The United Arab Emirates (UAE):
Issues for U.S. Policy

Kenneth Katzman
Specialist in Middle Eastern Affairs
December 23, 2011
Congressional Research Service
7-5700
www.crs.gov
RS21852
CRS Report for Congress
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epared for Members and Committees of Congress

The United Arab Emirates (UAE): Issues for U.S. Policy

Summary
The UAE’s relatively open borders and economy have won praise from advocates of expanded
freedoms in the Middle East while producing financial excesses, social ills such as prostitution
and human trafficking, and relatively lax controls on sensitive technologies acquired from the
West. The social and economic freedoms do not necessarily translate into rapid political opening;
the UAE government remain authoritarian, even as it allows informal citizen participation and
traditional consensus-building. Members of the elite (the ruling families of the seven emirates and
clans allied with them) routinely make national decisions unilaterally, obtain favored treatment in
court cases, and are favored for lucrative business opportunities. However, economic wealth has
allowed the UAE to largely, although not entirely, avoid the popular unrest and demands for
political change that have erupted elsewhere in the Middle East in 2011.
Political reform has been limited and halting. Lacking popular pressure for elections, the UAE
long refrained from following other Gulf states’ institution of electoral processes. It altered that
stance in December 2006 when it instituted a selection process for half the membership of its
consultative body, the Federal National Council (FNC). Possibly to try to ward off the unrest
confronting other Middle East states, in March 2011 the government significantly expanded the
electorate for the September 24, 2011, FNC election process. However, turnout was only about
25%, suggesting that the clamor for democracy in UAE remains limited or that the citizenry
perceived the election as unlikely to produce change in UAE. The government has not announced
an expansion of the FNC’s powers, which some intellectuals seek.
On foreign policy issues, UAE appears has become increasingly assertive in recent years, making
use of its ample financial resources. It has joined the United States and U.S. allies in backing
most international sanctions against Iran, causing friction with its powerful northern neighbor.
This friction could increase if the UAE boosts oil production to guard against the adverse affects
of what appears to be a growing international move to stop purchasing Iranian oil. It has deployed
troops to Afghanistan since 2004. In 2011, it sent police to help the beleaguered government of
fellow Gulf Cooperation Council (GCC) state Bahrain, hosted meetings of the anti-Qadhafi
opposition of Libya, joined a GCC diplomatic effort to broker a political solution to the unrest in
Yemen, backed the Arab League suspension of Syria, and appointed an Ambassador to NATO. It
gives large amounts of international humanitarian and development aid. The UAE’s growing
assertiveness on foreign policy marks its recovery from the 2008-2009 global financial crisis and
recession. That downturn hit Dubai emirate particularly hard and called into question its strategy
of rapid, investment-fueled development, especially of luxury projects.
For the Obama Administration and many in Congress, there are concerns about the UAE
oversight and management of a complex and technically advanced initiative such as a nuclear
power program. This was underscored by dissatisfaction among some Members of Congress with
a U.S.-UAE civilian nuclear cooperation agreement. The agreement was signed on May 21, 2009,
submitted to Congress that day, and entered into force on December 17, 2009. However, expert
concerns about potential leakage of U.S. and other advanced technologies through the UAE to
Iran, in particular, remain. For details and analysis of the U.S.-UAE nuclear agreement and
legislation concerning that agreement, see CRS Report R40344, The United Arab Emirates
Nuclear Program and Proposed U.S. Nuclear Cooperation
, by Christopher M. Blanchard and
Paul K. Kerr.

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The United Arab Emirates (UAE): Issues for U.S. Policy

Contents
Governance, Human Rights, and Reform........................................................................................ 1
Political Reforms: Background and Effects of 2011 Regional Unrest ...................................... 3
Arab Uprisings Increase Focus on September 24, 2011, FNC Election.............................. 4
Substantial Political Unrest Avoided To Date ..................................................................... 5
General Human Rights-Related Issues ...................................................................................... 6
Press and Research Institute Freedoms ............................................................................... 6
Justice/Rule of Law............................................................................................................. 6
Women’s Rights .................................................................................................................. 7
Religious Freedom .............................................................................................................. 7
Labor Rights........................................................................................................................ 7
Human Trafficking .............................................................................................................. 8
Cooperation Against Terrorism and Proliferation............................................................................ 8
Record on Proliferation Cooperation .................................................................................. 9
Nuclear Agreement............................................................................................................ 10
Foreign Policy and Defense........................................................................................................... 11
Regional Security Cooperation With the United States........................................................... 12
Iran .................................................................................................................................... 13
Cooperation on Iraq........................................................................................................... 14
Cooperation on Afghanistan and Pakistan......................................................................... 14
U.S. and Other Arms Sales................................................................................................ 15
Other Regional Issues: Response to 2011 Unrest in the Middle East...................................... 16
Other Regional Issues: Arab-Israeli Dispute..................................................................... 17
Border Issues..................................................................................................................... 18
UAE Provision of Foreign Aid.......................................................................................... 18
Economic Issues ............................................................................................................................ 18
Oil and Gas Sector/Dedication to Future Clean Energy.................................................... 19
U.S.-UAE Free Trade Agreement Negotiations ................................................................ 19

Figures
Figure 1. Map of United Arab Emirates........................................................................................... 3

Tables
Table 1.Some Basic Facts About UAE ............................................................................................ 2
Table 2. Recent U.S. Aid to UAE .................................................................................................. 20

Contacts
Author Contact Information........................................................................................................... 20

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The United Arab Emirates (UAE): Issues for U.S. Policy

Governance, Human Rights, and Reform1
The United Arab Emirates (UAE) is a federation of seven emirates (principalities): Abu Dhabi,
the oil-rich capital of the federation; Dubai, its free-trading commercial hub; and the five smaller
and less wealthy emirates of Sharjah, Ajman, Fujayrah, Umm al-Qaywayn, and Ras al-Khaymah.
After Britain announced in 1968 that it would no longer ensure security in the Gulf, six “Trucial
States” decided to form the UAE federation in December 1971; Ras al-Khaymah joined in 1972.
The UAE federation has completed a major leadership transition since the death of its key
founder, Shaykh Zayid bin Sultan Al Nuhayyan, long-time ruler of Abu Dhabi and UAE
president, on November 2, 2004.
Shaykh Zayid’s son, Shaykh Khalifa bin Zayid al-Nuhayyan, born in 1948, was at that time
Crown Prince and was named ruler of Abu Dhabi upon Zayid’s death. In keeping with tradition,
although not formal law, Khalifa was subsequently selected by all seven emirates (Federal
Supreme Council) as UAE president. The third son of Zayid, Shaykh Mohammad bin Zayid al-
Nuhayyan, is Abu Dhabi crown prince and heir apparent. The ruler of Dubai traditionally serves
concurrently as vice president and prime minister of the UAE; that position has been held by
Mohammad bin Rashid Al Maktum, architect of Dubai’s modernization drive, since the death of
his elder brother Maktum bin Rashid Al Maktum on January 5, 2006. Shaykh Mohammad bin
Rashid also continued as defense minister. The crown prince of Dubai is his son, Hamdan bin
Mohammad Al Maktum, who heads the “Dubai Executive Committee,” the equivalent of a
cabinet for Dubai emirate. Under a Dubai-level reorganization announced in January 2010, five
committees were set up to help the Executive Committee on various major issues.
The federation president and vice president serve five-year terms, but they technically owe their
positions to the UAE’s highest body, the Federal Supreme Council, which is composed of the
leaders of each of the seven emirates of the UAE. Two emirates, Sharjah and Ras al-Khaymah,
have a common ruling family: the Al Qawasim tribe. The Federal Supreme Council meets four
times per year to establish general policy guidelines, although the leaders of the seven emirates
consult frequently with each other. It met on November 3, 2009, to decide whether Shaykh
Khalifa and Shaykh Mohammad would continue in their posts and, as expected, no major changes
were made. In practice, the leadership posts change only in the event of death of an incumbent.
A UAE cabinet reshuffle in May 2009 resulted in a change in two new deputy prime ministers,
one of whom serves concurrently as interior minister (the lead agency on internal security). The
shift was viewed by observers as strengthening the hand of Crown Prince Mohammad bin Zayid
because the new deputy prime ministers are close to him. However, there are no evident rifts
between him and his brother, the UAE president.


