ASSESSMENT OF CASH COURIER ENVIRONMENT IN THE UAE

S E C R E T SECTION 01 OF 02 ABU DHABI 004592

SIPDIS

STATE FOR NEA/ARPI RSMYTH, EB/ESC/TFS FOR DNELSON, JSALOOM,
JUNDERRINER, S/CT TKUSHNER,
NSC FOR ZARATE, HERRING, RUPERT
TREASURY FOR GLASER, MURDEN, HEFFERNAN
MANAMA FOR BEAL

E.O. 12958: DECL: 11/09/2015
TAGS: PTER KTFN EFIN ETTC AE
SUBJECT: ASSESSMENT OF CASH COURIER ENVIRONMENT IN THE UAE

REF: TREASURY 011853Z

Classified By: Ambassador Michele J. Sison for reasons 1.5 (b) and (d).



1. (S) Summary. The UAE is a largely cash-based society, and
the importation of large sums of cash is not frowned upon.
In fact, the UAE tends to regard Westerners bringing in large
sums of cash as good for the country's economy, and we note
that it is common for people here to carry large amounts of
cash. Although the UAE has legal authorities in place that
require declaring imported cash, the requirement is not
strictly enforced. Even when cash is declared or discovered,
police and customs authorities do not necessarily
investigate. The U.S. has provided training to customs and
police officials on bulk cash smuggling, and Embassy officers
and Washington officials have discussed the problem of cash
couriers with UAEG officials on multiple occasions. End
summary.


2. (U) In response to reftel, following is Embassy's
assessment of the cash courier environment in the UAE.

At the Border and the Legal Environment
--------------


3. (S) UAE law specifically requires cash in excess of
$10,800 be declared when it is brought into the country, and
the Central Bank is in the process of revising the law to
also require the declaration of exported cash in excess of
$10,800. Although the UAE has an import declaration
requirement, it is not well publicized or enforced. Customs
officials have told Embassy officers on multiple occasions
that they do not view cash imports as problematic and that
they do not want to discourage people from bringing money
into the country. If customs officials discover someone
carrying undeclared cash, they are asked to declare the
money, but customs officials tell us they do not necessarily
consider it worth investigating further. Emiratis themselves
(and Middle Easterners in general) are accustomed to carrying
large amounts of cash on their persons, and this may be one
reason for the lack of concern on the part of the customs
officers. As a senior customs official told an Embassy
officer, "But he might be a businessman using the money for
legitimate purposes." Thus, the requirement to report cash
only creates a record of its movement, and UAE authorities
might not use the information to begin an investigation.
Although the customs officials do have a laissez-faire
attitude, this should not be mistaken for corruption. The
customs officials in Dubai and the rest of the UAE are not
typically perceived to be corrupt.


4. (S) Although customs officials do share some information
with law enforcement and Central Bank officials,
communication is informal and often ad-hoc. According to
documents from the Central Bank, customs officials only
submitted 111 suspicious transaction reports (STRs) to the
UAE's FIU, the Anti-Money Laundering and Suspicious Cases
Unit (AMLSCU) between December 2000 and January 2005. The
UAE is aware that large sums of cash coming from India and
Pakistan. In one instance, Dubai Police arrested an Indian
man who had taken multiple trips to and from India allegedly
smuggling the proceeds of illegal activity, and the case is
pending prosecution.


5. (C) Article 6 of the UAE's Anti-Money Laundering law
authorizes the Central Bank to establish a ceiling for the
amount of currency that can be brought into the country, and
Article 18 authorizes a fine of $545 to $2,700 for
violations. Additionally, the Central Bank regulation that
set the $10,800 ceiling for cash imports states, "In case no
declaration was made and cash amounts exceeding the said
ceiling were detected, the customs officer in charge should
inquire about the reasons for not declaring. If the said
officer found the reasons unconvincing, he should seize and
transfer the amount to the Attorney General to initiate legal
proceedings against the concerned person."

The Political Environment
--------------


6. (C) The UAE Central Bank has reviewed FATF Special
Recommendation IX on cash couriers, and it was discussed
during a December 2004 meeting of the National Anti-Money
Laundering Committee, which included UAE customs officials.
It was also discussed during a UAE-sponsored GCC-EU Seminar
on Combating Terrorist Finance held in March of 2004.
Washington visitors -- including Homeland Security Advisor
Fran Townsend -- have engaged Central Bank, law enforcement,
and security service officials in Abu Dhabi and Dubai on the
problem of cash couriers using the UAE to transit funds.
Although the senior-level leaders all note that the problem
of cash couriers is a concern, we have not seen this
awareness translate to a concentrated effort on the part of
the customs officers to try to address the situation.

USG Assistance
--------------


7. (C) In September of 2005, DHS/ICE provided training to
Dubai Police and Customs officials on detecting and
investigating bulk cash smuggling cases. Although Customs
Officials did not request additional training, they would
likely welcome it. We note, however, that they have not made
changes in their procedures or practices since the September
training. As a travel hub for the region that is easy to
transit, Embassy is concerned that a significant amount of
currency smuggling goes through Dubai. Abu Dhabi and the
rest of the emirates are not as much of concern. As such,
the USG has focused most of its training and enforcement
efforts on Dubai Customs and Police. The UAE Federal Customs
Authority has virtually no authority or capabilities in the
UAE.

The Strategic Picture
--------------


8. (C) Embassy agrees that all elements listed in para 6
reftel are essential for combating terrorists' use of cash
couriers. However, we note that first and foremost, the host
nation needs to enforce its laws and investigate suspected
individuals aggressively. The UAE has all the right laws in
place, but enforcement is still weak.
SISON