Identifier
Created
Classification
Origin
03ABUDHABI3477
2003-07-27 13:37:00
CONFIDENTIAL
Embassy Abu Dhabi
Cable title:
DUBAI INTERNATIONAL FINANCIAL CENTER - CENTRAL
how-tonull Diana T Fritz 03/21/2007 12:13:19 PM From DB/Inbox: Search Results Cable Text: CONFIDENTIAL SIPDIS TELEGRAM July 27, 2003 To: No Action Addressee Action: Unknown From: AMEMBASSY ABU DHABI (ABU DHABI 3477 - ROUTINE) TAGS: ECON, EFIN, ETTC, PREL Captions: None Subject: DUBAI INTERNATIONAL FINANCIAL CENTER - CENTRAL BANK VIEWS Ref: None _________________________________________________________________ C O N F I D E N T I A L ABU DHABI 03477 SIPDIS CXABU: ACTION: ECON INFO: P/M AMB DCM POL Laser1: INFO: FCS DISSEMINATION: ECON CHARGE: PROG APPROVED: AMB: MMWAHBA DRAFTED: A/DCM:OJOHN CLEARED: CGD:JDAVIS VZCZCADI585 RR RUEHC RUEHZM RUEATRS RUEAWJA RHEHNSC DE RUEHAD #3477 2081337 ZNY CCCCC ZZH R 271337Z JUL 03 FM AMEMBASSY ABU DHABI TO RUEHC/SECSTATE WASHDC 1020 INFO RUEHZM/GCC COLLECTIVE RUEATRS/TREASURY DEPT WASHDC RUEAWJA/DOJ WASHDC RHEHNSC/NSC WASHDC
C O N F I D E N T I A L ABU DHABI 003477
SIPDIS
E.O. 12958: DECL: 07/21/08
TAGS: ECON EFIN ETTC PREL TC
SUBJECT: DUBAI INTERNATIONAL FINANCIAL CENTER - CENTRAL
BANK VIEWS
REF: A) DUBAI 3100, B) ABU DHABI 1137
C O N F I D E N T I A L ABU DHABI 003477
SIPDIS
E.O. 12958: DECL: 07/21/08
TAGS: ECON EFIN ETTC PREL TC
SUBJECT: DUBAI INTERNATIONAL FINANCIAL CENTER - CENTRAL
BANK VIEWS
REF: A) DUBAI 3100, B) ABU DHABI 1137
1. (U) Classified by Acting DCM Oliver B. John for
reasons 1.5 (B and D)
2. (C) Summary: The Central Bank Governor told the
Ambassador that, despite press reports, banks and
financial institutions operating in the Dubai
International Financial Center (DIFC) will be
subject to UAE law, at least as far as money
laundering is concerned. He also noted that the
President still needs to sign the law to establish
an offshore financial center and that, if the
Central Bank had any concerns about the draft as
passed, it would not be signed. End Summary.
3. (C) Ambassador and Econchief met with Central
Bank Governor Sultan Nasser Al-Suweidi to discuss
recent news that the UAE cabinet passed a law
permitting Dubai to establish the DIFC. The
Governor noted that he had reviewed the original
draft bill and had requested a copy of the cabinet
approved bill. He added that the Federal Supreme
Council needed to ratify the bill and the President
needed to sign it before it became official. He
said that he would prevent any bill from being
signed that did not address the concerns that the
Central Bank expressed about the original draft.
4. (SBU) The Central Bank has four major conditions
for any offshore financial center (financial free
zone):
-- The DIFC must apply the UAE's anti-money
laundering law and financial institutions will have
the same reporting requirements that local
financial institutions have. The Central Bank will
inspect to ensure compliance.
-- Banks and financial institutions cannot set up
head offices in the DIFC and will not be permitted
to incorporate there. Furthermore, only banks and
financial institutions headquartered in "well
regulated" financial centers without currency
controls will be allowed to set up branches in the
DIFC.
-- Banks and financial institutions will not be
allowed to take local deposits.
