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DE RUEHAD #3537/01 2491446
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FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC 6839
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHAM/AMEMBASSY AMMAN 0675
RUEHAK/AMEMBASSY ANKARA 0423
RUEHEG/AMEMBASSY CAIRO 0926
RUEHYN/AMEMBASSY SANAA 1421
RUEHGB/AMEMBASSY BAGHDAD 0192
RUEHDM/AMEMBASSY DAMASCUS 0798
RHEHNSC/NSC WASHDC
RHEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHEFDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/CJCS WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUETIAA/DIRNSA FT GEORGE G MEADE MD
RHMFISS/FBI WASHINGTON DC
RHMFISS/HQ USCENTCOM MACDILL AFB FL
RUEILB/NCTC WASHINGTON DC 0005
RUEKJCS/SECDEF WASHDC

S E C R E T ABU DHABI 003537 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
STATE FOR NEA/ARP ABAGWELL, EB/ESC/TFS FOR DNELSON, KLEAHY, 
NEA/I FOR PEVANS, JHUNTER 
S/CT FOR TKUSHNER 
NSC FOR JZARATE, MMALVESTI, THINNEN 
TREASURY FOR DMCGLYNN, JROSS, KHECHT, RLOEFFLER 
OFAC FOR SZUBIN, WLANGFORD 
JCS FOR LTC GAVRILIS 
DOD FOR SALLEN 
USCENTCOM FOR PHOLTHAUS, RROTH 
DIA FOR JBYRNE 
CIA FOR PMUNOZ 
NSA FOR ACOOLEY 
FBI FOR WDAYHOFF 
DHS FOR MMIDDLETON, JGALLION 
 
E.O. 12958: DECL: 09/06/2016 
TAGS: PTER KTFN EFIN ETTC TC IQ
SUBJECT: ASSESSMENT OF UAE TERRORIST FINANCING ENVIRONMENT 
 
REF: A. SECSTATE 132693 
     ¶B. 2005 ABU DHABI 3565 
     ¶C. ABU DHABI 409 
     ¶D. 2005 ABU DHABI 4468 
     ¶E. 2005 ABU DHABI 4541 
     ¶F. 2003 ABU DHABI 3476 
     ¶G. 2004 ABU DHABI 1149 
     ¶H. ABU DHABI 2633 
 
Classified By: Ambassador Michele J. Sison for reasons 1.5 b and d. 
 
 ¶1. (SBU) Summary.  In response to ref A, Embassy's country 
team provides the following assessment of the 
terrorist/insurgent finance operating environment in the UAE. 
 Responses are keyed to reftel, to the extent possible.  End 
summary. 
 
Legal Regime 
------------ 
 
¶2.  (SBU) Question. What laws in your host country 
criminalize money laundering, terrorist financing and 
insurgent financing?  What are the penalties for violations 
of counter-terrorist/insurgent financing laws? 
 
(SBU) Answer. The two laws that serve as the foundation for 
the UAE's anti-money laundering (AML) and counter terror 
finance (CTF) efforts are the Anti-Money Laundering Law (Law 
No. 4/2002), and the Counterterrorism Law (Law No. 1/2004). 
Neither of these laws specifically addresses the issue of 
insurgent financing, but the language in the Counterterrorism 
Law can be interpreted to apply to insurgent financiers. 
Article 2 defines terrorism as "every act or omission where 
the offender commits himself to execute a criminal design, 
individually or collectively, with intention to cause terror 
between people or terrifying them, if the same causes breach 
of the public order or endangering the safety and security of 
the society or injuring persons or exposing their lives, 
liberties, security to danger (sic)..."  Article 12 
specifically criminalizes terrorist financing, "Whoever 
gains, provides, collects, carries or transfers property, 
directly or indirectly, with intention to be used or knows 
they are going to be used, in whole or in party, to financing 
any act terrorist acts provided in this Decree by Law within 
the State or abroad, whether the said act occurred or non 
occurred, shall be punished with life or provisional 
imprisonment.  And shall forfeit the property or possession 
subject of the offence and proceeds thereof or property 
equivalent to their value, if transferred or substituted in 
whole or in part of mixed with other property, gained from 
legal sources (sic)."  Additionally, Article 13 delineates 
the same penalties for any individual carrying, depositing, 
or transferring money or property with the intention of said 
funds being used to finance terrorism. 
¶3. (C) Question. What is the implementing mechanism for UNSCR 
1267, UNSCR 1617 and related UN resolutions? What legislation 
implements UNSCR 1483 and UNSCR 1518? 
 
