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Diana T Fritz  08/28/2006 04:27:19 PM  From  DB/Inbox:  Search Results

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S E C R E T        ABU DHABI 03346

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

DISSEMINATION: AMB
CHARGE: PROG

APPROVED: AMB:MJSISON
DRAFTED: FCS:MEOBRIEN
CLEARED: ECON: OJ, CGD:JD, DHS/ICE:WW, PM:ME

VZCZCADI712
PP RUEHC RUEHAM RUEHIL RUEHDE RHEBAAA RUEAIIA
RHEHNSC RUCPDOC RUEAHLC
DE RUEHAD #3346/01 2121222
ZNY SSSSS ZZH
P 311222Z JUL 05
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC PRIORITY 0914
INFO RUEHAM/AMEMBASSY AMMAN PRIORITY 0579
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 1422
RUEHDE/AMCONSUL DUBAI PRIORITY 5278
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEAHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC PRIORITY

S E C R E T SECTION 01 OF 04 ABU DHABI 003346 
 
SIPDIS 
 
STATE FOR NP/T, NP/CBM, NP/ECC, NEA/ARPI 
USDOC FOR BIS/US, BIS/OIP, BIS/EE/AS 
AMMAN FOR EXBS ADVISOR JIRVINE 
NSC FOR MAUREEN TUCKER 
DOE FOR DAVE HUIZENGA 
DHS/ICE FOR STRATEGIC INVESTIGATIONS 
 
E.O. 12958: DECL: 07/31/2015 
TAGS: ETTC KNNP PREL PARM TC
SUBJECT: STATUS OF UAE EXPORT CONTROLS 
 
REF: A. ABU DHABI 3068 
     ¶B. ABU DHABI 510 
     ¶C. 04 ABU DHABI 4365 
     ¶D. 04 ABU DHABI 4060 
     ¶E. PARIS 4977 
 
Classified By: AMB MICHELE J SISON FOR REASONS 1.4 (b) AND (d) 
 
¶1. (C) Summary:  The issue of export controls in the UAE has 
been raised in a number of contexts recently, including 
during the recent MTCR outreach mission to the UAE (Refs A 
and E) and FTA negotiations between the US and the UAE.  This 
message reviews the status of export controls in the UAE as 
well as US-UAE export control cooperation.  In spite of 
numerous State, USDOC, and DHS efforts from 2001 onward 
focused on UAE federal and emirate level training and 
outreach, the UAE still does not have an export control 
system resembling those of members of the international 
control regimes.  There is no federal or emirate level 
legislation establishing export controls and no national 
control list based on the multilateral export control regimes 
identifying items controlled for export.  There are certain 
laws, including the UAE anti-terrorism law enacted in 2004, 
that restrict the import, possession and transportation on 
aircraft of radiological materials, certain chemicals, 
certain biological substances and traditional firearms. 
However, there is currently no UAE federal bureaucracy to 
oversee the implementation of an export control effort. 
There is, however, strong concern at the highest levels of 
the UAEG and in Dubai that proliferators have in the past and 
could yet be utilizing the UAE,s free trade environment to 
engage in proliferation-related transshipment.  Embassy 
supports and encourages a visit from a senior USG official to 
help us deliver a strong message encouraging the UAE to 
establish an effective export control system.  End Summary. 
 
--------------------------------------------- -------- 
STATUS OF UAE EXPORT CONTROLS 
--------------------------------------------- -------- 
 
¶2. (C) The UAE does not have a specific export control law on 
the books.  High level UAEG officials have expressed their 
concern that proliferators have taken advantage of the UAE,s 
free trade environment and have voiced their commitment to 
implementing an export control system to stop these 
activities.  In December 2004, the UAEG made its UN 1540 
declaration that it had certain restrictions on trade in 
radiological, chemical and biological items.  The UAEG also 
said it expected to enact export control legislation in the 
near future.  The USG provided a draft legal template in 
early 2004, which the UAEG could use in drafting its own law. 
 Former Assistant Secretary John Wolf in March 2004 and 
former Under Secretary John Bolton in January 2005 weighed in 
on export controls, as did former Commerce Under Secretary 
Ken Juster in January 2004.  In addition, the Ambassador and 
other members of the country team regularly engage with the 
UAEG on the issue.  The draft law, however, still appears to 
be "stuck in committee" with interagency/inter-emirate 
disagreement over which agency should be responsible for 
overall lead of the issue. 
 
