Businesses fear $5.32bn of trade at risk as US-led financing curbs start to pinch
Iran shrugged off a fresh wave of international economic sanctions against it last week, saying they would have "no impact" on its trade with other countries. But in Dubai, one of Iran's top trading partners, businessmen are starting to worry.
"The restrictions imposed on the Iranian traders here are getting so hard that they are virtually going to go out of business," said Morteza Masoumzadeh, a member of the executive committee of the local Iranian Business Council and managing director of the Jumbo Line Shipping Agency.
"They are facing a hell of difficulties. Within a year or two, they will have to shut down. And these traders are dealing with basic commodities. There is no involvement with those banned items, or missile technology," he said.
Over the last five years, the US, the European Union and other countries have imposed an escalating series to sanctions over Iran's controversial nuclear programme, which is suspected of seeking to make atomic weapons. Most US-Iran trade has been banned, and foreign banks are effectively deprived of access to the US financial system if they do business with Iranian banks.
But Iranian trade with Dubai, 150km across the Gulf, has thrived, with the emirate serving as a convenient conduit for other countries' business with Iran. United Nations sanctions against Iran have focused on nuclear-related materials and weapons and targeted Iranian companies and people involved in those programmes, so the bulk of merchandise trade remains legal. Sanctions in other countries may have had the effect of pushing more trade through Dubai.
Around 8,000 Iranian traders and trading firms are registered in Dubai, Masoumzadeh said in his 14th floor office overlooking the sparkling waters of the Dubai Creek, where wooden dhows dock to take on cargo for transport to Iran.
According to the latest data from the United Arab Emirates' customs authority, re-export trade between Iran and the UAE - goods sent to the UAE for on-shipment to Iran, and Iranian goods sent to the UAE for on-shipment to other countries - totalled AED19.5bn ($5.32bn) in the first six months of this year, up from AED14.3bn a year earlier.
That represents a significant proportion of Iran's non-oil foreign trade; its total imports amounted to $92.4bn in all of 2010 while exports, including oil, were $116.5bn.
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