Identifier
Created
Classification
Origin
09ABUDHABI877
2009-09-03 08:20:00
SECRET//NOFORN
Embassy Abu Dhabi
Cable title:
THE UAE AND TALIBAN FINANCING: Our Analysis and Action Plan
how-toVZCZCXRO7614 PP RUEHDE RUEHDH RUEHDIR DE RUEHAD #0877/01 2460820 ZNY SSSSS ZZH P 030820Z SEP 09 FM AMEMBASSY ABU DHABI TO RUEHC/SECSTATE WASHDC PRIORITY 2898 INFO RUEHDE/AMCONSUL DUBAI PRIORITY 8418 RUEATRS/DEPT OF TREASURY WASHINGTON DC RHMFISS/HQ USCENTCOM MACDILL AFB FL RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE RUEHBUL/AMEMBASSY KABUL 0510 RUEHIL/AMEMBASSY ISLAMABAD 1767
S E C R E T SECTION 01 OF 02 ABU DHABI 000877
NOFORN
SIPDIS
DEPARTMENT FOR SRAP, SCA, NEA/FO, NEA/ARP (MCGOVERN),S/CT AND INR
E.O. 12958: DECL: 08/30/2019
TAGS: EFIN PTER PGOV PINR PK AF AE
SUBJECT: THE UAE AND TALIBAN FINANCING: Our Analysis and Action Plan
REFS: A) ABU DHABI 845
B) ABU DHABI 735 (NOTAL)
ABU DHABI 00000877 001.2 OF 002
CLASSIFIED BY AMBASSADOR RICHARD OLSON FOR REASONS 1.4 (B AND D).
S E C R E T SECTION 01 OF 02 ABU DHABI 000877
NOFORN
SIPDIS
DEPARTMENT FOR SRAP, SCA, NEA/FO, NEA/ARP (MCGOVERN),S/CT AND INR
E.O. 12958: DECL: 08/30/2019
TAGS: EFIN PTER PGOV PINR PK AF AE
SUBJECT: THE UAE AND TALIBAN FINANCING: Our Analysis and Action Plan
REFS: A) ABU DHABI 845
B) ABU DHABI 735 (NOTAL)
ABU DHABI 00000877 001.2 OF 002
CLASSIFIED BY AMBASSADOR RICHARD OLSON FOR REASONS 1.4 (B AND D).
1. (S/NF) SUMMARY: Given the UAE's open financial system, sizeable sub-continent immigrant community and significant legitimate financial flows between the two countries, it comes as no surprise that Taliban financing originates in and transits the UAE to Afghanistan and third countries. Afghan drug proceeds, including laundered funds, both transit the UAE and are invested here. Cash couriers are believed to carry the majority of illicit funds to and from Afghanistan. While the UAE legal framework is adequate at least at the outset, investigatory capacity is particularly limited. Multiple Mission agencies are increasing engagement with the UAEG to disrupt Taliban financing.
2. (S/NF) The UAE views its cooperation with the U.S. on Afghan issues through the prism of its military deployment to Afghanistan. (Note: The UAE is the only Gulf country with combat troops fighting alongside U.S. forces in Afghanistan. In this role, UAE troops have been in combat with Taliban and taken casualties. End Note.) As a result, UAE officials can be incredulous when accused of not taking seriously the problem of Taliban finance. One particular frustration expressed by senior Emirati officials is that the US has shared scant actionable intelligence on Taliban financing in the UAE.
3. (S/NF) Following up on UAE commitments made to Treasury A/S Cohen, the first meeting of the US-UAE Cash Courier Task Force (Ref A) will be on September 7 to discuss training and operations to target and intercept Taliban cash couriers. DEA is developing partnerships between UAE and Afghan authorities to combat drug smuggling and related money laundering. We are also working with Washington agencies to downgrade intelligence information to share with the UAEG. UAE security services will host a Taliban finance analytic exchange with Treasury and GRPO intelligence officials in early October. END SUMMARY.
