SCENESETTER FOR VISIT OF COMMERCE UNDER SECRETARY MARIO

S E C R E T SECTION 01 OF 02 ABU DHABI 000729

SIPDIS
DEPARTMENT FOR NEA/ARP, T, ISN AND ISN/CPI CHERRINGTON
COMMERCE FOR BIS U/S MANCUSO

E.O. 12958: DECL: 06/18/2018
TAGS: ECON ETRD OTRA ETRD BEXB ETTC AE
SUBJECT: SCENESETTER FOR VISIT OF COMMERCE UNDER SECRETARY MARIO
MANCUSO JUNE 23-24, 2008

REF: A. ABU DHABI 712

B. ABU DHABI 727

Classified by Charge d'Affaires Martin Quinn, Reasons 1.4 (b,d).


1. (C) Embassy Abu Dhabi welcomes the June 23-24 visit of U.S.
Department of Commerce, Bureau of Industry and Security, Under
Secretary Mario Mancuso. We have scheduled meetings with both BG
Mohammed Al-Qamzi, the head of Dubai's General Directorate of State
Security and the UAE Chair of the Counterproliferation Task Force and
with Minister of Foreign Trade heikha Lubna Al-Qasimi as well as
other official and business representatives.


2. (C) The UAE i a central trade route for many
proliferation-reated and financial transfers and has long been afocus of USG engagement in counter-proliferation matters. Dubai's
port of Jebel Ali is the world's argest man-made port and handled
almost 10 million TEUs in 2007, an increase of 25 percent over the
year before. In October 2005, the State Department's Under Secretary
for Arms Control proposed the establishment of a U.S.-UAE
Counterproliferation Task Force (CTF) designed to promote greater
cooperation and help the UAE identify and take steps necessary to
address the proliferation problems it faces. We have continued to
engage the UAE at all levels on export control and nonproliferation
related issues.

UAE Strongly Engaged on USG Initiatives
--------------


3. (S) The UAE has signed on to the Proliferation Security Initiative
and Global Initiative to Combat Nuclear Terrorism. The Emirate of
Dubai is a member of both the Container Security Initiative and the
Megaports Program. Our cooperation with the UAE on interdicting
transshipments to Iran has improved considerably with the passage of
UNSCRs 1737, 1747, and 1803. The UAE is currently detaining
containers from four separate interdictions made at USG request, and
is prosecuting its first case under the 2007 strategic trade control
law (ref b). The UAE is committed to ensuring that Iran does not
obtain nuclear weapons, but Iran remains one of the UAE's largest
non-oil export/re-export markets.


4. (S) Although the UAE has been cooperative in interdicting
shipments, UAE officials have raised concerns about the timeliness of
USG-provided information with regard to interdicting shipments to
Iran. They have also raised concerns with the provision of follow-up
information to help the UAE make a legal case for actions. UAE
officials have expressed concern about potential U.S. Congressional
interest in targeting the UAE as a transshipment point to Iran.


5. (S) With regard to proliferation finance issues, the UAEG quickly
froze the accounts of Bank Sepah after it was designated in UNSCR

1737. The Central Bank Governor told Treasury Under Secretary Levey
that the Central bank would issue guidance to financial institutions
with regard to Iranian banks listed in UNSCR 1803. Post has not yet
seen any guidance. According to the Central Bank Governor, the
Deputy Governor of the Bank of Iran visited the UAE recently to
complain about the strained relations between Iran and UAE banks. Al
Suwaidi said that he refused to meet with the Iranian official,
sending his Deputy with instructions that the UAE Central Bank would
not interfere on behalf of Iran.

UAE'S Export Control Law Positive Sign of Progress
-------------- --------------


6. (SBU) The UAE formally approved its federal export control law in
August 2007. The law includes controls over most items on the four
multilateral control regimes (WA, NSG, MTCR, and AG) but needs to be
amended in order to be fully consistent with international standards.
According to the UAE, it is working to update its controls lists.
The law has four chapters and includes criminal penalties for the
violation of the law. (NOTE: There is currently no provision for
administrative penalties in the UAE. END NOTE). On March 13, 2008,
UAE Arabic and English papers reported that the Dubai Public
Prosecutors Office had referred a case to court regarding an attempt
to import -- with the intent to re-export -- 250 kilograms of the
corrosion-resistant metal Zirconium in violation of the UAE's 2007
export control law. Dubai's Attorney General Esam Al-Humaidan told
the press that the accused was working with local brokers (Jordanian,
Russian, UAE, and Indian nationals are purportedly part of the
scheme). At a recent USG-sponsored counter-proliferation seminar, a
UAE official confirmed that the case is still on-going and has, to
date, resulted in two arrests. This is the first prosecution under
the 2007 export control law and represents a welcome step.

UAE Welcomes Training and Assistance
--------------


7. (SBU) As the USG works with the UAE to improve its export/border
control system, we see some real progress, including passage of the

ABU DHABI 00000729 002 OF 002


export control law but also enhanced training efforts. Under the
EXBS program, on June 3-4 (at UAE's request) the U.S. Department of
Justice's Office of Overseas Prosecutorial Development (DOJ/OPDAT) in
collaboration with Embassy Abu Dhabi conducted a two-day workshop for
UAE prosecutors and judges who handle proliferation related cases.
On June 5, U.S. Immigration and Customs Enforcement conducted a
half-day investigations training. In large measure due to DOJ's
excellent work in leading the training team, both workshops were very
well received. Prosecutors and judges have requested a visit to the
U.S. to learn more about DOJ's role in prosecuting strategic trade
control cases and said they would welcome a mutual legal assistance
treaty (MLAT),which would be helpful on data and law enforcement
information sharing. We are currently pursuing other training
possibilities, including licensing workshops. The UAE has expressed
interest in receiving training for customs officials. The USG stands
ready to continue working with the UAE to strengthen its strategic
trade control system. Under the EXBS program, we will continue to
provide training and assistance aimed at helping the UAE develop
responsible strategic trade control policies and practices consistent
with international standards.

Strengthening the Non-proliferation Relationship
-------------- ---


8. (C) U/S Mancuso's visit, coming shortly after a very successful
export control training session and four months after the
Counter-Proliferation Task Force meeting, will keep up the high level
engagement with the UAEG. Coming on the heels of Treasury Secretary
Paulson's visit, it will likely also raise generate interest in
Mancuso's thoughts on the CFIUS process.
Quinn