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Diana T Fritz  05/24/2007 04:54:37 PM  From  DB/Inbox:  Search Results

Cable 
Text:                                                                      
                                                                           
      
CONFIDENTIAL

SIPDIS
TELEGRAM                                           March 10, 2003


To:       No Action Addressee                                    

Action:   Unknown                                                

From:     AMEMBASSY ABU DHABI (ABU DHABI 1128 - UNKNOWN)         

TAGS:     EFIN, ETTC, PREL, PGOV                                 

Captions: None                                                   

Subject:  NEED TO RESOLVE ARBIFT ISSUE SOONEST                   

Ref:      None                                                   
_________________________________________________________________
C O N F I D E N T I A L        ABU DHABI 01128

SIPDIS
CXABU:
    ACTION: ECON 
    INFO:   DCM POL P/M AMB 
Laser1:
    INFO:   FCS 

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: AMB:MMWAHBA
DRAFTED: ECON:TEWILLIAMS
CLEARED: DCM:RAALBRIGHT

VZCZCADI869
OO RUEHC RUEATRS RUEHZM RUEAWJA RHEHNSC
DE RUEHAD #1128/01 0690855
ZNY CCCCC ZZH
O 100855Z MAR 03
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8749
INFO RUEATRS/TREASURY DEPT WASHDC IMMEDIATE
RUEHZM/GCC COLLECTIVE
RUEAWJA/DOJ WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001128 
 
SIPDIS 
 
STATE FOR E - USEC ALAN LARSON, EB - A/S TONY 
WAYNE, NEA/FO, NEA/ARP - JONES AND HEFFERNAN, 
NEA/RA - GRAPPO AND SUTPHIN, EB/ESC/ESP AND INL/C - 
CASSARA 
TREASURY FOR OGC - AUFHAUSER 
TREASURY ALSO FOR NILMINI GUNARATNE 
TREASURY PASS OFAC FOR NEWCOMB 
DOJ FOR TED GREENBERG 
NSC FOR JOSEPH MYERS 
 
E.O. 12958: DECL: 03/10/07 
TAGS: EFIN ETTC PREL PGOV LY TC
SUBJECT: NEED TO RESOLVE ARBIFT ISSUE SOONEST 
 
REF:  A) 02 ABU DHABI 5714 (NOTAL) 
 
      B) ABU DHABI 3406 
 
¶1.  CLASSIFIED BY AMBASADOR MARCELLE M. WAHBA FOR 
REASONS 1.5 (B,D). 
 
¶2. (C)  SUMMARY AND COMMENT:  That OFAC continues 
to hold more than than 120 million USD which 
belongs to the UAE is a matter which we need to 
resolve soon.  De facto Foreign Minister Hamdan bin 
Zayid raised the matter in the context of last 
Fall's bilateral Strategic Dialogue, and our 
strongest partner here in the Global War on 
Terrorist Financing, UAE Central Bank Governor 
Sultan bin Nasser Al-Suweidi, has on several 
occasions noted that our lack of response on this 
key issue is incomprehensible to the UAE leadership 
given their strong cooperation across the board in 
the GWOT -- the Governor has explicitly stated that 
our lack of action reduces his credibility and 
capacity to advocate for even closer partnership 
with us on terrorist financing issues.  The Arab 
Bank for International Finance and Trade (ARBIFT) 
has since the early 1990s been listed by OFAC as a 
Specially-Designated National of Libya (SDN), 
because of Libya's 42.5 percent equity stake in the 
bank (the UAE owns 42.5 percent and Algeria 15 
percent).  The funds seized by OFAC, however, are 
almost all payments to or from UAE entities -- no 
Libyan money is involved at all. 
 
¶3.  (C)  In an effort to remove the SDN status, the 
UAEG has already replaced the Libyan General 
Manager -- effectively eliminating any Libyan role 
in the day to day running of the bank -- and 
developed a UAE-focused business plan which leaves 
no role for Libya.  Al-Suweidi says the UAE will 
oust the last vestige of Libyan influence, the 
Chairman of the Board, at the next Board meeting 
this Spring.  The UAE will then be prepared to 
dilute Libyan equity in the Bank, but notes that 
nobody will buy shares as long as OFAC designation 
tarnishes the reputation of the bank and prevents 
any dollar-denominated business.  The Emiratis seek 
an agreement whereby the SDN status is lifted in 
return for their written commitment to 
substantially lower, or eliminate, Libyan equity. 
We believe the time has come to end this long- 
running bilateral irritant -- it is no longer 
consonant with our partnership with the UAE, 
particularly on terrorist financing issues.  We 
would ask that the Department engage actively with 
the appropriate authorities to move this matter to 
a satisfactory resolution.  END SUMMARY AND 
COMMENT. 
 
¶4.  (C)  Central Bank Governor Sultan bin Nasser 
Al-Suweidi told Econchief March 8 that the UAE 
plans to replace the Libyan Chairman of the Board 
of the Arab Bank for International Finance and 
Trade (ARBIFT) at the next board meeting scheduled 
for later this Spring.  Al-Suweidi said this 
approach had already been approved and coordinated 
with de facto Finance Minister Dr. Muhammad Khalfan 
bin Khirbash, and reflected an ongoing effort by 
the UAE to ensure that the Libyan role in managing 
and overseeing ARBIFT is eliminated.  The UAE, the 
Governor noted, had earlier removed the Libyan 
responsible for day to day management of the bank 
and replaced him with an Emirati. 
 
¶5.  (C)  According to Al-Suweidi, discussions with 
OFAC Director Richard Newcomb on the margins of 
last November's bilateral Strategic Dialogue in 
Washington had given the UAE hope that it might be 
possible to reach a settlement of the long-running 
ARBIFT issue.  (Note:  The bank has been listed by 
the USG as a Specially-Designated National (SDN) of 
Libya since the early 1990s owing to Libya's 42.5 
equity share -- the UAE also owns 42.5 percent and 
Algeria the rest.  More than 120 million usd of the 
bank's assets are currently frozen in the U.S.  End 
Note.)  The UAE approach will be to remove any 
Libyan involvement in running the bank (this has 
already been done but for the largely symbolic move 
of replacing the Libyan Board Chairman), and to 
then present OFAC with an action plan or draft MOU 
whereby the USG would drop the SDN listing in 
return for an agreement by the UAEG to dilute 
substantially or entirely Libya's stake in the 
bank.  Al-Suweidi observed that the UAE recognizes 
that it must take the next step on ARBIFT before 
approaching OFAC again; that said, he hoped that 
positive action by the UAEG would receive fair 
consideration from the USG. 
 
Wahba