1 Information in this section is from the following State Department reports: Country Reports on Human Rights
Practices-2010 (April 8, 2011); Trafficking in Persons Report for 2011 (June 27, 2011); and International Religious
Freedom report for July-December 2010 (September 13, 2011).
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Table 1.Some Basic Facts About UAE
Population
4.8 million, of which about 900,000 are citizens.
Expatriates are 85% of the work force.
Religions
96% Muslim, of which 16% are Shiite; 4% Christian and
Hindu
Ethnic Groups
19% Emirati (citizenry); 23% other Arab and Iranian; 50%
South Asian; 8% Western and other Asian expatriate
Size of Armed Forces
About 50,000
Gross Domestic Product (purchasing power parity)
$201 billion; per capita is $42,000 per year
Inflation Rate
About 14.5%
GDP Growth Rate
5%+ (May 2011 Kuwait National Bank est.) but could
vary with oil price fluctuations
Oil Exports
About 2.7 million barrels per day
Foreign Exchange and Gold Reserves
About $67 billion, but some estimates of the value of its
sovereign wealth fund investments run into the several
hundreds of bllions of dollars.
U.S. Exports to the UAE (2010)
$11.68 billion, making UAE the largest U.S. export
market in the Arab world. Goods sold to UAE are
mostly machinery, aircraft, industrial materials, and other
high value items.
Imports from UAE by the United States (2010)
$1.145 billion. About half of the total was crude oil.
Other major categories include clothing and diamonds.
U.S. citizens resident in UAE
About 30,000
Major Projects
Dubai inaugurated 2,000+ foot “Burj Khalifa,” world’s
tal est building, on January 4, 2010. Dubai metro has
begun operations and is expanding service. Burj al Arab
hotel in Dubai bills itself as “world’s only 7-star hotel.”
UAE participating in Gulf country-wide railroad network
to become operational by 2017. Abu Dhabi has built local
branches of Guggenheim and Louvre museums.
Source: CIA, The World Factbook.

The leaders of the other individual emirates are Dr. Sultan bin Muhammad Al Qassimi (Sharjah);
Saud bin Saqr Al Qassimi, (Ras al-Khaymah, see below); Humaid bin Rashid Al Nuaimi
(Ajman); Hamad bin Muhammad Al Sharqi (Fujayrah); and Saud bin Rashid Al-Mu’alla (Umm
al-Qaywayn). Shaykh Saud of Umm al-Qaywayn, who is about 58 years old, was named leader of
that emirate in January 2009 upon the death of his father, Shaykh Rashid Al-Mu’alla.
In Ras al-Khaymah, there was a brief leadership struggle upon the October 27, 2010, death of the
ailing longtime ruler, Shaykh Saqr bin Mohammad Al Qassim. He was succeeded by Shaykh
Saud bin Saqr, who was the crown prince since 2003 when the ruler replaced Saud’s elder
brother, Shaykh Khalid bin Saqr, as crown prince. During 2003-2010, often using public relations
campaigns in the United States and elsewhere, Shaykh Khalid had claimed to remain as crown
prince even though the UAE federal government had repeatedly stated that his removal was
legitimate and that he held no official position in the UAE. Shaykh Khalid’s home in Ras al-
Khaymah was surrounded by security forces the night his father died, enforcing the rulership
rights of Shaykh Saud.
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The United Arab Emirates (UAE): Issues for U.S. Policy

Figure 1. Map of United Arab Emirates

Source: CRS Graphics.

Political Reforms: Background and Effects of 2011 Regional Unrest
The UAE is not considered by any outside organization to be a democracy, but its perceived
social openness and tolerance, coupled with ample wealth, have rendered the overwhelming bulk
of the population unwilling to challenge the system intensively. Another potential source of
opposition, the Islamist movements in the UAE, including those linked to the Muslim
Brotherhood, are generally non-violent and limit their activities to social and relief work. UAE
residents of Iranian origin tend to oppose the UAE government’s frequent criticisms of Iran, but
this community does not constitute an organized opposition.
UAE leaders say that Western-style democracy, including elections for the country’s leadership, is
not needed in UAE because Emiratis are able to express their concerns directly to the leadership
through traditional consultative mechanisms, such as the open majlis (councils) held by many
UAE leaders, including Shaykh Khalifa. UAE leaders argued that elections would inevitably
aggravate long dormant schisms among tribes and clans and potentially cause Islamist factions to
become more radical. Formal political parties are not permitted.
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This view in the leadership prevailed until 2006, even as such elections began to expand in the
other Gulf states. Despite the absence of public agitation for major political opening, the UAE
leadership decided it had fallen too far behind its Gulf neighbors and, in December 2006, it
instituted a limited and controlled electoral process for half of the 40-seat Federal National
Council (FNC). The other 20 seats would still be appointed. Previously, all 40 members of the
FNC were appointed by all seven emirates. The seat distribution of the FNC remains weighted in
favor of Abu Dhabi and Dubai (eight seats each). Sharjah and Ras al-Khaymah have six each, and
the others have four seats each.
The electorate was to be limited to a “local council,” convened by the rulers of each emirate,
numbering 100 persons per FNC seat. So, for example, the Abu Dhabi electoral council would be
100 x 8 = 800 electors, and the total UAE-wide electorate would be 4,000 persons. However, the
Election Commission approved a slightly larger 6,595-person electorate, or about 160 persons per
FNC seat. Of this total, 1,162 electors were women (less than 20%). Out of the total of 452
candidates for the 20 FNC elected seats, there were 65 female candidates. Only one woman was
elected (from Abu Dhabi), but another seven women were appointed to the remaining 20 seats.
The “election” process was spread over three different days—December 16, 18, and 20, 2006.
Arab Uprisings Increase Focus on September 24, 2011, FNC Election
Even before the 2011 Middle East unrest, UAE plans were to gradually expand the size of the
FNC and to broaden its powers, according to the Minister of State for FNC Affairs (also Minister
of State for Foreign Affairs) Anwar Gargash and the FNC speaker Abdul Aziz al-Ghurair.
Currently, the FNC can review, but not enact or veto, federal legislation, and it can question, but
not impeach, federal cabinet ministers. It has questioned government ministers mostly on
economic and social issues although, in April 2009, the government prohibited the FNC from
discussing the economic ramifications for the UAE of the global financial downturn. Its sessions
are open to the public. According to the State Department, in 2008 the government accepted 80%
of the FNC’s recommendations on legislation. Each emirate also has its own consultative council.
No specific expansion of powers or time frames for such expansions have been announced, to
date. However, in an effort to address the 2011 Middle East unrest and demonstrate that it is
aware of popular calls for more political rights, on March 8, 2011, the government said the size of
the electorate will expand greatly to more than 300 times the total number of FNC seats—a total
of 129,000 electors, or “voters”—when the next FNC election process is held on September 24,
2011. The announcement did not prevent the March 9, 2011, presentation to the leadership of a
petition signed by 160 UAE intellectuals for free elections to a body that would have powers
similar to those of a Western-style parliament.2
A total of 468 candidates filed to run for the 20 seats up for election on September 24. Of those,
85 were women. The total is little more than the number of candidates who filed to run in the
2006 process, but the 2011 electorate was nearly half female, in contrast to the fewer than 20%
electors in the 2006 process. There was a restriction that no candidate spend more than about
$545,000 on their campaigns. The election campaign began September 4.


