Daughter's threat, bank's dilemma

UAE Central Bank wanted legal indemnity for blocking bank account held by A.Q. Khan's daughter

The Central Bank of the United Arab Emirates told the United States in 2005 to either cross out the name of Abdul Qadeer Khan's daughter from a list of people whose assets were blocked for their suspected involvement in suspected acts of nuclear proliferation, or provide the bank with legal indemnity for freezing her account.

Dina Khan was among those whose accounts were frozen after her father's 2004 television confession that he had sold Pakistan's nuclear secrets abroad.

The UAE blocked Ms. Khan's Dubai bank account soon after the UN Security Council adopted the anti-proliferation resolution 1540. But, as a diplomatic cable dated September 28, 2005 (

> 41524: secret/no forn ), accessed by

TheHindu through WikiLeaks, shows, the Central Bank developed cold feet when Ms. Khan threatened to sue it for blocking the account and for “physical and emotional damages.”

The cable, sent from the U.S. Embassy in Abu Dhabi, documented a meeting between Sultan Nasser al-Suweidi, Governor of the Central Bank, and Bob Werner, Director of the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC).

Mr. Al-Suweidi told Mr. Werner that he “personally recommends that Dina Khan be “eliminated from the list of frozen accounts” since “there is not enough evidence.” If the U.S. government was not willing to agree to this, the Governor demanded that the U.S. provide the bank “indemnity.”

In an affidavit submitted to the Central Bank, Ms. Khan had argued that there was no travel ban on her in any country, and that “she has no other accounts frozen — including those in the U.K. [where she was currently living].” She claimed that “the money was an inheritance from her grandmother, and that it had nothing to do with her father's activities.”

The cable noted that the Central Bank officials did not get “any corroborating documentation” from Ms. Khan to prove her claim that she had inherited the money from her grandmother. Still, the Dubai Attorney General advised the Central Bank that “there is not enough evidence to justify continuing the freeze.”

Ms. Khan said in her affidavit that the U.S. government had leased one of her properties in Pakistan, pointing out that “if she were connected to her father's network, the USG [U.S. government] would not be leasing her property.”

The U.S. Embassy in Islamabad, the cable remarked, had checked its 157 property lease agreements in Pakistan. The surname ‘Khan' had surfaced only in 13 leases, and none of them had any connection with Ms. Khan's immediate family members.

The UAE Central Bank was concerned that it did not have legal ‘cover' in Ms. Khan's case and asked the U.S. government, first in 2004, “to provide it with a letter of ‘indemnification' that would provide the bank with some cover.” The U.S. government declined.

The issue came up again in the 2005 meeting between the Central Bank Governor and Mr. Werner. The U.S. official reiterated his government's position that it was not possible to offer indemnity.

Instead, Mr. Werner told the Central Bank that UNSCR Resolution 1540 provided the UAE with the necessary authority to freeze accounts of suspected proliferators. The UAE official was unconvinced. He asked the U.S. to give a legal opinion on exactly how UNSCR 1540 was relevant in Ms. Khan's case.

The Pakistan Cables are being shared by The Hindu with NDTV in India and Dawn in Pakistan.