Sheikh Ali Salman, leader of the Shi’ite-led group al-Wefaq, told Reuters he welcomed Crown Prince Salman al-Khalifa’s appointment but that Bahrainis would have to wait to see if the move heralded any real improvements for them.

“People today look at what is happening on the ground. They appreciate positive words but they don’t give it real value unless it is translated into actions,” he said by telephone from the capital Manama.

Crown Prince Salman, who was named first deputy prime minister on Monday, pushed for talks between government and opposition after pro-democracy protests erupted in Bahrain at the height of the Arab Spring.

The latest attempt at a national dialogue, launched last month, is also seen as largely due to his efforts.

“We hope that having reformists in a decision-making position will translate into reformist steps being taken that will work towards a comprehensive and lasting political solution,” Sheikh Ali said.

He said negotiations were hard going, and that the government had turned down all of the opposition’s proposals for “mechanisms that would ensure a productive dialogue”.

One major gripe is the government’s refusal to bring a representative of the king to the negotiating table, as well as denying requests for proportional representation at the talks, in which Sheikh Ali says the opposition is underrepresented.

“We hope this appointment reflects the government’s will to combat financial and administrative corruption and to deal with the issue of systematic discrimination that has been going on for the last four decades,” he said.

The dialogue should result in reforms to the formation of government and the electoral system, as well as a parliament with greater legislative powers, he said.

He also called again for an immediate end to what he called persistent police brutality.

Violent clashes erupt daily between police firing birdshot and teargas at stone and petrol bomb-throwing youths on the streets of Manama. The authorities point to what they describe as terrorist attacks on security patrols.

“The government is carrying on with its programme of oppression without stopping … there must be an immediate decision to end this,” Sheikh Ali told Reuters.

The government says 35 people died during the unrest in 2011 and two months of martial law that followed, although the opposition puts the toll at more than 80.

At least two protesters and one policeman have been killed in recent weeks as the unrest has taken a more violent turn.

Political trials of opposition figures, nightly raids of homes, torture in prisons were all still happening on the island on a daily basis, Sheikh Ali said.

“All the indications until now are that nothing has changed in the sincerity of the regime to try to find a political solution and respecting the rights of the citizen,” he said.

High-level figures in the Bahraini government have not been held accountable for the deaths of protesters during the violence of 2011, and courts were too lenient on lower-level officials, Sheikh Ali said.

“Escaping justice seems to be an adopted policy,” he said.

(Editing by Louise Ireland and Sami Aboudi)

More than 60 people have been detained in a crackdown on Islamists in the past year amid heightened worries among officials about a spillover from Arab unrest elsewhere.

Those on trial also include some women who have been charged but were not detained and others being tried in absentia.

International rights groups such as Amnesty International and Human Rights Watch have questioned the fairness of the detentions and legal proceedings.

“The basis of the arrests was never made clear, while lawyers chosen to represent the defendants have been accorded scant access to clients,” Amnesty International’s UAE researcher, Drewery Dyke, said in a statement.

Announcing the trial in January, state news agency WAM quoted the attorney general, Salem Saeed Kubaish, as saying that members of the group had sought to penetrate institutions of the state, including schools, universities and ministries.

Their “unannounced aims were to seize power and confront the main principles on which the ruling system is based,” he said.

The accused, all UAE nationals, had invested money from Brotherhood membership fees and charity funds to set up commercial enterprises and real estate investments held in their own names to conceal their activities from the state, he said.

“STICK TO THE BOOK”

Among those arrested were many members of al-Islah, an Islamist group suspected of links to the Muslim Brotherhood, which is banned in UAE, according to the privately owned UAE newspaper al-Khaleej.

Abdulkhaleq Abdullah, an Emirati political scientist, said the scale of the trial was unprecedented and that the authorities had to be careful to conduct proceedings properly.

“For the UAE, this is all very new so … the more they stick to the book, the better,” he said.

One of the region’s most politically stable nations, largely thanks to its oil wealth and cradle-to-grave welfare system, the UAE has seen none of the violent turmoil that has shaken other parts of the Middle East and North Africa in the past two years.

But some UAE Islamists, inspired by the successes of counterparts in countries such as Egypt and Tunisia, have stepped up their activities, angering the authorities in a country where no political opposition is permitted.

International media were denied access to the court hearing and at least two international observers planning to attend were denied entry to the UAE, including an Amnesty lawyer.

As about 100 relatives of the defendants gathered in a car park waiting to be bussed to the court to attend the hearing, many denied their family members belonged to the Brotherhood.