2 Al Jazeera News Network, March 9, 2011.
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September 24, 2011 Election Results
There was widespread press reporting of citizen apathy about the election, with little information
about the election or campaigns in the media, little evidence of any campaigning, and reportedly
little enthusiasm. Those reports proved accurate on election day when turnout averaged about
25%, a figure that Minister of State Gargash called below government expectations. Turnout was
higher than that it the five smallest emirates, but the 21% turnout in the largest emirate, Abu
Dhabi, pulled the overall average down to the 25% level. It was almost exactly 25% in Dubai
emirate. The turnout was being watched by UAE leaders as an indicator of public attitudes toward
participation in governance, and the low turnout was likely to reduce the government’s impetus to
further empower the FNC.
Of the 20 winners, only one was female (Sheika Isa Ghanem) and she is from Umm Al Quwain,
one of the more conservative emirates. It was believed that female candidates would have the best
chance of winning in Dubai, considered the most liberal of the emirates. Other winners were
elected along tribal lines; in Abu Dhabi, three of the four who were elected are from the Al Amiri
tribe. The FNC as a whole—the election winners and the other twenty to be appointed—began
their sessions in mid-November. Upon the FNC’s convening, the government selected one of the
appointed members, well-know writer Mohammad al-Murr, as Speaker. A woman and another
appointed member (of the eight appointed women), Amal al-Qubaisi, was selected deputy
speaker, making her the first women to hold so high a position in any GCC legislative body.
Substantial Political Unrest Avoided To Date
The relatively minor reforms in the September 2011 FNC election process are not likely to satisfy
some UAE activists. However, in the aggregate, the UAE has not to date, and is unlikely to, face
the widespread popular unrest that has spread throughout the Middle East since the beginning of
2011. There have not been demonstrations in UAE in 2011, although early in 2011 some UAE
youth discussed protests in social networking outlets such as Facebook and Twitter. The
government reportedly tried to block these sites in UAE to prevent word from spreading. In late
February 2011, some of these media were nonetheless used to call for a protest on March 25,
2011, a protest that did not materialize to any major extent.
On April 8, 2011, a prominent Dubai blogger and activist, Ahmad Mansour Al Shehi, was
arrested; his detention came two months after another activist made a speech in Sharjah emirate
in support of Egyptian protesters. Four other critics and online activists were arrested later in
April 2011, charged with violating the penal code that prevents publicly humiliating senior
officials; they appeared in court on June 15 and again on October 2, 2011. Human rights
organizations said their trial violated the most basic defense of the rights of the accused, and
called on UAE leaders to release the five. Those calls were heeded on November 28, 2011, when
federation President Khalifa commuted the jail sentences of the “UAE-5” that were announced by
the Federal Supreme Court the previous day.
During April and May 2011, the government dissolved the elected board of directors of the Jurist
Association and the Teachers Association, leading civil society groups, after members of their
boards signed petitions for political reforms. In December 2011, the government revoked the
citizenship of a Muslim Brotherhood figure, who headed an institution called the “Innovative
Thinking Center” in Dubai emirate.
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In addition to arrests, the government has sought to use its ample financial resources to reduce
domestic unrest. In early March 2011, the government announced it would invest about
$1.5 billion in utilities infrastructure of the poorer, northern emirates. It also raised military
pensions by 70% and introduced subsidies for some foodstuffs.
General Human Rights-Related Issues
Although the government’s reaction to the few acts of opposition discussed above may color
future assessments, previously the human rights record of the UAE has been assessed by U.S. and
outside organizations as relatively positive on most issues. The State Department human rights
report for 2010 was as critical of the UAE’s human rights practices as the 2009 report, asserting
that there are unverified reports of torture, government restrictions of freedoms of speech, and
lack of judicial independence. Some human rights problems in UAE, such as human trafficking,
are caused in part because the government is relatively lax in some cases, not because it is too
strict. Political rights and democratization are discussed above; among other specific measures,
freedom of assembly is forbidden by law, but in practice small demonstrations on working
conditions and some other issues have been tolerated.
The United States has sought to promote democracy, rule of law, and civil society in the Persian
Gulf region, including in UAE. Some State Department programs to promote student and
women’s political participation, entrepreneurship, legal reform, civil society, independent media,
and international trade law compliance are funded by the State Department’s Middle East
Partnership Initiative (MEPI). The U.S. Embassy in Abu Dhabi houses a MEPI office/staff that
runs the MEPI programs throughout the Gulf region.
Press and Research Institute Freedoms
Some ministerial rank officials are committed to reform, including Foreign Minister Shaykh
Abdullah bin Zayid al-Nuhayyan and Minister of State Anwar Gargash, mentioned above. Shaykh
Abdullah’s former post of information minister was abolished in 2006 to allow media
independence. On the other hand, in April 2009, a media law drew opposition from some human
rights groups who said it allows for penalties against journalists who personally criticize UAE
leaders. Provisions governing media licensing do not clearly articulate the standards the
government will apply in approving or denying licenses for media organs to operate. The UAE
government says the law does not apply to the “Free Zones” in UAE in which major foreign
media organizations operate.
Some UAE residents report increasing restrictions on the ability of research institutes to operate.
Several such institutes have opened in UAE since the 1990s because of the perceived openness to
free expression and ideas. However, during 2010-2011, the government has applied increasingly
strict criteria to licensing research institutes and some have left the UAE entirely.
Justice/Rule of Law
In terms of process, there is a dual court system. Sharia (Islamic law) courts adjudicate criminal
and family law matters. Civil courts adjudicate civil law matters. There is a Federal Supreme
Court that exercises judicial review over the civil court system, but its writ does not extend to
Abu Dhabi, Dubai, or Ras al-Khaymah.
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Many observers note that justice in UAE is selective. For example, on January 10, 2010, a UAE
court acquitted the UAE president’s brother, Shaykh Issa bin Zayid Al Nuhayyan, on charges of
torturing an Afghan merchant. He was acquitted even though there was a video available of
Shaykh Issa beating the Afghan and driving over his legs with a sport vehicle, and even though
three others involved in the incident, all non-royals, were convicted. The UAE court ruled that
Shaykh Issa was not liable because he was taking prescription drugs that affected his actions.
The UAE justice system has often come under criticism when expatriates are involved. Many
reports indicated that arrests of expatriates and non-citizens increased during the 2008-2009
financial crisis, possibly out of citizen frustration that globalization and dramatic economic
expansion have led to bursting of the economic “bubble” in UAE. In 2007, human rights groups
criticized the conservative-dominated justice system for threatening to prosecute a 15-year-old
French expatriate for homosexuality, a crime in UAE, when he was raped by two UAE men; the
UAE men were later sentenced for sexual assault and kidnapping. In May 2011, a UAE judge
sentenced an American to one month in jail for possessing police handcuffs.
Women’s Rights
Progress on women’s political rights has been steady—as exemplified by the November 2011
appointment of a woman as deputy FNC Speaker. Observers say the UAE is perhaps the only
country in the Middle East where expatriate women are fully accepted working in high-paying
professions such as finance and banking. There are four women in the cabinet: Shayha Lubna al-
Qassimi, minister of foreign trade and planning; Mariam al-Roumi, minister of social affairs; and
two ministers without portfolio—Reem al-Hashimi and Maitha al-Shamsi. Nine women are in the
Federal National Council, and seven women serve on the 40-seat consultative council in Sharjah
emirate. About 10% of the UAE diplomatic corps is now female; none served prior to 2001. In
November 2008, Dubai emirate appointed 10 female public prosecutors. The UAE Air Force has
four female fighter pilots. The percentage of female voters in the September 2011 FNC election
process was expanded to nearly 50%, as discussed above. As of December 2011, UAE women are
allowed to pass on their citizenship to their children—the first GCC state to allow this.
Religious Freedom
The September 13, 2011, State Department report on international religious freedom, covering
July-December 2010, repeated the previous year’s assessment that there was “no change” in the
status of respect for religious freedom by the government during the reporting period.” The
constitution provides for freedom of religion but also declares Islam as the official religion of the
country. In practice, non-Muslims in UAE are free to practice their religion; there are 35 Christian
churches built on land donated by the ruling families of the various emirates, but there are no
Jewish synagogues or Buddhist temples. There is a Sikh temple that shares a building with one of
two existing Hindu temples. The Shiite Muslim minority is free to worship and maintain its own
mosques, but Shiite mosques receive no government funds and there are no Shiites in top federal
posts.
Labor Rights
On several occasions, foreign laborers working on the large, ambitious construction projects in
Dubai have conducted strikes to protest poor working conditions and non-payment of wages.
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Some of these concerns have been addressed by the Labor Ministry’s penalizing of employers,
and a process, formulated in June 2008, to have workers’ salaries deposited directly in banks.
Human Trafficking
Other social problems might be a result of the relatively open economy of the UAE, particularly
in Dubai. The UAE is still considered a “destination country” for women trafficked from Asia and
the former Soviet Union. The Trafficking in Persons report for 2011, released June 27, 2011,
again placed the UAE in “Tier 2”—the same level as in the 2010 report and an upgrade from the
“Tier 2: Watch List” placement in 2009. The 2010 upgrade was made on the grounds that the
UAE is taking steps to eliminate trafficking in persons, particularly against sex trafficking
offenders. This assessment was largely repeated in the report for 2011. The recent reports note
that UAE has made progress in curbing trafficking of young boys as camel jockeys; it has
repatriated at least 1,050 children out of a suspected 5,000 trafficked for camel racing, provided
$3 million for their care and repatriation, and it now uses robot jockeys at camel races. The 2011
report credits the government with sustained law enforcement efforts against sex trafficking, but
with failure to take measures against or punish labor offenses.
Cooperation Against Terrorism and Proliferation
These issues are of particular concern to the United States because of a pattern of lax UAE
enforcement of export and border controls, with respect particularly to the leakage of U.S. or
other technology to Iran. The relatively small sums of U.S. aid to UAE are generally for programs
to improve UAE performance on enforcing export control laws.
The UAE was one of only three countries (Pakistan and Saudi Arabia were the others) to have
recognized the Taliban during 1996-2001 as the government of Afghanistan, even though the
Taliban was harboring Osama bin Laden and other Al Qaeda leaders during that time. During
Taliban rule, the UAE allowed Ariana Afghan airlines to operate direct service, and Al Qaeda
activists reportedly spent time there.3 Two of the September 11 hijackers were UAE nationals,
and they reportedly used UAE-based financial networks in the plot.
Since then, the UAE has been credited in State Department “Country Reports on Terrorism,”
including the one for 2010 released August 18, 2011, with assisting in the arrests of senior Al
Qaeda operatives;4 denouncing terror attacks; improving border security; prescribing guidance for
Friday prayer leaders to criticize extremist ideology; investigating suspect financial transactions;
criminalizing use of the Internet by terrorist groups, and strengthening its bureaucracy and legal
framework to combat terrorism. The UAE Central Bank is credited in that State Department
report for providing training programs to UAE financial institutions on money laundering and
terrorism financing, although actions against informal financial transmittals (hawala) require
“further vigilance.” It was reported in September 2009 that earlier in 2009, UAE security officials
had broken up an Al Qaeda plot to blow up targets in Dubai emirate.5 UAE authorities assisted in

