UAEG OFFICIALS DISCUSS UAE-IRAN RELATIONS

C O N F I D E N T I A L SECTION 01 OF 02 DUBAI 005323

SIPDIS

SIPDIS

ALSO FOR DAO ABU DHABI
TREASURY FOR B. KIWAN AND K. WEITZ

E.O. 12958: DECL: 8/19/2016
TAGS: PGOV PREL IR ECON EFIN AE
SUBJECT: UAEG OFFICIALS DISCUSS UAE-IRAN RELATIONS

REF: A. A. ABU DHABI 2358

B. REF B. DUBAI 2342

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CLASSIFIED BY: Timothy M. Brys, Acting IRPO Chief, Dubai, UAE.
REASON: 1.4 (b),(d)



1.(C) Summary: In mid-August Department of Treasury and
Consulate/Embassy representatives discussed UAE-Iran relations
with UAEG officials. The UAEG expressed concern that direct
US-EU-Iran negotiations or actions taken against Iran would
affect Iran's neighbors. The UAEG would like to be consulted on
USG policymaking about Iran. Central Bank officials said Iran
is the UAE's largest trading partner, and Bank Melli Iran has
1.3 billion dollars in assets in the UAE, while Bank Saderat
Iran holds roughly 2.5 billion dollars in the UAE. A Dubai
Customs official confirmed that over 60 percent of containers
that pass through Dubai's ports are not subject to Customs
examination as they are transshipped to foreign ports. End
Summary.

2.(C) On August 14, Department of Treasury Intelligence Research
Specialists Basil Kiwan and Katherine Weitz, IRPOoff and Acting
Embassy Abu Dhabi EconChief held informal discussions with MFA
Assistant Undersecretary for International Cooperation Mohammed
Abdul Rahim Mohammed Abduljalil and the following day with UAEG
Central Bank Banking Supervision and Examination Department
Manager Saleh Mohamed Allaw Al Tenaiji. On August 12, Dubai
Immigration and Customs Attache, the Department of Treasury
representatives and IRPOoff engaged Dubai Customs Compliance
Department Executive Director Khalid Khammas on container
transshipment.

3.(C) MFA Assistant Undersecretary Abduljalil expressed concern
that negotiations between the USG or EU and Iran -- or any
actions taken against Iran -- will directly impact the Emirates.
Accordingly, Abduljalil said the UAEG would appreciate being
consulted in advance of the USG or EU making policy decisions
about Iran. "At the very least, please tell us once decisions
have been made." He said the UAEG opposes Iran's nuclear
program for environmental reasons -- the standard UAEG stance.
Regarding internal politics, Abduljalil believes Iran's
conservatives are consolidating power and speaking with one
voice in contrast to the factionalism during Khatami's
presidency. He claimed that Rafsanjani has been prevented from
acting independently (NFI). Comment: Abduljalil's comment
requesting USG consultation on policy decisions relating to Iran
is a direct reference to the UAE's frustration with not being
briefed on details of the P5+1 package at the time it was
proposed to Iran (ref A). The UAE remains concerned that the
U.S. may reach an agreement with Iran without considering the
interests of allies in the region. End comment.

4.(C) Central Bank (CB) Banking Supervision and Examination
Department Manager Al Tenaiji provided information about the
presence of Bank Melli Iran (BMI) and Bank Saderat Iran (BSI) in
the UAE. He said BMI was established in 1975 and has eight
branch offices with combined assets of 4.9 billion AED
(approximately 1.3 billion dollars). BSI opened in the UAE in
1976, also operates eight branches, and commands 9.4 billion AED
(approximately 2.5 billion dollars). He said Iran is the UAE's
largest trading partner (ref B). (Note: According to English
language website Iran Daily, Iran and the UAE trade between
March 2005 and March 2006 reached 9.6 billion dollars. End
Note.) Al Tenaiji also said the CB continues to encourage
hawaladars (those who engage in an informal system for
transferring funds internationally) to register with the CB.
The CB has received 215 applications for registration and has
granted 190 certificates of registration to the hawaladars. Al
Tenaiji said only those who do not meet basic criteria are
denied. For example, Emiratis cannot register as hawaladars
because they "do not need an informal means to transfer funds."
Al Tenaiji said the Central Bank hopes to implement computer
software in the near future that will facilitate registration
and oversight of hawaladars, as well as help the UAE's many
small money service businesses. The new software will
electronically maintain records and report data to the CB.

5.(C) Customs Official Khammas said over 60 percent of the 8
million containers that pass through Dubai's ports are not
subject to Customs examination as they are transshipped to
foreign ports. (Note: Khammas defined "transshipped goods" as

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those remaining aboard a vessel, transported ship-to-ship, from
ship to dock and back, or bonded and warehoused before moving to
another country. End Note.) Khammas stated the UAEG will search
transshipped goods if it receives derogatory information in
advance and has the container number. He said the dhows
entering Dubai Creek primarily engage in trade with Iran, India
and Pakistan. Dhows must present manifests to customs officials
at the mouth of the creek, but without specific threat
information the UAEG will not search them.
SUTPHIN