(Reporting By Raissa Kasolowsky, Editing by Sami Aboudi and Alistair Lyon)

Wary of non-Arab adversary Iran in a competition for
regional predominance, and seeing an increased security threat
from Islamist militants, Gulf Arab monarchies have some of the
fastest growing military budgets in the world.

The UAE has established a small defence industry that
includes maritime security and defence-related services such as
maintenance and repairs over the past two decades.

Now, the UAE has begun to pursue more sophisticated,
high-tech capabilities in a strategy combining joint ventures
with foreign firms and a programme in which deals commit
companies to transfer technology and skills to the Emirates.

“The point of the UAE having an indigenous defence industry
is to become self-sufficient and break away from the
stranglehold of particular countries,” said Theodore Karasik,
director of research at the Institute for Near East and Gulf
Military Analysis.

“The United States has some of the most advanced technology
capabilities but because of technology transfer restrictions to
other countries, the UAE wants to find solutions to those
problems from elsewhere.”

The UAE and Saudi Arabia are among several states, according
to diplomatic cables released by WikiLeaks, that have asked U.S.
officials to buy armed drones but which have been rebuffed. The
Gulf Arab state this week awarded a contract to buy an unarmed
version of a Predator drone from U.S. firm General Atomics.

“The aim is both to be defence-capable and part of the
diversification of the economy,” UAE military spokesman Obeid
al-Ketbi told a news conference at the biennial International
Defence Exhibition and Conference (IDEX) in Abu Dhabi.

“We are working hard through joint ventures on this strategy
of defence capabilities and industry.”

The UAE is forecast to spend up to $12.9 billion per year on
defence over the next three years, compared with $9.3 billion in
2011, said David Reeths, director of aerospace and defence
consulting for Europe, Middle East and Africa at IHS Jane’s.

Funded from huge oil and gas revenues, Gulf Arab states are
on pace for an overall 4.6 percent yearly growth in defence
spending over the next few years, Reeths said.

In contrast, the global annual rate is forecast at 1.3
percent over the same period. China’s defence budget is expected
to rise 9 percent in the same time.

HIGH TECH, SMALL SCALE

High-tech and small scale is the best way forward for the
UAE’s local defence manufacturing, according to Ali al-Dhaheri,
general designer at the privately-owned, Abu Dhabi-based ADCOM
Systems, which makes and exports drones.

“We don’t care about larger-scale industry, the country is
small. We don’t want to fool ourselves. We are small and all our
manufacturing will probably be hi-tech and small-scale. And
services will also be part of it.”

A recent joint venture between Abu Dhabi government-owned
Tawazun and Sweden’s Saab AB to build advanced radar
systems in the UAE highlights the strategy.

“That’s really a very high-technology capability so that’s a
first for the UAE,” Reeths said.

The UAE already has several joint venture defence deals with
global players including Boeing and Lockheed Martin
.

Abu Dhabi’s investment vehicle Mubadala is expanding on the
services side of the sector, running seven local companies in
defence-related operations such as maintenance and repairs.

On Tuesday, Ketbi announced that over 2 billion dirhams
($544.5 million) worth of deals had been awarded with Mubadala’s
Advanced Military Maintenance Repair and Overhaul Centre
(AMMROC, winning a 1.8 billion dirham aircraft maintenance
contract.

Analysts and industry players said Gulf Arab countries would
need to coordinate if they wanted their region to develop a
broad industrial defence base. But mistrust and rivalry among
Gulf states was preventing any such coordination, Karasik said,
and for now the UAE was leading the pack.

“In the short term I don’t see unity or alignment in the
defence industry (in the Gulf), but I do see a lot of countries
mimicking the UAE,” he said. “You see Saudi trying to do this,
and also Oman and Kuwait but it’s on a much smaller scale. They
don’t have the Mubadalas and Tawazuns.”

ADCOM’s Dhaheri agreed that any coordination among the Gulf
states – which maintain a loose economic and political bloc as
well as a Gulf defence pact – on this front was a long way off.

“We would love to see that but given the turbulence in the
region we have to be realistic. I don’t think we are ready yet
for integration.”
($1 = 3.6730 UAE dirhams)

(Editing by Mark Heinrich)

Controversy over the legality of attacks by missile-firing
drones will not dampen the volatile region’s enthusiasm for the
technology, in part because export curbs mean most equipment
sold will be for use only in reconnaissance, experts say.

