SUCCESSFUL US - UAE LEGAL/REGULATORY WORKSHOP

UNCLAS SECTION 01 OF 04 ABU DHABI 001695

SIPDIS

SIPDIS
SENSITIVE

STATE FOR NEA/ARP, ISN/CPI, ISN/ECC
ENERGY FOR NA - 24 ED FOX
ICE FOR FOLDEN

E.O. 12958: N/A
TAGS: ETTC PARM PREL KSTC AE
SUBJECT: SUCCESSFUL US - UAE LEGAL/REGULATORY WORKSHOP

REF: A. STATE 98673

B. ABU DHABI 1015


1. (U) This is an action request. Please see para. 15.


2. (SBU) Summary: On September 24-25, the U.S. held a legal
and regulatory workshop for the UAEG legal team responsible
for the UAE's export control law. The UAE's team members
clarified ambiguous aspects of the law and stated that the
UAE was currently working on implementing regulations. The
U.S. was pleased to hear that the law was drafted to give the
government broad authority and flexibility, so that the UAE
government can adapt their export control system to evolving
challenges, i.e., new threats and changes to control lists,
through regulations. The UAE legal team had clearly been
thinking about the challenges of implementing the new law and
pushed hard for examples of how the U.S. regulates exports,
licenses exports and enforces its law. Many of the UAE
questions were fairly basic, including questions on how to
structure a licensing system. The U.S. side praised the UAE
for being the first country in the region to establish a
comprehensive export control law The UAE team was delighted
to hear that the U.S. found their law to provide a sufficient
legal basis upon which to build an effective export control
system. The challenge would be ensuring that the
implementing regulations were sufficiently transparent and
detailed and reflected the licensing policy established by
the Guidelines of the four multilateral export control
regimes (the Nuclear Suppliers Group, the Australia Group,
the Missile Technology Control Regime, and the Wassenaar
Arrangement). The U.S. team also urged the UAE to modify its
control list to reflect the EU control list, which represents
the international standard. End Summary.


3. (SBU) On September 24-25, an interagency team with
representatives from State, Commerce, DHS/ICE, Department of
Energy, and DOD/DTSA conducted a legal and regulatory
workshop for UAE officials from the Ministries of Foreign
Affairs, Interior, Economy, and Justice, as well as
representatives from Dubai police, the Federal Customs
Authority, and the Federal State Security Organization.
Several of the UAEG attendees had been involved in the
interagency committee drafting the UAE,s new export control
law, as well as the drafting of the implementing regulations.
The UAE delegation opened their presentation by
acknowledging the importance of an export control law and
stressing that this was a new field for the country. The UAE
team leader Riyad Belhol stressed that the UAE was not a
manufacturing, but a trading nation and expressed his concern
that this would increase the challenges for implementing
effective export controls. He noted that the UAE legal team
needed to conduct outreach activities with the UAE's various
implementing agencies, with industry, and with prosecutors
and judges. Renee Pan, the U.S. Delegation head, emphasized
that we appreciated the significant step that the UAE took in
passing a comprehensive export control law, the first country
in the region to do so. She stressed the importance of an
effective export control system in guaranteeing legitimate
trade. Belhol, noting the difficulties the UAE would face in
evaluating the risk associated with a transaction and the
challenges of implementing an export control system in a
country that trades but does not manufacture, asked whether
the USG could provide the UAEG with advanced notification of
U.S. licensed exports to the UAE in three categories (goods
licensed for export to the UAE; goods licensed for another
country, but transiting the UAE; goods licensed for another
country that would be re-exported from the UAE). The U.S.
delegation recognized their concerns and offered to take back
to Washington the idea of an information sharing agreement
with the UAE.

UAE Export Control Law
--------------


4. (SBU) Issa Baddour, a legal advisor at the Ministry of
Economy (and one of the drafters of the law) explained the
process underpinning the law. He said that the process had
started about three years previously, when the UAE
established a national committee consisting of about 20
institutions, both public and private. The Committee reviewed
the comments, proposals, and suggestions of the institutions,
and tried to balance trade and security concerns. UNSCR 1540
(2004) on Non-Proliferation of Weapons of Mass Destruction
required countries to develop export control laws and various
U.S. sponsored workshops helped with the deliberations.

