US embassy cable - 03ABUDHABI1904

C O N F I D E N T I A L ABU DHABI 001904 
 
SIPDIS 
 
STATE FOR EB, NEA/ARP - JONES AND HEFFERNAN, NEA/RA 
-PSUTPHIN, EB/ESC/ESP -GGLASS, S/CT - CBLACK AND 
FOX, AND IO/PHO -APEREZ 
 
TREASURY FOR OGC - DAUFHAUSER, DAS FOR TERRORISM 
AND VIOLENT CRIMES (JZARATE), AND TERRORIST 
FINANCING TASK FORCE 
TREASURY PASS OFAC FOR NEWCOMB 
 
E.O. 12958: DECL: 04/21/13 
TAGS: EFIN, PTER, ETTC, ECON, TC 
SUBJECT: UAE MEASURES TO MONITOR OUTBOUND FINANCIAL 
TRANSFERS BY CHARITIES 
 
 
1. (U) CLASSIFIED BY DCM RICHARD A. ALBRIGHT FOR 
REASONS 1.5 (B,D). 
 
2.  (C) DCM called 4/21 on UAE Minister of Labor 
and Social Affairs Matar Al-Tayer to discuss 
oversight of charities (other topics septel).  Al- 
Tayer confirmed that subsequent to discussions last 
year with Treasury Enforcement DAS Zarate (reftel), 
the UAE had mandated that all licensed charities 
here interested in transferring funds overseas must 
do so via one of three umbrella organizations:  The 
Red Crescent Authority, the Zayed Charitable 
Foundation, or the Muhammad Bin Rashid Charitable 
Trust.  These three quasi-governmental bodies were 
properly managed, Al-Tayer observed, and in a 
position to ensure that overseas financial 
transfers went to legitimate parties.  As an 
additional step, the UAEG had contacted the 
governments in numerous aid receiving countries to 
compile a list of recognized, acceptable recipients 
for UAE charitable assistance.  Al-Tayer added that 
these transfers all take place via banks.  The 
Minister noted that, in keeping with the times, UAE 
charities are now much more sensitive to the need 
to ensure adequate accountability; the days of aid 
veing delivered via suitcases full of cash are 
"well and truly over." 
 
 
3.  (C)  Auditing the books of charities -- a key 
desire of the government -- is still a work in 
progress, the Minister noted.  The UAEG had 
originally proposed last year that all charities 
hire independent outside auditors and submit to the 
Ministry certified annual reports on their 
financial activities.  But questions had then been 
raised as to who would pay for these audits, 
whether the charities could use zakat (required 
religious tithes) for this purpose, etc.  The 
government, as a compromise measure, had then 
suggested that charities submit their books to the 
state auditing authorities, but the state auditors 
themselves had rejected this idea citing overwork 
and an inability to conduct spot audits.  The 
government was now considering funding private 
audits of charities -- to include possible 
governmental spot-checks -- and expected to have 
this matter resolved shortly. 
 
4.  (C)  COMMENT:  As the foregoing makes clear, 
the UAEG is fully aware of the importance of 
ensuring adequate oversight of outbound financial 
transfers by charities.  The current requirement to 
funnel funds through well-run, quasi-governmental 
umbrella organizations is a prudent temporary 
measure, but the best long-term solution is to 
establish formal audit requirements -- something 
that should transpire later this year. 
 
Wahba