Sello Ntsihlele, executive manager for UAVs at Denel
Dynamics, a division of state-owned Denel, South Africa’s
biggest maker of defence equipment, told Reuters this was “the
best time” for unmanned aerial vehicle (UAV) sales.

“Demand is growing fast in developing countries, in the
Middle East, the Far East and Africa. The Gulf is critical in
all this,” he said on the sidelines of the biennial
International Defence Exhibition and Conference (IDEX) in Abu
Dhabi, capital of the United Arab Emirates (UAE).

“I can’t be specific but all countries in the Arabian Gulf
are talking to us,” he said, adding that Denel’s UAV sales had
risen around 20 percent in the last four years, driven mostly by
the Middle East.

UAE DEAL

The company had received up to double the number of
inquiries from prospective clients than at the same conference
two years ago, Ntsihlele said.

At IDEX on Monday, the United Arab Emirates announced a deal
to buy an unspecified number of Predator drones from the
privately-owned U.S. firm General Atomics in a deal worth 722
million dirhams ($196.57 million).

Also on Monday, Abu Dhabi Autonomous Systems Investments
(ADASI), a subsidiary of state-owned investment firm Tawazun
Holding, said it had signed an agreement with Boeing Co
for ADASI to “provide training, support and marketing services”
for Boeing unmanned aircraft systems in the UAE.

Frank Pace, president at General Atomics Aeronautical, said
his firm’s sales had risen by about 120 percent over the last
five years, though until now it had not been able to sell to the
Middle East due to tight export restrictions.

The UAE and Saudi Arabia are among several states, according
to diplomatic cables released by WikiLeaks, that have asked U.S.
officials to buy armed drones but which have been rebuffed.

Washington says its commitments to the Missile Technology
Control Regime (MTCR), a non-binding international agreement
designed to limit the spread of long-range precision weaponry,
restrict drone exports.

Thomas Kelly, principal deputy assistant secretary at the
U.S. State Department’s Bureau of Political-Military Affairs,
told reporters at IDEX that “caution” was Washington’s point of
departure on drone sales.

“We’re not pushing armed systems right now to other
countries. We understand there’s a lot of interest in UAVs
internationally … (but) in terms of armed UAVs I think the
administration is going to take its time to make sure that we
have a policy that we’re comfortable with.”

General Atomics’ export-variant Predator will have no “hard
points” to attach missiles and would be deliberately engineered
to make adding new weaponry impossible, the firm said last year.

Pace said he hoped the company would get approval to sell to
more countries, especially in the Middle Eastern market, where
he saw great potential. “We are talking to all of the Gulf
(Arab) countries,” he said.

KEEPING TABS “VERY IMPORTANT”

Sales are growing in the Middle East because having
developed surveillance systems is fast becoming a requirement
for all states, said Theodore Karasik, director of research at
the Institute for Near East and Gulf Military Analysis.

“The region is still unstable, there are state actors and
non-state actors that want to cause trouble, and being able to
keep tabs on what’s happening is very important.”

The oil-rich, sparsely-populated Gulf Arab states are
alarmed at the civil war in Syria, and want to ensure that
popular uprisings in North Africa do not stir dissent at home.

The intentions of regional rival Iran, locked in a dispute
with major powers over its nuclear programme, are a perennial
concern for the Gulf region’s hereditary ruling families.

Controversy over the legality of drone strikes would have
little impact on global appetite for UAVs, Karasik said.

“Don’t forget the debate over UAVs is concentrated in the
United States. Countries that want that capabililty over here
will make their own decisions,” he added.

The U.S. government has dramatically increased its use of
drone aircraft abroad in recent years to target al Qaeda figures
in far-flung places from Pakistan to Yemen. Britain and Israel
have also carried out such attacks, and dozens more states are
believed to possess the technology.

Targeted killings carried out by remotely piloted unmanned
aircraft are controversial because of the risks to nearby
civilians and because of their increasing frequency.

General Atomics’ Pace said, however, that he didn’t expect
the controversy to have much impact on sales.

Missiles are “not a significant function of the aircraft and
most of the people that are buying (are buying) for ISR and are
going to keep buying,” he said, referring to intelligence,
surveillance and reconnaissance.

The surge in drone use has stirred debate in the United
States about the transparency of lethal strikes and the powers
of the president to order attacks on U.S. citizens overseas. A
2011 strike killed U.S.-born Anwar al-Awlaki, a recruiter and
propagandist for al Qaeda’s Yemen-based affiliate.

