GLOBAL WAR ON TERRORISM ASSESSMENT: OMAN

S E C R E T SECTION 01 OF 03 MUSCAT 000573

SIPDIS

NOFORN

STATE FOR NEA/FO, NEA/RA, NEA/ARPI
STATE ALSO FOR DS/T/ATA, DS/IP/NEA, DS/IP/ITA

E.O. 12958: DECL: 04/06/2015
TAGS: PREL PTER MU
SUBJECT: GLOBAL WAR ON TERRORISM ASSESSMENT: OMAN

REF: STATE 60749

Classified By: Deputy Chief of Mission William R. Stewart for
reasons 1.4 (b, c, d).

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Summary and Overview
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1. (C) Oman is a successful example of cooperation in the
Global War on Terrorism (GWOT). Military cooperation is
perhaps the brightest area of achievement owing to Oman's
benefit from the Foreign Military Finance (FMF) program,
which is beginning to fill gaping holes in its maritime and
border security. Our base access agreement and Oman's
willingness to host coalition ship visits is a key element in
our GWOT efforts in this theater of operations. Substantial
resource requirements remain, however, and full funding of
our FMF requests are of critical importance. Oman's banking
system enjoys a strong reputation for proper oversight and
control, yet can benefit from technical assistance to develop
a specific law on terror finance and to bring informal
remittance systems under supervision. Training opportunities
for the Omani police under DS's ATA program have brought
strong dividends in terms of raising capabilities and
enhancing cooperation, and need to be continued. State's
EXBS program and Custom's Container Security Initiative (CSI)
are key to addressing shortfalls in Oman's customs inspection
regime.


2. (C) Counterterrorism cooperation with the Omani government
is good, and their capabilities are as effective as limited
resources and Oman's difficult geography allow. Oman is one
of the very few states in the region not to have suffered a
terrorist attack, owing at least in part to the success of
internal security services in capturing suspected terrorists
before operations could be launched. This achievement is all
the more remarkable considering the prevailing security
situation in neighboring Yemen and Saudi Arabia (with which
Oman's shares long land borders),and the fact that the
Sultanate straddles strategic sea lanes used by nationals
from Pakistan, Iran, Somalia, and other countries of concern.
Oman's willingness to cooperate in the Proliferation
Security Initiative(PSI),as evidenced by its hosting a
PSI-related air interdiction exercise in March, is a major
success in our GWOT efforts in this strategic region. End
summary and overview.

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Military/Border Security
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3. (S) Oman need only look to its immediate neighbors,
particularly Saudi Arabia, to see the dire consequences of
inaction and lack of cooperation in the GWOT. Although Oman
is a strong USG partner in counterterrorism across the board,
the military sphere is in many ways the most successful field
of cooperation. The Sultanate gives the USG wide access to
military bases, hosts port calls by coalition navies, and
permits our storage of pre-positioned war readiness materiel
(WRM). Oman has permitted the U.S. military to operate both
combat and transport aircraft from the Sultanate, and
supports multilateral joint-combined military exercises.
Omani journalists have also taken part in media visits aboard
USN vessels patrolling the region. All of these efforts have
had direct and indirect benefits in the GWOT.


4. (S) Unfortunately, Oman's nearly 2000 km. long shoreline
and nearly as lengthy terrestrial borders across hostile
terrain far outstrip the limited financial and personnel
resources of the Sultanate's 2.3 million population, despite
its spending over 30 percent of the government's annual
budget on security and defense. Oman is investing heavily in
fast interdiction boats (USD 25.5M of FMF funds) and naval
vessels, and is redeploying military forces to aid the
overstretched police in guarding land borders with Yemen,
Saudi Arabia and the UAE. It has spent USD 5.3M on tactical
communications systems that facilitate command and control of
special operations forces and aid interoperability with U.S.
forces. Oman plans to invest USD 2.7M for night-vision
devices for its navy, army and special forces. It has
participated in joint training exercises with U.S. forces
with all of those assets currently in its inventory. Oman is
also using CENTCOM funds to send a Navy captain to the NDU
Counterterrorism Fellows Program, and to bring a Mobile
Training Team to train the Royal Oman Police Coast Guard in
boarding operations.


5. (S) But Oman still requires considerably more marine and
air reconnaissance assets, as well as an integrated radar and
camera surveillance system, to shore up coastal monitoring
that persists as a vulnerability exploited by human
smugglers. We anticipate that Oman will continue to employ
its FMF resources to enhance these border security efforts.
A critical boost to this endeavor would be certifying Oman
for funding under Article 1033 of the Defense Authorization
Act that would permit Oman's procurement of new
communications and sensors to complete its USD 30M phased
upgrade of the coastal surveillance system. Oman is also
vulnerable to open border policies for GCC nationals that can
make it difficult to track suspects from those states.

