INTERAGENCY TEAM WORKS WITH UAEG TO ADDRESS ARAB

UNCLAS SECTION 01 OF 02 ABU DHABI 000730 SIPDIS SENSITIVE STATE FOR NEA/ARP, NEA/RA COMMERCE FOR BIS: U/S MCCORMICK STATE PASS USTR FOR A/USTR DONNELLY AND DOUG BELL E.O. 12958: NA TAGS: KBCT KMPI ETRD ECON IS AE SUBJECT: INTERAGENCY TEAM WORKS WITH UAEG TO ADDRESS ARAB LEAGUE BOYCOTT Ref: 05 Abu Dhabi 4232 ¶1. (U) This message contains business proprietary information. ¶2. (SBU) Summary: A USDOC/State anti-boycott compliance team visited the UAE from February 18 to 21 for meetings with UAEG officials and U.S. businesses. MinEcon A/US Abdullah Al-Saleh stressed that the UAEG does not implement the secondary and tertiary aspects of the Arab League boycott of Israel and that he wanted to work with the USG to bring the UAEG's language in compliance with U.S. anti-boycott regulations. The team also reached out to U.S. businesses to discuss the boycott related problems that they faced in the UAE. One Dubai lawyer noted that he had always managed to modify boycott language to bring it into compliance with U.S. regulations. The regional government affairs director for Intel noted that he thought that there was still a popular perception in the Middle East that the boycott was justified. End Summary. UAE Ministry of Economy - Committed to Removing Barriers -------------- -------------- ¶3. (SBU) On February 18, Frederick Davidson and Cathleen Ryan of the Department of Commerce's Office of Anti-Boycott Compliance, NEA/RA Econoff Danielle Monosson, Econchief, and Embassy Export Control Officer met with Ministry of Economy A/US for Economic Affairs and International Cooperation Abdullah Ahmed Al-Saleh, Director of the Trade Control Department Juma Al-Mubarak, and Issa Baddour, Legal Advisor on WTO and International Trade Agreements. The meeting was a follow-up to Davidson's September 2005 visit to the UAE, where he offered to have U.S. experts work with UAEG officials to eliminate secondary and tertiary boycott requests (reftel). Al-Saleh said that the UAEG did not implement the secondary and tertiary aspects of the Arab League boycott and welcomed U.S. companies. He expressed willingness to work with the U.S. to develop language that met the legal requirements of both countries. Davidson and Ryan stressed that their goal was to help the UAE eliminate prohibited boycott language. ¶4. (SBU) Davidson and Ryan presented the ministry with examples of prohibited boycott language in UAE documents, along with examples of alternative language that complied 
with anti-boycott regulations. Al-Saleh committed to having the Ministry's experts review the language and look to ways to revise the UAE's boycott language to ensure that it complied with U.S. anti-boycott regulations. ¶5. (SBU) Al-Saleh expressed concern that the statistics that the USG was collecting on boycott requests risked "double- counting." He explained that, in some cases, when econchief had approached him with boycott related cases, it appeared as if one tender was counted as four separate prohibited boycott requests. He asked if Davidson and Ryan could also help him tighten the Ministry's focus on the real problem companies, as well as fixing the language. Davidson and Ryan offered to work with individual emirates, municipalities, state owned enterprises, and the chambers of commerce to help the UAEG in its efforts to eliminate prohibited boycott language. Al-Saleh declined, noting that given the political sensitivity on the Arab League boycott, it would be more effective for the message to come from the UAEG rather than the U.S. Business Concerns about Boycott -------------- ¶6. (SBU) On February 19, the team and Embassy Abu Dhabi Export Control Officer met with a representative of GIBB Ltd. Consulting Engineers in Abu Dhabi to discuss boycott related problems. The representative expressed concern that some possible modifications that would comply with U.S. anti- boycott regulations, could be problematic under the UK's tax regulations. ¶7. (SBU) In Dubai, the team, accompanied by Senior Commercial Officer, met with Charles Laubach, with the law firm of Afridi and Angell, then with Abdul Jarrar, Regional Government Affairs Director, Middle East, Turkey, and Africa for Intel, then with Eliane Masser, Regulatory Compliance Manager for Cisco Systems' regional office. Laubach acknowledged that boycott language is still found in both UAE federal and municipal procurement documents. In his personal experience, however, he said that he has "never failed to comply with U.S. law" and has always been able to have the language modified to comply with U.S. law. He attributed much of the continued use of boycott language to bureaucratic lethargy, defining it as nothing more than a "cost of doing business" for U.S. firms (i.e., paying a few hours of legal fees). ¶8. (SBU) Jarrar told the team that he had faced boycott issues throughout the region, but did not have details as his legal office handled compliance issues. He explained that, even without a boycott, he perceived a public opinion throughout the region that the Arab League boycott was justified. Masser briefed the team on CISCO's extensive training program on dealing with the Boycott and other compliance issues. She noted that the firm did face some problems in that it was unable to compete for projects, where the language could not be removed. ¶9. (SBU) Comment: The UAEG continues to stress its commitment to eliminating cases of secondary and tertiary boycott requests. This visit provided a useful opportunity to give the UAEG a better understanding of U.S. regulations. Some of the questions by UAEG officials continue to show confusion about the scope of U.S. law and regulations and the impact of UAE boycott language on U.S. companies. The upcoming visit of BIS U/S McCormick will provide a useful opportunity to reinforce this message at a more senior level. End Comment ¶10. (U) This cable was cleared by Mr. Davidson. SISON