(C) Answer. The Counterterrorism Law is also the implementing 
mechanism for all UN Security Council Resolutions relating to 
combating terrorism, although it does not specifically 
identify the resolutions.  Article 37 states that the UAE 
Counter Terrorism Committee is responsible for "follow(ing) 
up and enforc(ing) Security Council resolutions on combating 
terrorism and other international related resolutions in 
coordination with concerned bodies at the State."  Central 
Bank Governor Sultan Nasser Al-Suweidi has told Embassy 
officials that he pushed to have the law mention enforcing UN 
resolutions, in order to give him the authority to freeze 
accounts of persons designated by UNSCR 1267.  Although the 
UAE does not have a law specifically implementing UNSCR 1483 
or UNSCR 1518, which impose economic sanctions against 
designated officials of the former Iraqi regime, as a matter 
of course the Central Bank Governor freezes the assets of all 
individuals officially designated by the UN Security Council. 
 
¶4. (C) Question. What are the implementing mechanisms that 
bring the host country into compliance with the financial 
action task force's 40 9 recommendations?  Has the host 
country joined the MENA-FATF?  Has the host government 
established a financial intelligence unit capable of being 
accepted into the Egmont Group? 
 
(C) Answer. Administrative Regulation No. 24/2000 implements 
the Financial Action Task Force (FATF) 40 9 recommendations 
on money laundering and terrorist financing that relate to 
duties and responsibilities of financial institutions. 
Pursuant to the recommendations, banks and financial 
institutions (including the UAE's 106 money service 
businesses - MSBs) must maintain records of their customers 
(including copies of identification) and transactions, for as 
long as an account remains open and for five years after its 
closure, for the purpose of reconstructing transactions.  In 
concurrence with special recommendation (SR) VII, MSBs must 
verify identity and maintain transaction details (including 
name and address of originator and beneficiary) for all wire 
transactions over $545 (one of the lowest thresholds in the 
world).  The regulation also outlines types of transactions 
that could constitute money laundering and requires financial 
institutions to immediately report them to the Central Bank's 
financial intelligence unit, the Anti-Money Laundering and 
Suspicious Cases Unit (AMLSCU).  The AMLSCU has been a member 
of the Egmont Group since 2002, and the UAE is one of the 
founding members of the MENA-FATF. 
 
(C) In compliance with SR VI, the Central Bank issued a 
regulation in 2002 requiring hawala dealers (hawaladars) to 
register with the Central Bank.  As of August 16, 2005, the 
Central Bank had issued 190 licenses to hawaladars.  These 
registered hawaladars are required to submit records of every 
incoming and outgoing remittance to the Central Bank every 
quarter, and they are required to immediately report any 
suspicious transaction to the AMLSCU.  However, Embassy notes 
that this regulation is largely voluntary -- there are no 
sanctions for non-compliance imposed on hawaladars who do not 
register with the Central Bank. 
 
¶5. (SBU) Question. What other laws, regulations or legal 
procedures have been enacted to combat terrorist/insurgent 
financing? 
 
(SBU) Answer. On February 13, 2006, the UAE issued Law No. 2 
of 2006 on Cyber Crime.  Article 21 of this law states that 
anyone convicted of "setting up a website or publishing 
information for a terrorist group with intent to...promote 
their ideologies and finance their activities...shall be 
sentenced to no more than five years in jail."  Additionally, 
Article 19 criminalizes money laundering via "internet or 
other cyber means." 
 
