US embassy cable - 05MANAMA240

C O N F I D E N T I A L MANAMA 000240 
 
SIPDIS 
 
STATE FOR NEA/ARPI DBERNS 
STATE PASS USTR JBUNTIN 
 
E.O. 12958: DECL: 02/19/2015 
TAGS: ECON, EFIN, EPET, BA, ENGR 
SUBJECT: AMBASSADOR'S MEETING WITH NEW FINANCE MINISTER 
 
Classified By: AMBASSADOR WILLIAM T. MONROE FOR REASONS 
1.4 (B) AND (D). 
 
1.  (C) Summary.   The new Bahraini Finance Minister Sheikh 
Ahmed bin Mohammed Al Khalifa told the Ambassador February 9 
that new anti-money laundering legislation is being prepared 
for presentation to parliament.  He noted that he and 
Treasury Under Secretary Taylor had discussed the development 
and coordination among regional and G8 countries on the BMENA 
Network of Funds initiative during a recent phone call.  The 
Ambassador and the Minister discussed ways to promote the 
free trade agreement in the two countries.  Finance Under 
Secretary Sheikh Ibrahim Al Khalifa mentioned that Bahrain is 
 
SIPDIS 
considering purchasing natural gas from Iran.  The Ambassador 
strongly urged the MOF to reconsider such a deal.  End 
Summary. 
 
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Legislation 
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2.  (C)  The Ambassador paid an introductory call February 9 
on Bahraini Finance Minister Sheikh Ahmed bin Mohammed Al 
Khalifa to congratulate him and review U.S.-Bahrain economic 
issues.  In response to the Ambassador's question on 
anti-money laundering legislation, Sheikh Ahmed said new 
legislation had been passed from the prime ministry legal 
affairs department to the Cabinet along with a penal code 
amendment on terrorism financing.  The "two-package deal" 
would send a clear message about Bahrain's commitment to 
combating terrorism.  He expected that both pieces of 
legislation would be sent to the parliament within weeks. 
 
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Network of Funds 
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3.  (C)  The Minister said he had a productive phone call 
with Treasury U/S Taylor in early January on developing links 
between G8 and BMENA countries on the BMENA Network of Funds, 
which seeks to promote cooperation and improve effectiveness 
of the region's official financing.  The GOB will hold an 
inter-ministerial meeting on the initiative in preparation 
for additional G8/BMENA consultations on the issue. 
 
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FTA Promotion 
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4. (C)  Sheikh Ahmed and the Ambassador exchanged updates on 
where FTA ratification stands in their respective countries. 
They are optimistic about movement in the near future.  The 
Ambassador noted he would be doing an interview with Fox News 
and CNBC as well as additional public affairs opportunities 
to promote the FTA.  He pledged to work with the American 
Chamber of Commerce in Bahrain and the Bahrain Chamber of 
Commerce and Industry as they seek to utilize the FTA as a 
promotional tool.  The Minister said the MOF is considering a 
trade mission to Chicago, but noted it might take place after 
ratification. 
 
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Natural Gas 
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5.  (C)  In response to the Ambassador's question on a 
Bahraini-Qatari natural gas deal, U/S Sheikh Ibrahim replied 
that Bahrain and Qatar were considering a memorandum of 
agreement for construction of a 90-km gas pipeline.  However, 
he downplayed the urgency for an agreement with Qatar, 
suggesting that Bahrain's natural gas reserves are larger 
than reported and indicating that gas purchases from Iran 
remain a possibility.  The Ambassador reminded Ibrahim of our 
legal and political objections to a deal with Iran.  Comment: 
 Ibrahim's suggestion that Bahrain has sufficient natural gas 
reserves for the time being runs counter to all we have 
heard.  Our guess is that any talk of larger domestic 
reserves and possible deals with Iran are aimed at lessening 
the sense that Bahrain urgently needs a deal with Qatar. 
MONROE