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Terrorism Finance
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6. (C) Oman is inhospitable terrain for would-be terrorist
financiers. It is not a major center of financial activity,
and it boasts a well-respected and stringent banking
oversight regime. The local banking community is small (5
local and 9 foreign banks are in operation),and the Central
Bank of Oman (CBO) has a reputation as one of the strictest
in the region. Islamic banks are illegal, and Islamic
charities and other organizations are denied access to Oman
as a result of its strict laws on public associations. CBO
officials have demonstrated their implementation of terror
finance designations (under the UNSCR 1267 Committee),but to
date no assets have yet been uncovered.


7. (SBU) Oman does not have a formal law criminalizing terror
finance as it does for money laundering, but anti-terror laws
are understood to encompass financial activities. One of our
important bilateral goals is for Oman to develop a more
explicit, legal prohibition against terrorist finance; this
could be a prime area of cooperation for MENA/FATF in
Bahrain, of which Oman is a member and early supporter. We
continue to press Oman to ratify the International Convention
for the Suppression of Terrorist Financing, one of the two
remaining international CT conventions to which Oman is not
yet a party.


8. (C) Another area of lingering concern is the alternative
remittance system (i.e., hawalas and hundi),since such
operations fall outside the well-regulated and carefully
monitored formal banking system. The USG would be
well-served in providing technical assistance to Omani
officials to address this situation, possibly through the
auspices of the G-8 Counterterrorism Action Group (CTAG)
framework.

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Intelligence/Law Enforcement
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9. (S) The Omani security services are well-trained,
well-funded and motivated to do their jobs, even if
information-sharing and cooperation among them is sometimes
wanting. The Omani Royal Office (akin to the NSC and CIA
combined) also tackles security policy issues related to the
GWOT, and has proven a reliable partner within the
constraints of its resources. Though innately hesitant about
sharing information on Omani citizens, the Omani services
generally provide threat information as and when they deem
appropriate if there is a connection to U.S. persons and
interests in the Sultanate.


10. (C) Assistance from the Royal Oman Police (ROP) for the
protection of U.S. personnel and facilities, including
visiting ships, has been forthcoming whenever requested.
There is no doubt that this cooperation and the ROP's
professional capabilities have been greatly enhanced by the
training support afforded under Diplomatic Security's Office
of Anti-Terrorism Assistance Programs (DS/T/ATA). The ROP
and other security agencies receive these opportunities
extremely warmly, and the training has had a notable impact
in their ability to detect, deter, and counterterrorist
activity in this very challenging environment.


11. (SBU) Recent training programs under the Department's
Export Control and Border Related Security (EXBS) program
have revealed significant needs among ROP Customs officials
in the areas of detecting and interdicting weapons, illicit
cargo and WMD. Inspection of cargo containers, for instance,
are still done manually with dog teams, limiting their volume
to just 1 or 2 containers inspected each day. The container
port in Salalah is fast becoming one of the leading
transshipment ports of the region. Oman is therefore in
great need of additional EXBS programs, particularly those
involving practical components taking place on-site at Omani
ports. ROP Customs has also requested advanced equipment and
training for use in cargo inspection and the identification
of dual-use items. Oman formally requested to the U.S.
Customs Commission in March to participate in the Container
Security Initiative, which would be a tremendous benefit to
these efforts.

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Resource/Action Requirements
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12. (S) Drawing from the above, the following summarizes our
resource requirements:

-- Maritime and border security remain key vulnerabilities
for which Oman requires substantial assistance to address.
The bulk of our Foreign Military Finance requests (USD 71M in
FY06, and USD 74M in FY07) are directly targeted at these
needs and deserve full funding.

-- We need certification of Oman for funding under Article
1033 of the Defense Appropriate Act to complete a USD 30M
phased upgrade of its coastal surveillance system.

-- We must include Omani ports (particularly Salalah) in the
Container Security Initiative.

-- Oman can use technical assistance, either directly from
the USG or multilaterally through the G-8 CTAG or MENA/FATF
mechanisms, to improve terrorist finance legislation and
address vulnerabilities from the alternative remittance
system.

-- We require continued funding under the EXBS and DS/ATA
programs for counterterrorism training of Oman's police and
security forces and to enhance customs controls.
BALTIMORE