JUNE 11 U.S.-UAE COUNTERPROLIFERATION TASK FORCE

S E C R E T SECTION 01 OF 05 ABU DHABI 001015

SIPDIS

SIPDIS

STATE FOR ISN (JROOD, TFOLEY, CRUSSELL, RPAN)
COMMERCE FOR MBORMAN, LMEYERS, GKAMINSKY
TREASURY FOR BHAMMERLE
NSC FOR DSTEPHENS
USCENTCOM FOR JTORGLER, FRODRIGUEZ
DOE FOR PHEINE

E.O. 12958: DECL: 06/12/2017
TAGS: PREL PARM PGOV ETTC ETRD ECIN AE IR
SUBJECT: JUNE 11 U.S.-UAE COUNTERPROLIFERATION TASK FORCE
WORKING GROUPS

REF: A. STATE 77768

B. ABU DHABI 422

C. ABU DHABI 275

D. ABU DHABI 873

Classified By: AMBASSADOR MICHELE J. SISON FOR REASONS 1.4 B & D.


1. (S) Summary: Department of State International Security
and Nonproliferation/Counterproliferation Initiatives
(ISN/CPI) Director Tony Foley led an interagency delegation
to the June 11 US-UAE Counterproliferation Task Force (CTF)
working groups meetings in Abu Dhabi to discuss questions
related to the draft UAE export control law, UNSCR
implementation and counterproliferation cooperation. UAE CTF
Chairman Brigadier Mohammad al Qamzi spoke briefly about the
export control law and assured the US that the UAE export
control system would be "practical and achievable." The UAE
side discussed questions passed by the U.S. earlier in the
month on its export control law, investigations into entities
listed in the Annexes to UNSCRs 1737 and 1747, proliferation
finance, and interdiction cases (ref A). The UAE also
promised to check with the UAE military on adding a
Proliferation Security Initiative (PSI) element to
established CENTCOM-UAE exercises. The US and UAE agreed to
several after-actions, including submitting a proposal for an
Export Control Workshop in the September 9-10 timeframe.

Delegations
--------------


2. (SBU) ISN/CPI Director Tony Foley led an interagency
delegation to the June 11 CTF Working Groups in Abu Dhabi.
The U.S. delegation included: the Ambassador; Renee Pan,
ISN/CPI; James Torgler, USCENTCOM; Frank Rodriguez,
USCENTCOM; Peter Heine, Argonne National Laboratory,
Department of Energy; Lisa Meyers, Bureau of Industry and
Security, Department of Commerce (DOC/BIS); Glenn Kaminsky,
Senior Attorney, Office of Chief Counsel (DOC/OGC);
EconChief; PolEconoff; DHS/ICE Attache; DOC/BIS Attache; OFAC
Attache; and Naval Attache.


3. (SBU) Brigadier General Mohammad bin Dhaen al Qamzi,
Director of Dubai,s General Department of State Security
(GDSS) led an expanded UAE Counterproliferation Team similar
to the March 1 CTF meeting. The UAE delegation included:
Brigadier General Abdul Aziz Maktoum Al Sharifi, Protective
Security Administration, Ministry of Interior (MoI); Yousef

M. Al Otaiba, Director of International Affairs, Office of
the Crown Prince of Abu Dhabi; Yacoub Al Hosani, Director for
International Affairs, Ministry of Foreign Affairs; Brigadier
General Hamad Al-Shamsi, Federal State Security; Aouad
Al-Niadi, Major Mansour Al-Bastaki, GDSS; Mohammed Al-Mehari,
Director General Federal Customs Authority; Juma Al-Kait
Abdulla Al-Mutawa, Ministry of Energy; Saeed Khalifa Al
Marri, Federal Customs Authority (FCA); Ahmed Saeed Al Qamzi,
Anti Money Laundering Suspicious Crimes Unit (AMLSCU),
Central Bank; and Mohammad Khalifa Al Kitbi, Protective
Security Administration, MoI.

A "Practical and Achievable" Export Control System
-------------- --------------


4. (C) Qamzi thanked the US delegation for its lists of
questions related to the draft UAE export control law (ref A)
but said it was still too early for the UAE-side to discuss
the issues in depth as the law is not yet enacted Qamzi
pledged to take the questions, as well as any comments from
the meeting, to the Ministry of Justice (MoJ),which is
currently drafting and approving the law,s implementing
regulations.


