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Cablegate: Uaeg Report On Arab League Boycott

VZCZCXRO8380
RR RUEHBC RUEHDE RUEHKUK RUEHROV
DE RUEHAD #0257/01 0581119
ZNR UUUUU ZZH
R 271119Z FEB 08
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC 0476
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHTV/AMEMBASSY TEL AVIV 0596
RUEHJM/AMCONSUL JERUSALEM 0248
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 03 ABU DHABI 000257

SIPDIS

SENSITIVE
SIPDIS

STATE FOR NEA/ARP, NEA/RA
STATE PASS TO USTR JBUNTIN
COMMERCE FOR EWEANT AND FDAVIDSON

E.O. 12958: N/A
TAGS: ECON KBCT PREL IS AE
SUBJECT: UAEG REPORT ON ARAB LEAGUE BOYCOTT

REF: A) E-MAIL AL-SALEH/JOHN DATED 02/25/2008, B) ABU DHABI 169

Sensitive but unclassified, handle accordingly

1. (U) This is an action request. Please see paragraph 4.

2. (SBU) MinEcon U/S Abdullah Al-Saleh passed the following e-mail
update on UAE actions to eliminate secondary and tertiary
applications of the Arab League boycott to Econ Chief on February
25. Al-Saleh had committed to providing this report during
Econchief's February 6 meeting (ref b). The report has also been
e-mailed to USDOC/BIS.

3. (SBU) Begin Text

Re: Progress report on the substitute language for primary boycott
in the UAE relevant commercial documents

With reference to your visit on February 6th 2008 and following the
visit of Mr. Edward Weant III, Director of the Office of Antiboycott
Compliance Bureau of Industry and Security, and his team to the UAE
in mid 2007, and based on the email of Mrs. Cathleen Ryan of July
8th 2006 with regard to the substitute language for primary
boycott-related terms and conditions in relevant commercial
documents and my email of May 26th 2007 to Mrs. Ryan, we would like
to note the following:

1. Secondary and tertiary boycott have been terminated in the United
Arab Emirates based on the Council of Ministers resolution number
(462/17) of 1995, which came into full effect from the date of
issuance thereon. This is in line with the Gulf Cooperation Council
decisions.

2. The Ministry of Economy has sent letters to all institutions and
companies mentioned in the lists provided to us by the US Embassy in
Abu Dhabi for the years 2006 and 2007, in which we asked them to
revise relevant commercial documents to reflect the substitute
language agreed with the US Office of Antiboycott Compliance Bureau
of Industry and Security.

The Ministry of Economy has received confirmation from all of those
entities; most have amended the language in accordance with the
agreed substitute language while others are in the process of
amending their documents to be in line with the substitute language.


We are also conducting periodic checks to make sure that all
relevant entities are in conformity with the Council of Ministers
decision referenced above and abide by the substitute language.

The reported requests appearing in the January-September 2007 report
of the US Office of Antiboycott Compliance with regard to the UAE
are mostly permissible, and in comparison with other countries in
the region reflect the increasing trade between our two countries.
It is clear as well that several of the entities mentioned in the
2006 [lists] are no longer there, which is an indication that they
have revised the boycott language in their commercial documents and
we are following up with those that have recently entered the list.


It should be noted that some of the entities listed in the 2007
report have recently informed us that they have revised their
language to be in conformity with the substitute language sent to
them by the Ministry.

3. On the substitute language for primary boycott-related terms and
conditions in relevant commercial documents:

For Contracts

The language reads:

"Contractor/Supplier/Bidder acknowledges that the import and customs
laws and regulations of the United Arab Emirates shall apply to the
furnishing and shipment of any products or components thereof to the
United Arab Emirates".

As agreed by the US-BIS office, this language is permissible and not
reportable by a U.S. person-recipient.

For Tender Documents

The language reads

"Contractor/Supplier/Bidder acknowledges that the import and customs

ABU DHABI 00000257 002 OF 003


laws and regulations of the United Arab Emirates shall apply to the
furnishing and shipment of any products or components thereof to the
United Arab Emirates".

As agreed by the US-BIS office, this language is permissible and not
reportable by a U.S. person-recipient.

For Purchase Orders

The language reads:

"Contractor/Supplier/Bidder acknowledges that the import and customs
laws and regulations of the United Arab Emirates shall apply to the
furnishing and shipment of any products or components thereof to the
United Arab Emirates".

As agreed by the US-BIS office, this language is permissible and not
reportable by a U.S. person-recipient.

For Applications of Letters of Credit

The language reads:

We certify that the beneficiary is a ( ) person (or, country of
origin) and the suppliers of goods and services are ( ) persons
(or, country of origin).

As agreed by the US-BIS office, this language is permissible and not
reportable by a U.S. person-recipient.

For Letters of Credit

The language reads:

"On no condition may an Israeli bank be permitted to negotiate this
credit."

As agreed by the US-BIS office, this language is permissible but
reportable by a U.S. person-recipient.

Requests for Certificates of Origin

The language reads:

" .... certify that these goods are of ( ) origin and acknowledges
that the import and customs laws and regulations of the United Arab
Emirates shall apply to the furnishing and shipment of any products
or components thereof to the United Arab Emirates."

As agreed by the US-BIS office, this language is permissible but
reportable by a U.S. person-recipient.

Based on the above and with regard to both countries' shared
objective of moving gradually towards substitute language for
primary boycott-related terms and conditions in all relevant
commercial documents that is permissible and not reportable by a
U.S. person-recipient, we would propose amending the text on
requests for certificates of origin and that of the letters of
credit that are currently permissible but reportable to read as
follows:

For Certificates of Origin:

" .... certify that these goods are of ( ) origin and acknowledges
that the import and customs laws and regulations of the United Arab
Emirates shall apply to the furnishing and shipment of any products
or components thereof to the United Arab Emirates."

Please confirm that compliance with the above text, which
encompasses in general the substance of the language in contracts
and tender documents, would make UAE requests for certificates of
origin permissible and not reportable under the US Export
Administration Regulations.

For Letters of Credit

Based on our initial discussion, the language that was discussed and
agreed as permissible but reportable has been circulated to
operating banks in the UAE through the Central Bank, and we have
received confirmation from several banks affirming that they have
incorporated the amended language in their documents. However, we
shall be working closely with the Central Bank to come up with a
language that would meet their concerns and at the same time ensure
that it would not be reportable by a U.S. person-recipient under the
US Export Administration Regulations. The proposed revised language

ABU DHABI 00000257 003 OF 003


is:

"Subject to the laws and regulations of the United Arab Emirates,
any bank is permitted to negotiate this credit."

Please confirm that compliance with the above text would make UAE
requests for letters of credit permissible and not reportable under
the US Export Administration Regulations.

With the above proposed revised language for letters of credit and
certificates of origin we are pleased to note that all substitute
language will be permissible and not reportable for boycott-related
terms and conditions in all relevant commercial documents under the
US Export Administration Regulations.

We look forward to receiving the confirmation of the relevant US
authorities on the above at the earliest possible, in addition to
any comments that you may have in connection thereto.

Please accept my highest regards,

Best regards,
Abdulla Bin Ahmed Al Saleh
Under Secretary
Ministry of Economy- Economy Sector

End text.

4. (SBU) Action Request: The UAEG Ministry of Economy continues to
work with the USG in an effort to resolve the secondary and tertiary
aspects of the Arab League Boycott. We request that Department and
USDOC/BIS examine the proposed alternative language regarding
certificates of origin and letters of credit to ensure that it
complies with U.S. law. End Action Request.

Quinn

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