UAE CHARITY REGULATION: EMIRATE-LEVEL, NOT FEDERAL

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001301

SIPDIS

SIPDIS

STATE FOR NEA/ARP STHORNE, EB/ESC/TFS KLEAHY
TREASURY FOR U/S LEVEY, RLEBENSON, PHEFFERNAN, CBLANCHARD
MANAMA FOR JBEAL
NSC FOR JZARATE, NSHAMPAINE

E.O. 12958: DECL: 04/04/2016
TAGS: EAID PTER KTFN PHUM AE
SUBJECT: UAE CHARITY REGULATION: EMIRATE-LEVEL, NOT FEDERAL

REF: A. 2005 ABU DHABI 2741


B. ABU DHABI 440

C. ABU DHABI 1103

Classified By: Ambassador Michele J. Sison for reasons 1.4 b and d.


1. (C) Summary. The UAE does not have a unified federal
system of charity oversight or regulation. Charity
regulation is ultimately the responsibility of each of the
seven emirates. The Ministry of Social Affairs (MSA)
licenses and monitors charities in Abu Dhabi, and any charity
that is licensed by a local emirate that wants to operate
outside of its "home" emirate (ref A). The Dubai Department
of Islamic Affairs and Charitable Activities (DDIA) licenses
charities in Dubai (ref B). Charities in other emirates are
licensed by their home emirate's municipality department, and
it is unclear what monitoring regimes they adhere to. The
UAE has issued guidelines that charities may not transfer
funds overseas or operate internationally, but charities
licensed outside of Abu Dhabi and Dubai may not be aware of
these guidelines. End summary.


2. (C) The UAE federal law governing charitable organizations
(Law #6 of 1974),and its subsequent amendments, impose a
wide array of administrative requirements on charity
organizations. According to the federal law, charities are
not allowed to undertake any activity abroad -- to include
transferring money, establishing offices, collecting
donations, or participating in activities -- without prior
permission from the Ministry of Social Affairs (MSA)
(formerly the Ministry of Labor and Social Affairs).
According to a 1994 ministerial resolution, licensed
associations must channel all international contributions
"through the Red Crescent Association in this country (the
UAE) or through those bodies which are designated by the
official authorities in another country." UAE officials have
also told us they allow money to be transferred through the
Mohammed bin Rashid Foundation in Dubai and the Sheikh Zayed
Charitable and Humanitarian Foundation in Abu Dhabi.
Additionally, Minister of Social Affairs al-Roumi mentioned
during a meeting with Ambassador on March 26 that charities
could send money via the Al-Maktoum Foundation in Dubai.
Al-Roumi told Ambassador that every six months the Ministry
sends reminder letters to all the charities it licenses to
remind them of the regulations regarding international
transfers. She is "confident" that all MSA-licensed
charities know they are supposed to transfer funds abroad
"only through one of the four approved charities." She was
unable to comment on whether the MSA auditors are checking to
be sure the charities abide by this regulation.


3. (SBU) The MSA licenses 119 non-governmental social welfare
associations throughout the UAE. These include women's
societies, cultural associations, arts/theater clubs,
expatriate clubs, trade associations, and humanitarian
organizations. According to an MSA publication, it has
granted licenses to 42 associations in Abu Dhabi, 29 in
Dubai, 19 in Sharjah, 5 in Ajman, 5 in Umm al-Quawain, 13 in
Ras al Khaimah, and 6 in Fujairah. Of the 119, only 6 are
Islamic charity organizations:

-- Orphan Society (in Abu Dhabi)
-- Beit al-Khair (has 5 branches in the UAE)
-- Dubai Charity Association
-- Dar al-Ber Society (Charity House) (in Dubai)
-- Al-Fujairah Charity Association
-- Umm al-Quawain Charity Society


4. (SBU) Article 17 of federal Law #6 of 1974 (as amended by
Law #20 of 1981) allows individual emirates to license and
regulate their own charitable organizations. As a result of
this provision, many locally licensed charities are not
subject to federal MSA supervision or its guidelines.


