FOLLOW-UP ON ARAB LEAGUE BOYCOTT

UNCLAS SECTION 01 OF 02 ABU DHABI 004232

SIPDIS

SENSITIVE

STATE FOR NEA/ARPI, NEA/PI
STATE PASS USTR FOR A/USTR SHAUN DONNELLY

E.O. 12958: N/A
TAGS: KBCT KMPI ETRD ECON TC
SUBJECT: FOLLOW-UP ON ARAB LEAGUE BOYCOTT


1. (SBU) Summary and Action Request: Two Department of
Commerce officials from the Office of Anti Boycott Compliance
visited the UAE on September 28. They had productive
meetings with three U.S. businesses and with the Director of
the Ministry of Economy's trade control department.
Subsequently, Econchief met with MinEcon A/US for
International Cooperation Abdullah Saleh. Emirati officials
reiterated the UAEG's commitment to do away with prohibited
secondary and tertiary boycott requests and their interest in
working with the USG in that regard. It was also clear that
UAEG officials do not fully understand U.S. law and have a
different understanding what constitutes "primary" boycott
language and what constitutes "secondary" boycott language.
Commerce officials offered to again visit the UAE to have
follow-up discussions with UAEG experts in an effort to solve
the boycott problem. Embassy recommends that the follow-up
meetings happen quickly and will work with Commerce and the
UAEG to determine the best possible time. Econchief
suggested that the Ministry of Economy reiterate its
instructions regarding the boycott. End Summary and Action
Request.


2. (SBU) On September 28, Ned Weant and Frederick Davidson
of the Department of Commerce's Office of Anti Boycott
Compliance, and BIS Export Control Officer, met with Juma
Al-Mubarak, the Director of the Ministry of Economy and
Commerce's Trade Control Department and three U.S. companies
that have faced Arab League boycott issues. Juma Al-Mubarak
reiterated the UAEG's commitment to not implementing the
secondary and tertiary aspects of the boycott. The meeting,
however, made it clear that there are some differences of
opinion about whether certain language is primary boycott
language or secondary boycott language. For example,
Davidson explained that language stating that a company
"agrees to comply with all relevant UAE laws as they pertain
to the boycott of Israel" was prohibited as a second-level
boycott. Al-Mubarak disagreed, noting that the relevant laws
prohibit the import of Israeli goods, which is a primary
boycott issue. Davidson offered to have U.S. experts visit
the UAE to work with UAE counterparts on eliminating
secondary and tertiary boycott requests. Al-Mubarak welcomed
the visit and the potential cooperation.


3. (SBU) Weant and Davidson met with two companies and spoke
with a third about problems facing American companies in the
UAE regarding boycott language. One company advised that
prohibited language has in the past been maintained on the
Ministry of Finance website for downloading into contracts
for purchases by government agencies. Another company
expressed concern that individual companies or company
officers could choose to include such language independently
of the government policy. In the third case, Davidson was
able to provide on the spot counseling to a company who was
ready to sign a contract. EconChief contacted MinFin A/US
for Revenue and Budget Khalid Al-Bustani to ask about the
contracts on the website. Al-Bustani said that he had
understood that the contracts with the prohibited language
had been removed from the web site, but promised to double
check.


4. (SBU) On October 2, Econchief met with Ministry of Economy
Assistant Under Secretary for International Cooperation
Abdullah Al-Saleh to discuss the boycott. (Note: Al-Saleh
had been unable to meet with the Commerce anti-boycott team,
as both he and the Minister of Economy were traveling
internationally on the 28th. He offered to follow-up with
Econchief the day he returned. End Note.) Econchief
stressed the alarming increase in UAE prohibited boycott
requests during the second quarter of 2005 and that the UAE
needed to take actions to eliminate them. Econchief also
passed Al-Saleh information on the most recent boycott
requests along with information on Emirati companies making
these requests.


5. (SBU) Al-Saleh reiterated the UAEG's policy of not
implementing the secondary and tertiary aspects of the Arab
League Boycott. He stressed that the Ministry of Economy
would continue to work to eliminate these boycott requests,
adding "I want to remove barriers to U.S. firms that want to
do business in the UAE." Al-Saleh also explained that the
boycott issue was a sensitive one in the UAE and he
understood that it was a sensitive one in the US as well. He
confirmed that the Ministry of Economy and Commerce had sent
out instructions to the UAEG and to state owned enterprises
such as the Emirates Telecommunications Company (Etisalat)
and the Abu Dhabi National Oil Company (ADNOC) reminding them
that the UAE does not enforce the secondary and tertiary
boycotts. Al-Saleh added that the Ministry had also informed
some private sector companies, and that the memo had
suggested alternate language. During the conversation, he
also noted that there appeared to be differences in
interpretation on language between the UAEG and the USG, and
welcomed a visit by U.S. experts in an effort to resolve
this. Econchief suggested that it would be useful for the
Ministry to send out further reminders of the UAEG's policy,
to which Al-Saleh responded positively.
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