ARBIFT $116 MILLION UNFROZEN...FINALLY

UNCLAS ABU DHABI 001550 SIPDIS SENSITIVE STATE PASS USTR FOR DOUGLAS BELL MANAMA FOR JBEAL E.O. 12958: DECL: N/A TAGS: ECON ETRD EFIN KIDE SUBJECT: ARBIFT $116 MILLION UNFROZEN...FINALLY ¶1. (SBU) On April 2, Abu Dhabi EconChief and Manama OFAC attach met with Ibrahim Lootah, the Managing Director of the Arab Bank for Investment and Foreign Trade (ARBIFT). They met to discuss whether J.P. Morgan Chase Bank had released ARBIFT's assets frozen pursuant to the lifting of U.S. sanctions on Libya - Lootah reported that after six months of delay, Chase finally released the $116 million in frozen assets (Note. the Libyan sanctions were lifted in September 20, 2004. Endnote.). Lootah said that Chase never gave any reason for holding the assets after the U.S. had lifted ILSA sanctions on Libya, and he added that Chase required ARBIFT to sign a form permitting Chase to re- freeze the assets, should it become necessary. According to Lootah Chase is still in the process of transferring a small portion of the $116 million from the Chase accounts back to ARBIFT, but he was satisfied that the money was no longer being frozen. Also the two banks are discussing approximately $50,000 that ARBIFT claims it should receive in interest for January and February, but Lootah did not see this as a major impediment and expected it to be resolved. ¶2. (SBU) Comment: Resolution of this issue is good news. The continued freezing of the assets six months after the lifting of sanctions has been a sore spot with the Emiratis. The UAEG cited the issue often during the recent FTA negotiations and raised it several times with Embassy officials. End comment. Albright