Identifier
Created
Classification
Origin
07ABUDHABI1776
2007-10-25 12:49:00
SECRET//NOFORN
Embassy Abu Dhabi
Cable title:  

UAE CENTRAL BANK AFFIRMS COMMITMENT TO MENA-FATF

Tags:  AE ECON IR KTFN PREL PTER 
pdf how-to read a cable
VZCZCXRO9122
PP RUEHBC RUEHDE RUEHDIR RUEHKUK
DE RUEHAD #1776/01 2981249
ZNY SSSSS ZZH
P 251249Z OCT 07
FM AMEMBASSY ABU DHABI
TO RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
INFO RUEHDE/AMCONSUL DUBAI PRIORITY 7375
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHBUL/AMEMBASSY KABUL 0396
RUEHC/SECSTATE WASHDC 9918
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHINGTON DC
RUETIAA/NSA WASHINGTON DC
S E C R E T SECTION 01 OF 02 ABU DHABI 001776 

SIPDIS

NOFORN
SIPDIS

TREASURY FOR U/S LEVEY, A/S GARDNER, A/S OBRIEN, DAS
GLASER, DAS MENDELSOHN, OFAC DIR SZUBIN, JJERMANO, PCONLON,
BGRANT, KHECHT, MMILLERWISE, KBAUER
NSC FOR ZARATE
STATE FOR NEA/IR, NEA/ARP
STATE FOR S/CT, EB/ESC/TFS, INL/C/CP
CIA FOR OTI
NSA FOR FTM

E.O. 12958: DECL: 10/25/2017
TAGS: AE ECON IR KTFN PREL PTER
SUBJECT: UAE CENTRAL BANK AFFIRMS COMMITMENT TO MENA-FATF
REVIEW PROCESS; CONSIDERS ISSUING ADVISORY ON IRAN


ABU DHABI 00001776 001.2 OF 002


S E C R E T SECTION 01 OF 02 ABU DHABI 001776

SIPDIS

NOFORN
SIPDIS

TREASURY FOR U/S LEVEY, A/S GARDNER, A/S OBRIEN, DAS
GLASER, DAS MENDELSOHN, OFAC DIR SZUBIN, JJERMANO, PCONLON,
BGRANT, KHECHT, MMILLERWISE, KBAUER
NSC FOR ZARATE
STATE FOR NEA/IR, NEA/ARP
STATE FOR S/CT, EB/ESC/TFS, INL/C/CP
CIA FOR OTI
NSA FOR FTM

E.O. 12958: DECL: 10/25/2017
TAGS: AE ECON IR KTFN PREL PTER
SUBJECT: UAE CENTRAL BANK AFFIRMS COMMITMENT TO MENA-FATF
REVIEW PROCESS; CONSIDERS ISSUING ADVISORY ON IRAN


ABU DHABI 00001776 001.2 OF 002



1. (S//NF) Summary. On 23 October 2007, Treasury Attach
Matthew Epstein and Econ Chief Oliver John met with UAE
Central Bank official Abdulrahim al Awadi, head of the
Anti-money Laundering and Suspicious Cases Unit. Treasury
Attach and Econ Chief inquired about the ongoing MENA-FATF
review of the UAE and, separately, encouraged the Central
Bank to issue a statement highlighting threats of illicit
Iranian financial activity. Al Awadi stressed the UAE's
commitment to the open, transparent MENA-FATF review process,
and agreed to share with the U.S. any advisory that the
Central Bank may issue on Iran (Note: The decision to issue a
statement on Iran would fall to the Central Bank Governor.
End Note.) End Summary.


2. (S//NF) On 23 October 2007, Treasury Attach Matthew
Epstein and Econ Chief Oliver John met with UAE Central Bank
official Abdulrahim al Awadi, head of the Anti-money
Laundering and Suspicious Cases Unit. A variety of topics
were discussed, including the UAE,s ongoing MENA-FATF
review, recent FATF and FinCEN language on Iran, and a
possible Memorandum of Understanding between the UAE Central
Bank and the Afghan FinTRACA. During the visit, Al Awadi
stressed the importance of close cooperation with the US, a
close ally of the UAE, and extolled the great value of joint
training initiatives.

