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