¶3. (C) The UAE has laws in force which restrict the import 
and export of firearms, ammunition and explosives.  There are 
severe penalties for the use of biological substances to harm 
people or animals.  In addition, UAE civil aviation law 
prohibits the transfer by aircraft of explosives, 
pyrotechnics, firearms, radiological materials, chemicals, 
and certain biological materials.  The UAE's 2004 
anti-terrorism law criminalizes the import of weapons of mass 
destruction and WMD-related components.  The UAE remains a 
major transshipment hub, and it is not clear the WMD 
provision would apply to goods in transit. In addition, the 
thrust of this legislation is to deter terrorism and might 
not be applicable in the instance of another nation (vice a 
terrorist group) seeking to acquire WMD capability.  While 
the law could conceivably cover certain multilaterally 
export-controlled items, the UAE has not yet defined what 
&WMD)related components8 would include.  Furthermore, the 
UAE has not yet adopted a national control list of items that 
would be controlled for export.  Ministry of Interior 
officials told us that they used the provisions of the 
anti-terrorism law to arrest Pakistani national Osman Saeed 
and seize his assets after we provided them with information 
that he had diverted U.S. Munitions List items to Pakistan 
(Ref C). 
¶4. (C) The UAEG has not identified a lead organization with 
responsibility for export controls.  Some UAE officials have 
characterized the Federal Customs Authority (FCA) as the 
agency that has the main responsibility for regulating the 
import and export of items from the UAE (Ref E).  Embassy,s 
experience is that the FCA, which is largely a coordinating 
body, does not have the resources or sufficient influence, at 
the federal or emirate level, to establish and implement an 
effective export control system.  The director of the FCA has 
told us that the issue of export controls is being 
spearheaded by the Ministry of Foreign Affairs.  It is true 
that post,s main interlocutor regarding export controls is 
the MFA's U/S, but in private conversations he has described 
the export control process as &stalled8 due to concerns 
among the emirates that such an effort could hinder trade. 
Our understanding is that an unfinished draft export control 
law is at the Ministry of Justice's technical committee, and 
that there are interagency/inter-emirate issues that have 
prevented it from moving forward. 
 
--------------------------------------------- --------- 
RECAP OF U.S.-UAE EXPORT CONTROL COOPERATION 
--------------------------------------------- --------- 
 
¶5. (U) In 2001, the USG -- in consultation with the UAEG -- 
developed an export control cooperation plan, setting forth a 
multi-year plan of workshops, seminars and exchanges, to 
assist the UAE in establishing an export control system.  The 
UAEG agreed to this plan.  The US and UAE participated in 
executive exchanges in 2001 and 2002.  In December 2002, 
Commerce,s Bureau of Industry and Security posted an export 
control officer in the UAE to conduct end-use checks and 
focus on export control cooperation.  The Department of 
Commerce led a legal seminar in late 2003 and a control list 
workshop in April 2004. 
 
¶6. (C) In early 2004, the US provided the UAE with a template 
for an export control law in both English and Arabic.  The 
Department of Homeland Security led a WMD awareness program 
in December 2003 and training programs for UAE customs 
officials in 2004.  The UAE sent delegations to international 
transshipment conferences in Barcelona in 2002, Sydney in 
2003, and Malta in 2004.  Due to what post saw as a lack of 
progress in UAEG efforts to enact export control legislation, 
a second Commerce-led legal seminar was held in October 2004 
with the aim of reinvigorating the process.  The overwhelming 
reaction from US participants in the seminar was that the UAE 
was very far away from establishing an export control system. 
 
 
¶7. (C) Embassy believes that future sessions of the export 
control action plan depend on the existence of a control list 
and the establishment of a bureaucracy for actually 
controlling exports ) license processing, product 
identification, effective enforcement, and 
industry-government outreach.  (Comment: The UAE has always 
been eager to accept training, seminars, and workshops in 
export control cooperation.  Training is useful.  However, 
Embassy is concerned that such events could be contributing 
to distracting the UAE from the urgent business of 
establishing an underlying export control program. End 
Comment.) 
 