Pace said unmanned aircraft would have to be used
responsibly, but that ultimately they would help to save lives
compared to some of the older systems.
($1 = 3.6730 UAE dirhams)

(Additional reporting by Mahmoud Habboush and Praveen Menon,
Editing by William Maclean and Mark Heinrich)

It also expects rival political groups to solve disputes by dialogue, Major General Sedki Sobhi told Reuters

The military ran Egypt for six decades from the end of the colonial era and through an interim period after the overthrow of former air force chief and president Hosni Mubarak two years ago.

About 60 people have been killed since late January in protests that erupted after the second anniversary of the uprising.

Speaking to Reuters at an industry event in Abu Dhabi, said that in a week or 15 days some kind of national dialogue would take shape between the ruling Muslim Brotherhood and opposition groups.

The army would not back any political party, he said.

“We are not political, we don’t want to participate in the political situation because we suffered a lot because of this in the last six months,” he said.

“But sometimes we can help in this problem, we can play this role if the situation became more complicated,” he said without elaborating.

Diplomats and analysts suggest the army, fearful of further damaging a reputation that took a beating during a messy transition period when it was in charge, would only act if Egypt faced unrest on the scale of the revolt that toppled Mubarak.

Protests and violence now are nowhere near that stage.

Sobhi’s remarks were less categorical than those of General Abdel Fattah al-Sisi, the army chief, who said on January 29 that unrest was pushing the state to the brink of collapse and the army would remain the “solid and cohesive block” on which the state rests.

In recent months, opposition groups have criticized Islamist President Mohammed Mursi’s perceived drift towards authoritarianism, which they say fuelled this year’s unrest.

The instability has provoked unease in Western capitals, where officials worry about the direction of a powerful regional player that has a peace deal with Israel.

Asked about security in Egypt, Sobhi downplayed violence during protests earlier this month.

“We cannot say it is a very serious or very dangerous,” he said.

Liberal and Islamist political leaders met privately on Saturday to try to ease the latest tensions.

Politicians said Mohamed ElBaradei, a prominent liberal activist and leader of the National Salvation Front (NSF), met Saad el-Katatni, head of the Muslim Brotherhood’s ruling Freedom and Justice Party (FJP). Another leader of the NSF, Sayed el-Badawi, also took part in the talks.

Previously the NSF had boycotted the idea of talks with President Mursi of the Brotherhood, who has been the target of protester rage in weeks of violent demonstrations.

(Reporting by Raissa Kasolowsky, Writing by Amena Bakr, Editing by William Maclean and Angus MacSwan)

Such a deal would support the Indian carrier’s efforts to woo foreign investors to help cope with fierce competition and high costs in the Indian market.

Etihad, launched in 2003, is on a buying spree to compete with regional rivals Emirates EMIRA.UL and Qatar Airways. The Gulf carrier has taken stakes in Virgin Australia (VAH.AX: Quote, Profile, Research) and Aer Lingus and raised its shareholding in Air Berlin (AB1.DE: Quote, Profile, Research) and Air Seychelles.

“We are doing our due diligence (on Jet Airways) in the next week. We will present it to our board and take it from there,” Chief Executive James Hogan said at a press conference.

The Jet Airways deal would be the first foreign investment into India’s aviation industry since the government relaxed ownership rules in September last year.

This allows foreign airlines to buy up to 49 percent in the country’s domestic carriers, many of which are facing stiff competition and high operating costs.

Hogan said he had met with senior Indian aviation officials and ministers last week to understand the new rules of India’s foreign direct investment scheme.

“We also wanted to understand the issues that have impacted Indian civil aviation, how they think this will change in the coming years,” he said.

The terms of the possible deal have not been disclosed, but a government source said earlier this month Etihad was in talks to pick up a 24-percent stake in Jet for up to $330 million.

Unlisted Etihad reported net profit of $42 million for 2012, compared with $14 million in the previous year.

DREAMLINER

Hogan also said Etihad had no plans to cancel its orders for Boeing’s (BA.N: Quote, Profile, Research) troubled 787 Dreamliner. Etihad has a total of 41 787-9 Dreamliners on order and options for an additional 25 aircraft.

All 50 Boeing 787s are out of action as investigators in the United States, Japan and France look into problems with batteries on the aircraft.

Japan Airlines (9201.T: Quote, Profile, Research) said on Monday that it would talk to Boeing about compensation for grounding the 787.

“The 787 is a great aircraft, we have no doubt it will be resolved and the aircraft will be up and fine,” Hogan said. When asked if Etihad would cancel any Boeing orders, he said: “Not at all.”

