(S) US-UAE Cooperation Against Taliban Finance Continues

S E C R E T SECTION 01 OF 03 ABU DHABI 000027

SIPDIS
NOFORN

E.O. 12958: DECL: 2035/01/24
TAGS: PGOV PREL PTER EFIN AF IR AE
SUBJECT: (S) US-UAE Cooperation Against Taliban Finance Continues

REF: 10 ABU DHABI 9

CLASSIFIED BY: Richard Olson, Ambassador, State Department, U.S.
Embassy Abu Dhabi; REASON: 1.4(B),(D)

STATE FOR S/SRAP, SCA, AND NEA/ARP

TREASURY FOR U/S LEVEY, A/S COHEN, DAS MENDELSOHN

CENTCOM FOR GEN PETRAEUS, GEN MCCHRYSTAL



AMB DCM POL ECON USLO DAO POLM




1. (C) This cable contains an action request for Treasury, DoJ and
FBI. See para 19.




2. (S/NF) Summary. On 11 January 2010 SRAP Ambassador Holbrooke and
Treasury Assistant Secretary David Cohen met with UAE State
Security (SSD) head Sheikh Hazza bin Zayed al Nahyan. On 12
January, Cohen met separately with Mohammed al Qemzi, head of
Dubai's security apparatus (GDSS). Holbrooke praised the UAE for
its substantial positive contribution in Afghanistan, in the form
of humanitarian, economic, political and military assistance.
Holbrooke and Cohen praised the UAE for its cooperation on bulk
cash smuggling programs, and its growing intelligence cooperation
on Af/Pak issues with GPRO and Treasury through liaison channels.
Sheikh Hazza and al Qemzi pledged support for USG led efforts to
disrupt the flow of funding to the Taliban and its associated
groups in Afghanistan and Pakistan.




3. (S/NF) Sheikh Hazza asked how the UAE could support the Taliban
reintegration program. Holbrooke pointed to the reintegration fund,
targeted to reach $500 million, with the UK and Japan taking the
lead. Holbrooke and Cohen were accompanied by Ambassador Olson in
Abu Dhabi, and Cohen was accompanied by CG Siberell in Dubai. End
Summary.




4. (S/NF) Sheikh Hazza opened by expressing his deep condolences
for the recent loss of CIA officers in Afghanistan stating "your
loss is our loss." He called for deeper cooperation between the
U.S. and UAE to bring stability in South Asia, and therefore the
UAE as well. Hazza pointed to Iraq, Yemen and Somalia, describing
the terrorist threat as "growing," with the whole neighborhood
around the UAE "hot and getting hotter." He said the UAE continues
to watch Iran closely and is concerned about the strengthening of
extremists inside the Iranian regime. Hazza expressed pride in the
trust built between the U.S. and the UAE, and welcomed deeper
cooperation on such mutual security interests.




5. (S/NF) Cohen stressed the importance of disrupting Taliban
financing that touches the UAE. He raised U.S. concerns about bulk
cash moving from Afghanistan to the UAE, some of which may stem
from drugs, corruption and/or Taliban interests. He praised the
UAE's cooperation with the Department of Homeland Security on
training and practical exercises targeting bulk cash smuggling
(BCS),and noted the importance of ultimately carrying out
practical exercises in Dubai.




6. (S/NF) Cohen recommended that the U.S. and the UAE extend their
existing cooperation on bulk cash to work together with the
Government of Afghanistan (GOA). Sheikh Hazza agreed that including
the GOA would be useful and offered to raise the issue with Abu
Dhabi Crown Prince Sheikh Mohammed bin Zayed al Nahyan.

ABU DHABI 00000027 002 OF 003



7. (S/NF) With respect to the movement of bulk cash, Dubai GDSS
head al Qemzi noted the heavy traffic loads at Dubai's
international airport. With 40 million passengers per year and 800
flights per days (all international) Dubai faces a significant
logistical challenge. He said that Dubai imposes random checks on
30-40% of incoming passengers for transporting of illicit items,
including undeclared bulk cash. (NOTE: Dubai airport x-rays every
bag entering the UAE looking for illicit items including undeclared
bulk cash. END NOTE.) But he said small amount of cash are
difficult to control and asked for advice from A/S Cohen on how the
U.S. handles this challenge.




8. (S/NF) Al Qemzi agreed that the UAE's failure to require
declarations on cash leaving the UAE constitutes a vulnerability.
GDSS considers outbound cash declarations an important tool to
detect and disrupt several types of crime, including terrorist
financing. He encouraged Cohen to press the issue with the Central
Bank. Even without a law, however, al Qemzi noted that GDSS can
still act if it has specific information.