¶6. (C) Question. Please describe the host country's laws 
and/or regulations covering freezing of assets, blocking of 
transactions and asset forfeiture/seizure. 
 
(SBU) Answer. Both the Anti-Money Laundering law and the 
Counterterrorism Law authorize the freezing and confiscation 
of assets, and they authorize forfeiture of assets if the 
suspect is convicted.  Article 31 of the Counterterrorism Law 
gives the overall authority to seize or freeze assets to the 
Attorney General's office that has jurisdiction over the 
case.  (Note: Although the federal penal code is applied 
throughout the country, the UAE has three judicial systems -- 
federal, Emirate of Dubai, and Emirate of Ras al Khaimah -- 
and thus three separate Attorney General offices. End note.) 
This article authorizes the Attorney General's office to 
order the investigation of activities that the Attorney 
General has "sufficient evidence to believe" are related to 
the funding or committing of a terror activity stated in the 
law, and the law stipulates that assets may remain frozen as 
long as the law enforcement case is pending.  Article 32 of 
the Counterterrorism law authorizes the Central Bank Governor 
to freeze accounts for up to seven days if he suspects the 
funds will be used to fund or commit any of the crimes listed 
in the law, but it stipulates that the Central Bank must 
provide evidence to the Attorney General for prosecution in 
order to maintain the freeze beyond seven days. 
 
(C) In practice, the Central Bank holds freezes longer than 
seven days, even if no evidence has been provided to the 
Attorney General.  The Central Bank Governor, Sultan Nasser 
Al Suwaidi, is proactive and would rather keep accounts 
frozen extra-judicially than to allow individuals access to 
suspect funds.  However, Central Bank officials have 
expressed frustration when the USG has asked the Bank to 
 
freeze funds but has not provided evidence that could be used 
in a court of law.  Central Bank officials have told us on 
multiple occasions they are concerned that courts could force 
them to release frozen assets based on a lack of evidence, 
which would seriously damage the credibility and 
effectiveness of the Central Bank. 
 
¶7. (C) Question.  Please describe the host country's 
reporting regime for suspicious financial activity and/or 
currency transactions. 
 
(SBU) Answer. Central Bank Regulation 24/2000 outlines the 
reporting regime for financial institutions.  This regulation 
requires banks, MSBs, finance companies, and any other 
financial institutions operating in the UAE to follow strict 
"Know Your Customer" guidelines.  Additionally, financial 
institutions must verify the customer's identity and maintain 
transaction details (including name and address of originator 
and beneficiary) for all MSB transactions over $545 and for 
all non-account holder bank transactions over $10,900. 
However, there is no minimum threshold for a transaction to 
be reported to the Central Bank via a "suspicious transaction 
report" (STR).  Instead, the regulation states that financial 
institutions must report to the AMLSCU any "unusual" or 
suspected money laundering transaction no matter the amount 
of the transfer. 
 
(C) The Central Bank Governor has repeatedly told USG 
officials that he stresses to financial institutions the 
importance of "quality" STRs, vice "quantity."  Between 
December 2000 and November 2005, the AMLSCU had received 3031 
STRs (of which, only 1105 came from banks and 170 from MSBs, 
with the rest being referred to the AMLSCU by "other UAE 
authorities" - i.e. the security services).  As a data point 
for comparison, the UAE Exchange (one of the UAE's largest 
MSBs), processes 25,000 transactions per day.  The head of 
Standard Chartered's Compliance office told Econoff that "the 
AMLSCU does not have the capacity to be inundated with STRs, 
so we ensure that every single STR we send is absolutely, and 
unquestionably, suspicious."  He also noted that Standard 
Chartered's compliance office conducts its own vigorous 
review of all transactions.  He said that Standard Chartered 
maintains all of the required paperwork and transaction 
records at the bank so that the Central Bank's examiners can 
examine them at any time, and he said that the compliance 
officers at other major UAE banks (such as Citibank, Lloyds, 
ABN-AMRO, and HSBC) do the same.  Technically, the Central 
Bank has the authority to impose administrative penalties on 
financial institutions that fail to report suspicious 
transactions, but since there is no minimum amount that is 
required to report, whether a given transaction should have 
generated an STR is subjective -- thus making it difficult 
for the Central Bank to claim that a financial institution 
was negligent in failing to report any given transaction. 
 
