Viewing cable 03ABUDHABI1137
Title: DUBAI INTERNATIONAL FINANCIAL CENTER TO GO

IdentifierCreatedReleasedClassificationOrigin
03ABUDHABI11372003-03-10 10:53:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Abu Dhabi
null
Diana T Fritz  05/24/2007 04:54:07 PM  From  DB/Inbox:  Search Results

Cable 
Text:                                                                      
                                                                           
      
CONFIDENTIAL

SIPDIS
TELEGRAM                                           March 10, 2003


To:       No Action Addressee                                    

Action:   Unknown                                                

From:     AMEMBASSY ABU DHABI (ABU DHABI 1137 - UNKNOWN)         

TAGS:     EFIN, ETTC, EINV, PGOV                                 

Captions: None                                                   

Subject:  DUBAI INTERNATIONAL FINANCIAL CENTER TO GO FORWARD, BUT
           UNDER UAE CENTRAL BANK SUPERVISION                    

Ref:      None                                                   
_________________________________________________________________
C O N F I D E N T I A L        ABU DHABI 01137

SIPDIS
CXABU:
    ACTION: ECON 
    INFO:   P/M AMB POL DCM 
Laser1:
    INFO:   FCS 

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: DCM:RAALBRIGHT
DRAFTED: ECON:TEWILLIAMS
CLEARED: CGD:RGOLSON

VZCZCADI876
OO RUEHC RUEHZM RUEATRS RUEAWJA RHEHNSC RUEHLO
RUEHFR
DE RUEHAD #1137 0691053
ZNY CCCCC ZZH
O 101053Z MAR 03
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8756
INFO RUEHZM/GCC COLLECTIVE
RUEATRS/TREASURY DEPT WASHDC
RUEAWJA/DOJ WASHDC
RHEHNSC/NSC WASHDC
RUEHLO/AMEMBASSY LONDON 0593
RUEHFR/AMEMBASSY PARIS 0653
C O N F I D E N T I A L ABU DHABI 001137 
 
SIPDIS 
 
STATE FOR NEA/ARP - HEFFERNAN, NEA/RA - SUTPHIN, 
EB/ESC/ESP AND INL/C - CASSARA 
TREASURY FOR OGC - AUFHAUSER 
TREASURY ALSO FOR NILMINI GUNARATNE 
TREASURY PASS OFAC FOR NEWCOMB 
DOJ FOR TED GREENBERG 
 
E.O. 12958: DECL: 03/10/07 
TAGS: EFIN ETTC EINV PGOV TC
SUBJECT: DUBAI INTERNATIONAL FINANCIAL CENTER TO GO 
FORWARD, BUT UNDER UAE CENTRAL BANK SUPERVISION 
 
REF:  A) 02 DUBAI 3536, B) 02 ABU DHABI 3435 
 
¶1.  CLASSIFIED BY DCM RICHARD A. ALBRIGHT FOR 
REASONS 1.5 (B,D). 
 
¶2. (C)  UAE Central Bank Governor Sultan bin Nasser 
Al-Suweidi told Econchief March 8 that the long- 
anticipated Dubai International Financial Center 
(DIFC -- a much-publicized plan to create a state 
of the art financial services sector in Dubai, see 
refs) will be created shortly via the issuance of a 
Federal Decree.  However, while the authorities in 
Dubai, where DIFC will be located, had pushed hard 
for authority to establish their own independent 
regulatory and supervisory authority (in effect, 
off-shore status), that view had not won out and 
instead the Federal government (read:  the Central 
Bank) would oversee and limit the powers of the new 
financial center.  "Our view has won," Al-Suweidi 
noted with some satisfaction; "the Central Bank 
will supervise DIFC, ensuring full compliance with 
relevant UAE laws, particularly money-laundering 
legislation." 
 
¶3.  (C)  The Governor anticipated that the Federal 
Decree creating the DIFC could be issued within 
then next few weeks.  DIFC would be involved in 
bank back-office operations, reinsurance, Islamic 
banking and asset management.  He noted that 
technical meetings had already begun between DIFC 
personnel and both the SEC-equivalent and the 
Ministry of Economy and Commerce, which regulates 
insurance (reinsurance is an area DIFC is hoping to 
get into).  Nonetheless, while DIFC looked set for 
a launch in the near to medium term, Al-Suweidi 
cautioned that the blue-chip companies from the 
West which DIFC sought to attract would not all 
flock to Dubai at once.  "I expect it will take 
some time for these well-known global firms to 
invest," the Governor observed, "particularly given 
the current tensions in the region." 
 
¶4.  (C)  COMMENT:  The outcome anticipated by the 
Governor is the right one for DIFC.  At the end of 
the day, regardless of how good the rules might be 
that DIFC would put into place (and they hired some 
of the best legal and regulatory talent around), 
self-regulation (i.e., a quasi-off-shore status) is 
not the way to ensure high standards of 
accountability, since most observers have more 
faith in the probity of the UAE Central Bank than 
they do in the complicated by-laws proposed by 
DIFC's backers.  Central Bank supervision can also 
ensure that the UAE's new anti-money laundering law 
will be effectively implemented -- one of our key 
concerns all along.  If things go as predicted by 
the Governor, regulators of financial services 
industries across the OECD, but particularly in the 
U.S., U.K., and France, may find it easier to grant 
permission for the companies they oversee to 
participate in DIFC, and make it the kind of 
success its proponents in Dubai are hoping for. 
 
¶5.  (U)  This message coordinated with Amconsul 
Dubai. 
 
Wahba