Hogan also said that the airline has had no discussions with Italian carrier Alitalia beyond code sharing.

Investors in Alitalia are considering selling their shares in the airline, with some pushing for a deal with long-time stakeholder Air France-KLM.

The airline’s chief financial officer James Rigney also said Etihad had no plans to issue bonds for financing its aircraft deliveries this year.

(Writing by Praveen Menon; Editing by Amran Abocar and Jane Merriman)

Such a deal would support the Indian carrier’s efforts to woo foreign investors to help cope with fierce competition and high costs in the Indian market.

Etihad, launched in 2003, is on a buying spree to compete with regional rivals Emirates and Qatar Airways. The Gulf carrier has taken stakes in Virgin Australia (VAH.AX: Quote, Profile, Research, Stock Buzz) and Aer Lingus and raised its shareholding in Air Berlin (AB1.DE: Quote, Profile, Research, Stock Buzz) and Air Seychelles.

“We are doing our due diligence (on Jet Airways) in the next week. We will present it to our board and take it from there,” Chief Executive James Hogan said at a press conference.

The Jet Airways deal would be the first foreign investment into India’s aviation industry since the government relaxed ownership rules in September last year.

This allows foreign airlines to buy up to 49 percent in the country’s domestic carriers, many of which are facing stiff competition and high operating costs.�

Hogan said he had met with senior Indian aviation officials and ministers last week to understand the new rules of India’s foreign direct investment scheme.

“We also wanted to understand the issues that have impacted Indian civil aviation, how they think this will change in the coming years,” he said.

The terms of the possible deal have not been disclosed, but a government source said earlier this month Etihad was in talks to pick up a 24-percent stake in Jet for up to $330 million.

Unlisted Etihad reported net profit of $42 million for 2012, compared with $14 million in the previous year.

DREAMLINER

Hogan also said Etihad had no plans to cancel its orders for Boeing’s (BA.N: Quote, Profile, Research, Stock Buzz) troubled 787 Dreamliner. Etihad has a total of 41 787-9 Dreamliners on order and options for an additional 25 aircraft.

All 50 Boeing 787s are out of action as investigators in the United States, Japan and France look into problems with batteries on the aircraft.

Japan Airlines (9201.T: Quote, Profile, Research, Stock Buzz) said on Monday that it would talk to Boeing about compensation for grounding the 787.

“The 787 is a great aircraft, we have no doubt it will be resolved and the aircraft will be up and fine,” Hogan said. When asked if Etihad would cancel any Boeing orders, he said: “Not at all.”

Hogan also said that the airline has had no discussions with Italian carrier Alitalia beyond code sharing.

Investors in Alitalia are considering selling their shares in the airline, with some pushing for a deal with long-time stakeholder Air France-KLM (AIRF.PA: Quote, Profile, Research, Stock Buzz).

The airline’s chief financial officer James Rigney also said Etihad had no plans to issue bonds for financing its aircraft deliveries this year. (Writing by Praveen Menon; Editing by Amran Abocar and Jane Merriman)

Sheikha Noura bint Ibrahim al-Khalifa is also facing a separate trial for physically assaulting Aayat al-Qormozi, a young female Shi’ite opposition activist, while she was in detention during the same period, Nawaf Hamza, head of the Public Prosecution’s Special Investigation Unit, told Reuters.

“The charge is that she used torture, force and threats against the victims Zahra al-Sammak and Kholoud al-Durazi to make them confess to a crime,” Hamza, referring to the two doctors, told Reuters by telephone.

According to Sammak’s lawyer, the alleged torture took place in March and April 2011, a period when the U.S.-allied kingdom was convulsed by unrest following the start in February of demonstrations led by majority Shi’ites demanding democratic change in the Sunni-led monarchy.

Reuters submitted a request for comment from Sheikha Noura on the charges against her to her lawyer, Fareed Ghazi. He responded later saying he had spoken to her but that she did not wish to comment.

“Of course, she denies all the charges against her,” Ghazi said, referring to the allegations at issue in both of the trials.

An independent commission said thirty-five people died during the unrest and two months of martial law that followed, but the opposition puts that number at more than 80. The government rejects the figures and has accused opposition groups of being linked to Shi’ite power Iran.

The Arab Spring has heightened sensitivity in the Gulf region, where kingly or princely rule is the norm, over perceived criticism of how it deals with dissent. This has complicated efforts by the West to balance a push for rights and democracy with Western commercial and strategic interests.

