INTERAGENCY FOLLOW-UP ON ARAB LEAGUE BOYCOTT

UNCLAS ABU DHABI 000390 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/ARP, NEA/RA COMMERCE FOR BIS: EWEANT and FDAVIDSON STATE PASS USTR FOR JASON BUNTIN E.O. 12958: NA TAGS: KBCT ETRD ECON IS AE SUBJECT: INTERAGENCY FOLLOW-UP ON ARAB LEAGUE BOYCOTT Ref: A) ABU DHABI 257, B) ABU DHABI 169 ¶1. (U) This is an action request. Please see para 6. ¶2. (SBU) On March 9, a Commerce/State interagency team led by Edward Weant, Director of the Office of Anti Boycott Compliance, met with Ministry of Economy Officials, led by Under Secretary (planning sector) Mohammed bin Abdul Aziz to discuss UAE efforts to eliminate prohibited Arab League Boycott requests. Weant expressed appreciation for the UAE's efforts to eliminate prohibited boycott language in line with the 1994 GCC decision not to enforce the secondary and tertiary aspects of the Arab League Boycott. He stressed, however, that recent trends showed a sharp increase in both prohibited and permissible boycott requests. Weant noted, by way of example, repeated boycott requests by Etisalat, which we understood had committed to revising its language. Weant also highlighted other cases that demonstrated that UAE companies continued to use old forms with outdated language. ¶3. (SBU) Abdul Aziz, who now has oversight on the office that deals with the boycott, expressed surprise. He noted that Etisalat and other entities had formally notified the Ministry of Economy in writing that they had updated their language to match Ministry of Economy guidance. He promised to personally raise the issue with Etisalat. Based on his experience as an ex-Etisalat employee, he asserted that Etisalat was committed to complying, but was a "large company" which faced challenges in its efforts to do away with old forms. ¶4. (SBU) Ministry of Economy Legal Advisor Issa Baddour noted that the Ministry had agreed on substitute language with USDOC/BIS (language that would not be reportable) for everything but letters of credit and certificates of origin. The Ministry has asked all of the institutions and companies that have appeared on USDOC boycott reports to revise their language accordingly. Baddour also noted that the UAEG had developed substitute language for letters of credit and certificates of origin and had sent this revised language to USDOC/BIS in May 2007. He asked for confirmation that this language would also be permissible and not reportable. ¶5. (SBU) In response to a question by Econchief about UAEG-Emirate level coordination on the issue of the boycott, Abdul Aziz confirmed that the Arab League boycott was a matter of "federal competency" rather than "emirate competency." The Ministry of Economy could, therefore, instruct Emirate-level state owned enterprises to change their procedures. In most cases, he argued, these companies were more than willing to change, as they view the boycott rules as a restraint on their ability to trade. He did insist, however, that the Ministry could only encourage the private sector to comply, but could not compel compliance. ¶6. (SBU) Action request: Post requests that the Department provide a front channel response to the Ministry of Economy's revised language on the boycott (ref a). Post requests that the response confirm that previously agreed language is permissible and not reportable and provide feedback on the two outstanding language questions, i.e., letters of credit and certificates of origin. End Action Request. ¶7. (U) This message was cleared by Mr. Weant. QUINN