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continued to use old forms with outdated language.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