MASS PROTESTS

Sheikha Noura is about 29 years old, according to media reports, and is one of many members of the family who hold jobs in the public sector. At the time of the protests that shook Bahrain in 2011, she worked in the police drugs control unit, but has since moved to another department, according to Ghazi.

Bahrain’s Information Minister, Samira Rajab, confirmed Sheikha Noura was on trial in both cases.

“There was an investigation and her case was then referred to the court,” she told Reuters.

Rajab said Sheikha Noura’s trial was part of the Bahraini government’s accountability drive following the publication of the so-called “Bassiouni” report last year.

Widespread and excessive force, including confessions under torture, was detailed in a commission led by Cherif Bassiouni, a respected United Nations human rights lawyer, which published its findings and recommended measures to stop them.

The Bahrain government says it has taken steps to address the brutality of security forces by dismissing those responsible and introducing cameras at police stations to monitor abuses.

Bahrain drew fierce criticism from abroad for arrests of doctors and nurses during and after the uprising.

Since March 2011, at least 60 health professionals have been tried and sentenced to jail terms of up to 15 years on charges including attempting to bring down the government, according rights group Physicians for Human Rights.

MARTIAL LAW

Most appealed and the majority had their sentences reduced or quashed, including Sammak, one of the doctors Sheikha Noura is alleged to have tortured.

An anesthetist, Sammak was initially sentenced by a military court to five years in jail but was later acquitted by a civil court, according to her lawyers. Durazi was detained for allegedly providing false news about people injured in the unrest and inciting hatred of the government.

In the second case against Sheikha Noura, activist and poet Aayat al-Qormozi, born in 1991, says the princess applied electric shocks to her face, spat in her mouth and beat her while she was in detention, Qormozi’s lawyer Reem Khalaf told Reuters. However, the charge against Sheikha Noura in this case makes no reference to torture.

Qormozi was jailed for a year in 2011 for insulting the king, taking part in illegal gatherings and inciting hatred against the government, Khalaf said.

She was freed after serving only several months, Khalaf said, adding she did not know the reasons for her early release. Her case was later dismissed by the public prosecutor, again for reasons she did not know, Khalaf said.

Khalaf added that the trial of Sheikha Noura on the charges relating to Qormozi had been running since June 2012. The next hearing would be on 7 February, she said.

In the case concerning the two doctors, Sheikha Noura’s lawyer said the princess’s trial had started in October 2012 and that the next hearing was set for February 3.

To try to counter the unrest, the Bahrain government brought in Gulf Arab troops, mainly from Saudi Arabia, and imposed two months of martial law to end the uprising.

The Shi’ite opposition wants a constitutional monarchy and a more equitable political system that would allow them to have greater representation, ending decades-old discrimination against them in jobs including the army and security forces.

The government denies discriminating against the Shi’ite population.

(Reporting By Raissa Kasolowsky, Editing by William Maclean and Ralph Boulton)

The UAE, a major oil exporter and regional business hub, has not seen the unrest that has ousted autocratic Arab rulers elsewhere, but analysts and diplomats say the U.S. ally is anxious to prevent any instability spreading to its turf.

In March, the UAE closed two international think-tanks promoting democracy overseas, Germany’s Konrad-Adenauer-Stiftung (KAS) and the U.S.-funded National Democratic Institute (NDI), citing licensing irregularities.

“We were asked by the authorities in Abu Dhabi to close the office,” Jeffrey Hiday, director at RAND’s office for media relations, told Reuters in an emailed statement.

He declined to comment on the reason for the closure.

No UAE official was available for comment.

RAND has had a small representative office in Abu Dhabi since 2010, Hiday said, which “facilitated evidence-based research and analysis by RAND experts in such areas as education, public safety and environmental health”.

The clients for RAND research were emirate- and federal-level government institutions, he said.

The closures of NDI and KAS caused consternation in Washington and Berlin. NDI is loosely affiliated with the U.S. Democratic Party, while KAS has close links with German Chancellor Angela Merkel’s Christian Democratic Union (CDU).

A spokesman for KAS said in April that the group, which did not have a license, had been trying to obtain one for the past two years and was in Abu Dhabi at the invitation of the emirate’s crown prince.

Merkel herself told reporters that UAE officials had said they were closing all Western foundations in the Gulf state.

The Abu Dhabi Gallup Center, which was a branch of the U.S. polling and research firm, also closed down earlier this year.

Over the past year the UAE has shown little tolerance of home-grown dissent, detaining more than 60 local Islamists, who the authorities say are members of the Muslim Brotherhood and were plotting to overthrow the government.

