US embassy cable - 04ABUDHABI1000

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001000 
 
SIPDIS 
 
STATE FOR NEA/ARP - HEFFERNAN, NEA/RA -SUTPHIN, 
TREASURY FOR FINCEN 
 
E.O. 12958: DECL: 04/05/09 
TAGS: EFIN, ETTC, PREL, PGOV, TC 
SUBJECT:  UAEG OFFICIALS AND PRIVATE SECTOR DISCUSS ANTI- 
MONEY LAUNDERING EFFORTS WITH FINCEN DIRECTOR 
 
1.  (U) Classified by DCM Richard A. Albright for reasons 
1.5 (B) and (C). 
 
2.  (C) Summary and comment.  The UAE Central Bank welcomed 
the visit of the Treasury Department's Financial Crimes 
Enforcement Network (FinCEN) Director Bill Fox to the UAE, 
March 29.  The Central Bank Governor pledged further 
cooperation between the UAE's Anti-Money Laundering and 
Suspicious Cases Unit (AMLSCU) and FinCEN, and asked for 
more details on FinCEN's requests for information.  Despite 
the UAE's progress in recent years combating money 
laundering and terrorist financing, the Central Bank's 
AMLSCU is not yet fully lashed up with UAE law enforcement 
and prosecutorial authorities, and has limited 
investigative capabilities.  We are seeking additional 
areas for cooperation between the AMLSCU and FinCEN, which 
will serve to strengthen the AMLSCU's ability to 
investigate financial crimes. 
 
3.  (C) Summary and comment continued.  In Dubai, FinCEN 
met with Lloyds Bank Area Manager for UAE and the Gulf 
States Richard Stockdale, and then with officials from the 
Dubai Financial Services Authority (DFSA), the regulatory 
body for Dubai's planned huge offshore banking center the 
Dubai International Financial Center (DIFC).  While the 
overall willingness of the Central Bank to tackle the money 
laundering issue was a good thing, Stockdale felt that that 
the Central Bank was still too slow in providing feedback 
to banks that file Suspicious Transaction Reports (STRs). 
He also highlighted the large opportunity for money 
laundering that exists in Dubai's burgeoning real estate 
market.  CEO of DFSA Phillip Thorpe explained how DFSA 
intended to cooperate with the Central Bank, for example by 
going through the Central Bank when communicating with 
other national regulatory bodies.  DFSA, he indicated, 
would also work in tandem with the Central Bank on STRs 
filed on DIFC-based financial institutions.  End summary 
and comment. 
 
--------------------------------------------- -- 
More U.S.-UAE Anti-Money Laundering Cooperation 
--------------------------------------------- -- 
 
4.  (SBU) The UAE Central Bank Governor Sultan Nasser Al- 
Suweidi welcomed more communication between the AMLSCU and 
FinCEN.  The Governor noted that he recently designated an 
individual within the AMLSCU to act as point-of-contact for 
FinCEN's (and other FIU's) requests for information and 
other inquiries.  He admitted that the AMLSCU has more 
frequent contact with its counterpart FIUs in Europe, due 
to the larger number of financial transactions between the 
UAE and European financial institutions.  Al-Suweidi noted 
that 42 percent of the UAE's overall trade is with European 
countries, whereas only 8 percent of trade is conducted 
with the United States. 
 
5.  (C) Al-Suweidi and Director Fox discussed the 
establishment of a FATF-style regional body in the Middle 
East.  Al-Suweidi supported the idea, but said that three 
countries are competing fiercely to headquarter the 
organization in their respective territories.  "We will 
support it no matter where it is located," added Al- 
Suweidi.  He intimated that the UAEG's desire to remain 
neutral in the matter might have influenced its decision 
not to participate in the last FATF plenary. 
 
