRATEFUL FOR COMMENTS BY 070OZ ON 2 OCTOBER. YOU SHOULD NOT DISCLOSE OUR THINKING TO HOST GOVERNMENTS OR PARTNERS AT THIS STAGE.

9. WE ARE ALSO LOOKING AT LONGER TERM MEASURES TO ENSURE IRAQ IS HELD FULLY TO ACCOUNT FOR ITS ILLEGAL ACTS AND THEIR

CONSEQUENCES.

HURD

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CONFIDENTIAL

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