4. (SBU) This message is a Country Team Assessment.
THE PROBLEM
--------------
5. (S/NF) On August 24, an interagency group of EmbOffs met to coordinate efforts to combat illicit financial flows between the UAE and Afghanistan and Pakistan. High volumes of cash and electronic funds flow both to and from Afghanistan and Pakistan, the vast majority of which is derived from legitimate trade and remittances. However, there is no doubt about UAE connections to Taliban finance. Available information indicates three main avenues of financial flows: 1) Taliban funds raised in the UAE, 2) Taliban finance (either physical or electronic funds) transiting the UAE into Afghanistan, and 3) Taliban funds from Afghanistan and Pakistan entering the UAE legally or illegally. Given UAEG oversight of the formal financial sector, significant transfers are likely facilitated by cash couriers. Smaller amounts may also be diverted via hawala or charitable donations (reported septel).
DRUGS
--------------
6. (C) DEA believes over USD 2 billion in drug proceeds has transited through the UAE over the last three years. Millions are being carried by couriers through Dubai Airport every couple of days, often declared to UAE authorities per UAE law. (Note: Cash declarations are required for amounts exceeding AED 40,000/USD 10,900. End Note.) These funds are often transferred to registered trading companies in Dubai based on false purchase invoices for good exports to Afghanistan (e.g., trade based money laundering). Funds are then transferred on to third countries, including the United States.
UAE RESPONSE
--------------
7. (S/NF) UAE officials have repeatedly stated they are committed to disrupting terrorist financing, particularly Taliban-related funds. UAEG oversight of the formal financial sector is capable of addressing terror finance threats, with sufficient anti-money laundering and terrorist financing laws on the books. The Central Bank has frozen Taliban monies in the past, and has asked for additional names so that it may search for and freeze Taliban-related accounts (Ref B). The legal framework exists to seize declared or undeclared funds carried by cash couriers. The UAE Central Bank reports it is currently adding a requirement for outbound cash declaration.
8. (S/NF) However, the UAE's ability to identify and investigate cash couriers without detailed lead information is limited. UAE efforts are hindered by weak investigatory mandates and capacity. When incoming funds are declared, officials are reluctant to seize and investigate unless they are in possession of intelligence showing Taliban links. Specialized financial crimes prosecutors and judges/courts would likely support greater UAE activism, and the UAE is taking steps to develop such expertise.
9. (S/NF) More broadly, the global financial downturn and Afghan investment in property sector are complicating factors in our effort to disrupt illicit flows, as local liquidity remains limited. Afghan corruption and the involvement of senior government officials in drug trade also hinder US and UAE ability to combat illicit finance, as lines between Taliban, drug trade and government are blurred. It is therefore key that Afghan government capacity to intercept financial flows to the Taliban is developed concurrently.
ACTION PLAN
--------------
10. (S/NF) Senior UAE officials are aware of USG concerns and have expressed their commitment to disrupting Taliban financial flows. Mission UAE is working closely with Washington counterparts to strengthen UAEG efforts through three main short-term initiatives:
-- Mission UAE (Embassy Abu Dhabi and ConGen Dubai) will continue interagency coordination on this key topic.
-- At the UAEG's suggestion, we have established a joint Task Force and will meet for the first time on September 7. DHS is prepared to offer Bulk Cash Smuggling operational training for federal and local customs, police and prosecutors.
-- DEA-Dubai hosted Afghan counter-narcotics officials for meetings with their UAE counterparts the week of August 16, part of an ongoing effort to encourage UAE efforts to disrupt drug and financial flows to and from Afghanistan through information sharing.
-- Multiple agencies are working to downgrade available intelligence on Taliban financial flows to share with UAEG authorities, and UAE security services will host an analytic exchange with Treasury and GRPO officers to review the information in early October.