-- There will be no Dirham dealing. Monetary
policy will remain under Central Bank control.
5. (SBU) The Governor explained that the DIFC would
be self-regulating, but that the Central Bank would
have the right to inspect the DIFC and planned to
do so regularly. He added that if the USG had
concerns with specific companies it should raise it
with the Central Bank.
6. (C) The Governor downplayed media speculation
that the DIFC would be fully operational in time
for the September IMF/WB Annual meetings in Dubai.
In his opinion, it would take time to attract top-
flight financial institutions. He acknowledged
that Dubai would want to have something up and
running in time, but suggested that it would be
more symbolic than actual.
7. (C) Comment: The Central Bank's more cautious
view about regulating the DIFC is a welcome
antidote to the press reports that suggested that
the DIFC would be a completely self-regulating
offshore financial center. We will continue to
monitor developments in this matter, but we believe
that the UAE federal authorities and, for that
matter, the Dubai authorities recognize that
transparency and at least a level of federal
oversight are key both to the reputation of the UAE
and to the ultimate success of the DIFC. End
Comment.
Wahba
SIPDIS
E.O. 12958: DECL: 07/21/08
TAGS: ECON EFIN ETTC PREL TC
SUBJECT: DUBAI INTERNATIONAL FINANCIAL CENTER - CENTRAL
BANK VIEWS
REF: A) DUBAI 3100, B) ABU DHABI 1137
1. (U) Classified by Acting DCM Oliver B. John for
reasons 1.5 (B and D)
2. (C) Summary: The Central Bank Governor told the
Ambassador that, despite press reports, banks and
financial institutions operating in the Dubai
International Financial Center (DIFC) will be
subject to UAE law, at least as far as money
laundering is concerned. He also noted that the
President still needs to sign the law to establish
an offshore financial center and that, if the
Central Bank had any concerns about the draft as
passed, it would not be signed. End Summary.
3. (C) Ambassador and Econchief met with Central
Bank Governor Sultan Nasser Al-Suweidi to discuss
recent news that the UAE cabinet passed a law
permitting Dubai to establish the DIFC. The
Governor noted that he had reviewed the original
draft bill and had requested a copy of the cabinet
approved bill. He added that the Federal Supreme
Council needed to ratify the bill and the President
needed to sign it before it became official. He
said that he would prevent any bill from being
signed that did not address the concerns that the
Central Bank expressed about the original draft.
4. (SBU) The Central Bank has four major conditions
for any offshore financial center (financial free
zone):
-- The DIFC must apply the UAE's anti-money
laundering law and financial institutions will have
the same reporting requirements that local
financial institutions have. The Central Bank will
inspect to ensure compliance.
-- Banks and financial institutions cannot set up
head offices in the DIFC and will not be permitted
to incorporate there. Furthermore, only banks and
financial institutions headquartered in "well
regulated" financial centers without currency
controls will be allowed to set up branches in the
DIFC.
-- Banks and financial institutions will not be
allowed to take local deposits.
-- There will be no Dirham dealing. Monetary
policy will remain under Central Bank control.
5. (SBU) The Governor explained that the DIFC would
be self-regulating, but that the Central Bank would
have the right to inspect the DIFC and planned to
do so regularly. He added that if the USG had
concerns with specific companies it should raise it
with the Central Bank.
6. (C) The Governor downplayed media speculation
that the DIFC would be fully operational in time
for the September IMF/WB Annual meetings in Dubai.
In his opinion, it would take time to attract top-
flight financial institutions. He acknowledged
that Dubai would want to have something up and
running in time, but suggested that it would be
more symbolic than actual.
7. (C) Comment: The Central Bank's more cautious
view about regulating the DIFC is a welcome
antidote to the press reports that suggested that
the DIFC would be a completely self-regulating
offshore financial center. We will continue to
monitor developments in this matter, but we believe
that the UAE federal authorities and, for that
matter, the Dubai authorities recognize that
transparency and at least a level of federal
oversight are key both to the reputation of the UAE
and to the ultimate success of the DIFC. End
Comment.
Wahba