US embassy cable - 03ABUDHABI3975

C O N F I D E N T I A L ABU DHABI 003975 
 
SIPDIS 
 
DEPT FOR NEA/ARP - MALENAS AND HEFFERNAN 
USDOC FOR 3131/USFCS/OIO/ANESA/RD/BORR 
RIYADH FOR FCS/DWALLACE 
 
E.O. 12958: DECL 09/01/08 
TAGS: BEXP, ETTC, PARM, PREL, TC 
SUBJECT:  (C) UAE'S ARABSAT BOARD MEMBER WEIGHS IN ON U.S. 
LICENSING FOR LATEST PURCHASE 
 
REF: A) STATE 237960    B) RIYADH 4217 
 
1.  (U) CLASSIFIED BY CHARGE D'AFFAIRES, A.I. RICHARD A. 
ALBRIGHT FOR REASONS 1.5 (B) AND (D). 
 
2.  (U) THIS IS AN ACTION REQUEST; PLEASE SEE PARAGRAPH 9. 
 
3.  (C) SENIOR COMMERCIAL OFFICER (SCO) AND SENIOR COMMERCIAL 
SPECIALIST VISITED UAE BOARD MEMBER TO ARABSAT, MOHAMED OMRAN, 
ON SEPTEMBER 1 TO LEARN OF HIS TAKE ON THE ARABSAT PURCHASE (SEE 
REFS).  HE WAS MOST EAGER TO TALK ABOUT ARABSAT, HAVING BEEN ON 
THE BOARD SINCE 1986.  OMRAN CONTRASTED THURAYA, WHICH IS ONLY 
SEVERAL YEARS OLD, WITH THE OLDER ARABSAT, WHICH HAS ALWAYS 
BOUGHT ALCATEL SATELLITES. 
 
4.  (C) EGYPTIAN-EDUCATED OMRAN CLEARLY PREFERS U.S. TECHNOLOGY. 
HE INTIMATED THAT THE ARABSAT WORKING COMMITTEE, WHICH PRESENTS 
THE ARABSAT BOARD WITH THE BROAD OUTLINE ON WHICH TO VOTE, 
HAVING WORKED OUT THE DETAILS, WOULD PREFER U.S. TECHNOLOGY FOR 
THIS LATEST SATELLITE AND LAUNCH -- WHICH HE ESTIMATES ARE WORTH 
USD 350 MILLION TOTAL.  HE SAID THAT ONE OF THE TWO U.S. 
COMPETITORS IS THE LOW BIDDER, BUT ADDED THAT ARABSAT DID NOT 
HAVE THE ADVANTAGE OF THURAYA WITH 50 PERCENT OF ITS 100 
EMPLOYEES UAE NATIONALS, ESPECIALLY THOSE WITH TECHNICAL 
EXPERTISE.  ARABSAT HAS SOME LIBYANS ON ITS STAFF. 
 
5.  (SBU/PROPIN) OMRAN SHOWED SCO A PAPER ENTITLED "US 
TECHNOLOGY EXPORT REQUIREMENTS," WHICH WAS GIVEN TO THE TWO U.S. 
COMPANIES.  IT SAYS: "ARABSAT NEEDS ASSURANCE THAT, IF IT 
PURCHASES ANY U.S. MANUFACTURED SATELLITE(S) IT WILL BE TREATED 
NO LESS FAVORABLY THAN ANY OTHER NON-AMERICAN PURCHASER OF A 
U.S.SATELLITE.  WITH THE FOREGOING IN MIND, PLEASE PROVIDE AN 
ORIGINAL LETTER, SIGNED BY THE AMBASSADOR OF THE UNITED STATES 
IN RIYADH, OR AN EQUIVALENT HIGH U.S. STATE DEPARTMENT OFFICIAL, 
WHICH STATES THE FOLLOWING: THAT THE TERMS OF ALL EXPORT 
LICENSES, APPROVALS, PERMITS, AND CONSENTS GRANTED ALLOW ARABSAT 
TO: (1) PURCHASE, OWN, LAUNCH, INSURE, AND OPERATE THE 4A AND 4B 
SATELLITES; AND (2)USE THE 4A AND 4B SATELLITES FOR ALL OF 
ARABSAT'S BUSINESS COMMERCIAL OPERATIONS; WILL BE NOT MORE 
RESTRICTIVE ON ARABSAT THAN THOSE CONDITIONS APPLIED TO OTHER 
INTERNATIONAL PURCHASES (FOR EXAMPLE, INMARSAT, EUTELSAT, 
TELESAT, ASTRA, OR INTELSAT) OF U.S.-MANUFACTURED SATELLITES, 
AND WILL NOT CONTAIN ANY OTHER CONDITIONS WHICH DIRECTLY OR 
INDIRECTLY OPERATE TO BE MORE RESTRICTIVE THAN THOSE 
CONDITIONS." 
 
