UAE: FOLLOW-UP ACTION REQUEST ON ILLICIT CASH

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001838 SIPDIS SIPDIS DEPARTMENT FOR NEA/ARP, S/CT, EEB/ESC/TFS TREASURY FOR U/S LEVEY, A/A O'BRIEN DHS FOR DHS/ICE, FINANCIAL AND TRADE INVESTIGATIONS, KDELLACOLI, JGALLION E.O. 12958: DECL: 11/05/2017 TAGS: EFIN ETTC KTFN PTER KCRM PREL AE SUBJECT: UAE: FOLLOW-UP ACTION REQUEST ON ILLICIT CASH COURIERS REF: A. SECSTATE 152088 ¶B. 06 ABU DHABI 3872 ¶C. 06 ABU DHABI 2281 ¶D. 05 ABU DHABI 4592 ¶E. ABU DHABI 1293 Classified By: Ambassador Michele J. Sison for reasons 1.4 (b and d). ¶1. (C) Summary: Post has worked with the UAEG to have it focus on the issue of bulk cash smuggling. DHS/ICE has twice provided training to customs officials and DOJ/OPDAT will be providing money laundering prosecutorial training this December (which will have a bulk cash smuggling component). The USG proposed conducting a joint DHS/ICE - Dubai Customs cash courier operation in April 2006. This October, the UAE Central Bank Governor, who serves as the UAE's Chairman for the Joint Terror Finance Coordinating Committee, informed us that the UAEG did not wish to participate. (Note: Post still understands that the Central Bank Governor will be replaced and will raise this with his successor. End Note.) The UAE has regulations requiring declarations for cash imports of over USD 10,800, but no regulations covering cash exports. End Summary ¶2. (C) Post appreciates the opportunity to provide an update on our efforts to focus the UAEG on addressing the issue of bulk cash smuggling. DHS/ICE provided training to Dubai police and customs officials on detecting and investigating bulk cash smuggling cases in September 2005, and the issue has been raised at each of the U.S. - UAE Joint Terror Finance Coordinating Committee (JTFCC) meetings since their inception in January 2006. In the April 2006 JTFCC meeting, the U.S. side proposed holding a joint DHS/ICE - Dubai Customs cash courier operation. UAE Central Bank Governor Sultan Nasser Al-Suwaidi requested training before moving forward with any operation. That training was provided in June 2006 (ref c). ¶3. (SBU) Al-Suwaidi then requested that post work with the UAE Central Bank and Customs to provide a "gap analysis" of the relevant U.S. and UAE regulations. In post's initial draft of a gap analysis, we determined that the UAE has no regulations on declaring cash exports, only on cash imports (ref b). We continued working with the Central Bank and with other members of the UAEG to address the UAE's stated and unstated concerns about a joint cash courier operation. Based on concerns the UAEG stated about having non-UAE nationals publicly involved in the operation, DHS/ICE revised the proposal and Ambassador passed it to Al-Suwaidi on August 1, ¶2007. Al-Suwaidi promised to have the UAE's JTFCC review it. In October, during his visit to the U.S., Al-Suwaidi told Treasury U/S for Terrorism and Financial Intelligence Stuart Levey that the UAE did not wish to pursue the proposed DHS/ICE - Dubai Customs cash courier operation with the USG, arguing that having U.S. DHS/ICE officials visible in UAE airports would not be acceptable. He did agree to continue a two-way discussion about certain at-risk flights and suggested the December meeting of the UAE's National Anti-Money Laundering Committee. Post still understands that the UAEG plans to change the Governor of the Central Bank. We will raise this issue again with the new governor, whenever that person comes on board. ¶4. (C) Specific responses to questions follow (see 05 Abu Dhabi 4592 and 06 Abu Dhabi 3872 for more details). (U) Status of Host Nation Laws: -------------- -- UAE Federal Law 4 of 2002 is the relevant law (SBU) Key Elements of UAE Federal Law 4 (2002) with regard to bulk cash smuggling): -------------- -------------- -- The law permits the import and export of any amount of currency. It requires, however, that cash and travelers checks worth 40,000 dirhams (USD 10,800) be declared. There are no requirements to declare exports of cash or to declare other bearer negotiable instruments such as bearer bonds, 3rd party endorsed checks, etc. -- Although there is a requirement to declare cash imports, the UAE does not provide customs declaration forms to airlines, etc (as does the U.S.). While there may be signs ABU DHABI 00001838 002 OF 002 at some ports of entry laying out these requirements, it is not clear that they are at all points of entry. -- Although UAEG officials have the authority to seize undeclared cash, they do not have an administrative procedure for asset forfeiture. All cases must be brought to the courts. UAE officials have requested assistance in training prosecutors and judges in the understanding the importance of these cases and in how to make the case. -- The UAE Central Bank Governor has stated that the UAE would need to revise its regulations to deal with declarations on cash exports. As far as we are aware, these regulations have not yet been amended. (C) Status of investigations into bulk cash smuggling: -------------- -------------- -- The UAE is still largely a cash based society and Emiratis are used to carrying large amounts of cash. It is not clear that customs officials always initiate action against undeclared cash, nor is it clear how aggressively these cases are investigated or prosecuted. UAE officials have told us that they have investigated these cases and brought them to prosecution, but post has no independent access to records to determine the number of these cases, nor the success rate. (SBU) Mission Efforts -------------- -- In addition to the efforts briefly described in paras 1-2 above, DOJ/OPDAT will be delivering training on December 10-11 on prosecuting money laundering and financial crimes cases to prosecutors from the UAE. DHS/ICE will be delivering a presentation on bulk cash smuggling. -- Embassy will continue to engage the UAEG and Emirate level governments on the problem of cash couriers and the need to develop a plan to address the issue. SISON