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Diana T Fritz  03/29/2007 02:25:42 PM  From  DB/Inbox:  Diana T Fritz

Cable 
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UNCLAS        ABU DHABI 00524

SIPDIS
CXABU:
    ACTION: ECON
    INFO:   TREAS P/M OFAC AMB LEGAT DCM POL DAO

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: DCM:MQUINN
DRAFTED: OFAC:JBEAL
CLEARED: ECON:OJOHN, LEGAT:DROGGENBUCK

VZCZCADI180
PP RUEHC RUEATRS RUEAWJA RUEHZM RHMFIUU RUCNIRA
RUEAIIA RHEFDIA RHEHNSC RUCNSE
DE RUEHAD #0524/01 0871258
ZNR UUUUU ZZH
P 281258Z MAR 07
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC PRIORITY 8658
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
INFO RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RHMFIUU/FBI WASHINGTON DC
RUCNIRA/IRAN COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHDC
RUCNSE/US SECRET SERVICE WASHINGTON DC

UNCLAS SECTION 01 OF 02 ABU DHABI 000524 
 
SIPDIS 
 
TREASURY FOR U/S LEVEY, A/S POBRIEN, DAS DGLASER, RLOEFFLER 
NSC FOR JZARATE 
FINCEN FOR JEL-HINDI 
STATE FOR NEA/ARP TREUTER, DBAGWELL 
OFAC FOR ASZUBIN 
FBI FOR TFOS MMOREHART, FWAIKHART 
DHS FOR MMIDDLETON, JGALLION 
 
E.O. 12958: N/A 
TAGS: PREL KTFN ECON PTER AE
SUBJECT: UAE HOSTS 4TH INTERNATIONAL HAWALAS CONFERENCE 
 
¶1. (U) Summary.  On March 18 and 19, 2007, at the Fourth 
International Conference on Hawalas the UAE Central Bank (CB) 
stressed the importance to poor workers of hawalas, and the 
need to regulate without being overly burdensome and 
expensive.  In the UAE there are 215 registered Hawaladars, 
each whom needs a certificate from the CB to maintain bank 
accounts.  The CB reported that it received over 700 reports 
from the registered hawalas but provided no analysis of this 
data.  The CB noted these confidential reports were subject 
to law enforcement scrutiny and the CB will close accounts. 
However, the CB has not imposed more stringent requirements 
on hawaladars in order to encourage their registration.  Also 
during the conference Cynthia Oberg (AUSA) and Matt Meyer 
(FBI) presented their hawaladars investigation and Jamal 
El-Hindi (FinCEN) explained the objectives of US regulations 
on hawalas.  End summary. 
 
¶2. (U) On March 18 and 19, 2007, the UAE CB hosted its Fourth 
International Conference on Hawalas (informal money 
remittance systems).  There were over thirty presenters who 
discussed the current regulatory environment for hawalas, the 
pitfalls of over-regulating hawalas, the challenges for law 
enforcement, and the importance of interagency coordination 
between regulators and law enforcement.  CB Governor Sultan 
bin Nasser Al-Suweidi opened the conference by highlighting 
the importance of hawalas for poor migrant workers, and 
stressing that regulations should prevent misuse without 
being too restrictive or expensive to implement. 
 
¶3. (U) The CB gave a report on hawalas in the UAE.  In the 
UAE, registered hawaladars can hold accounts with whatever 
banks they choose but they must have a certificate from the 
CB to keep the account open.  The CB reported that, so far, 
250 entities have applied with the CB to register as 
hawaladars and 215 have been registered as hawaladars in the 
UAE. The CB also reported that they have received over 700 
quarterly reports from the registered hawaladars. Central 
Bank officials reported that they review all the reports that 
come in and question the hawaladars about any suspicious 
transactions.  However, they did not provide any analysis of 
the 700 reports that they had received and did not report 
that the registered hawaladars had filed any STRs.  (Note. 
The 700 reports seems to demonstrate that the hawalas are not 
all reporting, at least quarterly, as they are required.  As 
of January 2005 there were 128 registered hawalas and if just 
these hawalas were reporting there would be over 1000 
reports.  End note.)  The CB also noted that the data 
provided by hawaladars was confidential and that no one but 
the CB will review the data.  However, the confidentiality is 
subject to the Anti-Money Laundering Law, and law enforcement 
can request information on the hawaladars and the CB has the 
power to "investigate and dismantle" and refer the issue to 
judicial authorities (Comment.  We know of no case where UAE 
authorities investigated or shut down a hawaladar. End 
comment.) 
 
¶4. (U) Regarding concerns over the lack of control over the 
hawaladars, Abdulrahim Al-Awadi, Head of the Anti-Money 
Laundering and Suspicious Cases Unit (AMLSCU) noted that if a 
hawaladar fails to register the CB will close its bank 
accounts.  Additionally, banks must still file STRs if they 
see suspicious activity in a hawaladar account.  When asked 
if the hawaladars needed compliance officers, Al Awadi 
responded that the more stringent regulations and 
requirements for hawalas will come later and that if the CB 
imposed all the regulations now it would drive the hawaladars 
underground. 
 
USG Presentations - FBI/DOJ and FinCEN 
-------------------------------------- 
 
¶5. (U) Cynthia Oberg, Assistant United States Attorney in the 
Eastern District of Michigan, and Matthew R. Meyer, Special 
Agent with the Federal Bureau of Investigation, made a 
thorough presentation detailing their prosecution of the case 
US v. Omian, Wassil et al.  Mrs. Oberg and Mr. Meyers 
successfully prosecuted an unregistered and unlicensed 
hawaladar in Michigan who moved over 10 million dollars and 
used accounts to launder narcotics proceeds, perpetrate visa 
and naturalization fraud while concealing personal income in 
order to qualify for state and federal aid.  The presentation 
demonstrated succinctly how hawalas can be abused and the 
necessity for regulation and careful scrutiny. 
 
¶6. (U) In his presentation Jamal El- Hindi, the Associate 
Director for Regulatory Policy and Programs of FinCEN stated 
that the objectives of US regulations with regard to hawalas 
were not to disrupt them and the population they serve but to 
ensure compliance with money laundering regulations and to 
take action if corrective measures are not taken by the money 
service business (MSB) (Note. Hawalas are regulated as MSBs 
in the US. End note.) 
 
¶7. (U) Post would like to thank Mr. El Hindi, Mrs. Oberg and 
Mr. Meyer for their participation in the Hawalas conference. 
Most of the presentations will be available at the UAE CB 
website at www.centralbank.ae/Hawala/hawala2007.php. 
SISON