3 Department of State. Office of the Coordinator for Counterterrorism. Country Reports on Terrorism 2010. August 18,
2011. Author conversations with executive branch officials, 1997-2011.
4 “U.S. Embassy to Reopen on Saturday After UAE Threat.” Reuters, March 26, 2004.
5 Lake, Eli and Sarah Carter. “UAE Kept Tight Lid on Disrupted Terror Plot.” Washington Times, September 17, 2009.
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foiling an October 29, 2010, Al Qaeda in the Arabian Peninsula plot to send bombs to the United
States.
The UAE has signed on to several U.S. efforts to prevent proliferation and terrorism. These
include the Container Security Initiative Statement of Principles, aimed at screening U.S.-bound
containerized cargo transiting Dubai ports. Under it, three U.S. Customs and Border Protection
officers are co-located with the Dubai Customs Intelligence Unit at Port Rashid in Dubai. The
program results in about 20 ship inspections per week of U.S.-bound containers, many of them
apparently originating in Iran, according to the State Department terrorism report for 2008
(published April 30, 2009). The UAE is a party to the Proliferation Security Initiative, the
Megaports Initiative designed to prevent terrorist from using major ports to ship illicit material,
and the Customs-Trade Partnership Against Terrorism.
Record on Proliferation Cooperation
The UAE record on preventing the re-export of advanced technology, particularly to Iran, is
mixed, although said to be improving as of mid-2010. Taking advantage of geographic proximity
and the high volume of Iran-Dubai trade ($10 billion per year), numerous Iranian entities
involved in Iran’s energy sector and its WMD programs have offices in the UAE that are used to
try to procure needed technology and equipment. However, the UAE has enhanced its
cooperation at times when U.S. officials or outside experts have questioned its performance. In
connection with revelations of illicit sales of nuclear technology to Iran, Libya, and North Korea
by Pakistan’s nuclear scientist A.Q. Khan, Dubai was named as a key transfer point for Khan’s
shipments of nuclear components. Two Dubai-based companies were apparently involved in
transshipping components: SMB Computers and Gulf Technical Industries.6 On April 7, 2004, the
Administration sanctioned a UAE firm, Elmstone Service and Trading FZE, for allegedly selling
weapons of mass destruction-related technology to Iran, under the Iran-Syria Non-Proliferation
Act (P.L. 106-178). In June 2006, the Bureau of Industry and Security (BIS) released a general
order imposing a license requirement on Mayrow General Trading Company and related
enterprises in the UAE. This was done after Mayrow was implicated in the transhipment of
electronic components and devices capable of being used to construct improvised explosive
devices (IED) used in Iraq and Afghanistan.7
In February 2007 the Administration threatened to form a new category of control called
“Destinations of Diversion Control” with UAE as the intended designee country, and a 2010 Iran
sanctions law, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA,
P.L. 111-195) set up a provision for a category of countries similar to that, which would be
sanctioned (restrictions on dual use U.S. exports) for a determination of non-cooperation. Earlier,
in September 2007, the FNC headed off U.S. penalties by adopting a law strengthening export
controls (April 2007). In September 2007, the UAE used the new law to shut down 40 foreign
and UAE firms allegedly involved in dual use exports to Iran and other countries. However, UAE
officials publicly acknowledged that the UAE’s application of this law is still evolving. On July
22, 2010, Deputy Assistant Secretary of State for International Security and Nonproliferation
Vann Van Diepen testified before the House Foreign Affairs Committee (Subcommittee on
Terrorism, Nonproliferation and Trade) that the UAE had augmented the staff of the office that

