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 DUBAI 00005323 001.2 OF 002 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 DUBAI 00005323 002.2 OF 002 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