(C) The AMLSCU is an administrative, not an investigative 
unit.  If a person or business comes under suspicion, the 
AMLSCU can request the individual's or business' financial 
records from the UAE's 46 banks and 110 MSBs.  The AMSLCU 
will then analyze data based on the financial records and 
data in the AMLSCU's STR database.  The AMLSCU may then 
recommend that the Central Bank Governor either a) freeze the 
accounts, b) refer the case to law enforcement or the 
security services for investigation or further action, or c) 
take no further action. 
 
¶8. (SBU) Question. Please describe the host country's 
oversight of cross-border transactions, with particular 
attention to physical transfers of currency.  What laws and 
regulations, if any, require declarations of cash?  What is 
the minimum amount of cash that individuals are required to 
declare? 
 
(SBU) Answer. There is no limit for how much cash can be 
imported into the UAE; however in 2002, the Central Bank 
established a cash declaration requirement of 40,000 dirhams 
(approximately $10,900).  Travelers are supposed to fill out 
a declaration form and provide it to the customs authorities. 
 The form requests the traveler identify the purpose of the 
funds and provide his/her identification, contact, and travel 
details.  According to the cash import regulation, customs 
officers have the authority to seize undeclared cash.  Cash 
and travelers checks coming through shipments, postal 
parcels, or courier services are also subject to the 
declaration requirement. 
 
Implementation 
-------------- 
 
¶9. (S/NF) Question. Please describe in general terms the host 
country's level of administration and enforcement of 
counter-terrorist/insurgent financing measures.  What has the 
host country done to impede or disrupt mechanisms and 
networks of terrorist/insurgent finance?  What is the host 
country's de facto policy toward inhibiting support? 
 
(S) Answer.  The UAE -- and especially the Central Bank -- 
recognizes it would be detrimental to the UAE's reputation 
for terrorists or criminals to exploit the UAE's financial 
system.  As such, the Central Bank has implemented a number 
of laws and regulations to try to prevent the misuse of its 
financial sector, and widely publicizes its efforts in the 
UAE newspapers.  For example, the Central Bank noted in a 
press release announcing a joint US/UAE seminar on Cash 
Courier Operations on June 10th that "The seminar was held 
from the standpoint of the United Arab Emirates policy to 
exchange experience and technologies applied in friendly 
countries in combating all types of financial crimes...This 
is evident in the AMLSCU's 331 training programs, including 
conferences, seminars, and workshops in relation to 
encountering financial crimes, particularly money laundering 
and terrorism financing, till date (sic)."  Embassy country 
team assesses that the Central Bank often judges that passing 
laws and conducting training programs is a sufficient 
deterrent and makes the UAE less vulnerable to abuse by 
criminals and terrorist financiers.  The AMLSCU does not have 
the capacity or expertise to fully investigate suspicious 
activity, and the UAE's law enforcement and prosecutorial 
elements are not trained or pro-active in financial crimes 
investigations.  Even though the UAE's laws are very robust, 
Embassy country team assesses that the lack of enforcement of 
the laws makes the UAE's financial system vulnerable to abuse. 
 
(S/NF) To date, the security services have been the main 
element of the UAE to investigate and take action on terfin 
cases; however, we have seen little evidence that they are 
truly engaged on this issue.  Both the federal State Security 
Department (SSD) and Dubai's General Department of State 
Security (GDSS) have elements that work against the terfin 
target, and they are able to electronically monitor financial 
transactions flagged by the AMLSCU's database as suspicious. 
Additionally, the SSD has designated officials who work 
alongside the Central Bank's AMLSCU and in several of the 
UAE's semi-governmental charity organizations.  However, 
Embassy country team assesses that the primary intent behind 
the security services' activities is to ensure individuals 
and entities are not instigating or fomenting political 
dissent. 
 