6 Milhollin, Gary and Kelly Motz. “Nukes ‘R’ US.” New York Times op.ed. March 4, 2004.
7 BIS, “General Order Concerning Mayrow General Trading and Related Enterprises,” 71 Federal Register 107, June 5,
2006.
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implements the 2007 law. He added that the UAE’s enforcement bodies—customs, law
enforcement, and intelligence services—are functioning to that end.8
Still, allegations continue to emerge periodically. In January 2009, the Institute for Science and
International Security issued a report entitled “Iranian Entities’ Illicit Military Procurement
Networks,” published January 12, 2009. The report asserts that Iran has used UAE companies to
obtain technology from U.S. suppliers, and that the components obtained have been used to
construct improvised explosive devices (IEDs) shipped by Iran to militants in Iraq and
Afghanistan. Other UAE companies the report alleges were involved in this network included not
only Mayrow but also Majidco Micro Electronics, Micatic General Trading, and Talinx
Electronics.
The issue of leakage of technology has sometimes caused U.S. criticism or questioning of UAE
investment deals. In December 2008 some Members of Congress called for a review by the inter-
agency “Committee on Foreign Investment in the United States” (CFIUS) of a proposed joint
venture between Advanced Micro Devices and Advanced Technology Investment Co. of Abu
Dhabi for the potential for technology transfers. In February 2006, CFIUS approved the takeover
by the Dubai-owned “Dubai Ports World” company of a British firm that manages six U.S. port
facilities. Members, concerned that the takeover might weaken U.S. port security, opposed it in
P.L. 109-234, causing the company to divest assets involved in U.S. port operations (divestment
completed in late 2006 to AIG Global Investments). Little opposition was expressed to a
September 2007 Borse Dubai plan to take a 20% stake in the NASDAQ stock market, or to a
November 2007 investment of $7.5 billion in Citigroup by the Abu Dhabi Investment Authority
(ADIA).
Nuclear Agreement9
It is the concern about the leakage of technology to Iran, via the UAE, that underpins much of the
concern about a U.S.-UAE agreement, signed January 15, 2009, to help the UAE develop a
nuclear power program. The government of the United Arab Emirates (UAE) announced in 2008
an ambitious plan to acquire its first nuclear power reactors to satisfy projected increases in
domestic electricity demand.10
Policymakers and advisers in the government of Abu Dhabi, in consultation with representatives
from the other six emirates, are guiding the program’s implementation. A number of U.S. and
European firms have secured administrative and financial advisory contracts with the program.
The agreement for the United States to assist the program, subject to conditions specified in
Section 123 of the Atomic Energy Act of 1954 [42 U.S.C. 2153(b)], was signed by the Obama
Administration on May 21, 2009 (and submitted to Congress that day). It required congressional
approval in the form of passage of a joint resolution of approval or non-passage of a joint
resolution of disapproval within 90 days of continuous legislative session following the May 21
submission). In the 111th Congress, concerns were encapsulated in H.R. 364, which would require

8 Testimony of Mr. Vann Van Diepen before the House Foreign Affairs Committee. July 22, 2010.
9 This section was prepared by Paul Kerr, Analyst in Weapons of Mass Destruction Nonproliferation, CRS.
See CRS Report R40344, The United Arab Emirates Nuclear Program and Proposed U.S. Nuclear Cooperation, by
Christopher M. Blanchard and Paul K. Kerr.
10 UAE officials estimate that their country must expand its power generation and transmission capacity
from the current level of 16 gigawatts to 40 gigawatts by 2020 in order to meet projected demand increases
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the President to certify that the UAE has taken a number of steps to stop illicit trade with Iran
before any agreement would take effect. Several congressional resolutions of approval of the
agreement (S.J.Res. 18 and H.J.Res. 60) were introduced, compared to only one disapproving
(H.J.Res. 55). No measure blocking the agreement was enacted, and the “1-2-3 Agreement”
entered into force on December 17, 2009.
In January 2010, the UAE announced that it had chosen the Korea Electric Power Corporation
(KEPCO of South Korea) to construct the first of four APR1400 nuclear reactors that would sell
electricity to the Abu Dhabi Water and Electricity Authority. The first plant is expected to start
operating in 2017 and the other three are scheduled to be completed and operational by 2020,
according to the UAE.11 The plant construction is to take place at Baraka, near Abu Dhabi’s
western border with Saudi Arabia, pending final approval by the UAE Federal Authority for
Nuclear Regulation.12
The Emirates Nuclear Energy Corporation (ENEC) announced in July 2011 that it has begun a
“procurement competition” to obtain fuel supplies for the four proposed reactors.13 “The final
contracts are expected to be signed in the first quarter of 2012,” according to the ENEC. No
specific decisions have been made regarding the disposition of spent reactor fuel. The UAE has
committed to refrain from domestic uranium enrichment and reprocessing spent nuclear reactor
fuel. Enrichment and reprocessing are considered to the most sensitive parts of the nuclear fuel
cycle because they can both produce fissile material for nuclear weapons.
The International Atomic Energy Agency announced December 14, 2011, that a group of experts
had completed a review of the UAE’s “regulatory framework for nuclear safety and radiation
protection.” The review both “noted good practices” and provided suggestions to the Federal
Authority for Nuclear Regulation, the UAE’s nuclear regulatory authority.14
Foreign Policy and Defense
Following the 1991 Gulf War to oust Iraqi forces from Kuwait, the UAE determined that it
needed a closer security relationship with the United States. The UAE did not necessarily fear a
direct threat from Saddam Hussein’s Iraq, which is at the north end of the Persian Gulf, but the
UAE saw the United States as the key actor in any successful effort to balance out Iranian
power—the primary UAE concern. As discussed below, its actions and responses to the 2011
unrest in the Middle East suggest that the UAE is more assertive on foreign policy posture than it
has been.
In addition, in recent years, perhaps deciding it cannot rely solely on the United States, the UAE
has sought to broaden its defense relationships. 2004, the UAE joined NATO’s “Istanbul
Cooperation Initiative,” which was launched that year by NATO as an effort to bolster bilateral
security with Middle Eastern countries. In May 2011, the UAE requested to send an Ambassador

11 http://enec.gov.ae/our-nuclear-energy-program/prime-contractor/.
12 http://enec.gov.ae/our-nuclear-energy-program/preferred-site/.
13 http://www.enec.gov.ae/media-centre/news/content/emirates-nuclear-energy-corporation-begins-nuclear-fuel-
procurement-co.
14 http://www.iaea.org/press/?p=2572.
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to NATO under a new alliance policy approved by the organization in April 2011; the request is
subject to NATO concurrence. In January 2008 the UAE signed an agreement with French
President Nicolas Sarkozy to allow a French military presence. The facilities were inaugurated
during a visit by Sarkozy to UAE on May 27, 2009, and include (1) a 900-foot section of the
Zayid Port for use by the French navy; (2) an installation at Dhafra Air Base to be used by
France’s air force; and (3) a barracks at an Abu Dhabi military camp that will house about 400
French military personnel. On the other hand, in October 2010, the UAE reportedly threatened to
ask Canada to evacuate a UAE base, Camp Mirage, used by Canada as a staging point for its
forces to deploy to Afghanistan, when Canada refused additional landing slots in Canada for
Emirates Air.15 The two countries subsequently negotiated a solution to the mutual concerns.
Regional Security Cooperation With the United States
The UAE is one lynchpin of U.S. strategy to defend the Gulf, despite the small size of the UAE
armed forces (about 50,000). The framework for U.S.-UAE defense cooperation is a July 25,
1994, bilateral defense pact, the text of which is classified, including a “status of forces
agreement” (SOFA).16 Under the pact, during the years of U.S. “containment” of Iraq (1991-
2003), the UAE allowed U.S. equipment pre-positioning and U.S. warship visits at its large Jebel
Ali port, capable of handling aircraft carriers, and it permitted the upgrading of airfields in the
UAE that were used for U.S. combat support flights during Operation Enduring Freedom in
Afghanistan and Operation Iraqi Freedom (OIF).17 Currently, according to Secretary of Defense
Leon Panetta in November 2011, there are about 3,000 U.S. forces, mostly Air Force, in UAE.
That is up from 800 before OIF. They use Al Dhafra air base (mostly KC-10 refueling) and naval
facilities at Fujairah to support U.S. operations in Iraq and Afghanistan, even though UAE
officials say that OIF benefitted Iran strategically. U.S. officials say there are no plans to increase
these numbers, either in UAE or elsewhere in the Gulf, in the wake of the U.S. withdrawal from
Iraq that was completed on December 15, 2011.
The U.S.-UAE defense pact has also reportedly included U.S. training of UAE armed forces. As
another possible indication that the UAE might question official U.S. commitments to the UAE, it
confirmed on May 15, 2011, that it had retained the U.S. private firm Reflex Responses, to
provide “operational, planning, and training support,” to the UAE military. The statement
followed a New York Times report that the UAE had hired the firm, which is run by the founder of
the well-known Blackwater Worldwide security contractor, to a $529 million contract to build a
foreign mercenary battalion to help defend the UAE from internal revolt or related threats—an
account based partly on observations of foreign nationals entering the UAE to undergo training at
a UAE base.18 The State Department stated subsequently that it is investigating the reports to
determine whether it violates any U.S. laws controlling the export of U.S. defense technology and
expertise.

