(C) UAE'S ARABSAT BOARD MEMBER WEIGHS IN ON U.S.

1. (U) CLASSIFIED BY CHARGE D'AFFAIRES, A.I. RICHARD A.
ALBRIGHT FOR REASONS 1.5 (B) AND (D).



2. (U) THIS IS AN ACTION REQUEST; PLEASE SEE PARAGRAPH 9.



3. (C) SENIOR COMMERCIAL OFFICER (SCO) AND SENIOR COMMERCIAL
SPECIALIST VISITED UAE BOARD MEMBER TO ARABSAT, MOHAMED OMRAN,
ON SEPTEMBER 1 TO LEARN OF HIS TAKE ON THE ARABSAT PURCHASE (SEE
REFS). HE WAS MOST EAGER TO TALK ABOUT ARABSAT, HAVING BEEN ON
THE BOARD SINCE 1986. OMRAN CONTRASTED THURAYA, WHICH IS ONLY
SEVERAL YEARS OLD, WITH THE OLDER ARABSAT, WHICH HAS ALWAYS
BOUGHT ALCATEL SATELLITES.



4. (C) EGYPTIAN-EDUCATED OMRAN CLEARLY PREFERS U.S. TECHNOLOGY.
HE INTIMATED THAT THE ARABSAT WORKING COMMITTEE, WHICH PRESENTS
THE ARABSAT BOARD WITH THE BROAD OUTLINE ON WHICH TO VOTE,
HAVING WORKED OUT THE DETAILS, WOULD PREFER U.S. TECHNOLOGY FOR
THIS LATEST SATELLITE AND LAUNCH -- WHICH HE ESTIMATES ARE WORTH
USD 350 MILLION TOTAL. HE SAID THAT ONE OF THE TWO U.S.
COMPETITORS IS THE LOW BIDDER, BUT ADDED THAT ARABSAT DID NOT
HAVE THE ADVANTAGE OF THURAYA WITH 50 PERCENT OF ITS 100
EMPLOYEES UAE NATIONALS, ESPECIALLY THOSE WITH TECHNICAL
EXPERTISE. ARABSAT HAS SOME LIBYANS ON ITS STAFF.



5. (SBU/PROPIN) OMRAN SHOWED SCO A PAPER ENTITLED "US
TECHNOLOGY EXPORT REQUIREMENTS," WHICH WAS GIVEN TO THE TWO U.S.
COMPANIES. IT SAYS: "ARABSAT NEEDS ASSURANCE THAT, IF IT
PURCHASES ANY U.S. MANUFACTURED SATELLITE(S) IT WILL BE TREATED
NO LESS FAVORABLY THAN ANY OTHER NON-AMERICAN PURCHASER OF A
U.S.SATELLITE. WITH THE FOREGOING IN MIND, PLEASE PROVIDE AN
ORIGINAL LETTER, SIGNED BY THE AMBASSADOR OF THE UNITED STATES
IN RIYADH, OR AN EQUIVALENT HIGH U.S. STATE DEPARTMENT OFFICIAL,
WHICH STATES THE FOLLOWING: THAT THE TERMS OF ALL EXPORT
LICENSES, APPROVALS, PERMITS, AND CONSENTS GRANTED ALLOW ARABSAT
TO: (1) PURCHASE, OWN, LAUNCH, INSURE, AND OPERATE THE 4A AND 4B
SATELLITES; AND (2)USE THE 4A AND 4B SATELLITES FOR ALL OF
ARABSAT'S BUSINESS COMMERCIAL OPERATIONS; WILL BE NOT MORE
RESTRICTIVE ON ARABSAT THAN THOSE CONDITIONS APPLIED TO OTHER
INTERNATIONAL PURCHASES (FOR EXAMPLE, INMARSAT, EUTELSAT,
TELESAT, ASTRA, OR INTELSAT) OF U.S.-MANUFACTURED SATELLITES,
AND WILL NOT CONTAIN ANY OTHER CONDITIONS WHICH DIRECTLY OR
INDIRECTLY OPERATE TO BE MORE RESTRICTIVE THAN THOSE
CONDITIONS."



