Dubai: Trade between Iran and the UAE, a key source of imports for the Islamic Republic, is being squeezed by sanctions on Tehran'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 UAE to Iran, said Morteza Masoumzadeh, a director of the Iranian Business Council, a group that promotes economic ties.
"What we see is the UAE 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 UAE is abiding by the UN resolutions that have intensified sanctions on Iran, UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi said yesterday in Basel, Switzerland.
The level of trade between Iran and the UAE may decline to about $6 billion (Dh22 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.
Cash only
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 per cent over a period of about two years, he said.
Over the past year, the number of Iranian-owned businesses here 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, Gulf News reported on June 21.