6.  (U) Al-Suweidi also agreed to co-host with FinCEN 
regional FIU training for South Asian countries, many of 
which have nascent or non-existent FIU programs.  He asked 
Director Fox if the co-hosts could invite additional 
countries to the training -- "from the Nile to the Bay of 
Bengal."  He also asked whether the United States would be 
willing to invite states such as Iran and Syria to the 
training.  We indicated that this would be a problem. 
Comment: This FIU training is an opportunity for the UAE 
Central Bank to showcase its achievements in this area and 
bolster its position as the regional leader in anti-money 
laundering efforts; we can understand why the Governor 
would like to be as inclusive as possible.  The Governor 
and FinCEN staff agreed to discuss timing and a notional 
agenda with some of the intended participants on the 
margins of the International Hawala Conference. (reported 
septel).  Econoff will follow-up.  End comment. 
 
---------------------------- 
Request For More Information 
----------------------------- 
 
7.  (SBU) Al-Suweidi encouraged the FinCEN delegation to 
include more background in its requests for information, 
which would allow the AMLSCU to better tailor its 
responses.  Background information, the final objective of 
the request for information, and more identification 
documentation of individuals under investigation would be 
especially useful to the AMLSCU. 
 
8.  (U) AMLSCU Executive Director Abdul Rahim Al-Awadi 
described a recent U.N. request for the UAE Central Bank to 
freeze accounts of Liberian President Charles Taylor's 
relatives, including "John Taylor, his two sons, their 
families and affiliated companies."  Al-Awadi asked, "This 
is a common name; how can banks know which accounts are 
involved or related to these unspecified individuals or 
companies?"  He noted that the AMLSCU undertook to ask the 
U.N. for more information before forwarding the circular to 
UAE banks.  Al-Suweidi admitted that the AMLSCU sometimes 
delays issuing a freeze order to request additional 
clarifying information, but he said, "targeting an innocent 
person is worse than delaying action for a few days against 
a felon." 
 
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Lunch With Lloyds 
----------------- 
 
9.  (C) Director Fox and the FinCEN delegation came to 
Dubai on March 29 for two meetings and to attend the World 
Diamond Conference (reported septel).  In a luncheon with 
Lloyds Bank Area Manager for UAE and the Gulf Richard 
Stockdale, the discussion focussed on AML efforts in the 
UAE.  Stockdale praised the willingness of the UAE Central 
Bank to engage in AML, but added that there was still a 
lack of expertise in some areas.  Stockdale told a story of 
how he had filed a Suspicious Transaction Report (STR), 
frozen the suspicious account as requested, and then been 
unable to get any follow-up response from the Central Bank. 
On his fifth phone call to the Central Bank to resolve the 
matter, he finally told Executive Director of the AMLSCU 
Al-Awadi that he was going to release the funds unless he 
received an answer.  Stockdale said Al-Awadi grumbled, but 
the next day Stockdale had his answer. 
 
10.  (C) Stockdale also brought up the issue of money 
laundering through purchasing property.  He said that the 
huge property development boom in Dubai, combined with 
practically no controls or checks on funds used to purchase 
these properties, surely provided a lot of opportunity for 
money-laundering in Dubai's property market. 
 
------------------------- 
Offshore Banking in Dubai 
------------------------- 
 
11.  (C) FinCEN's other Dubai meeting was with officials 
from the Dubai Financial Services Authority (DFSA), the 
regulatory body of Dubai's planned huge, offshore banking 
center, the Dubai International Financial Center (DIFC). 
CEO of DFSA Phillip Thorpe described the cutting edge 
legislation, supervision, and enforcement regime that DFSA 
had been setting up.  In an about-face from DFSA's previous 
position, Thorpe said DFSA would not, in fact, be signing 
formal MoUs with regulatory authorities in other countries, 
but would instead be going through the Central Bank.  Fox 
agreed that that was a good idea.  Thorpe added that he 
still hoped to develop less formal relationships with other 
national regulatory bodies so that actions and 
communications could occasionally be done more quickly than 
would be the case if DFSA always went through the UAE 
Central Bank. 
 
12.  (C) Another issue brought up by the FinCEN team was 
how STRs relating to DIFC-based institutions would be filed 
-- with the Central Bank, the DFSA, or both?  Thorpe said 
that while STRs would be filed with the AMLSCU, DFSA itself 
would also be simultaneously copied. 
 
13.  (U) Director Fox did not have the opportunity to clear 
this cable before departing the UAE.   This cable was 
coordinated with Amconsul Dubai. 
 
Wahba