¶10. (S) Question.  Which host government organizations are 
responsible for implementing the legislation, and how 
effective is their administration and enforcement? 
 
(S) Answer.  Many elements of the UAEG are responsible for 
administration and oversight of the UAE's anti-money 
laundering and counterterror finance laws.  The most visible 
element is the UAE Central Bank; however, it mainly issues 
regulations and oversees the financial sector.  The Ministry 
of Interior and state security departments are responsible 
for investigating cases.  The Ministry of Justice and the 
appropriate Attorneys General offices are responsible for 
coordinating any type of prosecution or legal action.  The 
UAE's various customs authorities are responsible for 
implementing the cash declaration requirement, and the 
Ministry of Economy oversees the UAE's security and 
commodities market. 
 
(C) The Central Bank Governor chairs the National Anti- Money 
Laundering Committee (NAMLC) that is charged with overseeing 
the UAE's national anti-money laundering policies and 
efforts.  Members include the Central Bank, the Ministries of 
Interior, Justice, Finance, and Economy, and the Federal 
Customs Authority.  There is also a National Counter 
Terrorism Committee that is comprised of officials from the 
Ministries of Foreign Affairs, Interior, Justice, and 
Defense, the SSD, the Central Bank, and the Federal Customs 
Authority.  These two committees do not meet on a regular 
basis, and they appear to be more policy-making bodies, 
rather than action-oriented task forces. 
 
(S) The Emiratis' clear preference for handling all types of 
terrorism cases (including those with a financial angle) is 
to deport the perpetrator, as opposed to prosecuting.  As 
such, the most active elements of the government are the 
Ministry of Interior, police, and security services.  The 
least active are the prosecutors.  Embassy country team 
assesses that the failure to prosecute is due to a lack of 
capacity and experience on the part of the prosecutors, and 
to a lack of will in the Ministry of Justice. 
 
¶11. (S/NF) Question.  Please describe any raids or arrests of 
significant terrorist/insurgent finance personalities.  Did 
those actions result in successful prosecutions, asset 
freezes/seizures, etc.? 
 
(S/NF) Answer.  Embassy is only aware of one terror finance 
related prosecution.  In a January meeting, Brigadier General 
Mohammed Al-Qemzi, director of Dubai's General Department of 
State Security, told Treasury U/S Levey that Emirati national 
Ali Sa'id Al-Kindi had been sentenced to a seven year 
imprisonment for supporting the Iraqi insurgency.  The courts 
sentenced Al-Kindi under the provisions of the 2004 
Counterterror law, but Al-Qemzi noted that the case had not 
been made public (ref C). 
 
(S/NF) The case of al-Qa'ida financier and Emirati national 
Salah Salim Mohammad Ghanim al-Shamsi has been an ongoing 
challenge for USG/UAEG terfin cooperation.  The GDSS detained 
Shamsi in 2003, and he served a combined 15 months in 
detention.  However, as Shamsi's activities pre-dated the 
UAE's 2004 criminalizing terrorist financing, the UAE claims 
it cannot prosecute him for his actions. According to the 
GDSS, Shamsi cannot leave the country, he has to report on a 
regular basis to an officer, he was forced to change his 
phone numbers so that his past associates cannot contact him, 
the license for his religious education center in Sharjah was 
cancelled, he cannot leave Dubai without permission of the 
GDSS, and he is not allowed to visit the bookstore he 
previously owned.  GDSS chief Mohammed Al-Qemzi told Treasury 
U/S Stuart Levey in January 2006 that he believes the 
provisions of Shamsi's parole are very "strict and severe" 
and that Shamsi is "suffering enough" (ref C).  In response 
to U/S Levey's recommendation to designate Shamsi in order to 
make an example of him, Al-Qemzi said he believed that 
imposing restrictions on Shamsi were more effective, because 
making his actions public could cause extremists to view him 
as a "hero." 
 