------------------------------------------ 
OPERATIONAL CAPABILITIES 
------------------------------------------ 
 
¶8. (U) Recent figures announced by Dubai trade officials 
indicate that Dubai is responsible for 73% of all 
transshipment trade in the UAE.  Transshipment in the UAE 
includes both transit and re-export, the latter of which 
appears to be the more common method of diverting controlled 
items through the UAE:  most diverted items are addressed to 
a company in the UAE and then re-exported after receipt. 
 
¶9. (U) In order to process the vast amount of trade coming in 
and going out of the ports in Dubai, the Dubai Ports, Customs 
and Free Zone Corporation has a modern and sophisticated 
cadre of customs officials responsible for ensuring accurate 
tariff collection and the interdiction of contraband, such as 
alcohol, pornography, drugs, counterfeit software, etc. 
Dubai Customs has all the requisite container inspection 
equipment and uses it on a regular basis.  The information 
systems capability of Dubai Customs is very efficient and 
there is an ongoing program to keep these systems at the 
highest level.  Dubai Customs does not, however, conduct 
investigations regarding violations of customs laws, 
referring such cases to the Dubai Police. 
 
¶10. (C) The Dubai Ports Authority has signed on to both the 
Department of Homeland Security,s Container Security 
Initiative and The Department of Energy,s Megaports 
Initiative.  Dubai authorities told the visiting MTCR 
outreach team last month that they have established an 
interagency Counterproliferation Task Force (Ref E). 
However, Embassy has yet to identify a point of contact 
within the UAEG for this task force. 
 
¶11. (C) The other emirates have their own customs services, 
which are significantly less sophisticated than that of 
Dubai.  Sharjah has a not-insignificant record of diversions, 
including Osman Saeed,s diversion of controlled missile 
technology uncovered just last December, and does not have 
comparable resources to Dubai.  Abu Dhabi Customs is also 
somewhat less sophisticated than Dubai, but admittedly tracks 
significantly less non-oil trade.  There is always the 
concern that as enforcement becomes more aggressive in Dubai, 
proliferators will move to other locales within and without 
the UAE to set up their networks. 
 
-------------------------------------- 
LAW ENFORCEMENT COOPERATION 
-------------------------------------- 
 
¶12. (S) The UAEG has been cooperative in some aspects of 
detecting and interdicting proliferation goods.  The UAEG has 
returned and/or detained shipments at the USG,s request. 
The UAEG has also closed a number of Dubai companies for 
improper actions.  The challenges are great, however.  It 
should be noted that end use checks performed by BIS and 
State have uncovered several very recent attempts by private 
entities to evade US export laws by providing false end user 
certificates ostensibly showing an end use in the UAE for the 
purchase of controlled commodities that were actually headed 
elsewhere (including Iran). 
 
----------------------------- 
FREE TRADE AGREEMENT 
----------------------------- 
 
¶13. (C) The UAEG recently raised the issue of the U.S. policy 
on approving export licenses for the UAE in free trade 
agreement negotiations.  The UAE side was seeking a more 
favorable licensing policy for technology transfer to 
entities in the UAE.  USTR negotiators reminded the UAE 
delegation that without an export control system in the UAE 
it would be difficult to move to a more favorable licensing 
policy for the UAE.  (Comment:  Embassy does not/not support 
formally putting an export control chapter in the FTA, as it 
could well open the door to continued UAEG requests to add 
other, unrelated chapters, such as visas and movement of 
persons that the USG cannot agree to.  However, the USG side 
should -) and must -- continue to emphasize that a robust 
export control system is a top USG-wide priority.  End 
Comment.) 
 
------------------------- 
THE WAY FORWARD 
------------------------- 
 
¶14. (C) Embassy recommends that a senior USG official visit 
Abu Dhabi and Dubai to discuss nonproliferation and export 
control priorities.  This will help underscore Embassy,s own 
senior-level discussions on this issue as well as 
re-emphasize the message carried by former Assistant 
Secretary Wolf and former Under Secretaries Bolton and Juster 
 
SIPDIS 
in 2004 and early 2005. 
SISON