15 Chase, Steven and Brent Jang. “UAE Threatens to Kick Canada Out of Covert Military Base Camp Mirage.” Toronto
Globe and Mail, October 8, 2010.
16 Some provisions are discussed in Sami Hajjar, U.S. Military Presence in the Gulf: Challenges and Prospects (U.S.
Army War College: Strategic Studies Institute), March 2002, p. 27.
17 Jaffe, Greg. “U.S. Rushes to Upgrade Base for Attack Aircraft.” Wall Street Journal, March 14, 2003.
18 http://www.nytimes.com/2011/05/15/world/middleeast/15prince.html?_r=1&partner=rss&emc=rss.
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Iran
Iran is the highest priority foreign policy issue for the UAE, which remains highly wary of Iran’s
ambitions and powers but has sought to reach out to Iran’s government and deny Iran any
justification for aggression or adverse action. Commercial ties between the two are extensive,
with many Iranian firms and individuals operating businesses or offices there, and U.S.
policymakers see the UAE as a key to cutting off Iran’s access to the international banking and
preventing the flow of dual-use technology to Iran.
Aside from trying to limit technology leakage to Iran via UAE, the United States has successfully
enlisted the UAE in a multilateral effort to stiffen international sanctions on Iran—the so-called
“coalition of like minded countries.” In October 2009, Foreign Minister Abdullah bin Zayid was
uncharacteristically public in expressing support for “political and diplomatic pressure on Iran to
stop it from acquiring nuclear technology.” The 2010 GCC summit, held in Abu Dhabi and
concluded December 7, 2010, called for a peaceful resolution of the Iran nuclear issue, although
expressing “utmost concern” about Iran’s program; similar language was repeated following the
GCC summit that ended December 20, 2011. These comments add to UAE statements that reflect
GCC backing for more aggressive U.S. action to set back Iran’s program, although the UAE has
muted its comments in 2011 in line with U.S. and other assessments that Iran’s nuclear program
may be suffering technical setbacks. The Obama Administration has successfully encouraged the
UAE and other oil exporters to offer to boost oil supplies to China to compensate for any loss of
imports from Iran that may result from China’s cooperation against Iran.19
In terms of concrete action, in October 2010, the UAE government directed its banks to fully
comply with the restrictions on dealing with Iranian banks outlined in U.N. Security Council
Resolution 1929, adopted June 9, 2010. The move caused a 15% drop in the value of Iran’s
currency, the rial. In advance of UAE attendance at a “coalition of like minded countries”
meeting in Rome on December 21, 2011, rumors swept Iran that UAE-Iran trade was being
halted, and the rial fell dramatically. At that meeting, the United States continued its efforts to
convince the UAE and other Gulf oil producers to ramp up oil production to make up for any
shortfall in the event the European Union does adopt a voluntary ban on buying Iranian oil in
January 2012. That EU move reportedly is under consideration. Still, reflecting the UAE’s free
and open trading regimen and unwillingness to antagonize Iran outright, there continue to be
reports that some small firms in the UAE continue to supply gasoline to Iran even though such
activity is potentially sanctionable under CISADA, referred to earlier.
Some Iranian actions may account for the UAE’s strategic closeness to the United States and
other Western powers. UAE fears of Iran have been elevated since April 1992, when Iran asserted
complete control of the largely uninhabited Persian Gulf island of Abu Musa, which it and the
UAE shared under a 1971 bilateral agreement. (In 1971, Iran, then ruled by the U.S.-backed
Shah, seized two other islands, Greater and Lesser Tunb, from the emirate of Ras al-Khaymah, as
well as part of Abu Musa from the emirate of Sharjah.) In October 2008, the UAE and Iran signed
an agreement to establish a joint commission to resolve the dispute; that agreement came two
months after the UAE protested Iran’s opening in August 2008 of administrative and maritime
security offices on Abu Musa. Iran has allowed Sharjah to open power and water desalination
facilities on the island. The 2010 GCC summit in Abu Dhabi, referenced above, nodded to UAE

19 Solomon, Jay. “U.S. Enlists Oil to Sway Beijing’s Stance on Tehran.” Wall Street Journal, October 20, 2009.
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concerns by demanding Iran return the UAE islands. The United States is concerned about Iran’s
physical control over the islands, but takes no position on the legal sovereignty of the islands.
The UAE, particularly Abu Dhabi, has long feared that the large Iranian-origin community in
Dubai emirate (estimated at 400,000 persons) could pose a “fifth column” threat to UAE stability.
Illustrating the UAE’s attempts to avoid antagonizing Iran, in May 2007, Iranian President
Mahmoud Ahmadinejad was permitted to hold a rally for Iranian expatriates in Dubai when he
made the first high-level visit to UAE since UAE independence in 1971. Still, reflecting the
underlying tensions and volatility of UAE-Iran relations, the two countries issued mutual
recriminations in January 2009 over the UAE decision in late 2008 to begin fingerprinting Iranian
visitors to UAE.
Cooperation on Iraq
Aside from allowing U.S. use of UAE military facilities, the UAE has undertaken several
initiatives to support U.S. efforts to stabilize Iraq since the fall of Saddam Hussein. The UAE has
provided facilities for Germany to train Iraqi police. Agreeing with the U.S. view that Sunni Arab
states need to engage the Shiite-dominated government in Baghdad, in June 2008, the UAE
appointed an Ambassador to Iraq, Abdullah Ibrahim al-Shehi, the first Arab country to do so. The
following month it wrote off $7 billion (including interest) in Iraqi debt. Abu Dhabi Crown Prince
Shaykh Mohammad bin Zayid visited Iraq in October 2008. The UAE tended to defer to Saudi
Arabia in its efforts to encourage inclusion of high profile Sunni Arabs in the new Iraqi
government formed in late 2010. In October 2011, the UAE announced it intends to open a
consulate in the Kurdish region of Iraq which comprises three northern provinces and is
administered by the Kurdistan Regional Government (KRG), a legally constituted region within
Iraq.
In humanitarian efforts, the UAE has provided about $215 million for Iraq reconstruction but has
provided the funds not in cash but in the form of humanitarian contributions. Some of the funds
have been used to rebuild hospitals in Iraq and to provide medical treatment to Iraqi children in
the UAE. Bilateral trade is estimated at about $5 billion, and UAE companies reportedly are
considering new investment in housing and other projects in Iraq.
Cooperation on Afghanistan and Pakistan
In addition to placing some of its military facilities at U.S. and allied disposal for use in
Afghanistan (and Iraq), the UAE is assisting the U.S. and international mission to stabilize
Afghanistan. Despite the small size of its military force, a 250-person contingent of UAE troops
has been serving in Afghanistan since 2004. The UAE forces, the only Arab combat forces in
Afghanistan, are operating in the restive southern part of Afghanistan, particularly Uruzgan
Province, where they appear to be welcomed by the Muslim population there.
The UAE has pledged a total of $323 million in economic aid for Afghanistan since the fall of the
Taliban. Among the projects funded with UAE aid include “Zayed University,” a college serving
over 6,000 Afghan students per year; six medical clinics; a major hospital with a capacity of
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7,000 patients; the building of “Zayed City” that houses 200 Afghan families displaced by
violence; 160 drinking wells; and 38 mosques.20
In related aid for U.S. regional policy, Abu Dhabi hosted the November 2008 meeting of the
“Friends of Pakistan” donors group that is attempting to help Pakistan through its financial
difficulties. The UAE provided about $100 million to aid victims of a major earthquake in
Pakistan in October 2005, and substantial amounts in 2010 to help victims of flooding there. The
UAE also appointed a direct counterpart to the Obama Administration’s Special Representative
for Afghanistan and Pakistan (SRAP), the position held by Ambassador Marc Grossman.
U.S. and Other Arms Sales
The UAE views arms purchases from the United States as enhancing the U.S. commitment to
UAE security. The United States views these sales as a means to enhance the U.S.-led security
architecture for the Gulf in which the Gulf partners take on increased responsibilities. In 2009, the
UAE bought about $18 billion worth of U.S. military equipment, according to June 16, 2010,
testimony by then CENTCOM Commander General David Petraeus. Until 2008, the most
significant buy was the March 2000 purchase of 80 U.S. F-16 aircraft, equipped with the
Advanced Medium Range Air to Air Missile (AMRAAM) and the HARM (High Speed Anti-
Radiation Missile), a deal exceeding $8 billion. Congress did not try to block the aircraft sale, but
some Members questioned the AMRAAM as an introduction of the weapon into the Gulf. Among
other sales with the potential to enhance the UAE’s offensive capability, a sale of High Mobility
Artillery Rocket Systems (HIMARS) and Army Tactical Missile Systems (ATACMs), valued at
about $750 million, notified on September 21, 2006.
THAAD and Other Major Missile and Air Defense Systems
More recent sales to UAE, some with offensive potential, have been in concert with the U.S.-led
“Gulf Security Dialogue,” intended to help the Gulf states contain Iran. The UAE is a key
participant in U.S. efforts to build a missile defense shield for the Gulf, in order to deter or
contain Iran. The most significant is the Terminal High Altitude Air Defense System (THAAD),
the first sale ever of that sophisticated missile defense system (notified September 9, 2008, valued
at about $7 billion). The main manufacturer, Lockheed Martin, said in June 2010 that a firm
agreement for three THAAD fire units with 147 THAAD missiles and four radar sets might be
signed in the next few months, although the firm said in August 2011 that the UAE might reduce
the buy somewhat.21
Among the most significant other recent missile defense sales are the advanced Patriot anti-
missile systems (PAC-3, up to $9 billion value, notified December 4, 2007) and kits for the Joint
Direct Attack Munition (JDAM) kits ($326 million value, notified January 3, 2008). Also notified
on September 9, 2008 (see above), were sales to UAE of a surface launched AMRAAM ($445
million value) and vehicle mounted “Stinger” anti-aircraft systems ($737 million value).