In recent days at least another four people have been arrested in what human rights campaigners said might be part of a crackdown on online dissent and a tightening of the Gulf Arab state’s Internet law.

(Reporting By Raissa Kasolowsky, Editing by William Maclean and Mark Heinrich)

The sanctions were designed to freeze property and bank accounts, make it harder to access money and move assets around, and, ultimately, bring about an end to the violence. Eighteen months on, though, the fighting is worse and Brussels and Washington are struggling to make these sanctions bite.

There is no official tally of the amount of Assad riches frozen by the U.S., EU and Arab League under targeted sanctions on individuals and companies. But based on the amounts known to have been blocked by Britain and non-EU Switzerland, it is likely to be several hundred million dollars.

Switzerland has blocked about 100 million francs in assets linked to Assad, his associates and Syrian companies, in line with EU sanctions. Britain has frozen Syrian assets worth about 100 million pounds, a source familiar with the situation said in July.

But Western diplomats and experts in asset tracing say the search has unearthed only glimpses of a suspected international financial network supporting Syria’s ruler and his inner circle.

Western governments appear to be more focused on applying a set of broad based sanctions, such as those blocking Syria’s central bank from U.S. markets and imposing curbs on trade and services including a European Union ban on Syrian oil imports.

In part, this may be because the size of Assad’s personal wealth – the assets he could realistically offload to generate funds – is probably no more than $1 billion, according to private sector experts in corporate investigations. This is much less than the multi-billion dollar hoard that his opponents alleged he owned when the conflict began in March 2011.

Iain Willis, Director of Research at UK-based business intelligence company Alaco Ltd, said that early in the uprising “enormous figures” of more than $120 billion were being floated as estimates of Assad’s wealth, based on the fact that the Assads in effect controlled most of the levers of the economy.

“In reality, while they certainly had fingers in an awful lot of industries, it’s nowhere near that, in terms of what’s realisable, liquid, practical and moveable. I would say one percent of that is likely to be a realistic figure,” he said.

Efforts to freeze whatever money he does have access to have been hindered by lawsuits lodged by some of those who appear on sanctions lists, Russian and Chinese opposition, lack of intelligence resources, and perhaps even a policy to calibrate the amount of pressure on Assad to give him a path to exile.

“There’s been a sense that at the end of the day it’s not a lot of money, that it doesn’t have a significant impact on the decision-making calculus of the leadership,” said Mark Dubowitz, executive director of the Foundation for Defense of Democracies think tank in Washington, though he said he did not know this was fact.

“The other operating theory is that – and this is potentially pretty cynical – if your goal is to get rid of Assad and there is an opportunity to get him to agree to step down, potentially you don’t want to go after his assets because you want to be able to give him an escape route where he can end up in exile and enjoy the fruits of his despotic regime. ‘Let’s not squeeze him entirely’.”

Another explanation may be psychological tactics, said Charles Crawford, a former British ambassador to Bosnia and Herzegovina, Serbia/Montenegro and Poland who helped implement sanctions intended to topple late Serb strongman Slobodan Milosevic. He said sanctions officials might want to list some regime hardliners but not others to stir up paranoia.

But a simple lack of manpower may also have hurt. A Western envoy in the United Arab Emirates, where Assad and the family of Rami Makhlouf, Assad’s cousin and main financial ally, are believed to have assets, said the probe into their private wealth was valuable but “we just don’t have the resources. There is so much happening in the region right now that there are many other issues that take priority.”

Nick Bortman, Gulf-based head of London corporate investigation firm GPW’s Middle East practice, said Bashar’s wealth had been meticulously invested overseas, over many years, and behind multiple layers of proxies and offshore companies and in countries where disclosure laws were weak or not enforced.

“Such groundwork dulls the blade of broad sanctions regimes,” he said. “Freezing wealth requires identifying wealth, and that ultimately comes down to accessing advisors and consiglieri figures, something beyond the typical remit of financial and commercial watchdogs and other would-be enforcers.”

Information from Gulf Arab states has been meagre, some Western officials say. A senior Western diplomat said: “We have been discussing with Russia and the Gulf countries in terms of our concerns they may be using their banking systems. It’s not clear the extent that the regime money may have gone there.”

BENIFICIARIES

There has been some progress.

Take Makhlouf, accused by European Union foreign ministers in May 2011 of bankrolling Assad. The tycoon has been under U.S. sanctions since 2008 for what Washington calls public corruption. Brussels brought in its own sanctions last year.

