US embassy cable - 03OTTAWA1862

UNCLAS SECTION 01 OF 02 OTTAWA 001862 
 
SIPDIS 
 
SENSITIVE 
 
FOR EB 
DEPARTMENT PLEASE PASS USTR 
 
E.O. 12958: N/A 
TAGS: ECON, ECIN, EFIN, ETRD, EINV, ETTC, PREL, PTER, PINR, QA, XF, Terrorist Finance 
SUBJECT: A/S WAYNE'S MEETING WITH ABDULLA BIN AL-ATTIYAH, 
GOVERNOR OF THE CENTRAL BANK OF QATAR 
 
 
 1.  (SBU)  Summary:  During a bilateral meeting held June 25 
on the margins of the International Arab Banking Summit in 
Montreal, A/S Anthony Wayne and Abdulla bin al-Attiyah, 
Governor of the Central Bank of Qatar, discussed the regional 
economic situation with a focus on the fight against 
terrorist financing, privatization plans, and trade issues 
including the President's initiatives on the Middle East Free 
Trade Agreement (MEFTA) and Middle East Partnership 
Initiative (MEPI).  End summary. 
 
2.  (U) Al-Attiyah confirmed that Qatar's economy is booming: 
 oil and gas revenues are up; prices on the stock exchange 
are up almost 20% this year after increasing nearly 35% last 
year; and real estate prices are strong. 
 
New Steps to Control Financial Flows 
------------------------------------ 
 
3. (U) A/S Wayne congratulated al-Attiyah on the success of 
last fall's anti-money laundering conference and mentioned 
participation by Qatari officials in the recent USG training 
sessions. He stressed the importance we continue to place on 
blocking the flow of funds to terrorist organizations, and 
asked the status of Qatar's anti-money laundering 
legislation.  Al-Attiyah said that the money laundering law 
is moving: it has been approved by the Council of Ministers 
and the shura, and should be finalized soon.  The GOQ has 
established a new committee to address money laundering under 
the jurisdiction of the Central bank. 
 
4. (SBU) Qatar is adding terrorist financing to the criminal 
law, and has just established a committee to coordinate the 
fight against terrorist financing.  They are adding a legal 
article permitting the Central Bank Governor to freeze any 
asset on instructions from the Attorney General-equivalent. 
(Al-Attiyah said he is pleased that he does not have the 
authority to freeze assets unilaterally, fearing that could 
lead to perceptions of abuse of power.  The proposed 
arrangement will allow officials with access to intelligence 
reporting and legal information to make the decision.) 
 
MEFTA and MEPI have Promise 
--------------------------- 
 
5. (SBU) Asked his views on MEFTA and MEPI, al-Attiyah said 
he is not an expert.  It sounds like a nice approach; has 
validity; a good idea.  But he wanted to emphasize his 
personal view on the importance of solving Middle East 
problems first.   The initiatives are nice, but the 
Palestinian problem is crucial. Bush seems to be a firm 
president and al-Attiyah stated that he tells people the U.S. 
president shouldn't be underestimated.  A/S Wayne responded 
that the situations in Iraq and the Middle East peace process 
are crucial and President Bush and the Administration are 
committed to finding a solution, but MEFTA and MEPI provide 
other pillars to support growth and development in the 
region. 
 
Democracy is Key 
---------------- 
 
6. (U) Asked his view on the most important ingredient for 
peace and growth in the region, al-Attiyah said "democracy." 
The region has never had cooperation; it has not even been 
able to agree on a customs union.   The GCC is hoping to 
establish a common currency by 2010, to really integrate the 
GCC economies.  Most big projects in the region are 
successful if they have government support, and the US should 
be sure governments are involved. 
 
Need to Refine Informal Fund Transfer Systems 
--------------------------------------------- 
 7. (U) Al-Attiyah noted that during international meetings, 
his fellow GCC Governors have commented on Americans' 
apparent misunderstanding of the term "hawala," giving it 
meaning beyond its Arabic meaning of "transfer."  A/S  Wayne 
said we are aware of the nuances and have adopted various 
terms such as "informal value transfer system" to refer to 
the process.  There was discussion of the benefits of sharing 
best practices, including licensing those engaged in 
transferring funds and lowering the costs of transferring 
funds in the formal financial system.  Al-Attiyah confirmed 
that in Qatar the correspondent in a hawala transfer should 
be a licensed bank.  He suggested that a more targeted 
approach on specific individuals might be more effective than 
the very broad effort to control all fund transfers.  (The 
issue of providing what could be an expensive system for 
transfer of remittances had been raised during the panel 
discussion moderated by al-Attiyah.) 
 
Privatization Plans 
------------------- 
8. (U) Asked about Qatar's privatization plans, al-Attiyah 
mentioned that the first target will be in the petrochemical 
sector, and discussed plans regarding aluminum. 
 
Bio 
--- 
9. (U) Al-Attiyah's father has a house in Beirut at which 
al-Attiyah vacations.  He went to school in Michigan and 
attended SAIS.  He later served in Qatar's embassy in 
Washington from 1979-82.  He speaks fluent but un-enunciated 
English. 
 
10. (U)  A/S Wayne cleared this cable. 
 
CELLUCCI