S/P DIRECTOR HAASS' JANUARY 8 MEETING

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 000235 SIPDIS STATE FOR NEA/ARP - HEFFERNAN, NEA/RA - SUTPHIN, EB/ESC/ESP, INL/C - CASSARA, AND S/CT - REALUYO TREASURY FOR LONERGAN AND GUNARATNE TREASURY PASS OFAC FOR NEWCOMB JUSTICE FOR TED GREENBERG NSC FOR JOSEPH MYERS STATE FOR S/P - AMBASSADOR RICHARD HAASS ALSO FOR NEA/ARP E.O. 12958: DECL: 1/11/2013 TAGS: PREL TC SUBJECT: S/P DIRECTOR HAASS' JANUARY 8 MEETING WITH UAE CENTRAL BANK GOVERNOR ¶1. (U) Classified by Ambassador Marcelle M. Wahba, Reasons 1.5 (B) and (D). ¶2. (C) SUMMARY: Visiting Policy Planning Director Ambassador Richard Haass, accompanied by Ambassador Wahba, S/P staffer Dr. Meghan O'Sullivan, A/DCM and control officer, called January 8 on UAE Central Bank Governor Sultan bin Nasser Al-Suweidi. Al-Suweidi was attended by the Bank's FIU chief, the head of Banking Supervision, and the Correspondent Banking director. Topics covered included need for better SOPs for information-sharing on terrorist financing, developing a consensus on the role of Financial Intelligence Units, developing world concerns about the WTO, and efforts to move towards a common market in the GCC. END SUMMARY. -------------- -------------- CBG CALLS FOR GREATER INFO EXCHANGE ON TERRORIST FINANCING -------------- -------------- ¶3. (C) Ambassador Haass noted the considerable steps the UAE has taken to address anti-money laundering and terrorist financing issues and asked the Governor for his views of how good a job the international community is doing in addressing the latter concern. Al-Suweidi said a lot has been accomplished and that international consensus had been key to much of the progress to date. That said, he stressed the need for even greater openness and sharing of information on terrorist financing, particularly the requirement to remove many of the legal constraints in the developing world which make it difficult to obtain financial data. He suggested that an international standard should be set for the role of Financial Intelligence Units -- to empower them, for example, to provide telephone numbers and other data which often lie outside the authority of existing FIUs. Privacy issues may be a consideration, of course, but an agreed scope of authority for FIUs world-wide -- especially if that authority was defined broadly, could be of inestimable value in the war on terrorist financing. ¶4. (C) Ambassador Haass asked if some new international convention or agreement would be helpful; the Central Bank Governor opined that existing mechanisms are adequate, but what is needed is an agreed framework to better organize international cooperation and to establish accepted standard operating procedures to which all would subscribe. He noted, for example, that the FIU can provide telephone numbers in response to inquiries -- something the U.S. FIU, FinCEN, cannot. The UAE provides information generously, but often finds that the U.S. and others (particularly the Germans) are much less user-friendly. Ambassador Haass agreed to take the Governor's suggestions back and to raise them with Treasury. -------------- DEVELOPING WORLD DISAPPOINTED WITH WTO -------------- ¶5. (C) Ambassador Haass inquired into the UAE's experience with the WTO and movements in the region towards creation of a broader, more open market. Al-Suweidi noted that the UAE had been grandfathered into the WTO; Saudi had not and thus faced far more restrictive terms for entry which made accession much more difficult. The WTO, he opined, had proved to be a disappointment for the developing world, where new regulations and policies proved both difficult to explain to the populace and much more difficult to enforce than in the OECD. The advanced western economies tended to have little understanding or concern with regard to what would and would not work in the developing world. ¶6. (C) In terms of creating a regional market, the Governor noted that the GCC Customs Union was a move in the right direction. The principal problem in building closer economic ties in the region is that most states have few exports, and what few exports they have compete (rather than compliment) their neighbors. The UAE is far ahead of the rest of the GCC in terms of economic diversification, and ultimately hopes to be able to meet 60-80 percent of domestic needs for goods via local manufacture. Asked about the future of the UAE as a regional high-tech center, the Governor said the economic benefits are questionable. Most of the business is going to India and increasingly China, to the degree that the workforce is expatriate, the net economic benefits to the UAE of pursuing the high-tech route probably don't exceed the costs by much. ¶7. (U) This cable has been cleared by Ambassador Haass. WAHBA