In July this year, evidence released by the U.S. Senate’s permanent sub-committee on investigations into anti-money laundering weaknesses at HSBC (HSBA.L: Quote, Profile, Research) showed that Makhlouf and his father Mohammed were beneficiaries of a trust established in the Cayman Islands by the British bank.

On August 16, the EU listed a Luxembourg company, Drex Technologies Holding S.A., saying Makhlouf was the beneficial owner. It said Makhlouf used the firm to facilitate and manage his international financial holdings, including a majority share in mobile phone operator Syriatel, which the EU has previously listed on the grounds that it provides financial support to the Syrian regime.

Drex Technologies could not be reached for comment. Paolo Poveda, a client relations analyst at Panama law firm Mossack Fonseca, described as a registered agent of Drex in the EU listing, said they had resigned that position in June 2012. On Aug 30, the Swiss sanctions department listed the Luxembourg company.

Makhlouf could not be reached for comment and questions sent through Syriatel were not answered. Makhlouf is believed to live in Syria still.

Swiss prosecutors last year froze roughly 3 million euros held in a Geneva bank by Makhlouf, on grounds of suspected money-laundering. The money was unfrozen when Makhlouf appealed, saying it predated sanctions imposed by the Swiss last May.

Mahlouf’s lawsuit was one of 35 legal challenges against the Syria sanctions at the European Court of Justice, according to one EU official. The majority of those are still pending. Several European officials said the bar for evidence of wrong doing was being set much higher than in the early months of the uprising.

In another case, a Syrian businessman, Emad Ghreiwati, was taken off the sanctions list this year after he challenged his listing in a lawsuit at the European Court of Justice. The court ruled there was no need to make a formal finding in the case, as he had been taken off the list, for undisclosed reasons, after his lawsuit was launched, an official said.

Asked about the pace of the EU’s efforts to target Assad’s circle, a senior EU official said it was up to member states to propose “ideas for potential candidates” and legal challenges to the measures had resulted in a more cautious approach.

“Sometimes when mistakes are being made, evidence that is put on the table is not strong and solid enough, then there is always a possibility for legal recourse. And we are having a few of them in front of European courts and we have to be careful, to have solid ground,” he said.

THE ROMANIAN CONNECTION

Perhaps the most interesting case study is Romania.

Romania’s former communist dictator Nicolae Ceausescu and Assad’s father Hafez al-Assad had a long and warm friendship. Romania-based Syrian dissident Mohamad Rifai alleges close ties continue between the two countries, specifically the Syrian ambassador to Romania Walid Othman, who is Rami Makhlouf’s father-in-law.

Rifai, a dentist who left Syria in the early 1980s to study in then-communist Romania, wants the EU and the United States to investigate companies linked to Othman as possible havens and conduits for funds belonging to Assad and his extended family, including Makhlouf.

Former Syrian Oil Minister Abdo Husameddin said Othman was “one of the people making (money transfer) dealings on behalf of the Assad family.” But Othman’s opponents have produced no evidence of any wrongdoing.

A Romanian investigative journalism website called Rise Project published documents in May 2012 that show the extent of Syrian commercial activity in Romania, including companies owned by Othman’s sons, but no evidence of any connection to Assad himself, or to his assets.

An EU diplomat who spoke on condition of anonymity said Othman’s name and that of his sons and his daughter, Razan, were on a list of potential sanctions targets presented by Syrian opposition activists to the EU in mid-September. But Razan’s was the only name that drew interest.

On October 15 the EU added her and 27 other names to a list of individuals targeted by EU asset freezes and travel bans, bringing the total number of people facing such sanctions to 181. Razan Othman is married to Makhlouf. The EU said she was “associated with the Syrian regime and benefiting from it”.

A request for an interview with Walid Othman delivered to the Syrian embassy in Bucharest went unanswered. Reached for comment, an embassy employee, who declined to be identified, confirmed Othman had received the request.

There was no answer to a request for comment from Razan Othman delivered via Syriatel.

A Western official, speaking on condition of anonymity when asked about Othman, said only that Romania was one of several countries being studied as a potential location of activity by Assad’s private financial network.

(Additional reporting by Martin de Sa’Pinto in Zurich, Georgina Prodhan and Michael Shields in Vienna, Chris Vellacott, William Maclean, Mo Abbas, Dave Cutler and Tom Bill in London, Dominic Evans in Beirut, Regan Doherty in Doha, Thomas Grove in Moscow, Khaled Oweis and Suleiman al-Khalidi in Amman, Editing by Janet McBride)