ABU DHABI 00001695 002 OF 004




5. (SBU) Baddour then explained in detail the provisions of
the law. He explained that the law broke down into two parts.
Part one dealt with general export-import issues. The goal
was to harmonize efforts and regulations among the emirates
under a federal umbrella. The Ministry of Economy had the
lead on this portion of the law and would chair an
interagency committee dealing with general exports and
imports. Part two of the law dealt with export, reexport,
transit and transshipment of "strategic goods" and was
modeled on Singapore's export control law. According to
Baddour, the UAE views its economic status as similar to
Singapore's, with both countries enjoying a position as a
regional trading hub. Although the UAE published Singapore's
control list, the law allows the government flexibility to
amend the list in regulations without amending the entire
law. He stressed that the UAE had brought both the private
sector and the various emirates into the legislative
decision-making process and that the law had the blessings of
both.


6. (SBU) According to this law, UAE's MFA will have the lead
in dealing with strategic goods and will chair a strategic
goods committee (committee). Baddour noted that, since most
re-exports are via the UAE's many free zones, the UAEG
ensured that the law covered the free zones. Representatives
of the UAE's free zones will also be on the committee. The
law also provides for establishing an executive agency under
the MFA. This will serves as the secretariat to the
strategic goods committee, receive and examine licensing
applications, and make recommendations to the committee. He
noted that the UAE had done something similar in its
Chemical Weapons Convention (CWC) implementation, where the
executive body makes recommendations to the committee and the
committee makes the final determinations.


7. (SBU) The U.S. team expressed concerns that the size and
varied representation of the committee, which includes
industry representatives, might make it difficult for a
licensing decision to be reached, especially if decisions
required consensus. The UAE side noted that the law allows
for the committee to establish sub committees for specific
tasks, such as license review. Baddour suggested that working
groups for issues such as reviewing licenses would be set up
under bylaws issued by the MFA. envisioned that certain
subcommittees could have the lead on certain licensing issues
and would discuss the recommendations of the Executive Agency
and would refer cases directly to the head of the committee
for a decision. The MFA head of the committee would have the
final say on whether a license is issued. (Note: The MFA
has not yet designated a committee head. End Note.) The
regulations would specify conditions for licensing. Licenses
could be denied due to violations of law or according to
conditions covered in the regulations. There would be a two
tier appeal process, first to the head of the committee, then
to the courts.


8. (SBU) The U.S. side noted that the law presented a good
framework for an export control system and one that gave the
UAEG significant flexibility to be able to adapt to changing
circumstances. It would be key for the regulations to go
into sufficient detail for companies to be able to understand
their license obligations and the licensing decision making
process. Pan explained that the USG did have some concern
about the UAE's control list, which was based on Singapore,s
old control list. Lisa Meyers from the Department of
Commerce explained that Singapore will adopt an updated list
in January 2008 that adds over 1,000 new items, thereby
bringing under control items from the Missile Technology
Control Regime and the Wassenaar Arrangement and additional
Australia Group chemicals and equipment. The new Singapore
list is in conformity with the European Union control list,
which is the international standard. U.S. delegates passed
over a copy of the EU list and urged the UAEG to revise its
current list to match the EU list, explaining that conformity
with international standards would improve clarity for
businesses. The UAE team committed to bringing the list back
to appropriate members of the committee for consideration.



U.S. Export Control Regulations and Enforcement
-------------- --


9. (SBU) At the request of the UAE delegation, the U.S. team

ABU DHABI 00001695 003 OF 004


discussed developing a licensing regime, presented an
overview of the U.S. legal and regulatory system, and case
studies of enforcement actions.


10. (SBU) Ms. Meyers gave a brief overview on the licensing
process, focusing on the technical and policy review that the
licensing authority conducts. The delegation discussed the
roles of various agencies in the U.S. system, as well as our
process to resolve disputes. Ms. Meyers emphasized the
importance of the regulations having license review
guidelines consistent with those established by the four
multilateral export control regimes, and the importance of
having clearly stipulated license review and denial standards
which are well understood by industry. The UAE delegation
was interested in the type of information the U.S. requires
to be submitted with the applications, how applications are
submitted and processed electronically. The UAE side appeared
shocked about the number of licenses issued each year and
wanted information on how many of the Department of
Commerce's licensing officers were technical experts. They
expressed concern that the UAEG would not have the technical
expertise to adequately review license applications. USDel
reminded them that they could reach out to other government
agencies, universities and other organizations (such as the
Abu Dhabi National Oil Company) which could have the
requisite expertise and committed to helping the UAE develop
the requisite knowledge of the regime control lists necessary
to process licenses. The UAE and U.S. had an extensive
discussions about how to evaluate the risk associated with a
transaction. The UAE delegation was very interested in any
information the U.S. could provide about entities known to be
involved in WMD programs (such as the Department of
Commerce,s Entity List),as well as information on licenses
the U.S. issued for export to the UAE or reexport or
transshipment through the UAE.


