US warns local firms of Iran link

Dubai: The United States yesterday warned private companies in the UAE of "risks" in doing business with Iran, pointing out they could not differentiate between legitimate and illegitimate trade.

Stuart Levey, under secretary for terrorism and financial intelligence at the US Department of Treasury, then praised the EuroFinance conference in Dubai for cancelling a session on doing business with Iran.

"This is a good indication of the prevailing view in the business community," he said.

Levey was a guest speaker at the EuroFinance conference in Dubai yesterday.

However, EuroFinance managing director Carolyn Mier told Gulf News that the Iran session was not cancelled for "political reasons."

"We had planned a session on Iran but had to cancel it because we couldn't find a speaker for it," she said.

Levey told companies not to step into the "void" created by some businesses that are suspending links with Iran amid a US-led push for UN trade sanctions against the country over its nuclear programme.

The UAE is one of Iran's top trading partners and is home to many Iranian-owned businesses.

"As you make your business decisions, I urge you to consider whether it is wise for your company to focus its efforts on doing business with Iran," Levey said at the conference, which attracted a large number of bankers dealing in trade finance.

"I recognise that it may be tempting to step into the void that is being created by other companies pulling back their business in Iran, but they are pulling back for a reason," Levey said.

Swiss bank UBS said last year it was cutting off dealing with Iran and a number of Western banks are limiting their Iran exposure amid tensions.

The US official said that Iran, under its current regime, is an example of a country where there are heightened risks to investing, adding that its policies have "implications for your businesses, especially when that business deals with government enterprises".

Levey said Iran disguises its commercial activities through "deceptive techniques" and uses front companies for procuring dual-use goods that can be used in nuclear activities.

However, Nasser Hash-empour, vice-president of the Iranian Business Council in Dubai, said the UAE and Iran have traditional trade links and they will continue.

"This kind of talk is part of the US policy of putting pressure on Iran. This is not going to discourage UAE companies from doing business with Iran. The UAE-Iran bilateral trade was $9 billion last year and it is going to grow," Hashempour said.

Still, Eckart Woertz, an economist with the Gulf Research Centre, believes there is a "reputation risk" for companies in dealing with Iran.

"It all depends on whether the US will implement sanctions on companies that do business with Iran," he said, adding that the UAE's re-export trade with Iran would be hit by any sanctions.