1. (C) I look forward to welcoming you back to the United
Arab Emirates January 30-February 1. Your visit will provide
a timely opportunity to discuss our common concerns about the
Iranian nuclear program with the UAEG as well as to review
progress on the UAEG,s export controls program. The UAE has
been working on an export controls list for more than 18
months and a new export control law awaits promulgation. In
Abu Dhabi, we have requested meetings with Crown Prince
Mohammed bin Zayed Al Nahyan (MbZ) and Deputy PM/MinState
Foreign Affairs Sheikh Hamdan bin Zayed (HbZ). In Dubai, we
have requested a meeting with Dubai Crown Prince and titular
UAE Defense Minister General Sheikh Mohammed bin Rashid Al
Maktoum (we will ask Dubai Ports Chairman Sultan bin Sulayem,
our principal interlocutor on export controls, to join MbR).



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A. IRAN


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2. (S) Sheikh Hamdan has told us repeatedly that the UAE is
deeply concerned about what Iran represents, the threat of
proliferation and terrorism emanating from Iran, and Iran,s
nuclear program. Relations between the UAE and Iran remain
strained (the territorial dispute of the Abu Musa and Tunb
Islands remains unresolved). The Emiratis are deeply
suspicious of Iran,s territorial/military ambitions in the
Gulf, particularly with respect to Tehran,s nuclear and WMD
acquisition policy, and have consistently supported a tough
approach by the IAEA. The Emiratis are also worried about
Iranian designs in Iraq.



3. (S) The UAE has acknowledged that it needs to do a better
job on Iranian front companies located in the UAE (mainly
Dubai), but will likely focus only on potential shipments
related to nuclear or other WMD technologies, not on
sanctions-busting, since Iran is the UAE,s largest non-oil
trading partner. Shipments to Iran from Dubai include
everything from cosmetics to plumbing equipment to computer
parts. Dubai serves as the main entrepot of the Arabian
Gulf. (As much as 50 percent of all of Dubai,s imports are
re-exported. In 2002, Iran accounted for $1.1 billion )-
almost 10% -- of these re-exports.) The UAEG has bristled at
Dubai,s labeling in the U.S. press as &Nukes R Us,8
referring to the New York Times, characterization of Dubai
as &the key transfer point in (A.Q.) Khan,s atomic
bazaar.8 However, UAEG sensitivity about its reputation has
done much to encourage greater cooperation on stopping,
seizing, or turning around suspect shipments.



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B. MTCR


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4. (S) The UAE has expressed strong interest in joining the
Missile Technology Control Regime and you are likely to be
asked about MTCR membership protocols. We have passed the
MFA information on the regime, urged the UAE to adhere
unilaterally to MTCR guidelines, and encouraged the UAE to
pass an export control law. The MFA followed the 2004 MTCR
Seoul Plenary very carefully and expressed concern about
possible negative mention of UAE transshipment challenges.



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C. SCUDS AND PREDATOR B


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5. (S) The UAE forwarded a request three years ago to procure
unarmed Predator B UAVs. The Emiratis believe this system
will provide the UAE with much-needed capability to survey
and defend its long, porous coasts, islands, and inland
borders. Given our inability to meet this request due to
MTCR considerations, MbZ has told us that he intends to
pursue a foreign co-production offer. We are aware that
South Africa, Jordan, Russia, France, and China have entered
into discussions with the UAE on this proposal. The Predator
issue now appears to be having an impact on the release of
the UAE,s SCUDs to the USG. We were told by an MbZ aide in
January that MbZ,s new position is that &the UAE government
will look favorably on releasing the 38 SCUDs it now owns to
the USG, when the USG looks favorably on releasing to the UAE
the Predator B system.8 MbZ,s office explained that the
transfer of the SCUDs was originally tied to the UAE,s
acquisition of ATACMS. However, the &non-competitive8
price of the ATACMS no longer makes it a &viable option8
for the UAE, he said.



--------------------------



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D. COOPERATION ON DIVERSIONS OF EXPORT-CONTROLLED ITEMS


--------------------------



--------------------------





6. (S) The UAE,s draft export control law is still being
reviewed in the interagency process. You should urge speedy
adoption in your conversations with UAEG interlocutors.
Nonetheless, we are encouraged by the UAE,s continuing
cooperation in individual cases, e.g., their recent quick
action in taking into custody Osman Saeed for the diversion
of licensed items through the UAE to Pakistan,s missile
program. UAE authorities have acted on a number of
suspected shipments of WMD-related goods to Pakistan and Iran
when advised that the shipments were going to transit the
UAE.



7. (C) The DHS/ICE and USDOC BIS attaches have experienced a
drastic increase in the number of investigations involving
transshipment through the UAE. Pre-license and post-shipment
verifications done on U.S. exports destined for the UAE has
resulted in a 25-30% unfavorable rate, meaning the items were
likely to be diverted or had already been diverted.



8. (S/NF) The UAE leadership has pledged cooperation and
acted to shut down A.Q. Khan network activities and front
companies; Sheikh Hamdan and MbR heard directly from former
U/S Ken Juster and former A/S John Wolf on specific concerns
in 2004. There remains an outstanding USG request to the
Dubai Attorney General outlining the type of access the US
desires. Ambassador has pressed the MFA several times on
this (most recently on January 17); this issue should again
be raised during your visit.