(S/NF) The USG is aware of one case where the UAE detained 
three foreign nationals involved terrorist-finance 
activities, at the request of another government.  The 
individuals were detained for several days, debriefed, and 
then deported.  In this instance, the UAEG did not share the 
results of their investigation with the USG, and none of them 
were ever taken to court for prosecution. 
 
¶12. (S) Question.  Have any assets been frozen/seized under 
either the UNSCR 1267/1617 or 1483/1518 sanctions regime?  Is 
host country willing and able to investigate and, if 
appropriate, act to freeze/seize assets based on information 
provided by the USG? 
 
(S) Answer.  The UAE Central Bank freezes accounts of any 
individual placed on the UN 1267 list.  Between 2000 and 
2005, the Central Bank froze seventeen accounts totaling 
$1,353,170 based on the UN 1267 list.  The accounts remain 
frozen to date.  Embassy is unaware of any accounts being 
frozen under UNSCR 1483/1518. 
 
(S) UAE law enforcement officials typically do not have the 
expertise or resources to conduct detailed financial 
investigations, and Central Bank officials claim that the 
AMLSCU cannot initiate an investigation or refer a case to 
law enforcement authorities unless there is evidence of 
illegal activity in the UAE (ref D).  Although the UAE has 
used information from the USG to justify asset freezes, over 
the past two years the Central Bank has become concerned that 
doing so makes it vulnerable to law suits.  As such, Central 
Bank officials now tell us they will freeze accounts only if: 
a) the account holder is listed on a UN list; or b) the USG 
request comes through formal legal channels via the MFA or 
Ministry of Justice (ref E).  (Note: This precondition set by 
the Central Bank has not yet been tested, as the USG has not 
requested the UAEG freeze any accounts since telling us of 
this new policy.  End note.)  Central Bank Governor 
al-Suweidi told Treasury U/S Stuart Levey in January that if 
an account holder is not designated by the UN, it is easier 
for the UAE to simply close accounts -- vice freezing them. 
¶13. (SBU) Question.  How, if at all, does host country 
prohibit persons located within its borders, as well as host 
country nationals wherever located, from providing funds and 
other financial assets and economic resources to 
UN-designated sanctions targets? 
 
(SBU) Answer.  The main way that the UAE prevents individuals 
from providing funds to UN-designated sanctions targets is by 
disseminating the list of UN-designated individuals to the 
financial institutions and requesting that they freeze the 
accounts of the designated individuals and entities. 
 
¶14.  (S) Question.  Please provide a current appraisal of the 
host government's fulfillment of UN obligations under UNSCR 
1483 to return to the Development Fund for Iraq (DFI) former 
regime assets located in host country. 
(S) Answer.  UAE authorities did not discover significant 
assets related to the former Iraqi regime.  In July of 2003, 
Central Bank Governor Al-Suweidi told Econchief that during 
Operation Desert Storm, the Central Bank had frozen a small 
sum of money belonging to Iraqi Airways, but that the UAEG 
had not yet transferred the assets to the Development Fund 
for Iraq (ref F).  Additionally, in April 2004, Embassy 
notified the UAEG that the USG intended to propose listing a 
UAE-based company (Al Wasl and Babel General Trading) to the 
UN 1518 Sanctions Committee (ref G).  In the summer of 2004, 
the UAE froze $43.5 million of Al Wasl and Babel's assets 
that the company held on behalf of the former Iraqi regime. 
As of late 2004, the Dubai Attorney General's Office was 
investigating the case, but Embassy has been unable to learn 
the status of the investigation.  Despite multiple requests 
to the Central Bank, Ministry of Foreign Affairs, and Dubai 
Attorney General's Office, Embassy is unaware whether the 
UAEG repatriated these assets to the Development Fund for 
Iraq. 
 
