Ports flap: White House issues ``fact sheets'' on U.S.-UAE relations and ``CFIUS'' process

The Bush team goes on the offensive to defend the ports deal with a United Arab Emirates company

FACT SHEET: THE CFIUS PROCESS AND THE DP WORLD TRANSACTION

THE WHITE HOUSE

Office of the Press Secretary

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______

For Immediate Release February 22, 2006

The CFIUS Process And The DP World Transaction

“If there was any chance that this transaction would jeopardize the

security of the United States, it would not go forward. The company has

been cooperative with the United States government. The company will

not manage port security. The security of our ports will continue to be

managed by the Coast Guard and Customs. The company is from a country

that has been cooperative in the war on terror, been an ally in the war

on terror. The company operates ports in different countries around the

world, ports from which cargo has been sent to the United States on a

regular basis.”

– President George W. Bush, February 21, 2006

President Bush Strongly Supports The Decision To Move Forward With The

DP World Transaction

The Administration, As Required By Law, Has Reviewed The Transaction To

Make Certain That It Does Not In Any Way Jeopardize National Security.

Under the process conducted by the Committee on Foreign Investment in

the United States (CFIUS), officials carefully reviewed the national

security issues raised by the transaction and its effect on our national

security. Twelve Federal agencies and the government’s counterterrorism

experts closely and carefully reviewed the transaction to make certain

it posed no threat to national security.

DP World Has Provided Strong Security Assurances To The United States.

DP World has signed a letter of assurances making commitments to meet

and maintain security standards for the port terminals that they will

own and operate in the United States. There are a number of safeguards

that are in place in the agreement, and the American people should feel

confident that the transaction will in no way harm the security of the

Nation’s ports.

DP World’s Bid For The London-Based Peninsular And Oriental (P&O) Steam

Navigation Company Was Announced Last Fall. DP World, a UAE-based

commercial entity, is purchasing the U.S. subsidiary of the London-based

P&O Steam Navigation Company. The announcement of DP World’s bid for

P&O was made in November 2005, and the news was widely reported in the

press and international financial trade publications. The formal CFIUS

process was set into motion in December, and the Federal government

conducted a thorough review to ensure that port security would in no way

be compromised by the deal.

The Administration Has Taken A Principled Position Based On The Security

Of Our Nation And Careful Review Of The Transaction. The President has

made clear that he stands firmly behind the decision to allow the DP

World transaction to move forward. Preventing this transaction by a

reputable company to go forward after careful review would send a

terrible signal to friends and allies that investments in the United

States from certain parts of the world are not welcome.

The Port Security Of the United States Is The Administration’s First And

Foremost Concern

The Department of Homeland Security (DHS) Is Always In Charge Of The

Nation’s Port Security, Not The Private Company That Operates Facilities

Within The Ports. Nothing will change with this transaction. DHS,

along with the U.S. Coast Guard, U.S. Customs and Border Protection, and

other Federal agencies, sets the standards for port security and ensures

that all port facility owners and operators comply with these standards.

The Transaction Is Not About Port Security Or Even Port Ownership, But

Only About Operations In Port. DP World will not manage port security,

nor will it own any ports. DP World would take on the functions now

performed by the British firm P&O – basically the off- and on-loading of

cargo. Employees will still have to be U.S. citizens or legal permanent

residents. No private company currently manages any U.S. port. Rather,

private companies such as P&O and DP World simply manage and operate

individual terminals within ports.

Background On The CFIUS Process

The CFIUS Process Was Rigorously Followed, And CFIUS Agencies Carefully

Reviewed The Transaction. Ensuring the protection of our national

security is the top priority of all members of CFIUS. In reviewing a

foreign transaction, CFIUS brings together 12 Federal agencies with

diverse expertise to consider transactions from a variety of

perspectives and identify and analyze all national security issues.

*The Department of the Treasury, which chairs CFIUS, receives

notices of transactions, serves as the contact point for the private

sector, establishes a calendar for review of each transaction, and

coordinates the interagency process.

*During the initial 30-day review, each CFIUS member agency

conducts its own internal analysis of the national security implications

of the transaction under review. CFIUS also consults with the

intelligence community. In this case, the Departments of Transportation

and Energy were also brought in to widen the scope and add to the

expertise of the CFIUS agencies involved in the review process.

*All CFIUS decisions are made by consensus of the entire

committee. The review process allows any agency that sees a potential

credible threat to the national security to raise those concerns.

*In the course of the review of this transaction, DHS reached an

agreement with DP World to mitigate security concerns.

DP World Has Played By The Rules, Has Cooperated With The United States,

And Is From A Country That Is A Close Ally In the War on Terror. The

United Arab Emirates (UAE) has been a solid partner in the War on

Terror. The UAE has been extremely cooperative on counter-terrorism and

counter-proliferation and has provided considerable support to U.S.

forces in the Gulf and to the governments and people of Iraq and

Afghanistan.

