STATUS OF UAE EXPORT CONTROLS

S E C R E T SECTION 01 OF 04 ABU DHABI 003346

SIPDIS

STATE FOR NP/T, NP/CBM, NP/ECC, NEA/ARPI
USDOC FOR BIS/US, BIS/OIP, BIS/EE/AS
AMMAN FOR EXBS ADVISOR JIRVINE
NSC FOR MAUREEN TUCKER
DOE FOR DAVE HUIZENGA
DHS/ICE FOR STRATEGIC INVESTIGATIONS

E.O. 12958: DECL: 07/31/2015
TAGS: ETTC KNNP PREL PARM TC
SUBJECT: STATUS OF UAE EXPORT CONTROLS

REF: A. ABU DHABI 3068

B. ABU DHABI 510

C. 04 ABU DHABI 4365

D. 04 ABU DHABI 4060

E. PARIS 4977

Classified By: AMB MICHELE J SISON FOR REASONS 1.4 (b) AND (d)


1. (C) Summary: The issue of export controls in the UAE has
been raised in a number of contexts recently, including
during the recent MTCR outreach mission to the UAE (Refs A
and E) and FTA negotiations between the US and the UAE. This
message reviews the status of export controls in the UAE as
well as US-UAE export control cooperation. In spite of
numerous State, USDOC, and DHS efforts from 2001 onward
focused on UAE federal and emirate level training and
outreach, the UAE still does not have an export control
system resembling those of members of the international
control regimes. There is no federal or emirate level
legislation establishing export controls and no national
control list based on the multilateral export control regimes
identifying items controlled for export. There are certain
laws, including the UAE anti-terrorism law enacted in 2004,
that restrict the import, possession and transportation on
aircraft of radiological materials, certain chemicals,
certain biological substances and traditional firearms.
However, there is currently no UAE federal bureaucracy to
oversee the implementation of an export control effort.
There is, however, strong concern at the highest levels of
the UAEG and in Dubai that proliferators have in the past and
could yet be utilizing the UAE,s free trade environment to
engage in proliferation-related transshipment. Embassy
supports and encourages a visit from a senior USG official to
help us deliver a strong message encouraging the UAE to
establish an effective export control system. End Summary.

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STATUS OF UAE EXPORT CONTROLS
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2. (C) The UAE does not have a specific export control law on
the books. High level UAEG officials have expressed their
concern that proliferators have taken advantage of the UAE,s
free trade environment and have voiced their commitment to
implementing an export control system to stop these
activities. In December 2004, the UAEG made its UN 1540
declaration that it had certain restrictions on trade in
radiological, chemical and biological items. The UAEG also
said it expected to enact export control legislation in the
near future. The USG provided a draft legal template in
early 2004, which the UAEG could use in drafting its own law.
Former Assistant Secretary John Wolf in March 2004 and
former Under Secretary John Bolton in January 2005 weighed in
on export controls, as did former Commerce Under Secretary
Ken Juster in January 2004. In addition, the Ambassador and
other members of the country team regularly engage with the
UAEG on the issue. The draft law, however, still appears to
be "stuck in committee" with interagency/inter-emirate
disagreement over which agency should be responsible for
overall lead of the issue.


3. (C) The UAE has laws in force which restrict the import
and export of firearms, ammunition and explosives. There are
severe penalties for the use of biological substances to harm
people or animals. In addition, UAE civil aviation law
prohibits the transfer by aircraft of explosives,
pyrotechnics, firearms, radiological materials, chemicals,
and certain biological materials. The UAE's 2004
anti-terrorism law criminalizes the import of weapons of mass
destruction and WMD-related components. The UAE remains a
major transshipment hub, and it is not clear the WMD
provision would apply to goods in transit. In addition, the
thrust of this legislation is to deter terrorism and might
not be applicable in the instance of another nation (vice a
terrorist group) seeking to acquire WMD capability. While
the law could conceivably cover certain multilaterally
export-controlled items, the UAE has not yet defined what
&WMD)related components8 would include. Furthermore, the
UAE has not yet adopted a national control list of items that
would be controlled for export. Ministry of Interior
officials told us that they used the provisions of the
anti-terrorism law to arrest Pakistani national Osman Saeed
and seize his assets after we provided them with information
that he had diverted U.S. Munitions List items to Pakistan
(Ref C).

4. (C) The UAEG has not identified a lead organization with
responsibility for export controls. Some UAE officials have
characterized the Federal Customs Authority (FCA) as the
agency that has the main responsibility for regulating the
import and export of items from the UAE (Ref E). Embassy,s
experience is that the FCA, which is largely a coordinating
body, does not have the resources or sufficient influence, at
the federal or emirate level, to establish and implement an
effective export control system. The director of the FCA has
told us that the issue of export controls is being
spearheaded by the Ministry of Foreign Affairs. It is true
that post,s main interlocutor regarding export controls is
the MFA's U/S, but in private conversations he has described
the export control process as &stalled8 due to concerns
among the emirates that such an effort could hinder trade.
Our understanding is that an unfinished draft export control
law is at the Ministry of Justice's technical committee, and
that there are interagency/inter-emirate issues that have
prevented it from moving forward.