20 Information provided to CRS by the UAE Embassy in Washington, DC, December 2009.
21 Jim Wolf. “UAE Said to Trim Planned US Missile-Defense Purchase.” Reuters, August 24, 2011.
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Other Major Pending Sales: Joint Direct Attack Munitions
In conjunction with the international defense exhibit in Abu Dhabi in March 2009, the UAE
signed agreements with Boeing Co. and Lockheed Martin Corp. to buy $3 billion worth of
military transport aircraft (C-17 and C-130, respectively). On November 4, 2010, the Defense
Security Cooperation Agency notified Congress of two potential sales: $140 million worth of
ATACMs (see above) and associated support; and a possible $5 billion worth of AH-64 Apache
helicopters (30 helicopters, remanufactured to Block III configuration).22 In 2011, a notification
was made for $300 million worth of support for UAE’s F-16 fleet and AIM-9X missiles. On
September 22, 2011, there was notification to Congress of a possible sale of 500 “Hellfire”
missiles and related equipment and services, a total estimated cost of $65 million.
A potential sale that caused discussion was notified by DSCA on November 30, 2011 (transmittal
number 10-56). The possible sale is for 4,900 Joint Direct Attack Munitions (JDAM) kits with an
estimated value of $304 million. The widespread perception was that the munitions could
potentially be used to strike hard targets, such as nuclear facilities in Iran, although there are no
indications the UAE would contemplate such a strike on its own, no matter its concerns about
Iran.
Other Country Sales to UAE
The United States is in competition with France for further aircraft sales. France is hoping that, as
part of the facilities basing agreement discussed above, the UAE will buy about 60 Rafale combat
aircraft, which could be valued at about $8 billion. The UAE has already bought 380 French-
made Leclerc tanks and 60 Mirage 2000 warplanes. However, the United States is hoping to sell
the UAE additional F-16’s, according to press reports.
Other Regional Issues: Response to 2011 Unrest in the Middle East
The unrest in the broader Middle East reportedly was the focus of the meeting between President
Obama and Abu Dhabi Crown Prince Mohammad bin Zayid Al Nuhayyan on April 26, 2011. In
reacting to the uprisings in the Arab world, the UAE leadership has sought to tamp down unrest in
Bahrain, a fellow GCC state, but it has supported rebel movements in other states, such as Libya.
The UAE joined other GCC states in supporting the Al Khalifa regime in Bahrain during its
confrontations with protesters and, on March 14, it sent 500 UAE police to join a 1,000 troop
Saudi force that deployed to Bahrain to help the regime protect key locations. The UAE, Saudi
Arabia, Kuwait, and Qatar, the wealthiest of the GCC states, also have pledged financial help to
Bahrain and Oman, the two GCC states where substantial protests have taken place in 2011. The
UAE police pulled out of Bahrain in concert with a broader withdrawal of the GCC country
forces in late June 2011, after the state of emergency in Bahrain ended on June 1, 2011.
On Libya, the UAE played a significant role in supporting the opposition to Muammar Qadhafi,
which succeeded in ending his regime in late August 2011. It sent six of its U.S-made F-16s and
six Mirage fighters to participate in the NATO no-fly zone enforcement operation in Libya. On
May 10, 2011, Abu Dhabi hosted a major meeting of Libyan dissidents, including representatives
of cities and towns still formally under the Qadhafi regime control. In June 2011, in the context of