6.  (SBU/PROPIN) THE DOCUMENT FURTHER STATES, "THAT ANY 
INDIVIDUAL CURRENTLY EMPLOYED BY ARABSAT IN THE OPERATION OF 
SATELLITES WILL BE APPROVED TO OPERATE THE 4A AND 4B SATELLITES 
(AND TO RECEIVE ALL TECHNOLOGY AND TECHNICAL DATA RELATIONS TO 
THE 4A AND 4B SATELLITES) REGARDLESS OF HIS NATIONALITY (BUT 
AFTER THAT (SIC) INDIVIDUAL HAS CLEARED STANDARD U.S. SECURITY 
CHECKS, ALTHOUGH SUCH CHECKS THEMSELVES SHALL NOT RESTRICT OR 
PROHIBIT ANY SUCH INDIVIDUAL FROM BEING APPROVED OR CLEARED BY 
REASON ONLY OF HIS NATIONALITY) IF NECESSARY, THROUGH THE GRANT 
OF A PRESIDENTIAL EXEMPTION." 
 
7.  (C) OMRAN SAID THAT ARABSAT MERELY WANTS TO BE TREATED NO 
MORE HARSHLY THAN OTHER NON-U.S. SATELLITE PURCHASERS AND HAS NO 
PROBLEM WITH HAVING ITS EMPLOYEES FROM COUNTRIES SUBJECT TO 
SANCTIONS BE INTERVIEWED AND SUBJECTED TO A SECURITY CHECK BY 
USG SECURITY PERSONNEL.  OMRAN EXPLAINED THAT HE IS PART OF A 
WORKING COMMITTEE THAT DOES NOT INCLUDE LIBYANS, AND THEY SEEK 
TO WORK OUT THE DETAILS SO THAT THE BOARD MEMBERS "ARE NOT 
EMBARRASSED."  (COMMENT:  THIS INDICATES THAT THE FOCUS OF 
ATTENTION OF BOTH COMPANIES AND THE USG SHOULD BE WITH THE 
WORKING GROUP, SINCE BY THE TIME AN ISSUE REACHES THE BOARD THE 
DETAILS ARE PRETTY WELL WORKED OUT). 
 
8.  (C) OMRAN REQUESTED THAT SCO TRANSMIT THIS MESSAGE TO 
WASHINGTON, ALONG WITH THE ADMONITION THAT WE HAVE LITTLE TIME, 
SINCE THE DECISION WILL BE FINALIZED IN CAIRO DURING THE BOARD'S 
MEETING ON SEPTEMER 25.  HE CLEARLY WANTS TO BREAK THE FRENCH 
MONOPOLY, OBSERVING THAT WHILE BOTH BOEING AND LOCKHEED HAVE 
DOWNSIZED AND THE GLOBAL SATELLITE INDUSTRY IS DISTRESSED, THEY 
REMAIN EXCELLENT COMPANIES AND WOULD DO WELL TO SEIZE THE 
OPPORTUNITY TO SELL TO ARABSAT. 
 
9.  (C) ACTION REQUEST: OMRAN IS AWARE OF OUR SENSITIVITIES TO 
PASSING TECHNOLOGY TO LIBYANS (AND HAD OBTAINED FROM ARABSAT THE 
BLOOMFIELD LETTER PER REF A) AND IS LOOKING FOR A WORKABLE 
SOLUTION.  BECAUSE OF HIS 16 YEARS WITH ARABSAT, WE BELIEVE 
OMRAN WIELDS MORE INFLUENCE IN ARABSAT THAN THE UAE'S MINORITY 
SHARE WOULD INDICATE.  GIVEN THE MAJOR U.S. COMMERCIAL INTEREST 
IN THIS DEAL -- USD 350 MILLION AND AN APPROXIMATE 5,000 JOBS -- 
POST APPRECIATES FROM WASHINGTON ANY GUIDANCE WE CAN PROVIDE 
OMRAN.  END ACTION REQUEST. 
 
ALBRIGHT