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RECAP OF U.S.-UAE EXPORT CONTROL COOPERATION
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5. (U) In 2001, the USG -- in consultation with the UAEG --
developed an export control cooperation plan, setting forth a
multi-year plan of workshops, seminars and exchanges, to
assist the UAE in establishing an export control system. The
UAEG agreed to this plan. The US and UAE participated in
executive exchanges in 2001 and 2002. In December 2002,
Commerce,s Bureau of Industry and Security posted an export
control officer in the UAE to conduct end-use checks and
focus on export control cooperation. The Department of
Commerce led a legal seminar in late 2003 and a control list
workshop in April 2004.


6. (C) In early 2004, the US provided the UAE with a template
for an export control law in both English and Arabic. The
Department of Homeland Security led a WMD awareness program
in December 2003 and training programs for UAE customs
officials in 2004. The UAE sent delegations to international
transshipment conferences in Barcelona in 2002, Sydney in
2003, and Malta in 2004. Due to what post saw as a lack of
progress in UAEG efforts to enact export control legislation,
a second Commerce-led legal seminar was held in October 2004
with the aim of reinvigorating the process. The overwhelming
reaction from US participants in the seminar was that the UAE
was very far away from establishing an export control system.



7. (C) Embassy believes that future sessions of the export
control action plan depend on the existence of a control list
and the establishment of a bureaucracy for actually
controlling exports ) license processing, product
identification, effective enforcement, and
industry-government outreach. (Comment: The UAE has always
been eager to accept training, seminars, and workshops in
export control cooperation. Training is useful. However,
Embassy is concerned that such events could be contributing
to distracting the UAE from the urgent business of
establishing an underlying export control program. End
Comment.)

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OPERATIONAL CAPABILITIES
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8. (U) Recent figures announced by Dubai trade officials
indicate that Dubai is responsible for 73% of all
transshipment trade in the UAE. Transshipment in the UAE
includes both transit and re-export, the latter of which
appears to be the more common method of diverting controlled
items through the UAE: most diverted items are addressed to
a company in the UAE and then re-exported after receipt.


9. (U) In order to process the vast amount of trade coming in
and going out of the ports in Dubai, the Dubai Ports, Customs
and Free Zone Corporation has a modern and sophisticated
cadre of customs officials responsible for ensuring accurate
tariff collection and the interdiction of contraband, such as
alcohol, pornography, drugs, counterfeit software, etc.
Dubai Customs has all the requisite container inspection
equipment and uses it on a regular basis. The information
systems capability of Dubai Customs is very efficient and
there is an ongoing program to keep these systems at the
highest level. Dubai Customs does not, however, conduct
investigations regarding violations of customs laws,
referring such cases to the Dubai Police.


10. (C) The Dubai Ports Authority has signed on to both the
Department of Homeland Security,s Container Security
Initiative and The Department of Energy,s Megaports
Initiative. Dubai authorities told the visiting MTCR
outreach team last month that they have established an
interagency Counterproliferation Task Force (Ref E).
However, Embassy has yet to identify a point of contact
within the UAEG for this task force.


11. (C) The other emirates have their own customs services,
which are significantly less sophisticated than that of
Dubai. Sharjah has a not-insignificant record of diversions,
including Osman Saeed,s diversion of controlled missile
technology uncovered just last December, and does not have
comparable resources to Dubai. Abu Dhabi Customs is also
somewhat less sophisticated than Dubai, but admittedly tracks
significantly less non-oil trade. There is always the
concern that as enforcement becomes more aggressive in Dubai,
proliferators will move to other locales within and without
the UAE to set up their networks.

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LAW ENFORCEMENT COOPERATION
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12. (S) The UAEG has been cooperative in some aspects of
detecting and interdicting proliferation goods. The UAEG has
returned and/or detained shipments at the USG,s request.
The UAEG has also closed a number of Dubai companies for
improper actions. The challenges are great, however. It
should be noted that end use checks performed by BIS and
State have uncovered several very recent attempts by private
entities to evade US export laws by providing false end user
certificates ostensibly showing an end use in the UAE for the
purchase of controlled commodities that were actually headed
elsewhere (including Iran).

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FREE TRADE AGREEMENT
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13. (C) The UAEG recently raised the issue of the U.S. policy
on approving export licenses for the UAE in free trade
agreement negotiations. The UAE side was seeking a more
favorable licensing policy for technology transfer to
entities in the UAE. USTR negotiators reminded the UAE
delegation that without an export control system in the UAE
it would be difficult to move to a more favorable licensing
policy for the UAE. (Comment: Embassy does not/not support
formally putting an export control chapter in the FTA, as it
could well open the door to continued UAEG requests to add
other, unrelated chapters, such as visas and movement of
persons that the USG cannot agree to. However, the USG side
should -) and must -- continue to emphasize that a robust
export control system is a top USG-wide priority. End
Comment.)

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THE WAY FORWARD
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14. (C) Embassy recommends that a senior USG official visit
Abu Dhabi and Dubai to discuss nonproliferation and export
control priorities. This will help underscore Embassy,s own
senior-level discussions on this issue as well as
re-emphasize the message carried by former Assistant
Secretary Wolf and former Under Secretaries Bolton and Juster

SIPDIS
in 2004 and early 2005.
SISON