040428-28
eggs BSA
COALITION PROVISIONAL AUTHORITY
BAGHDAD
¡AS ®
LI
LPB HAS SEEN
INFO MEMO
April 28, 2004
FOR:
sarge moff-omes.
THE ADMINISTRATORE
FROM:
James B. Warlick, Counselor
SUBJECT: OFF Authentication
Just in case this issue reaches you .....
• All Oil for Food goods must be "authenticated" at the border by a third party. This
verifies that a contract is fulfilled triggering payment. A Swiss company, Cotecna (b)(5)
(b)(5)
Thas the contract with the UN. That contract
expires June 30, but the requirement for authentication continues.
• We have two options:
1. Extend Cotecna's contract at a cost of $8 million for six months or find another
company to do the authentication. This is expensive, objectionable to the Iraqis, and
unnecessary since it adds little value. However, it would reassure suppliers and leave
in place a control mechanism.
2. End authentication and treat OFF contracts under the rules of "normal commercial
practice." This requires UNSCR language. It allows Iraqi ministries to verify that
goods are received, but without independent confirmation.
(b)(5)
• I have two ideas that could help on the corruption angle that I'll pursue with the Iraqis:
1. Appoint a commercial ombudsman on the Board of Supreme Audit.
1(5) 2. Fouage SA 10 hire a third pary (i loye: 3)ro audi spot check warehouses)
silos, construction sites, to ensure deliveries are made. It would only cover a small
percentage, but would be a deterrent and some measure of outside oversight.
ATTACHMENTS: NONE
COORDINATION: NONE
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