*The UAE Is A Partner In Shutting Down Terror Finance Networks.

The UAE has worked with us to stop terrorist financing and money

laundering, including by freezing accounts, enacting aggressive

anti-money-laundering and counter-terrorist financing laws and

regulations, and exchanging information on people and entities suspected

of being involved in those actions.

*The UAE Is An Established Partner In Protecting America’s Ports.

Dubai was the first Middle Eastern entity to join the Container Security

Initiative (CSI) – a multinational program to protect global trade from

terrorism. Dubai was also the first Middle Eastern entity to join the

Department of Energy’s Megaports Initiative, a program aimed at stopping

illicit shipments of nuclear and other radioactive material.

Port Security Begins Abroad. U.S. Customs and Border Protection (CBP)

created the CSI to enable CBP to inspect 100% of high-risk containers at

foreign seaports before they are loaded onboard vessels destined for the

United States. Dubai was the first Middle Eastern entity to join CSI.

Cooperation with Dubai has been outstanding and a model for other

operations.

*DP World currently manages 19 container terminals and has

operations in 14 countries. The United States government has a strong

working relationship with DP World.

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Office of the Press Secretary

________________________________________________________________________

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For Immediate Release February 22, 2006

The United States – UAE Bilateral Relationship

“But I also want to repeat something again, and that is, this is a

company that has played by the rules, that has been cooperative with the

United States, a country that’s an ally in the War on Terror, and it

would send a terrible signal to friends and allies not to let this

transaction go through.”

– President Bush, 2/21/06

“[T]he military-to-military relationship with the United Arab Emirates

is superb. … They’ve got airfields that they allow us to use, and

their airspace, their logistics support. They’ve got a world-class

air-to-air training facility that they let us use and cooperate with

them in the training of our pilots. In everything that we have asked and

work with them on, they have proven to be very, very solid partners.”

– General Peter Pace, Chairman Of The Joint Chiefs Of Staff, 2/21/06

The United Arab Emirates (UAE) Is A Longstanding Friend And Ally Of The

United States. The United States and UAE have a longstanding alliance.

The UAE is a key partner of the United States in the War on Terror,

helping to advance Middle East peace efforts. The UAE is also a vibrant

trading partner and has provided critical support in the wake of

Hurricane Katrina.

The UAE Is A Key Partner In The War On Terror. The UAE provides U.S.

and Coalition forces unprecedented access to its ports and territory,

overflight clearances, and other critical and important logistical

assistance. Today, the UAE is providing assistance to the missions in

Afghanistan and Iraq, combating terrorists by cutting off their

financing, and enhancing America’s homeland security by actively

participating in initiatives to screen shipments and containers.

* UAE Ports Host More U.S. Navy Ships Than Any Port Outside The

United States. The UAE provides outstanding support for the U.S. Navy

at the ports of Jebel Ali – which is managed by DP World – and Fujairah

and for the U.S. Air Force at al Dhafra Air Base (tankers and

surveillance and reconnaissance aircraft). The UAE also hosts the UAE

Air Warfare Center, the leading fighter training center in the Middle

East.

* The UAE Is A Partner In Shutting Down Terror Finance Networks.

The UAE has worked with us to stop terrorist financing and money

laundering, including by freezing accounts, enacting aggressive

anti-money-laundering and counter-terrorist financing laws and

regulations, and exchanging information on people and entities suspected

of being involved in these activities.

* The UAE Is An Established Partner In Protecting America’s Ports.

Dubai was the first Middle Eastern entity to join the Container Security

Initiative (CSI) – a multinational program to protect global trade from

terrorism. Under CSI, a team of U.S. Customs and Border Protection

officers is permanently stationed inside Dubai’s ports, where they work

closely with Dubai Customs to screen containers destined for the United

States. Cooperation with Dubai officials has been outstanding and a

model for other operations. Dubai was also the first Middle Eastern

entity to join the Department of Energy’s Megaports Initiative, a

program aimed at stopping illicit shipments of nuclear and other

radioactive material.

* The UAE Is A Critical Partner In Afghanistan. The UAE extends

vital military and political support to Operation Enduring Freedom in

Afghanistan and substantial financial and humanitarian support to

Afghanistan and its people.

* The UAE Is Supporting The New Iraqi Government. The UAE has

provided significant monetary and materiel support to the Iraqi

government, including a pledge of $215 million in economic and

reconstruction assistance.

The UAE Is Supporting Middle East Peace Efforts. The UAE is a moderate

Arab state and a long-time supporter of all aspects of Middle East peace

efforts. The U.S. and the UAE are also working together to create a

stable economic, political and security environment in the Middle East.

The UAE Provided $100 Million To Help The Victims Of Hurricane Katrina.

The UAE was one of the first nations to offer financial aid to the U.S.

after Hurricane Katrina struck the Gulf Coast. UAE’s $100 million

donation was one of the largest by any nation.

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