More broadly, we will continue to focus on two major objectives:
-- First: dealing with structural elements that allow money to flow from the UAE to Afghanistan and Pakistani Border Areas. Essentially, this means getting the UAE to carry out randomized searches for excessive amounts of cash, with a particular focus on flights to South Asia.
-- Second: building on our very successful programs of cooperation on Counter-Terrorism and Counter-Proliferation, we need to develop the ability to pass actionable intelligence to UAE authorities (through intell channels) so that they can disrupt activities, and as appropriate, detain key financiers. Much of the onus will be on us to provide actionable tear lines, much as we do in other areas of cooperation.
11. (S/NF) The following offices/agencies participated in the August 24 meeting:
-- Embassy Abu Dhabi: A/DCM, DAO, DHS, DOJ-OPDAT (RLA),ECON, GRPO, Treasury, and USLO.
-- Consulate General Dubai: DPO, ECON, DEA OLSON
OLSON
NOFORN
SIPDIS
DEPARTMENT FOR SRAP, SCA, NEA/FO, NEA/ARP (MCGOVERN),S/CT AND INR
E.O. 12958: DECL: 08/30/2019
TAGS: EFIN PTER PGOV PINR PK AF AE
SUBJECT: THE UAE AND TALIBAN FINANCING: Our Analysis and Action Plan
REFS: A) ABU DHABI 845
B) ABU DHABI 735 (NOTAL)
ABU DHABI 00000877 001.2 OF 002
CLASSIFIED BY AMBASSADOR RICHARD OLSON FOR REASONS 1.4 (B AND D).
1. (S/NF) SUMMARY: Given the UAE's open financial system, sizeable sub-continent immigrant community and significant legitimate financial flows between the two countries, it comes as no surprise that Taliban financing originates in and transits the UAE to Afghanistan and third countries. Afghan drug proceeds, including laundered funds, both transit the UAE and are invested here. Cash couriers are believed to carry the majority of illicit funds to and from Afghanistan. While the UAE legal framework is adequate at least at the outset, investigatory capacity is particularly limited. Multiple Mission agencies are increasing engagement with the UAEG to disrupt Taliban financing.
2. (S/NF) The UAE views its cooperation with the U.S. on Afghan issues through the prism of its military deployment to Afghanistan. (Note: The UAE is the only Gulf country with combat troops fighting alongside U.S. forces in Afghanistan. In this role, UAE troops have been in combat with Taliban and taken casualties. End Note.) As a result, UAE officials can be incredulous when accused of not taking seriously the problem of Taliban finance. One particular frustration expressed by senior Emirati officials is that the US has shared scant actionable intelligence on Taliban financing in the UAE.
3. (S/NF) Following up on UAE commitments made to Treasury A/S Cohen, the first meeting of the US-UAE Cash Courier Task Force (Ref A) will be on September 7 to discuss training and operations to target and intercept Taliban cash couriers. DEA is developing partnerships between UAE and Afghan authorities to combat drug smuggling and related money laundering. We are also working with Washington agencies to downgrade intelligence information to share with the UAEG. UAE security services will host a Taliban finance analytic exchange with Treasury and GRPO intelligence officials in early October. END SUMMARY.
4. (SBU) This message is a Country Team Assessment.
THE PROBLEM
--------------
5. (S/NF) On August 24, an interagency group of EmbOffs met to coordinate efforts to combat illicit financial flows between the UAE and Afghanistan and Pakistan. High volumes of cash and electronic funds flow both to and from Afghanistan and Pakistan, the vast majority of which is derived from legitimate trade and remittances. However, there is no doubt about UAE connections to Taliban finance. Available information indicates three main avenues of financial flows: 1) Taliban funds raised in the UAE, 2) Taliban finance (either physical or electronic funds) transiting the UAE into Afghanistan, and 3) Taliban funds from Afghanistan and Pakistan entering the UAE legally or illegally. Given UAEG oversight of the formal financial sector, significant transfers are likely facilitated by cash couriers. Smaller amounts may also be diverted via hawala or charitable donations (reported septel).
