MFA ON STATUS OF INTERDICTIONS

S E C R E T ABU DHABI 000352

SIPDIS

NOFORN
SIPDIS

DEPARTMENT FOR T, ISN, EAP, AND NEA/ARP

E.O. 12958: DECL: 02/07/2033
TAGS: PARM ETRD ETTC AE
SUBJECT: MFA ON STATUS OF INTERDICTIONS

REFS: A) STATE 27996, B) ABU DHABI 343

Classified by Charge d'Affaires Martin Quinn, reasons 1.4 (B),(C),
and (D).


1. (S/NF) On March 19, Econchief met with MFA International
Organizations Director Yacub Al-Hosani to discuss ref a demarche and
other outstanding interdictions. Econchief informed Al-Hosani that
the U.S. is requesting China's assistance in arranging for the goods
to be recalled. Econchief also highlighted new information
indicating that Iran's Defense Industries Organization's (DIO)
foreign purchasing manager is responsible for arranging the shipment
and highlighted that there is some information that we are sharing
with the UAEG, but do not want to share with China. Al-Hosani
expressed his appreciation for the information and asked to be
informed about China's response.


2. (S/NF) Al-Hosani turned the discussion to the three other
outstanding interdiction cases: YM Energy, M/V Sinotrans Qingdao, M/V
Anne E. He explained that the UAEG faces two choices in dealing with
these unresolved shipments. It can either confiscate the shipments or
return them to their countries of origin. He stressed that the UAE
is not prepared to release any of the shipments to Iran. The
problem, Al-Hosani explained, is that the UAE does not have a strong
enough legal case to bring to the court and have the shipments
confiscated. In the pre-export control law days, he noted, the UAEG
might have been able to confiscate the goods under an executive
order, but this path was now closed. He did not want to be in the
position of taking one of these cases to court and losing. The UAE
would be forced to release the shipment and could face demands for
compensation. Losing an early judicial test could also undermine the
new export control law, he added. He stressed that the UAE needs to
close the cases and that -- absent compelling new information --
could make the decision to return the goods to their country of
origin in as early as a week.


3. (C) Al-Hosani and Econchief briefly discussed the UAE's first
prosecution under the export control law (ref a). Al-Hosani said
that his colleagues had e-mailed him the article while he was in
Senegal, but that he did not have any details other than those in the
press. He stated that he had counseled the investigators to be sure
that they made no "procedural mistakes" since this was an important
test case. Al-Hosani did say that the case originated with Customs
and that it had sent a clear warning to the business community about
doing business with Iran, since "everyone knows the goods were
destined for Iran."


4. (C) Al-Hosani also asserted that the Iranians were feeling the
pressure. The Iranian ambassador had met with him to complain about
restrictions on trade and finance and to ask whether his office was
the cause. He noted that the Iranians had complained to UAE Vice
President, Prime Minister, Ruler of Dubai Sheikh Mohammed bin Rashid
Al-Maktoum about the issue.


5. (S/NF) Comment: The UAEG feels the pressure to close the
outstanding shipments. Al-Hosani stated his government's commitment
not to let the shipments through, but stressed the need to resolve
the matter soon. He indicated his willingness to inform us after the
UAEG makes its decision so we could work with the recipient
governments to ensure that the items were not re-exported. There
are, however, a number of different agencies involved in the
decision, including Customs and the security service, and it is
possible that the UAEG may return the goods and not inform us, as
happened with the M/V Iran Tabatabaei.
QUINN