9. (S/NF) Cohen pointed to the December 2009 visit by Treasury DAS
Mendelsohn and asked for an update on the lead information passed
by GPRO and Treasury identifying Taliban finance-related activity
in the UAE. In particular, Cohen noted that Taliban finance
officials Tayeb Agha and Mullah Jalil have made repeated visits to
the UAE; he queried about Dubai-based Afghan businessman Abdul
Bari, about whom GPRO and Treasury had passed information
indicating financial ties to the Taliban. He urged SSD and GDSS to
work with GPRO and Treasury to identify and disrupt Taliban finance
activity in the UAE. Holbrooke stated that more names and
intelligence would be forthcoming from the U.S. and stressed the
need for action and cooperation to put pressure on the money flow.




10. (S/NF) SSD head Sheikh Hazza stated that his service is working
with GPRO to target these people and the other names passed by GPRO
and Treasury. He pledged the cooperation of his service in
targeting this activity. GDSS head al Qemzi noted that the Taliban
finance information discussed during the December visit by
Mendelsohn is being handled through intelligence channels in
cooperation with GPRO and pledged to go after specific targets
"when we have them." Both Hazza and al Qemzi encouraged greater
information sharing through established GRPO liaison channels on
Taliban financing activity related to the UAE.




11. (S/NF) Sheikh Hazza asked Holbrooke to describe how Iran is
working toward instability in Afghanistan. Holbrooke explained that
Iran is playing a double game in Afghanistan. On the one hand, Iran
does not like the Taliban, but on the other hand Iran has sent
weapons into Afganistan for anti-coalition activity.




12. (S/NF) Al Qemzi stated that the UAE has been the most
aggressive country in the Gulf in confronting Iranian activity. He
recapped that the UAE has closed 42 Iranian front companies,
rejected scores of new Iranian companies, denied 500-600 Iranian
visas, and intercepted 30+ ships with dual use or WMD materials. He
praised the strong interagency team the UAE has put together and
its active role in the Port Security Initiative. He said the UAE
stopped opening new Iranian businesses three years ago. In
retaliation, the Iranian media has escalated negative press
campaigns against the UAE.

ABU DHABI 00000027 003 OF 003



13. (S/NF) Al Qemzi said that due to the UAE's efforts "we don't
see as much happening here." According to al Qemzi, Iranian media
reported that the IRGC is looking to open overseas in Macao,
Malaysia and Turkey because Dubai is "too difficult." Nonetheless,
he said the Iranians are still looking for loopholes in the UAE,
something they are very good at, and that Iranians still want to
take advantage of Dubai as a business and finance hub.




14. (S/NF) Al Qemzi asked about the laws and actions used to go
after Iranian front companies in the U.S. He requested that the
U.S. share all the names of companies and individuals with Dubai in
order to help Dubai protect itself. He specially noted the Alavi
Foundation, recently the target of U.S. law enforcement action.
Alavi, he said, had been used by Iran to fund U.S. NGOs and to
investigate and criticize human rights practices and stir up
trouble among the Gulf States, including the UAE. He requested that
the USG share whatever information it has on Alavi with GDSS,
including financial records.




15. (S/NF) Al Qemzi stated that GDSS detected that Iran was trying
to bring $5-10 billion in cash to the UAE, leave it in UAE banks
for 5 years, and then return it in euros (NFI). He said Iran was
trying to arrange this deal through a "powerful person."




16. (S/NF) Al Qemzi pledged continued cooperation against Iran, but
noted that the UAE cannot be openly hostile because of the UAE's
geographical proximity to Iran and the security threat it poses;
"we can act as long as no publicity."




17. (S/NF) Cohen passed al Qemzi information pertaining to North
Korean financial activity in Dubai. Al Qemzi reviewed the
information and noted that one of the identified entities, Green
Mountain Electronics, had closed down and moved to Malaysia. Al
Qemzi promised to gather all the details and pass them through GPRO
channels.




18. (S/NF) Al Qemzi raised the issue of Dubai's corruption
investigation targeting U.S. citizen Zack Shahin. He said Shahin
has admitted (NFI) sending funds to the U.S., and refused to
repatriate the money as it is "for his children's future." Al Qemzi
said the funds originate from corrupt activity and encouraged the
USG to cooperate with the investigation and respond to requests for
information from Dubai authorities. (Note: in March 2009, the UAE
Embassy in Washington submitted by diplomatic note to the
Department of State a request for "judicial assistance" regarding
the case against Amcit Shahin. End Note.)



ACTION REQUEST:




19. (S/NF) Embassy requests that Treasury, DoJ and FBI share with
GDSS all information possible regarding the Alavi Foundation,
including available financial records.
OLSON