DRUGS
--------------
6. (C) DEA believes over USD 2 billion in drug proceeds has transited through the UAE over the last three years. Millions are being carried by couriers through Dubai Airport every couple of days, often declared to UAE authorities per UAE law. (Note: Cash declarations are required for amounts exceeding AED 40,000/USD 10,900. End Note.) These funds are often transferred to registered trading companies in Dubai based on false purchase invoices for good exports to Afghanistan (e.g., trade based money laundering). Funds are then transferred on to third countries, including the United States.
UAE RESPONSE
--------------
7. (S/NF) UAE officials have repeatedly stated they are committed to disrupting terrorist financing, particularly Taliban-related funds. UAEG oversight of the formal financial sector is capable of addressing terror finance threats, with sufficient anti-money laundering and terrorist financing laws on the books. The Central Bank has frozen Taliban monies in the past, and has asked for additional names so that it may search for and freeze Taliban-related accounts (Ref B). The legal framework exists to seize declared or undeclared funds carried by cash couriers. The UAE Central Bank reports it is currently adding a requirement for outbound cash declaration.
8. (S/NF) However, the UAE's ability to identify and investigate cash couriers without detailed lead information is limited. UAE efforts are hindered by weak investigatory mandates and capacity. When incoming funds are declared, officials are reluctant to seize and investigate unless they are in possession of intelligence showing Taliban links. Specialized financial crimes prosecutors and judges/courts would likely support greater UAE activism, and the UAE is taking steps to develop such expertise.
9. (S/NF) More broadly, the global financial downturn and Afghan investment in property sector are complicating factors in our effort to disrupt illicit flows, as local liquidity remains limited. Afghan corruption and the involvement of senior government officials in drug trade also hinder US and UAE ability to combat illicit finance, as lines between Taliban, drug trade and government are blurred. It is therefore key that Afghan government capacity to intercept financial flows to the Taliban is developed concurrently.
ACTION PLAN
--------------
10. (S/NF) Senior UAE officials are aware of USG concerns and have expressed their commitment to disrupting Taliban financial flows. Mission UAE is working closely with Washington counterparts to strengthen UAEG efforts through three main short-term initiatives:
-- Mission UAE (Embassy Abu Dhabi and ConGen Dubai) will continue interagency coordination on this key topic.
-- At the UAEG's suggestion, we have established a joint Task Force and will meet for the first time on September 7. DHS is prepared to offer Bulk Cash Smuggling operational training for federal and local customs, police and prosecutors.
-- DEA-Dubai hosted Afghan counter-narcotics officials for meetings with their UAE counterparts the week of August 16, part of an ongoing effort to encourage UAE efforts to disrupt drug and financial flows to and from Afghanistan through information sharing.
-- Multiple agencies are working to downgrade available intelligence on Taliban financial flows to share with UAEG authorities, and UAE security services will host an analytic exchange with Treasury and GRPO officers to review the information in early October.
More broadly, we will continue to focus on two major objectives:
-- First: dealing with structural elements that allow money to flow from the UAE to Afghanistan and Pakistani Border Areas. Essentially, this means getting the UAE to carry out randomized searches for excessive amounts of cash, with a particular focus on flights to South Asia.
-- Second: building on our very successful programs of cooperation on Counter-Terrorism and Counter-Proliferation, we need to develop the ability to pass actionable intelligence to UAE authorities (through intell channels) so that they can disrupt activities, and as appropriate, detain key financiers. Much of the onus will be on us to provide actionable tear lines, much as we do in other areas of cooperation.
11. (S/NF) The following offices/agencies participated in the August 24 meeting:
-- Embassy Abu Dhabi: A/DCM, DAO, DHS, DOJ-OPDAT (RLA),ECON, GRPO, Treasury, and USLO.
-- Consulate General Dubai: DPO, ECON, DEA OLSON
OLSON