11. (SBU) Glenn Kaminsky briefed the UAE delegation on U.S.
export control authority. The UAE's legal team was also
interested in the enforcement briefing, expressing concern
about how UAE officials could make effective cases for
prosecution. DHS/ICE and BIS representatives walked the UAE
through two case studies of successful export control
investigation and prosecutions.


12. (SBU) The U.S. delegation discussed the training plan
that was provided to the UAE in July (ref A) which proposed
workshops on licensing, industry outreach, and enforcement.
The U.S. team also promised to consider the UAEG request for
training of judges and prosecutors in the application of the
new export control law. The U.S. noted that it was open to
the UAE,s further recommendations on what types of
assistance would be most useful.


13. (SBU) List of Attendees
--------------
UAE

--Lt. Col Dr. Riyadh Mohamed Kalfan Belhol, Legal Advisor
Dubai Police

--Lt. Col Hasan Ali Mirza, State Security, Legal Advisor

--Staff Lt Col. Mohamed Khalifa Al-Kitbie, Ministry of
Interior, Coordinator for Anti Trafficking in WMD

--Major Mansour Abdullah Mohamed, Dubai Police

--Major Omar Al Rahoumi, Dubai Police, Legal Department

--Captain Mohamed Saif Al-Miqbali, Dubai Police

--Saeed Muhaier Al-Kitbi, MFA Legal Department

--Juma Mohamed Al-Kait, Director WTO and FTA Affairs Ministry
of Economy

--Issa Baddour, Legal Advisor Ministry of Economy

--Yahya Al-Dabagh, Advisor Ministry of Economy

--Ahmed Baqr, legal Advisor Federal Customs Authority

--Mohamed Amadi, Advisor Ministry of Justice

U.S.

ABU DHABI 00001695 004 OF 004



--Renee Pan, Department of State

--Lisa Meyers, Department of Commerce

--Tom Madigan, Department of Commerce

-- Glenn Kaminsky, Department of Commerce

-- Shane Folden, Department of Homeland Security/ICE

-- Edward Fox, Department of Energy

-- Chuck Shotwell, Department of Defense

-- Ransom Avilla, ICE Attach

-- Oliver John, Econchief

-- Nasir Khan, Export Control Attach


14. (SBU) Comment: This was a very positive workshop. It
was clear that the UAE legal team had thought about issues
related to the law and was able to explain the thinking
behind the law and clarify how some of the law,s more
ambiguous provisions would be clarified in implementing
regulations. This was purposeful because the UAE wanted the
law to give the federal government broad authority and allow
the government the flexibility to adapt the export control
system to evolving challenges. Based on the elementary
nature of many of their questions, however, it was clear that
they are still grappling with the complexities of
implementing this new export control system. Post believes
that we would have the opportunity to help the UAE implement
its new law and would recommend holding a follow-on licensing
workshop as soon as possible after the regulations are
drafted. Post will follow-up with MFA to try and obtain a
copy of either the draft or final regulations. In addition,
post will follow-up on ref b training plan.


15. (SBU) Action Request: Post recommends that we seek to
capitalize on the momentum by scheduling both a visit by
Acting Undersecretary of State John Rood and the next
Counterproliferation Task Force meeting in late January/early
February 2008. Post also recommends that we propose a
licensing workshop for December as soon as the regulations
are issued. Post recommends that the Interagency consider a
mechanism to share information on U.S. licensed exports to
(and via) the UAE with the UAEG. Post also requests that
Department consider a proposal to train prosecutors and
judges on export controls and non-proliferation. This will
help them understand the importance of these types of cases
and improve the chances of successful prosecutions. Post
requests that Department provide us with copies of Commerce
licensing forms, and copies of USG and other governments'
published entities lists.


16. (U) This cable was cleared by the delegation.
SISON