US embassy cable - 05ABUDHABI509

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 000509 
 
SIPDIS 
 
NSC FOR PATRICK HEFFERNAN 
 
E.O. 12958: DECL: 02/04/2015 
TAGS: EFIN, ETRD, IZ, PTER, TC 
SUBJECT: UAE CENTRAL BANK GOVERNOR DISCUSSES CT FINANCE, FTA 
 
REF: ABU DHABI 00301 
 
Classified By: (U)  Classified by Ambassador Michele J. Sison for reaso 
ns 1.4 (b) and (d). 
 
1. (U) Summary: Ambassador met with Central Bank Governor 
Sultan Nasser Al Suwaidi to discuss counterterror finance 
cooperation on January 29.  Governor Al Suwaidi focused on 
regional CT finance engagement and on expected Free Trade 
Agreement discussions with the banking sector.  End summary. 
 
 
Bilateral CT Cooperation Continues, Deepens 
------------------------------------------- 
 
2. (C) The Ambassador thanked Al Suwaidi for the Central 
Bank,s cooperation and assistance in regards to 
counterterror financing efforts, particularly for his 
leadership in freezing accounts related to CT and 
proliferation concerns (septel).  Al Suwaidi laughed and 
said, &it wasn,t leadership, it was pressure.8  The 
Central Bank has, on more than one occasion, taken the 
initiative to exceed its strict legal mandate to freeze 
accounts. 
 
3. (C) The Governor informed the Ambassador that cooperation 
and coordination between the Central Bank and FINCEN is 
excellent, and he cited as an example the UAE-initiated 
investigation on the Iraqi insurgent financier, Izz al-din Al 
Majid.  He said that the Central Bank official in charge of 
the investigation is actively collecting information and 
sending it to FINCEN, and that they are in daily contact. 
 
4.  (C) Likewise, the U.S. has continued to receive excellent 
support from the Central Bank on its investigations of 
Moussoui and 9/11, and the Ambassador thanked Al Suwaidi for 
continually granting FBI/Terrorist Financing Operations 
Section (TFOS) access to information and documents relating 
to the case (a TFOS team is in Abu Dhabi this week to 
follow-up).  The Ambassador also thanked Al Suwaidi for his 
assistance on the Al-Shamsi case and asked for an update.  Al 
Suwaidi responded that the case remains with SSD/Dubai. 
 
5.  (C) In response to Ambassador,s question about reporting 
requirements for cash couriers, Al Suwaidi provided a draft 
regulation that requires individuals to report cash exports 
in excess of 10,000 USD.  (Comment: The previous regulation 
required reporting only for the importation of cash.  Central 
Bank officials have told us that the failure to address the 
export of cash was an oversight, and this new regulation 
corrects that problem.  End comment.) 
 
 
Central Bank Governor Supports MENA/FATF 
---------------------------------------- 
 
6. (C) Al Suwaidi informed the Ambassador that the UAE 
intends to approach the chair of Middle East North 
Africa/Financial Action Task Force (MENA/FATF) and offer the 
organization to opportunity to co-sponsor the upcoming 3rd 
Hawala conference in April.  Al Suwaidi told the Ambassador 
that he believes MENA/FATF should focus on two areas in 
regards to counterterrorist financing.  First, the countries 
of the region need to unify standards and criteria for 
identifying wrongdoers, and second, a transparent and uniform 
system needs to be created.  One of the challenges that 
countries will face as they move toward standardizing the 
process stems from the fact that not all of the GCC countries 
have their FIU,s within the Central Bank.  In several of the 
countries, counterterrorist financing responsibilities lie 
with the ministries of interior. 
 
7. (C) The Governor noted that in the past year, U.S. 
training programs in the UAE have decreased, but he observed 
that this decline might be the result of MENA/FATF, and that 
he agrees with the shift of emphasis to the U.S. providing 
multilateral assistance programs.  Al Suwaidi stated his 
intent to discuss ideas for specific training with the 
MENA/FATF chair, and said that they would then approach the 
U.S. with specific requests for workshops, seminars, and 
technical assistance. 
 
 
Consultations to Begin with Banks in Advance of FTA 
--------------------------------------------- ------ 
 
8. (C) The Central Bank will begin the consultation process 
with UAE commercial banks in advance of the expected Free 
Trade Agreement negotiations with the United States, and the 
Governor observed that he is anticipating a &big row8 with 
the banks.  The Central Bank issued a questionnaire to UAE 
banks, and after each bank completes it, officials from the 
Central Bank will meet with the banks to discuss issues of 
concern, and then will issue a press release.  Al Suwaidi 
noted that his government must take into consideration the 
needs and concerns of the private sector, and he hopes that 
these consultations will help address and allay their 
concerns.  (Comment: This is a pro-active and useful effort 
on the Central Bank Governor,s part to consult and garner 
support in the banking sector for an FTA.  Although bankers 
have not approached us directly with specific concerns, based 
on our understanding of the banking environment, we suspect 
some bankers will be apprehensive about the sector being 
overbanked and the threat of American competition to the 
smaller banks.  There are 46 banks in the UAE, many of which 
are small.  Allowing a U.S. bank to establish a 100% owned 
subsidiary or acquire 100% of a local financial institution 
would be controversial within UAE banking circles, which 
support the current moratorium on new licensing.  End 
comment.) 
 
 
SISON