¶15. (C) Question.  Has the country team demarched the host 
government on repatriating Iraqi assets?  Has the government 
of Iraq demarched the host government on repatriating Iraqi 
assets? 
(C) Answer.  Embassy has demarched the UAEG a number of times 
regarding the repatriating of Iraqi assets, but we are not 
aware of the Iraqis' ever approaching the Emiratis about this 
issue. 
 
¶16. (C) Question.  Please describe the host country's actual 
oversight over the formal financial sector, alternative 
remittance systems and cash couriers.  In particular, what is 
post's assessment of the host country's enforcement, if any, 
of laws and regulations involving cash couriers transiting 
their borders with Iraq? 
 
(C) Answer.  The Central Bank resoundingly claims that its 
laws and regulations are stringently applied and prevent 
"wrongdoers" from misusing the UAE.  However, there are 
clearly gaps and vulnerabilities that terrorists and 
criminals can exploit.  Although the Central Bank has issued 
guidelines to banks for what constitutes a suspicious 
transaction, since there is no amount that automatically 
triggers an STR, the reporting requirement is highly 
subjective (see para 10).  Additionally, Embassy country team 
assesses that the hawala system in the UAE is extremely 
vulnerable.  As noted in para 5, there is no mechanism in 
place to ensure that all hawaladars register, and there are 
no penalties imposed on unregistered hawaladars.  Reporting 
indicates that individuals are exploiting this loose 
regulatory environment to move money into Iraq, Afghanistan, 
and Pakistan via UAE hawalas; however, it is difficult to 
correlate this movement directly to terrorist financing. 
 
(C) Embassy also notes that the requirement to report cash is 
applied very loosely.  There are no signs in airports or at 
border crossings informing travelers of the reporting 
requirement, and at no point during the transit process are 
passengers given the declaration forms.  Customs officials 
have told Embassy officials that they do not view the 
declaration system as a tool for combating money laundering, 
and since the UAE is a cash-based society it is not 
considered unusual for individuals to be carrying significant 
sums of money.  As such, any declarations filed by travelers 
only create a record of the movement of the cash; the UAE 
authorities do not necessarily use the information to begin 
an investigation.  In the spring of 2006, Embassy approached 
the UAE about conducting a joint cash courier operation 
targeting individuals trying to evade the cash declaration 
system.  However, the UAE's National Anti-Money Laundering 
Committee has not yet given UAE customs authorities the 
authorization to conduct the operation. 
 
Communication 
------------- 
 
¶17. (S/NF) Question.  Does the host government regularly 
share terrorist/insurgent finance information with Embassy 
officials? 
 
(S/NF) Answer.  The UAE does share information with the USG, 
but only when asked.  For example, in the spring of 2005, 
Embassy's Legatt office requested the UAE Central Bank 
provide certified bank records for use in the sentencing 
phase of Zacarias Moussaoui's trial.  The Central Bank 
provided the requested documents in May of 2005.  While the 
UAE has previously provided thousands of such documents for 
intelligence purposes, this is the first time any U.S. law 
enforcement agency has received certified bank records from 
the UAE Government for use in a judicial proceeding. 
 
(S/NF) Embassy country team assesses that the senior levels 
of the UAEG assume that information sharing is more 
pro-active than it actually is.  For example, in November of 
2004 then Dubai Crown Prince (now UAE Prime Minister) 
Mohammed bin Rashid (MbR) briefed CENTCOM Commander General 
Abizaid on a Dubai-based network involved in facilitating the 
Iraqi insurgency in Fallujah that the GDSS had identified and 
disbanded (ref F).  This information had not previously been 
shared with the USG.  MbR had the GDSS chief show a linkchart 
with pictures, names, and details of suspected foreign 
nationals and Emiratis involved.  In a follow-up meeting with 
the GDSS, the names and pictures of the Emiratis implicated 
had been deleted. 
 
¶18. (SBU) Question. Does the host government regularly share 
terrorist/insurgent finance information with the government 
of Iraq? 
 
(SBU) Answer.  Embassy is unaware whether the UAEG shares 
terrorist/insurgent finance information with the government 
of Iraq. 
 
