VZCZCXRO9335
OO RUEHBC RUEHDIR RUEHKUK
DE RUEHDE #0443/01 3301527
ZNR UUUUU ZZH
O P 251527Z NOV 08
FM AMCONSUL DUBAI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6286
INFO RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 3312
RUEHDE/AMCONSUL DUBAI PRIORITY 9503
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE

UNCLAS SECTION 01 OF 02 DUBAI 000443 
 
NEA/ARP FOR BMASILKO; ISN FOR PMCNERNEY; DOE FOR WTOBEY; SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL IR ENRG ETTC ECON KNNP KCEM KOMC AE
SUBJECT: AA/S MCNERNEY'S MEETINGS  WITH THE AMERICAN BUSINESS COUNCIL 
AND THE DUBAI CHAMBER 
 
DUBAI 00000443  001.2 OF 002 
 
 
¶1. (SBU) Summary:   Acting Assistant Secretary for International 
Security and Nonproliferation Patricia McNerney visited Dubai on 
October 16 to discuss counter proliferation cooperation and 
export control issues related to Iran (see septel for meeting 
with MG Mohammed Al Qemzi).  McNerney discussed a range of trade 
and trade control related issues in events hosted by the 
American Business Council (official U.S. Chamber of Commerce 
affiliate) and the Dubai Chamber of Commerce and Industry 
(DCCI), representing Dubai's private sector.  In roundtable 
discussions with senior members, McNerney also touched upon the 
impact of Iran on security and economic growth in Dubai.  End 
Summary. 
 
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American Business Council 
 
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¶2. (SBU) The American Business Council (ABC) hosted AA/S 
McNerney, accompanied by Deputy Administrator for National 
Nuclear Security Administration's Office of Defense Nuclear 
Nonproliferation Will Tobey and Consul General, for a roundtable 
discussion with senior members McNerney talked broadly about the 
U.S.' policy towards Iran and the success we have had pressuring 
Iran through United Nations Security Council sanctions and 
targeted financial measures.  She described the U.S.'s concerns 
about Iran's nuclear program, as well as the deep implications 
for the region should it acquire nuclear weapons.  McNerney 
pointed out how Dubai's relationship with Iran affects its 
security and economic prosperity. 
 
¶3.  (SBU) On export controls, McNerney discussed implementation 
of the UAE's new export controls law and how export controls are 
helping to build a more secure business environment in the UAE. 
McNerney noted that Hong Kong and Singapore are models of 
implementing export controls without disrupting legitimate 
business.  McNerney underscored the important role the American 
business community can play in preventing the diversion of 
controlled materials to Iran, especially as the UAE works toward 
better implementation of its export control law.  Tobey 
described for the group a number of Department of Energy 
programs to detect, secure, and dispose nuclear material as well 
as prevent nuclear terrorism and proliferation. 
 
¶4. (SBU) McNerney also highlighted the positive impact in the 
region of the Section 123 Nuclear Cooperation Agreement under 
negotiation with the UAE as an example of transparent 
cooperation in pursuit of a civilian nuclear power program. The 
Agreement will allow the UAE to produce nuclear energy without 
enrichment and reprocessing capabilities.  Countries adopting 
this program will rely on external fuel banks created by the 
IAEA.  Although the Section 123 Agreement is still under 
negotiation in the UAE, McNerney noted that the UAE and the 
United States were very close to reaching agreement on the text. 
 
¶5. (SBU) In a question and answer session, McNerney was asked a 
series of questions on regional stability and transparency on 
Israel. One member of the American business community commented 
that businesses are establishing offices in countries such as 
Tunisia and bypassing Dubai to transport goods to Iran.  While 
specific companies were not named, the argument suggested that 
Dubai is transitioning away from being the economic pipeline to 
Iran.  McNerney said that, if true, this would be a good news 
story because it indicates that the new export control laws are 
forcing nefarious companies to make extra stops in the shipment 
of goods to Iran Extra stops, she noted, provide more 
opportunities for interdictions of sensitive materials en route 
to Iran and make it more difficult and costly for Iran to get 
these items.  She noted that while Dubai is a significant point 
for diversion to Iran, Dubai is not the only problem. 
 