5. (SBU) The second largest emirate, Dubai, licenses its
charities through the Dubai Department of Islamic Affairs and
Charitable Organizations (DDIA). As of late January 2006,
DDIA licensed 10 charities (two of which are also licensed by
the MSA because they operate in emirates other than just
Dubai):

-- Mohamed bin Rashid Foundation
-- Al-Maktoum Foundation
-- Beit al-Khair
-- Dubai Charity Association

ABU DHABI 00001301 002 OF 002


-- Dar Maktoum Foundation
-- Sultan Khalifa al-Habtoor Charity
-- Red Crescent (the Dubai office)
-- Dubai Aid City/Dubai Humanitarian City
-- Al Shifa Charity Establishment
-- Society of Reform and Social Guidance


6. (C) The DDIA, which licenses, monitors, and develops
Dubai's Islamic charities, allows its charities to send money
to international charities so long as they seek prior
approval from DDIA. During a January 25 meeting with
Treasury Under Secretary Stuart Levey, DDIA Deputy Director
General Sami al-Gargash said that DDIA's main concern is
working to be sure that charities, activities abroad are
legitimate (ref B). Al-Gargash said that DDIA relies on
Dubai's security services to help confirm the legitimacy of a
given foreign charity, and that before DDIA grants a charity
a license to operate in Dubai, the security service checks
the names of all charity employees and board members to be
sure that none have objectionable connections. The charities
licensed by DDIA only have to seek a license by the MSA if
they want to conduct activities in an emirate outside of
Dubai. In the case of the two charities that have gained MSA
approval to operate outside of Dubai, they still report to
the DDIA.


7. (SBU) While this is by no means a comprehensive list,
Embassy is aware of a number of other charity organizations
that are not licensed by either MSA or the DDIA. We do not
know what licensing and/or monitoring regime they adhere to.
Those in the northern emirates are likely licensed by that
emirate's municipality department. These charities include
(but are not limited to):

-- Gulf for Good (Dubai)
-- Human Appeal International (Ajman)
-- Ajman Care Society (Ajman)
-- Al Ihsan Charity Center (Ajman)
-- Welfare Association (Fujairah)
-- Sharjah City for Humanitarian Services (Sharjah)
-- Sharjah Charity Association (Sharjah)
-- Charity International (Sharjah)
-- Triam Omran Establishment for Cultural and Humanitarian
Services (Sharjah)
-- Sanabel Committee in Support of Palestinian Women and
Children (Abu Dhabi) (Note: although this charity is not
licensed by the MSA, it does channel its international
donations through the UAE Red Crescent.)


8. (SBU) Finally, it is worth noting that neither the UAE Red
Crescent, nor the Sheikh Zayed Charitable and Humanitarian
Foundation are licensed by MSA. The Secretary General of the
UAE Red Crescent Authority (RCA) told econoff March 28 that
the RCA is an "independent authority" that does not report to
any UAE ministry. Rather, it reports directly to the
President of the UAE Red Crescent, Sheikh Hamdan bin Zayed
al-Nahyan (HbZ) -- the UAE's Deputy Prime Minister. The
Zayed Foundation, which was established by the passage of a
1992 federal law, submits its annual audit report to the UAE
Ministry of Foreign Affairs. According to the Zayed
Foundation's charter, the foundation is an "independent legal
entity" that reports only to its Board of Trustees (whose
chairman is also HbZ).


9. (C) Comment. The fractured nature of UAE charity
regulation will be one of the topics for the upcoming April
30 meeting of the U.S./UAE Joint Terrorism Finance
Coordinating Committee (JTFCC). Embassy and the U.S. JTFCC
delegation will work with the UAEG to encourage adoption of a
unified system of charity oversight, as outlined in the
Financial Action Task Force and Middle East and North Africa
Financial Action Task Force best practices papers on the
regulation and oversight of non-profit and charitable
organizations.
SISON