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Mon 29 Aug 2011 11:22 AM

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US pressure curbs Dubai, Iranian trade ties

Iran firms complain of tightening curbs as Washington pressures UAE to limit trade

US pressure curbs Dubai, Iranian trade ties
A Pakistani man rests in Dubai before loading a ship destined for Iran with cargo

The US is applying growing pressure on Dubai to limit its
trading ties with Iran, making it increasingly difficult for legitimate Iranian
firms to operate in the Gulf emirate.

Iranian firms working in Dubai, a major trade and financial
partner for the Persian state, are reporting banks and other firms are turning
away their business due to the difficulties of operating within US-led
sanctions on trade with Iran.

“It seems that Dubai has been under substantial pressure to
limit much of this Iranian trade,” said Farhad Alavi, partner at
Washington-based BHFA Law Group. “The US has made it clear to countries, banks
and business that there can be a high level of reputational danger in dealing
with Iran and there is also the risk of shutting yourself out of the US market
or having difficulty dealing with the US market [should you continue to engage
in business].”

Iran over the last five years has been the subject of
tougher UN Security Council sanctions intended to curb its nuclear programme.
Western nations have accused the Islamic state of developing atomic weapons but
Iran has insisted it wants to produce nuclear energy.

The US and its European allies have followed up with their
own measures aimed at making it more difficult for Iran to operate internationally. 

Iran is a significant trade partner for the UAE, with trade
volume between Iran and Dubai - which are separated by just 54km across the
Strait of Hormuz - estimated at $10bn a year.

The UAE central bank last June bowed to international
pressure and told financial institutions to freeze accounts belonging to dozens
of firms targeted by UN sanctions, also blacklisting 40 entities and one
individual.

In November, businessmen and traders met the deputy ruler of
Dubai to complain of obstacles they face doing business with Iran due to the
banking restrictions.

Hamid Reza Hamidi, president of Dubai’s Iranian Business
Council, said Iranian companies felt tightening restrictions were making it
impossible for them to trade in the Gulf country.

“Nobody can deny that the trade between Iran and the UAE has
become stricter and more difficult,” he told Arabian Business. “Today in the
UAE, all Iranians, irrespective of what they are doing, they are facing
problems. Banks generally do not want to have any Iranian business.

“This is partly due to the sanctions and partly due to non-clarity
of the sanctions on Iran.”

Dubai Exports last week said trade between the emirate and
Iran remained strong, despite anecdotal evidence of a decline in the Iran-bound
re-export business.

“While many expected the measures to spell disaster for
thousands of Iranian businesses that deal with Dubai… trade between the two
countries has grown, according to the latest figures,” said Saeed Al Awadi, CEO
of Dubai Exports.

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abdul hafeez sheikh 8 years ago

USA should reconsider their approach towards Iranians . The Iranians who are very friendly to USA and are peaceful and legitimate citizens of U.A.E and other countries . USA should support all the liberal Irani Muslims rather than victimizing them through sanctions . U.A.E has lot of Iranian who are UAE nationals and are playing very important role in the development of the country . UAE government is always friendly to all liberal and peace loving people therefore USA must support UAE to encourage liberal Iranians to develop themselves in Business and as part of the world community >

Huzzain 8 years ago

Why can't the same measures applied in relation with Israel?! is it not Palestinians and Palestine is dearer to Arabs and Muslim world? Why bow to US for its own strategic interests? Arab countries don't have their own strategic and nationalistic interest like US?

Red Snappa 8 years ago

It would be interesting to remove the US Fifth Fleet from Bahrain and Al Khaleej or should I correctly say Persian Gulf altogether and see what happens next!

Jack 8 years ago

Isn't it interesting that the US is still the only nation to have ever used a nuclear weapon against another nation!
The Chinese and Russians continue to grow their trade links with Iran, ignoring US sanctions. Instead of using the US dollar they will increasingly look to trade with a direct barter system and maybe use their own currencies (plus oil and gold), as the once 'mighty' US dollar continues to crumble.
Imposing trade sanctions is meant to entice the Iranians into doing 'something stupid'. They are far less likely to do that 'stupid thing' if countries continue to trade with them as this benefits the people from each country.
The US really needs to sort out the mess in their own country instead of continuing to dictate to the rest of the world.

Telcoguy 8 years ago

Yes, That would be an interesting experiment.

procan 8 years ago

The 5th fleet should leave now irregardless

Bu Hamad 8 years ago

@ abdul hafeez sheikh, if only you showed as much concern for Pakistan instead of worrying about the UAE and Iran.

Binshamak 8 years ago

Red Snappa just to correct your misconception; how could it be Persian whilst both sides of the gulf is Arabia? It is Arabian Gulf. One side is Sovereign Arabian and the others side is an Occupied Arabian country by Persians . That country is Ahwaz.

Karl Forberg 8 years ago

Iran must mend its ways and needs to know that the Arabian Gulf is not its backyard where it can irresponsibly do as it pleases. Iran cannot afford to underestimate the whole world and the Arabian Gulf countries. The Arabian GCC will not sacrifice its security for the sake of business with any rogue nation that is keen on fomenting trouble. All nations must abide by the UN resolutions and any nation or financial institutions or sympathisers that circumvent or attempt to circumvent international trade sanctions should be considered as enemies to the global peace and security and be held accountable. A nuclear Iran is not only anathema to the Arabian Gulf but to the whole world.

Abbas 8 years ago

Iran lacks any credibility otherwise why did it conceal its enrichment programme for 18 years??? It is high time the UN blocks the trade in gas and oil which are the major source of Iran's income. Iran cannot afford to test the patience and mighty will of the international community.