6. (SBU/PROPIN) THE DOCUMENT FURTHER STATES, "THAT ANY
INDIVIDUAL CURRENTLY EMPLOYED BY ARABSAT IN THE OPERATION OF
SATELLITES WILL BE APPROVED TO OPERATE THE 4A AND 4B SATELLITES
(AND TO RECEIVE ALL TECHNOLOGY AND TECHNICAL DATA RELATIONS TO
THE 4A AND 4B SATELLITES) REGARDLESS OF HIS NATIONALITY (BUT
AFTER THAT (SIC) INDIVIDUAL HAS CLEARED STANDARD U.S. SECURITY
CHECKS, ALTHOUGH SUCH CHECKS THEMSELVES SHALL NOT RESTRICT OR
PROHIBIT ANY SUCH INDIVIDUAL FROM BEING APPROVED OR CLEARED BY
REASON ONLY OF HIS NATIONALITY) IF NECESSARY, THROUGH THE GRANT
OF A PRESIDENTIAL EXEMPTION."



7. (C) OMRAN SAID THAT ARABSAT MERELY WANTS TO BE TREATED NO
MORE HARSHLY THAN OTHER NON-U.S. SATELLITE PURCHASERS AND HAS NO
PROBLEM WITH HAVING ITS EMPLOYEES FROM COUNTRIES SUBJECT TO
SANCTIONS BE INTERVIEWED AND SUBJECTED TO A SECURITY CHECK BY
USG SECURITY PERSONNEL. OMRAN EXPLAINED THAT HE IS PART OF A
WORKING COMMITTEE THAT DOES NOT INCLUDE LIBYANS, AND THEY SEEK
TO WORK OUT THE DETAILS SO THAT THE BOARD MEMBERS "ARE NOT
EMBARRASSED." (COMMENT: THIS INDICATES THAT THE FOCUS OF
ATTENTION OF BOTH COMPANIES AND THE USG SHOULD BE WITH THE
WORKING GROUP, SINCE BY THE TIME AN ISSUE REACHES THE BOARD THE
DETAILS ARE PRETTY WELL WORKED OUT).



8. (C) OMRAN REQUESTED THAT SCO TRANSMIT THIS MESSAGE TO
WASHINGTON, ALONG WITH THE ADMONITION THAT WE HAVE LITTLE TIME,
SINCE THE DECISION WILL BE FINALIZED IN CAIRO DURING THE BOARD'S
MEETING ON SEPTEMER 25. HE CLEARLY WANTS TO BREAK THE FRENCH
MONOPOLY, OBSERVING THAT WHILE BOTH BOEING AND LOCKHEED HAVE
DOWNSIZED AND THE GLOBAL SATELLITE INDUSTRY IS DISTRESSED, THEY
REMAIN EXCELLENT COMPANIES AND WOULD DO WELL TO SEIZE THE
OPPORTUNITY TO SELL TO ARABSAT.



9. (C) ACTION REQUEST: OMRAN IS AWARE OF OUR SENSITIVITIES TO
PASSING TECHNOLOGY TO LIBYANS (AND HAD OBTAINED FROM ARABSAT THE
BLOOMFIELD LETTER PER REF A) AND IS LOOKING FOR A WORKABLE
SOLUTION. BECAUSE OF HIS 16 YEARS WITH ARABSAT, WE BELIEVE
OMRAN WIELDS MORE INFLUENCE IN ARABSAT THAN THE UAE'S MINORITY
SHARE WOULD INDICATE. GIVEN THE MAJOR U.S. COMMERCIAL INTEREST
IN THIS DEAL -- USD 350 MILLION AND AN APPROXIMATE 5,000 JOBS --
POST APPRECIATES FROM WASHINGTON ANY GUIDANCE WE CAN PROVIDE
OMRAN. END ACTION REQUEST.

ALBRIGHT