BAHRAIN COMMITTED TO COUNTER TERROR FINANCE

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000365

SIPDIS

E.O. 12958: DECL: 06/17/2019
TAGS: EFIN PTER PREL IR BA
SUBJECT: BAHRAIN COMMITTED TO COUNTER TERROR FINANCE
COOPERATION

Classified By: CDA Christopher Henzel for reasons 1.4 (b) and (d)


1. (C) Summary. Treasury Deputy Assistant Secretary Daniel
Glaser met with GOB officials May 21 on the margins of the
annual MENAFATF meetings to discuss the pardon of convicted
terrorist financier Adil Amin, counter terrorist and
proliferation finance cooperation in regard to Iran, and the
coordination of an Islamic charities/counter terror finance
(CTF) conference to be held in Manama. End Summary.

Adil Amin
--------------


2. (C) Glaser told Minister of Justice Sheikh Khalid bin Ali
Al Khalifa and MFA Assistant Under Secretary Sheikh Abdulaziz
bin Mubarak Al Khalifa that the USG was considering
designating Adil Amin as a terrorist financier under U.S.
executive authorities and submitting his name to the UN for
designation under UNSCR 1267. Both Sheikh Khalid and
Abdulaziz welcomed the idea and noted that Bahrain is
committed to upholding UN Security Council Resolutions under
Chapter VII authority. Glaser asked whether it would be
helpful to have an international designation when the GOB
takes action against terrorist networks. Sheikh Khalid
responded stating that an international designation would
serve to reinforce Bahraini actions, such as the one taken
against Amin. He went on to explain that the pardon was done
for POLITICAL and strategic reasons and should not be
construed as a softening of the GOB approach to CTF issues.
Noting that Amin will remain under close observation, he
stated that sometimes a pardon is used to balance "the threat
that a person poses out of prison, and the potentially larger
threat that they pose as a martyr." Minister of Finance
Sheikh Ahmed bin Mohammed Al Khalifa later told Glaser that
the GOB was under constant pressure from sectarians in
parliament and in society to become more Islamist, and that
it is "constantly fighting to keep Bahrain in the middle."

Iran
--------------

3. (C) In his meeting with the Minister of Finance, Ahmed bin
Mohammed Al Khalifa, Glaser reaffirmed the USG dual-track
diplomatic strategy of using both engagement and pressure to
contain Iran. Glaser also asked Sheikh Ahmed for his views
on the Iran's foreign reserves held in Bahrain. Explaining
the need for a cordial relationship with Iran as neighbors,
the Minister said that the GOB does not want "much beyond
that" and that from the GOB's perspective, the amount of
Iranian foreign reserves in Bahrain is small. Sheikh Ahmed
also noted that the Central Bank of Bahrain monitors Future
Bank, a U.S.-designated entity, closely and that there has
not been activity to warrant closure but that Bahrain has the
authorities to act against the bank if the situation
warranted. Recounting the strong trade relationship that
Bahrain had with Iran in the 1980s, Sheikh Ahmed said that
those times were over and Bahrain does not look towards Iran
for a market. He stated that although the business
opportunities with Iran are huge, there would be "associated
things that we would not want to deal with."


4. (C) In his meeting with MFA Assistant Under Secretary
Sheikh Abdulaziz bin Mubarak Al Khalifa, Glaser highlighted
current U.S. diplomatic strategy and the February 2009
Financial Action Task Force statement on Iran, which calls
for counter-measures. Abdulaziz told Glaser that Bahrain has
little leverage with Iran, but backs the U.S. approach. "In
Bahrain, you are preaching to the converted--we are already
standing firm." Adding that he thought the UAE and Oman need
to do more, Abdulaziz said "they have a cozy relationship
(with Iran) and it worries us." Glaser replied by noting
that the USG is heavily engaged with the UAE on this issue.
Abdulaziz observed that Iran is in a "desperate situation"
and is ready to sit down to the negotiating table, concluding
that the Iranian government is only ratcheting up the
rhetoric now because they feel it puts them in a position of
strength for negotiations.


Charities Conference
--------------

5. (C) Abdulaziz told Glaser that the MFA was prepared to
host a regional CFT/Charities conference in conjunction with
MENAFATF and the Treasury Department at the end of October.
He said that just as Bahrain had established itself as the
worldwide model for Islamic banking oversight, the GOB wants
Bahrain to become the worldwide model for Islamic charities
oversight, stating that "it is important that the money go to
legitimate purposes." Despite the fact that the conference
will be "controversial within the Shi'a community," Abdulaziz

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stated that the GOB was committed to holding the conference
even if it means "going out on a limb." Justice Minister
Sheikh Khalid also expressed strong interest in this
conference, explaining that the GOB is working to enhance
oversight of its charitable sector and that "money needs to
go where the donor intends it."


6. (U) Deputy Assistant Secretary for Treasury Terrorist
Financing and Financial Crimes Daniel Glaser has cleared this
message.

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Visit Embassy Manama's Classified Website:
http://www.state.sgov.gov/p/nea/manama/
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HENZEL