¶19. (S/NF) Question.  Please describe the host country's 
public affairs campaigns, if any, with respect to support for 
terrorist and insurgent groups in Iraq.  Is such support 
condemned, in part or in whole or not at all?  Please provide 
an assessment of the host country's receptivity to 
proactively condemning the insurgency, if it does not already 
do so. 
 
(S) Answer.  UAEG officials publicly and strongly condemn 
extremism and terrorist attacks.  UAEG officials prepare, 
distribute, and monitor the Friday sermons delivered at 
mosques; anti-extremism and the condemnation of terrorism 
acts have been the repeated focus of these sermons.  The UAE 
has specifically and publicly condemned acts of sectarian and 
terrorist violence in Iraq, such as the February 22 bombing 
of the al-Askariya Shrine. 
 
(S/NF) The UAE's intelligence service is working with five 
other countries (Jordan, Egypt, Kuwait, Turkey, and Saudi 
Arabia) to support Iraqi "nationalists" to counter sectarian 
violence; this work is not publicized.  Abu Dhabi Crown 
Prince Sheikh Mohammed bin Zayed Al-Nahyan has said that this 
"Group of Six" has been able to provide Iraqi moderates with 
about ten percent of the $50-$60 million that they require 
each month.  Deputy PM Sheikh Hamdan bin Zayed Al-Nahyan has 
suggested that there be a "collective effort" to support the 
Shi'a groups from the south by assisting them to establish 
radio and television stations (ref H). 
 
Background Information 
---------------------- 
 
¶20. (S/NF) A body of reporting indicates that financiers use 
the UAE to raise funds for the Iraqi insurgency, but Embassy 
does not have a clear picture of the mechanism for how the 
funds are raised or the individuals involved.  Anecdotal 
reporting suggests that some money is collected from wealthy 
patrons and that other funds are generated via trade-based 
money laundering.  Additional reporting has identified 
instances where money was sent via courier, hawala, and 
formal financial institutions.    Although Embassy is 
concerned that some charities in the UAE are wittingly or 
unwittingly being used by extremist organizations, we do not 
have any reporting that indicates UAE charities are being 
used to funnel money into the Iraqi insurgency. 
 
¶21. (S) Approximately 40,000 Iraqis reside in the UAE, an 
unknown number of whom are former members of the IIS, GDS, 
and the Ba'ath Party.  We have no concrete information on how 
many former regime members reside in the UAE, or whether they 
are engaged in supporting the insurgency.  The one exception 
is former IIS officer, Khalaf Al-Dulaymi, who is designated 
under UNSCR 1483 and whose family resides in Dubai.  During 
the January meeting of the Joint Terrorist Finance Task Force 
(JTFCC), Treasury U/S Stuart Levey passed Central Bank 
Governor Sultan Nasser Al-Suweidi the names of Al-Dulaymi's 
family members.  U/S Levey passed the same list to GDSS Chief 
Mohammed Al-Qemzi the next day.  (Note: Embassy does not know 
what actions, if any, the UAEG has taken against Khalaf 
Al-Dulaymi and his family.  End note.) 
 
¶22. (S) During the JTFCC meeting, Governor Al-Suweidi stated 
that the Central Bank was in the process of responding to 
FinCEN requests for information on Iraq insurgency members 
with bank accounts in the UAE (ref C).  He noted that the 
Central Bank is willing to freeze accounts of individuals 
designated by the UN, but he did not specify whether the 
Central Bank had frozen the accounts of any former regime 
members.  He also stated that the UAE was willing to "watch" 
any individuals the USG is concerned might be connected to 
the Iraqi insurgency, and he requested that the USG provide 
the UAE with names. 
 
Comment 
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¶23. (SBU) Electronic copies of the Counterterrorism Law, 
Anti-Money Laundering Law, and Administrative Regulation No. 
24/2000 will be sent via email to Katherine Leahy in 
EB/ESC/TFS and James Hunter in NEA/I. 
SISON