With a long weekend ahead and many residents expecting to travel, we look at the current trends in the marketDecember 1, 2015 10:08
New Iranian sanctions may influence UAE markets
8,000 Iranian companies currently operate in the UAE.
June 11, 2010 9:54 by Rasha Reslan
The effects of the new United Nations Security Council sanctions against Iran will be felt far beyond Tehran, in the United Arab Emirates. Despite not always seeing eye-to-eye on political issues and a longstanding territorial conflict over three islands in the Gulf, economic ties between Iran and the United Arab Emirates have always been strong.
But the new UN sanctions may very well change this.
The sanctions were approved by a 12-to-2 vote on Wednesday. Lebanon abstained, Turkey and Brazil voted against the sanctions, and all the permanent members of the Security Council – including the United States, France, the United Kingdom, Russia and China – voted in favor.
The sanctions are the latest round in the standoff between the United States and Iran over its alleged nuclear weapons program.
“China-UAE trade is a lot about re-export that goes to Iran,” David Butter, regional director for the Middle East and North Africa with the Economist Intelligence Unit, recently told The Media Line. “It could shrink as access to the Iranian market is becoming harder as a result of sanctions.”
The UAE is not only re-exporting Chinese goods, but it is also doing so with American goods.
According to a recent report by the National US-Arab Chamber of Commerce, a Washington-based NGO working to promote US business ties with the Arab world, the single largest importer of American goods in the Arab world is the UAE, which is expected to import goods and services totaling about $22 billion in 2010. A majority of these will be re-exported across the region.
Morteza Masoumzadeh, executive deputy president of the Iranian Business Council in United Arab Emirates, argued the effects of the sanctions would be minimal.
“The new restriction and sanctions do not affect our business in the United Arab Emirates because we (Emiratis) are already hit hard by the previous sanctions in the latest three rounds,” he told The Media Line. “It’s not something that will affect our future.”
“The UAE and Iran have historical and traditional ties,” he said. “This is not something new; there has always been Iranian trade houses in the United Arab Emirates and Emirate businessmen in Iran… Around 8,000 Iranian companies are operating in the UAE at the moment.”
Christian Koch, director of international studies at the Gulf Research Center in Dubai, agreed that the affects would be minimal.
“I do not think the new round of sanctions will impact trade between the UAE and Iran that much, as we are talking about targeted sanctions here instead of a general embargo,” he told The Media Line. “Those items covered under the new regime, dual-use goods for Iran’s nuclear industry or military items, have never made up the majority of goods traded with Iran. Along with the new sanctions, there will certainly be continued efforts to stop loopholes and enhance compliance and the UAE is committed on both fronts.”