Font Size

- Aa +

Mon 28 Jun 2010 01:43 PM

Font Size

- Aa +

Iran-Dubai trade hit by tougher sanctions

Traders say strict new checks over Iran's nuclear programme will have negative impact on trade.

Iran-Dubai trade hit by tougher sanctions
TRADE LINKS: Boats and containers are seen at the Dubai Creek as sanctions against Tehran over its nuclear drive become tougher. (AFP/Getty Images)

Trade between Iran and Dubai, a key source of imports for the Islamic Republic, is being squeezed by sanctions over the Persian Gulf country’s nuclear programme, an Iranian business group said.

Customs authorities over the past few months have adopted a new system to check every shipment that passes via the emirate to Iran, said Morteza Masoumzadeh, a director of the Dubai-based Iranian Business Council, a group that promotes economic ties.

“What we see is Dubai customs is being very strict,” he said in an interview on Sunday. “These sanctions will have a negative impact on trade.”

The United Nations Security Council on June 9 approved a fourth round of sanctions on Iran, including restrictions on financial transactions, a tighter arms embargo and authority to seize cargo suspected of being used for Iranian nuclear or missile programmes. The US and European Union are also imposing energy and financial sanctions.

The level of trade between Iran and Dubai may decline to about $6 billion this year from $8 billion in 2009, said Masoumzadeh, who owns a shipping company that transports goods between the two destinations. Trade had earlier reached a peak of as much as $12 billion in 2008, he said.

Masoumzadeh said his firm and other traders can no longer use letters of credit issued by Iranian banks to buy goods from suppliers in Europe and Asia because of the sanctions regime. With UAE banks refusing to deal with Iranian enterprises, all transactions are now on a cash basis, which has cut his shipping company’s business by 70 percent over a period of about two years, he said.

Over the past year, the number of Iranian-owned businesses in Dubai has fallen to 8,000 from 8,400 because of the effect of the financial crisis and sanctions, according to the business council.

The UAE has closed down more than 40 companies in a crackdown on money-laundering and sales of equipment with possible military uses linked to Iran, the Gulf News reported June 21, citing an unidentified official.

The central bank has also asked banks and financial institutions in the federation to freeze 41 accounts linked to Iran’s ballistic missile and nuclear programs, Emirates Business 24/7 reported on Monday, citing a circular by the bank.

The bank said the move was made in compliance with the United Nations Security Council Resolution 1929 of June 9 and listed 41 individual and company names provided by the UN, the newspaper reported. (Bloomberg)

For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.