UAE ARAB LEAGUE BOYCOTT APPLICATION

UNCLAS SECTION 01 OF 02 ABU DHABI 001123 SENSITIVE SIPDIS STATE FOR NEA/ARP (MCGOVERN),NEA/RA (MKELLY) STATE PLEASE PASS USTR (MOWREY, BUNTIN) COMMERCE FOR BIS/OIC TREASURY FOR DAVID JOY E.O. 12958: N/A TAGS: ETRD KBCT ECON UAE SUBJECT: UAE ARAB LEAGUE BOYCOTT APPLICATION REF: STATE 120272 ¶1. (SBU) The responses below are keyed to reftel questions: ¶A. Whether the host government requires participation in or cooperation with any of the three forms of the ALB or other international boycotts, for example by requiring that U.S. firms complete boycott compliance questionnaires or furnished boycott-clearance certificates as a prerequisite to licensing, trademark or company registration, bidding on contracts, or as part of a contract, or refrain from doing business with companies headquartered in Israel. - The UAEG continues to formally apply the primary Arab League boycott of Israel, based on law # 15 of 1972. The UAEG formally rescinded application of the secondary and tertiary boycott application in 1995, in accordance with a Gulf Cooperation Council policy. There are no UAEG reporting requirements and/or required documentation of compliance. ¶B. Whether the host government, as a matter of policy, practice, or contract, requests that U.S. firms comply with boycott requirements or provides information regarding such compliance. - Although contrary to the laws and policies indicated in section A, some UAE government and quasi-government entities at the federal and local level occasionally request boycott compliance certificates and include secondary and tertiary boycott requirements in tender and contract documents. The UAE continues to have one of the highest incidents of boycott application in the Arab League, in part due to the large volume of U.S. goods and services available in the country. ¶C. Whether a host government's formal or informal boycott practices have had an identifiable impact on U.S. businesses. - Illegal boycott practices in the UAE are a bureaucratic burden on U.S. firms providing goods and/or services to UAE entities. These firms regularly approach the Embassy for guidance on how to respond to such requests and/or how to comply with U.S. reporting requirements. U.S. firms and the U.S. law firms that represent them continue to report that some UAE entities resist efforts to remove boycott language from policies, contracts and tenders. ¶D. Whether the country has legislation or regulations covering aspects of the ALB. If so, comment on steps the host government has taken to change domestic legislation or regulations with respect to either strengthening or eliminating any form of the boycott. See section A. ¶E. Whether a host government maintains an ALB Office, and if so, what are its duties. Does the government send representatives to meetings of the Central Boycott Office in Damascus? The Ministry of Economy Arab League Boycott Office is responsible for applying UAEG policies regarding the boycott and sends representatives to CBO meetings. ¶F. Whether a host government, when apprised of instances of attempted boycott enforcement by government agencies or compliance requests by private entities, has taken corrective steps. Please provide details of any positive measures taken by host governments. The USG and the embassy have ongoing and fruitful dialogue with this office and other Ministry officials, who routinely approach UAE entities identified to be violating UAEG policies (as outlined in section B) to alert them to legal and policy violations. U.S. firms have reported that illegal secondary and tertiary boycott applications have been rescinded following Ministry engagement with the involved UAEG entity. The boycott office continues to issue circulars and directives to UAE federal and local government entities instructing them to follow UAEG ALB policies. For example, in 2009, the Ministry instructed an emirate-level department to remove boycott language from its website; the department complied within days. ¶G. Whether ALB outreach efforts have been undertaken by Embassy officials during FY09 and whether these efforts have elicited either positive or negative stances by host government officials. In addition to the successful engagement noted in section F, EmbOffs find that Ministry officials are committed to ensuring only official UAEG policies on the ALB are applied. Ministry officials are responsive to requests, timely in their follow up and informative in ABU DHABI 00001123 002 OF 002 discussions. ¶2. (SBU) Comment: The continued high incidence of boycott application requests in the UAE appears to be the result of both significant goods and services trade between the U.S. and UAE, as well as a weak federal system, limited Ministry staff and resources, and local/regional sensitivities to normalization with Israel. There is no indication UAE federal or local government officials are encouraging application of any aspect of the Arab League Boycott. Post continues to have an active dialogue with the Ministry of Economy, involved USG agencies and affected U.S. firms. End Comment.