US embassy cable - 04ABUDHABI1371

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001371 
 
SIPDIS 
 
STATE FOR NEA/ARP - HEFFERNAN, NEA/RA -SUTPHIN, 
EB/ESC/ESP, INL/C - CASSARA, INL/ENT - NOVIS, AND 
S/CT - REALUYO 
TREASURY FOR ENFORCEMENT DAS JUAN ZARATE AND IEA 
DIRECTOR BOYLAN, ALSO FOR LONERGAN 
TREASURY PASS OCC FOR BLACKER 
TREASURY PASS OFAC FOR NEWCOMB 
JUSTICE FOR ASSET FORFEITURE AND ML UNIT -- DEPUTY 
CHIEF DAVITT, ALSO TED GREENBERG 
JUSTICE PASS OPDAT FOR SILVERWOOD 
NSC FOR GARY PETERS 
 
E.O. 12958: DECL: 04/27/09 
TAGS: PTER, EFIN, ETTC, PREL, PGOV, TC 
SUBJECT:  UAEG ANNOUNCES NEW LAW TO COMBAT TERRORIST 
FINANCING 
 
REF: ABU DHABI 1026 
 
1.  (U) Classified by Deputy Chief of Mission Richard A. 
Albright for reasons 1.5 (B) and (C). 
 
2.  (C) UAE Central Bank Governor Sultan Nasser Al-Suweidi 
announced that the UAEG was nearing completion of a new 
terrorist finance law at the close of the Second 
International Hawala Conference on April 5 (ref).  While 
conference participants generally welcomed the new 
legislation focused on terrorist financing, the Governor's 
statement and subsequent news articles about the law were 
short on specifics.  Executive Director of the Central 
Bank's Anti-Money Laundering and Suspicious Case Unit 
(AMLSCU) Abdul Rahim Al-Awadi briefed Econoff April 27 on 
the new law, and said that it gave the Central Bank more 
authority to freeze assets and undertake investigations 
related to terrorist finance. 
 
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Scope Of The New Law 
-------------------- 
 
3.  (U) The new law is based on the various UN declarations 
to combat terrorism, the UN Convention for the Suppression 
of the Financing of Terrorism (1999), and takes into 
consideration the Arab Convention on the Suppression of 
Terrorism, signed at the Arab League Secretariat in Cairo 
in 1998. 
 
4.  (C) Al-Awadi listed the many problems that the Central 
Bank has encountered freezing terrorist assets and 
investigating suspected terrorist financiers under the 
current money laundering law.  Law No. 4 of 2002 requires a 
predicate offense -- an underlying illicit activity -- to 
trigger a Central Bank/law enforcement response, but the 
new law will provide the Central Bank extraordinary powers 
to freeze assets of any suspect individual immediately, 
whether or not the funds can be linked to a crime.  Under 
Law No. 4, the Central Bank may freeze assets of suspect 
individuals for seven days only, and must present evidence 
to the Public Prosecutor to continue freezing the accounts 
or release the funds.  He noted that such a restriction was 
impractical in terrorist finance cases; "terrorism is like 
a cancer to our society and is a threat to our national 
security -- we must be free of all legal restrictions to 
deal with terrorist cases as required." 
 
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Status Of The Law 
----------------- 
 
5.  (C) Al-Awadi said that the Central Bank recognized the 
need for a law focusing on terrorist financing and separate 
from Law No. 4 of 2002 on money laundering.  An inter- 
agency committee has met regularly during the last six 
months to create the new law, and the committee -- of which 
Al-Awadi is a member -- already has received the Minister 
of Justice's approval to submit the draft legislation to 
the Federal Cabinet for final review.  The new law also 
must be approved by all the rulers of the seven emirates, 
but Al-Awadi did not think the process would take more than 
a couple of months; "we are all of like mind on these 
issues." 
 
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Comment 
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6.  (C) While Post has not seen a draft of the proposed 
law, we are encouraged by Al-Awadi's assurances that the 
new legislation will provide the Central Bank more 
authority to freeze indefinitely the assets of terrorist 
financiers in the UAE.  The new law also should provide 
clear guidelines for investigating and prosecuting 
financial crimes related to terrorism.  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 the process of initiating and advancing 
financial investigations here has been cumbersome.  It is 
noteworthy that the new law also will provide procedures 
for the seizure and forfeiture of non-bank assets of 
suspected terrorist financiers, including securities, cars, 
buildings, etc. 
 
7.  (C) At our request, the UAE Central Bank has frozen 
indefinitely a number of bank accounts since 9/11 related 
to suspected terrorists -- and in spite of the requirements 
of Law No. 4 to produce evidence to the Public Prosecutor 
or release the funds.  The Central Bank occasionally has 
come under fire from the Ministry of Justice to respect Law 
No. 4 and release funds, and this has -- in some instances 
-- been a source of tension in our bilateral efforts to 
combat terrorist financing.  We hope the new law will 
provide the political cover the Central Bank needs to 
legitimate its current practices and fend off pressure to 
release funds before a proper investigation can be 
initiated. 
 
Wahba