MENA-FATF review of UAE
--------------


3. (S//NF) Treasury Attach and Econ Chief inquired as to
whether the UAE's FATF review would be on the agenda of the
upcoming MENA-FATF plenary in Damascus. Al Awadi explained
that the IMF/FATF review team met with 62 different entities
and agencies in the UAE, with the UAE Central Bank (CB)

serving as the coordinator. When the report came in, the CB
sent it out to the 62 entities for review and comment. Each
agency provided written comments where they did not agree
with the assessment. This input was forwarded by the CB in a
34 page response to the IMF/FATF. According to Al Awadi, the
IMF/FATF initially responded with a 1-2 page letter that did
not address the points of the 62 bodies. Then, on October 10,
the CB received a more robust response from the IMF/FATF. As
this response came in during the end of Ramadan/beginning of
Eid, it took the CB a few days to farm the appropriate
portions out to the 62 entities. Al Awadi explained that the
CB must give these entities appropriate time to review the
IMF/FATF response and comment if necessary.


4. (S//NF) Al Awadi stated that he fully supports a
transparent, open discussion on the UAE FATF review; however,
he does not believe it will be possible to do so by the time
of the Syria plenary because the CB is obligated to give each
participating UAE entity the opportunity to comment on the
IMF/FATF responses. Al Awadi proposed three possible
alternatives:

1. Schedule UAE review for the MENA-FATF plenary after
Damascus (Awadi recognized that this option could raise a
possible conflict of interest as UAE will hold the MENA-FATF
Presidency in 2008);

2. Delay UAE review until 2009; or

3. Take the UAE review directly to the FATF (as opposed to
MENA-FATF).
Al Awadi said that he is open to any option.


5. (S//NF) Al Awadi stressed the importance of the MENA-FATF
and the open review process. He repeated several times that
the UAE is committed to this process and "not hesitant about
an open review." He was visibly upset to learn that Treasury
DAS Glaser would not be in Syria for the plenary, expressing
tremendous respect for DAS Glaser and all the work he has
done in the FATF context.

FATF Iran Statement
--------------

ABU DHABI 00001776 002.2 OF 002




6. (S//NF) Treasury Attach and Econ Chief reviewed with
Awadi the new FATF language and the FinCEN advisory on Iran.
Al Awadi advised that he was aware of the FATF statements and
appreciated receiving the FinCEN language. Treasury Attach
encouraged the UAE CB to issue a similar advisory and
requested to see a copy if the CB does so. Al Awadi reviewed
the language, took notes and seemed to be agreeable, but did
not commit to anything. (Note: A UAE Government official
subsequently told Econ Chief that during a Dubai conference
on investing in Iran (SEPTEL),bank officials complained
about the chilling impact of a UAE CB circular on the dangers
of dealing with Iranian banks. Separately, the head of
International Affairs for the CB's AML unit, Ahmed Qamzi,
confirmed that the CB issued guidance on UNSCR 1747,
including Bank Sepah. Qamzi stated that two banks later
sought guidance from the CB on conducting business with the
Government of Iran. Qamzi informed that the CB instructed its
bank examiners to deliver the same strong message to these
banks on risks of dealing with Iran. End Note.)


7. (S//NF) Treasury Attach and Econ Chief also highlighted
FATF language discussing possible financial sanctions against
a financial institution. Treasury Attach pointed out that
engaging with the banking sector in advance to prepare for
such an eventuality would help protect the stability of the
UAE banking sector should an additional Iranian bank be
listed. Al Awadi seemed to agree that there was value in
ensuring that UAE banks were prepared and appreciated the
guidance.


8. (S//NF) During a more general conversation on Iran, Al
Awadi commented on the unacceptability of Iran going nuclear.
Al Awadi opined that the International Community needed to
get tougher with Iran, and pointed out the counter
productiveness of Putin,s visit. Al Awadi did not offer
additional steps to be taken by the UAE CB to increase
pressure on Iran in the absence of International Community
consensus.

MOU with Afghan FinTRACA
--------------

Treasury Attach and Econ Chief inquired about the status of
a Memorandum of Understanding providing for information
sharing between the UAE CB and the Afghan FinTRACA,
Afghanistan's Financial Intelligence Unit. Al Awadi said that
the CB will sign the MOU, but that it is currently with the
lawyers.
SISON