TNAG-2028-FCO40-2890-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 40

CONFIDENTIAL

CONFIDENTIAL

FM FCO

TO IMMEDIATE WASHINGTON

TELNO 1447

OF 20123OZ AUG 90

AND TO IMMEDIATE UKDEL OECD

HKB 020/26

RECEIVED IN BE

..

DESK

INDEX

24 AUG 1990

INFO IMMEDIATE OECD POSTS, UKREP BRUSSELS

195

101476

MDHOAN 4659

ار

YOUR TELNO 1958: OECD SPECIAL MEETING ON SANCTIONS

WE HAVE RECEIVED THE FOLLOWING INFORMATION FROM THE TREASURY ABOUT THE RECENT MEETING OF THE TECHNICAL EXPERTS IN BASLE (PARA 3 OF TUR).

1.

2.

TECHNICAL EXPERTS, MAINLY FROM THE G10 BUT WITH

PARTICIPATION FROM SPAIN, AUSTRIA AND LUXEMBORG ALSO BECAUSE OF THE IMPORTANCE OF THEIR FINANCIAL RELATIONS WITH KUWAIT AND IRAQ, MET IN BASLE ON 16 AUGUST. THE INITIATIVE CAME FROM A NUMBER OF CENTRAL BANKS, NOTABLY THE BANK OF ENGLAND. THE PURPOSE WAS TO IDENTIFY MARKET DIFFICULTIES ARISING FROM THE IMPLEMENTATION OF SCR 661, AND TO CONSIDER POSSIBLE WAYS FORWARD. THE UK WAS REPRESENTED BY THE BANK OF ENGLAND: OTHER COUNTRIES WERE REPRESENTED BY CENTRAL BANKS AND MINISTRIES OF FINANCE, ACCORDING TO LOCAL PRACTICE.

3.

WE UNDERSTAND THAT THE ATMOSPHERE WAS CONSTRUCTIVE.

ALL DELEGATIONS WERE CLEARLY IN FAVOUR OF OPERTING SANCTIONS EFFECTIVELY AND EVIDENTLY WORKING IN THE SAME DIRECTION. A NUMBER OF DETAILED TECHNICAL ISSUES WERE DISCUSSED, INCLUDING THE FOLLOWING:

-

EXTRA-TERRITORIALITY. IT WAS DECIDED THAT THIS WAS AN AREA LIKELY TO CAUSE PROBLEMS OF CO-ORDINATION IN RELATION TO SOME COUNTRIES (EG US, JAPAN). PROBLEMS SHOULD BE DEALT WITH ON A CASE BY CASE BASIS.

PRE-ZERO TRANSACTIONS. IT WAS AGREED THAT PUTTING OBSTACLES IN THE WAY OF SUCH TRANSACTIONS MIGHT HARM BOTH BANKS

AS INNOCENT PARTIES AS WELL AS LEGITIMATE KUWAITI INTERESTS. STEPS WERE AGREED TO ARRANGE FOR THESE NOT TO BE BLOCKED.

BANKS. THERE WAS SOME SUPPORT FOR THE IDEA THAT

KUWAITI-RELATED BANKS SHOULD BE TREATED IN ALL COUNTRIES IN THE SAME WAY THEY ARE TREATED IN THE COUNTRY IN WHICH

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CONFIDENTIAL