UAE shuts business for trade with Iran

UN sanctions adopted in one of Teheran’s largest trading partners.

June 23, 2010 23:58
2 minute read.
In a photo provided by the Departmeent of Defense,

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Authorities in the United Arab Emirates have closed down 40 companies for selling products to Iran or dealing with the country’s Revolutionary Guards in violation of UN sanctions.

Analysts said the move would have little impact on the estimated $8 billion in trade between the UAE and Iran.

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The 40 companies that were shut down had reportedly been found to be trading strategic dual purpose goods – items that could be used for both civilian or military production – and other dangerous material. The UN has barred these goods as part of sanctions against Iran over its nuclear program.

On June 9, the UN Security Council slapped a fourth round of sanctions on Iran barring dealings with firms linked to the Iranian Revolutionary Guard Corps.

The IRGC is a separate organization from the Iranian army and operates its own armed forces, navy, air force and militia. Its goal is to preserve the theocracy in Teheran, but over the years it has widened its scope and runs a vast business empire ranging from construction to telecommunications.

Dr. Christian Koch, director of international studies at the Gulf Research Center in Dubai, said the crackdown was part of a national strategy.

“This is certainly one step, although the commitment to enforce United Nations sanctions has been there from the very beginning,” Koch said.

“There is awareness within the UAE that there are Iranian front companies set up in the free zones. This is a concerted move to try to undermine those companies involved in possible illegal transactions,” Koch added.

An estimated 400,000 Iranians live in the UAE, and the trade flow between the two countries is worth some $8b. annually.

“In the latest official figures from the UAE authority for 2009, we can see that imports from Iran were negligible, but total exports [exports + reexports] represented almost $8b.,” Philippe Dauba-Pantanacce, senior economist with Standard Chartered Bank.

“I would certainly argue that the pressure on the UAE to put a lid on its commerce with Iran could put a strain on these exchanges, but might also translate into a diminishing part of the actual trade translated into the official figures,” Dauba-Pantanacce said.

But some, like Morteza Masoumzadeh, the executive deputy president of the Iranian Business Council in United Arab Emirates, were sanguine.

“These 40 or so companies...we heard about in the media are not members of the Iranian Business Council in United Arab Emirates, therefore such crackdowns do not bother us at all.”

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