22 DSCA transmittal number 10-52. http://www.dsca.mil.
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its hosting a meeting of the international Libya Contact Group, the UAE formally recognized the
Benghazi-based Transitional National Council (TNC) as the sole representative of the Libyan
people and pledged financial support to the TNC.
In Yemen, the UAE has joined a high-profile GCC mediation effort that reached an agreement for
President Ali Abdullah Saleh to step down in favor of a political transition. President Saleh was
injured in an assassination attempt in June 2011 and recuperated in Saudi Arabia, but he returned
to the country in November 2011 and his intentions were unclear. He signed the transition
agreement but he reportedly still wields substantial influence through close relatives in charge of
key military units and security services.
In contrast with Saudi Arabia, the UAE did not initially taken a clear position against President
Bashar Al Assad of Syria’s crackdown against burgeoning dissent. The UAE was said by some
observers to fear that Assad’s downfall could cause his close ally, Iran, to increase its meddling in
the Gulf to compensate for a loss of influence in the Levant. On the other hand, most UAE
leaders see Assad’s fall as key to weakening Iran in the Middle East and have hope for that
outcome. In November 2011, after the Arab League suspended Syria’s membership because of its
crackdown, the UAE embassy in Damascus was attacked, among other embassies.
Other Regional Issues: Arab-Israeli Dispute
On most regional issues, including the Arab-Israeli dispute, the UAE does not follow U.S. policy
strictly or uncritically, but it does generally agree with most U.S. assessments of regional threats,
and it supports U.S. diplomatic efforts to resolve regional issues. On the Arab-Israeli issue, the
UAE wants to ensure that any settlement between Israel and the Palestinians is “just,” and, like
other Gulf and Arab states, it criticizes the United States as excessively supportive of Israel. UAE
leaders have publicly backed the Palestinian Authority’s bid for statehood recognition at the
United Nations General Assembly, launched in September 2011—a proposal the United States
opposes as premature and preemptive of Israeli-Palestinian negotiations.
The UAE has not advanced its own far-reaching proposals to resolve the Israeli-Palestinian
dispute, as has King Abdullah of Saudi Arabia. Nor has UAE tried to directly mediate between
Palestinian factions, as have Saudi Arabia, Qatar, or Egypt. In 1994 the UAE joined with the
other Gulf monarchies in ending enforcement of the Arab League’s boycott of companies doing
business with Israel and on companies that deal with companies that do business with Israel. The
UAE formally bans direct trade with Israel, although UAE companies reportedly do business with
Israeli firms and some Israeli diplomats have attended multilateral meetings in the UAE. Unlike
Qatar and Oman, the UAE did not host multilateral Arab-Israeli working groups on regional
issues when those talks took place during 1994-1998. In 2007, the UAE joined a “quartet” of
Arab states (the others are Saudi Arabia, Egypt, and Jordan) to assist U.S. diplomacy on Israeli-
Palestinian issues, and it attended the Annapolis summit on the issue that year.
The UAE publicly supports the Palestinian cause and has sometimes put its considerable financial
resources to work on behalf of the Palestinians. One major UAE action has been to fund a
housing project in Rafah, in the Gaza Strip, called “Shaykh Khalifa City.” It also has given
economic aid to Lebanon, perhaps in part to counter Iranian and Syrian influence there—an
objective that UAE shares with Saudi Arabia and the other GCC states. In December 2008 and
January 2009, the UAE government permitted street demonstrations in support of Hamas during
its war with Israel. In February 2009, the UAE denied a visa to an Israeli tennis player who was
to participate in a Dubai tennis tournament, earning the UAE some international criticism. It also
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aggressively investigated and, based on evidence developed, formally accused Israel in the killing
of Hamas leader at a Dubai hotel in January 2010.
Border Issues
The UAE cooperates with virtually all GCC-wide development and economic initiatives,
although some past border disputes and other disagreements with Saudi Arabia occasionally flare.
A 1974 “Treaty of Jeddah” with Saudi Arabia formalized Saudi access to the Persian Gulf via a
corridor running through UAE, in return for UAE gaining formal control of villages in the
Buraymi oasis area.
UAE Provision of Foreign Aid
The UAE asserts that it has provided billions of dollars in international aid through its
government and through funds controlled by royal family members and other elites. Among the
foreign aid activities reported are $100 million to aid victims of the December 2004 tsunami in
the Indian Ocean and $100 million to help victims of Hurricane Katrina in the United States in
2005. Among other initiatives:
• The Abu Dhabi Fund for Development (ADFD), established in 1971, has
distributed about $3.5 billion to 207 projects in 53 countries. Of this amount,
about $240 million was distributed in 2010.
• In 2010, the Zayid Foundation provided $10 million to the education and social
services sectors of various Middle Eastern countries, including the Palestinian
territories, Lebanon, Yemen, Egypt, and Afghanistan.
• In July 2011, UAE foundations responded to a U.N. appeal for aid to the victims
of a drought in East Africa.
Economic Issues
The UAE, a member of the World Trade Organization (WTO), has developed a free market
economy, widely considered weakly regulated. Partly as a result, the UAE, particularly Dubai
emirate, whose strategy was built on attracting investment to construct large numbers of opulent
and futuristic projects, built up a “bubble” in real estate prices and other assets. The UAE,
particularly Dubai, was therefore hurt significantly by the global economic downturn. At the
height of the financial crisis, there were widespread layoffs in UAE and the departure of
thousands of foreign workers, who often abandoned cars and properties that were financed,
leaving UAE banks with additional non-performing loans.23 During 2008-2009, real estate prices
fell about 40%-50% from the 2007 levels. The downturn in real estate prices also affected
regional investors, such as those in Afghanistan, who bought into high-end housing such as on the
Palm Islands. The fall in value nearly caused a collapse of a major Afghan bank, Kabul Bank, in
September 2010; the bank had made large loans to prominent Afghan power brokers and officials
to buy property there.

23 Worth, Robert. “Laid Off Foreigners Flee as Dubai Spirals Down.” New York Times, February 12, 2008.
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To address the crisis, the federal government took on some public debt and drew upon used some
of the country’s purported $700 billion “sovereign wealth fund” to inject into Dubai banks to help
them ride out the downturn. The largest such fund, called Mubadala, is owned and run by Abu
Dhabi. Among the cash injections, in late 2009, Abu Dhabi pledged about $10 billion to help
Dubai World (major real estate developer) avert outright default on about $26 billion in debt
repayment. As a result of its efforts to deal with the financial crisis, the overall public debt level
stands at over $230 billion, according to the IMF in May 2011. As of the end of 2011, economic
analysts say that the UAE’s worst economic problems are behind it and its growth outlook has
improved substantially to about 3.3% in 2011, with an expected 3.8% growth expected in 2012,
levels likely sufficient for the UAE to manage its debt obligations. 24
Oil and Gas Sector/Dedication to Future Clean Energy
The source of the UAE’s sovereign wealth has been oil sales. Abu Dhabi has 80% of the
federation’s proven oil reserves of about 100 billion barrels, enough for over 100 years of exports
at the current production rate of about 2.5 million barrels per day (mbd). Of that, over 2 mbd are
exported, and the UAE may have as much as 500,000 bpd of spare capacity.25 Small amounts of
its oil exports go to the United States. The UAE lacks non-associated natural gas. It has entered
into a deal (Dolphin project) with neighboring gas exporter Qatar and gas importer Oman that is
bringing natural gas, via a newly constructed pipeline, from Qatar to UAE, and then on to Oman.
Seeking to reinvest its oil wealth, Abu Dhabi has sought in recent years to outdo Dubai by
building local branches of famous U.S. and European museums. However, it has also tried to use
its oil wealth to plan for a time when the developed world is no longer reliant on oil imports. It
has funded “Masdar City”—a project, the first phase of which is to be completed in 2015, to build
a planned city which will rely only on renewable energy sources. Automobiles that run on fossil
fuels are banned from Masdar City. One feature of the city is a system of driverless taxis that use
automation to take passengers to their destinations. The civilian nuclear energy project discussed
above is also part of the effort to plan for a post-oil world economy.
U.S.-UAE Free Trade Agreement Negotiations
On November 15, 2004, the Administration notified Congress it had begun negotiating a free
trade agreement (FTA) with the UAE. Several rounds of talks were held prior to the June 2007
expiration of Administration “trade promotion authority,” but progress was been halting. The
UAE, which is considered wealthy, has received small amounts of U.S. assistance. The primary
purpose of the aid is to make the UAE eligible for advice and programming to improve its border
security and export controls, as shown below.

24 Economist Intelligence Unit. “Country Report: United Arab Emirates,” December 2011.
25 http://www.thenational.ae/events/areas/abu-dhabi/adnoc-preserves-spare-supplies.
Congressional Research Service
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The United Arab Emirates (UAE): Issues for U.S. Policy

Table 2. Recent U.S. Aid to UAE
FY2010

FY2007 FY2008 FY2009
FY2011 FY2012
(est.)
(req.)
NADR
(Nonproliferation,
Anti-Terrorism,
$ 1.409
Demining, and
million
$725,000

0
Related) -
Counterterrorism
Programs (ATA)
NADR-
$172,000 $300,000 $200,000 $230,000 $230,000 0
Combating WMD
International
Military Education

$10,000
0-
and Training
(IMET)
Totals $
1.581
$300,000 $925,000 $240,000 $230,000 0
million


Author Contact Information

Kenneth Katzman

Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612


Congressional Research Service
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