5. (C) Qamzi said the bodies responsible for enforcement and
other facets of the export control law are yet to be
determined. He acknowledged that the overlapping roles of

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the various committees established in the draft law are
confusing and shared that there is a proposal to establish a
body that would be responsible for thinking through the roles
of the various UAEG agencies. Another proposal is for the
&Strategic Committee for Commodity Control Procedures8 to
establish the control lists but not enforce the law. (Note:
it is unclear whether this committee is the Executive
Committee for Commodity Control Procedures (refs B-C) or the
&Control Committee8 or the &Strategic Commodities
Committee8 referenced in the draft law. End note.) He
envisioned licensing and enforcement falling to &smaller
units,8 but did not elaborate on who those units were
composed of, and establishing a full time office to do this
work, rather than the Committee, since it would meet
irregularly. During a luncheon conversation, Al Qemzi
informed Foley that the UAE was considering establishing a
separate agency to implement all phases of its export control
regime. He seemed to imply that this entity would be separate
from those identified in the law. However, in a side
conversation with Yacoub Al Hosani of the MFA, Lisa Meyers
(DOC/BIS) learned that the MFA was planning to be the
implementing agency, which seems to be consistent with what
is in the export control law. He noted that until the law is
enacted, the MFA cannot do any official work towards
implementation, but that the MFA has been advising the
Ministry of Justice on its draft implementing regulations and
considering the types of employees necessary to perform these
functions. When asked, Al Hosani indicated that he had
expected the law to have been enacted by now and assured Ms.
Meyers that the reasons for the delay were probably
logistical not substantive.


6. (C) Foley pointed out the importance of incorporating the
items contained in lists developed by the MTCR, NSG, AG, and
Wassenaar which will establish a baseline consistent with the
applicable international control regimes. He noted that an
effective regime should account for dual use items and
include catch-all controls, as well as a means for updating
of control lists.


7. (C) Meyers, provided a summary of the role of various
departments in the US export control process, and asked about
the roles and responsibilities of the large number of
entities named in the law to be part of the UAE,s export
control system, including the role of private industry and
free zones. Qamzi said the free zones would have a role
because of the integral part they play in the transit of
goods, but he did not elaborate. Qamzi said the UAE cannot
follow the US system 100 percent but vowed the UAE system
would be "practical and achievable." He stated that because
the UAE,s main businesses are re-exports rather than
manufacturing, the UAE needs a system that would work more
quickly than what he viewed as a cumbersome US system, but
reassured the US that there would be no loopholes in their
system.


8. (C) Meyers noted that the law is a good solid start for a
comprehensive export control system; however, the UAE now
needs to build a strong licensing authority, enforcement
capabilities, and industry- government relationship. She
stressed the need to work closely with industry during the
law,s roll-out, to help ensure the rules are understood
and companies are able to comply. Glenn Kaminsky, DOC/OGC,
stressed the need for clear regulations and penalties, as
well as clear responsibility for investigations and
enforcement. Qamzi stated that the necessary decisions to
"protect the UAE and exercise our strong commitment to the
international community" would continue- even in advance of
completion of export control regulations- to prevent entities
from taking advantage of the friendly UAE business
environment. He noted that the UAE has recently been able to
take administrative actions against proliferation shipments
even in the absence of an export control law and regulations.


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9. (SBU) Foley and Qamzi agreed that an export control law
workshop bringing together DOC, MoJ and other US and UAE
legal experts would be an appropriate next step. The US
proposed September 9-10 for this workshop and committed to
provide a proposal for such a workshop.

UVL and Country Group C
--------------


10. (SBU) Meyers said the USG intends to add Sharjah-based Al
Minzal Medical Equipment and Industries to its Unverified
List (UVL),and explained the purpose of the UVL. Qamzi
asked for further information on Al Minzal -- which post
subsequently provided -- and said he would follow up on the
company. Later in the meeting after receiving a short
briefing from his staff, he explained that Al Minzal was
already being investigated and found to be connected to
Medline, which had been shut down. Meyers also informed the
UAE that an amendment to the Mayrow General Order was
published on June 8, 2007 and contained the four UAE entities
that the U.S. had already shared with the UAE at the March 1
CTF (ref B).


11. (C) Foley informed the UAE that no decisions have been
made on whether any countries have met the criteria for
inclusion or what countries to place in Country Group C, the
new licensing category for &Destinations of Diversion
Concern.8 He stressed that continuing, outstanding UAE
cooperation on interdictions as well as enactment and
effective implementation of the UAE,s export control law
would make a positive contribution to the USG,s future
deliberations on Country Group C.

Answering Questions on UNSCR Implementation
--------------


12. (S) Qamzi answered questions on UNSCR implementation
passed in ref A -- beginning with UNSCRs 1737 and 1747 --
indicating the UAE has investigated and found no information
on the 7th of Tir. He stated that no actions were taken
against the UAE-based entities that were found to have been
linked to UNSCR listed entities, but did not indicate whether
any actions were pending. According to Qamzi, none of the
designated entities have attempted to open companies in the
UAE.


13. (C) Regarding financial measures, Qamzi said Bank Sepah
does not have offices in the UAE and the Central Bank has
circulated relevant information to UAE banks to ensure they
comply with the UNSCRs. No other actions have been taken and
no UAE banks have been found to be engaged in activities
violating the UNSCRs, he said. Ahmed Saeed Al Qamzi, Central
Bank AMLSCU International Affairs Director provided a summary
of their report to the UN on 1737 and 1747. He explained
that some of the Bank Sepah accounts frozen in the UAE are
debit accounts that Sepah owes to UAE banks and therefore,
subject to UNSCR regulations, so long as the contracts do not
involve UNSCR proscribed activities, they will be unfrozen so
that Bank Sepah may pay its creditors.


