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