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E. ESTABLISHMENT OF AN EXPORT CONTROL SYSTEM


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9. (C) The UAE recognizes the need to tighten security at
airports, ports and borders through the enactment of laws and
regulations, and welcomes the assistance of the United States
in this matter. Sheikh Hamdan has told us the UAE is anxious
to address diversion and proliferation issues because the UAE
faces a direct threat from Iran and other countries. The USG
has been training the UAEG on export
controls/nonproliferation with the goal of attaining
unilateral UAE adherence to all the nonproliferation export
control regimes. Through the EXBS program, export
control-related training has been particularly active within
the past 18 months. State and Commerce, in conjunction with
the UK conducted a Control List workshop. UAE officials
attended a Global Transshipment Conference in Malta, where
they had the opportunity to hear export control presentations
from other countries that also have high-volume ports.
USDOC/BIS, which has an export control attach at post,
conducted a second legal and regulatory workshop with UAE
export control officers in October 2004. In 2004, U.S.
Customs and Border Protection conducted a Seaport
Interdiction Training Program.



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F. PROLIFERATION SECURITY INITIATIVE (PSI)


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10. (C) We have briefed the MFA and senior military on PSI
and our desire for a shipboarding agreement several times.
The UAE Armed Forces GHQ and the Ministry of Foreign Affairs
have been reviewing PSI since July 2004 and have been
reminded several times of our strong interest. At the
January 11-12 Joint Military Commission in Abu Dhabi, we
urged the UAE to endorse the principles of PSI and to
consider participation in future PSI activities. The UAE is
a natural participant given its geography and strategic
security concerns. We continue to emphasize that PSI
activities are voluntary and do not infringe on a country,s
sovereignty. We have also noted that such an agreement
provides an important way for nations to cooperate on
stopping WMD shipments and transfers.



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G. CONTAINER SECURITY INITIATIVE


--------------------------





11. (U) On December 13, 2004, Commissioner Robert Bonner from
U.S. Customs and Border Protection and Sultan bin Sulayam,
Chairman of Dubai Ports Athority, signed the Container
Security Initiative. CSI is expected to become operational
in February 2005 with four DHS staff stationed at Port
Rashid. While CSI is largely a border
security/counterterrorism program, the processes and
procedures to ensure container security that will be
instituted by the Dubai ports would facilitate UAE efforts to
detect and interdict WMD and related shipments transiting
their ports.



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H. MIL-MIL ISSUES


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Iraq and Afghanistan:


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12. (S) Senior UAEG officials have been supportive of our
broader regional objectives in Iraq and Afghanistan. UAE
assistance to Iraq, both pledged and delivered, has been
significant. The UAE has been working with Germany to
provide police and military training to the Iraqis in the
UAE, as well as 100 trucks for the Iraqi armed forces. The
UAE contributed over 8 million dollars toward the transfer of
M-113 armored personnel carriers (APCs) from Jordan to Iraq.
Recently the UAE donated four light reconnaissance aircraft
to Iraq (and trained Iraqi pilots to fly the planes), as well
as 45 French-built Panhard APCs, with a pledge of 80
additional M-113 APCs purchased from Switzerland. The UAE
directorate of military intelligence sent officers to
coalition headquarters in Baghdad and Bagram in May 2004 to
perform duties as joint operations and joint intelligence
officers.

Access to UAE Bases:


--------------------------





13. (S) Al Dhafra air base remains a key component of our
relationship with UAE and is vital to the ability of CENTCOM
and CENTAF to project combat power in the Gulf. Al Dhafra
currently hosts the 380th Air Expeditionary Wing, with more
than 1200 CentAF personnel operating 14 KC-135 and 4 KC-10
air-refueling tankers, as well as 6 U-2 surveillance aircraft
and a Global Hawk remotely piloted vehicle. The ports at
Jebel Ali on the Arabian Gulf and Fujairah on the Gulf of
Oman are crucial to CENTCOM access and power projection in
the region. The ports host more than 500 U.S. Navy port of
call visits per year.



14. (S) Despite our excellent cooperation and the UAE,s
accommodation of our military presence on their soil, the
Emiratis have recently insisted on negotiations formalizing
our joint use of UAE military bases, infrastructure and
associated services. In December 2004, CENTCOM personnel
developed a draft Base Operating Arrangement (BOA). The
draft BOA addresses the current constraints at Al Minhad and
Al Dhafra air bases, without crossing potential &red lines8
of the existing Defense Cooperation Agreement. The BOA has
been under review by OSD/P since January 5.

Gulf Air Warfare Center:


--------------------------





15. (S) The success of the Gulf Air Warfare Center is one of
the highlights of the bilateral relationship. The inaugural
class, comprised of participants from the U.S., UAE, and UK,
successfully completed the program in February 2004 and a
second class graduated in May 2004. The third class, which
graduated this past December, expanded participation to
French, Saudi and Qatari pilots and crews. Future classes
will include participants from other Gulf countries, as well
as Italy.

SISON