Business as usual at the Jebel Ali Free Zone in Dubai. Image Credit: Ahmed Ramzan/Gulf News

Dubai: Businessmen have appealed to the Dubai Government to intervene and ease restrictions imposed on them in trading with Iran.

The appeal was made on Monday by businessmen and traders during their meeting with Shaikh Maktoum Bin Mohammad Bin Rashid Al Maktoum, Deputy Ruler of Dubai.

The businessmen and traders in the export and import sector, trading in food, medicines, building materials and auto spare parts, have complained that they were facing obstacles when importing, exporting and re-exporting with Iran due to restrictions imposed by banks in terms of opening letters of credit and finance so as to fulfill their contracting obligations with their partners.

The businessmen appealed to the government to intervene with the relevant authorities and related countries to facilitate finance and find clear mechanisms of dealing to curb the damage that may face the trade sector.

They said they face problems even when they re-export food and commodities that are licensed by the United Nations.

Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation, and Mohammad Ebrahim Al Shaibani, Director of the Dubai Ruler's Court, were present at the meeting.

Important partner

Iran is one of the UAE's closest trading partners, with around $8 billion (Dh29.4 billion) in bilateral trade in 2009 after a peak of $12 billion in 2008, according to figures by the UAE-Iran Chamber of Commerce.

The level of trade is expected to come down to $6 billion this year after US sanctions have been imposed.

An estimated 400,000 Iranians live in the UAE, with around 8,000 companies with Iranian executives registered. Many of them are involved in the multi-billion-dollar trade deals between the two countries.

After June 9, 2010, when the UN Security Council slapped a fourth round of sanctions on Iran barring dealings with firms linked to the Iranian Revolutionary Guard Corps, relations have become strained.

The UAE has asked banks and financial institutions to freeze 41 accounts linked to Iran's ballistic missile and nuclear programmes.

While all trade in food products is exempt from the sanctions, some 25,000 companies registered in the UAE which have done business with Iran for over four decades have lost 40 per cent of their business because Iranian banks are affected by the sanctions.

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.

The Tehran Times quoted the head of the Iranian Business Council last month as saying that trade between the UAE and Iran is near "a standstill" because local banks "are going beyond UN sanctions to prevent almost all transactions tied to the Islamic Republic".

US Defence Secretary Robert Gates says UN-backed sanctions against Iran are hurting the country more deeply than anticipated.

— With inputs from WAM