Dubai Businesses Oppose US Economic Sanctions Against Iran

By Mandy Clark

Dubai
05 February 2009

American sanctions against Iran have been in place since 1979, following the seizure of the U.S. Embassy in Tehran by Iranian students who then held a group of Americans hostage for more than a year. The sanctions were left in place as relations between the two nations remained frozen and were even tightened by the Bush administration, in response to Iran's nuclear ambitions. Iranian business operating in the Persian Gulf states have felt the squeeze but now are hoping for some easing under the administration of President Barack Obama.

Amir is an Iranian businessman in Dubai, shipping foodstuffs from the United States to Iran. He says the sanctions are too restrictive.

"Everybody is hoping for change in the future, even me, myself," he said. "I hope the market gets better in the future."

Amir has been in business here for 27 years. But, even now, he does not to give his last name out of concern for his family in Iran, although he insist there is nothing illegal about his business.

Dubai, like many places along the Persian Gulf, has a long history of trade. Its dhows (traditional wooden boats) have plied these waters for centuries.

More recently, this has also been a place where Iranians can get around American and international sanctions.

Under the sanctions, U.S. companies are not allowed to sell goods directly to Iran. But, the United Arab Emirates, of which Dubai is a part, does not impose the same limitations on its local distributors. Iran's port, Bandar Abbas, is only a about 160 kilometers northeast of here.

"Dubai is very close to Iran. So, it is very good business for us," said Amir. "For example, if we load one container and ship it to Iran, it will take nine to ten hours. So, goods will go to Iran very fast."

The United Arab Emirates is Iran's top trading partner. There are an estimated 450,000 Iranians living here, with about 10,000 Iranian firms operating in the country.

Washington wants the Emirates to keep a closer eye on Iranian banks operating in Dubai. Washington suspects that Iran is using those banks as a financial conduit to skirt international sanctions and pursue its nuclear program.

Although the lack of trade between Washington and Tehran has been bad for Iran, it has been quite good for the Emirates.

Andrew Critchlow, the managing editor for the Dow Jones news service, says the Gulf states are benefiting from the sanctions and are not eager to see that change.

"It is certainly not in their interest to see the United States move towards a more amicable relationship with Iran," he said. "And, Saudi Arabia for a long time has been opposed, on religious and theological grounds, to the Iranian regime."

But Iranian businessmen like Amir want to see a rapprochement, so they can trade openly and boost their business. And, they are pinning their hopes on President Obama, who has said he is open to dialogue with Iran.

However, Richard Thompson, editor of the Middle East Economic Digest, doubts Mr. Obama will move to lift sanctions, just yet.

"I suspect American policy will continue as it is," said Thompson. "It will seek to put pressure on Iran any way it can, in the hope that Iran will change its policies regarding its energy program, regarding Israel, regarding Iraq."

But, like Amir, most Iranian businessmen say they have nothing to do with politics.

"I'm telling you business is for businessmen. Politics are for politicians," said Amir. "Dubai is a financial capital. No need for politics here."

Most analysts say that 30 years of mistrust between Washington and Tehran will not be reversed quickly. Politics are likely to continue to have an impact on trade and business.