14. (S) Yacoub Al Hosani acknowledged that US questions
cOntained in ref A regarding UAE inspections of all DPRK
cargo, including those seeking bunkering or other services,
was not addressed in the UAE,s UNSCR 1718 report to the UN.
He agreed that the MFA would respond to the US questions.
Regarding the Tanchon Commercial Bank officials in ref D, the
UAE checked the names against suspicious transaction reports
and came up with nothing. Following the meetings, Qamzi
indicated to Foley the importance the UAE puts on the UNSCRs,
saying they provide the necessary legal framework to inspect
shipments. Foley stressed that UNSCRs will not always be in
place and therefore stringent export control laws are
necessary.


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Counterproliferation Cooperation Improves
--------------


15. (S) Foley thanked the UAE for its cooperation,
information and efforts related to shipments onboard the M/V
Iran Tehran and M/V Iran Kerman, acknowledging that the
UAE,s detainment of containers from these vessels is
politically sensitive. Major Mansour provided the following
summary of both interdictions. The Iran Tehran contained
three suspect containers. Upon inspection, one -- containing
electronic cabling -- was related to Bank Sepah and therefore
detained. There was no information linking the two other
containers -- holding CNC equipment and other machine tools
-- to UNSCR-named entities and they were released. Jam
Industrial Trading Company (JamCo) and Bank Melli Iran were
responsible for these two containers. The UAE asked for more
information on JamCo and its links to the Shahid Begheri
Industrial Group (SBIG) so that it might take action next
time. Foley agreed to follow up.


16. (S) The UAE asked why goods on the M/V Iran Kerman were
not stopped at their point of origin or other transit points
before coming to Dubai. Foley explained that the nature of
the information made it impossible to provide greater lead
time. The UAE asked why China appears reluctant to cooperate
on the issue and whether China (and other countries) view
JamCo as related to UNSCR-named entities. Later in the
conversation, Qamzi said the lack of pre-arranged agreement
to return the goods to China put the UAE in an embarrassing
position, effectively holding the bag. Foley assured the UAE
that the USG has asked China to repatriate the goods and
asked whether a joint demarche to China would be favorable.
Qamzi deferred to the MFA, to which Yacoub Al Hosani
responded that the UAE would welcome a joint demarche.


17. (S) Qamzi provided biographical and passport information
on Daniel Frosch, his father Erich Frosch, and Bazar Trading
Company (BTC) owner Mohammad Rohani and agreed to pass a
hardcopy of the information. The UAE investigation of Frosch
has revealed that he had an office within BTC. The UAE has
determined that Frosch has dealt with over 20 Iranian
military entities -- including SHIG, SBIG, Ya Mahdi, and
Aerospace Industries Organization (AIO) -- to export
commercial items. Financing has gone through BTC to Frosch.
The UAE has closed BTC and is acting to cancel the visas of
Frosch and Rohani and blacklist them; they have three months
to leave the UAE. Qamzi said the UAE has written to the
Austrians about Frosch, but has received no response. He
asked why Frosch has not been listed by Interpol, sharing
that many governments have raised him with the UAEG. Post
requests ISN approach FBI about establishing a Red Notice for
Frosch.


18. (S) On Mayrow General Trading, Qamzi shared that Mayrow
affiliates Atlinx and Ned Overseas Electronics are being
closed. These affiliates have a three month grace period to
finalize business before officially closing and its
personnel,s visas are similarly being cancelled. Mayrow,s
UAE sponsor is on a monitoring list and any applications by
him to open new companies will be screened.


Non-Committal on Maritime PSI Event
--------------


19. (SBU) James Torgler, USCENTCOM, provided information on
scheduled CENTCOM exercises with the UAE and proposed adding
PSI activities -- in particular an air and maritime exercise
-- to facilitate future cooperation. Due to potential
scheduling conflicts, Torgler suggested a date in late 2008.
Yousef Al Otaiba, Director of International Affairs, Office
of the Crown Prince of Abu Dhabi, said he would take it to
the General Staff and inform us if a PSI event could be
incorporated.

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Chemical Weapons Convention (CWC)


20. (C) After the meeting, Yacoub Al Hosani of the MFA noted
that although the &Federal Law on the Prohibition of the
Development, Production, Stockpiling, and Use of Chemical
Weapons8 has been enacted, the MFA is waiting until the
export control law is enacted to implement the CWC
requirements. The MFA intends for the implementation of both
to be the responsibility of the same office in the MFA. Al
Hosani indicted that he expected the law to be implemented in
the near term and that the MFA was already making unofficial
plans for implementation. It was unclear whether the same
MOJ officials were drafting the implementing regulations for
both the CWC and export control laws. Ms. Meyers indicted
that the US would be happy to share our experiences in
developing regulations and working with industry to implement
the CWC.

Biological Weapons Convention (BWC)
--------------


21. (C) After the meeting, Yacoub Al Hosani, Director for
International Affairs, Ministry of Foreign Affairs, said the
UAE has signed, but not yet ratified the Biological Weapons
Convention. It is currently under internal study.
SISON