¶6. (SBU) A businessman from Federal Express noted their 
particular problem in applying U.S. sanctions law in Dubai and 
their frustration that their competitor DHL is a significant 
player in the Iranian market yet is also receiving lucrative 
U.S. government contracts in Iraq. McNerney agreed to look into 
addressing this issue.  A representative from Hewlett- Packard 
complained that due to strict citizenship laws in the UAE, 
Iranians residing in the UAE for decades remain Iranian 
nationals, and thus U.S. laws prohibit the technology transfer 
necessary to adequately train them as employees. One businessman 
repeated the oft-heard complaint about the difficulty of getting 
U.S. visas, especially for third country nationals requiring 
special processing.  The Consul General said the USG will 
continue to work to improve procedures and process visa 
applications for legitimate businessmen as expeditiously and 
fairly as possible under U.S. regulations. 
 
 
DUBAI 00000443  002.2 OF 002 
 
 
------------------------------------- 
 
Dubai Chamber of Commerce 
 
------------------------------------- 
 
¶7. (SBU) The Dubai Chamber of Commerce and Industry (DCCI), the 
premier organization representing all sectors of Dubai's dynamic 
private sector also hosted a roundtable discussion for select 
senior members, including Vice Chairman Hisham Shirawi and 
Director General Hamad Buamim.  McNerney kicked off her remarks 
by acknowledging the challenges faced in Dubai vis-a-vis Iran, 
particularly given Iran's use of front companies to disguise 
illegitimate trade.  She noted the important role the private 
sector can and should play, especially given its enormous size 
(the DCCI has over 100,000 members at present).  She reminded 
participants that the key international framework with regard to 
Iran are UN Security Council Resolutions (UNSCRs) 1737 and1747. 
Tobey again described DOE's programs with regard to detecting, 
securing, and disposing nuclear material. 
 
¶8. (SBU) Shirawi stressed the importance of Dubai maintaining 
its status in the region by offering a certain standard of 
living and openness to all nationalities.  He said he understood 
the USG's concern regarding the transshipment through the UAE of 
illicit goods, but he conveyed his personal doubts that this was 
actually happening to the extent claimed.  If Iran wanted 
sensitive materials, he argued, it would look to transport 
through other channels so as not to jeopardize the livelihood of 
Iranian citizens living here. 
 
¶9. (SBU) Buamin explained that the DCCI, Dubai Customs, and 
Dubai's General Department of State Security require a 
certificate for transactions of goods costing more than 
$200,000.  Buamim noted that trade with Iran decreased by more 
than 35 percent after UNSCRs 1737, 1747, and 1803, which had had 
a negative impact on the Dubai business community.  However, he 
stressed Dubai is working hard on this issue.  He described 
DCCI's efforts to continue to raise awareness among the Dubai 
business community through various means such as training. 
Despite this, though, Buamim clearly expressed his belief that 
tighter trade controls would result in a larger gray/black 
market. 
 
¶10. (SBU) Al Shirawi said that the DCCI will promote the 
implementation of the UAE's export control laws to maintain 
stability and security.  He stated that monitoring dual-use 
items is especially challenging because it could involve 
everything, including goods not on a control list.  McNerney 
emphasized the importance of end-user checks for this very 
reason.  In order for the DCCI to implement any law, Al Shirawi 
requested that we provide clear lists with detailed 
descriptions, bar codes, and restrictions.  He stated that 
without harmonized systems between the USG and the UAE, it will 
be difficult to implement the laws.  Al Shirawi suggested a 
secure website where the DCCI could access updated lists of 
companies or individuals. 
SUTPHIN