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Iranian traders in Dubai feel pressure of new sanctions

02-10-2012 08:58 BJT

DUBAI, Feb. 9 (Xinhua) -- Iranian companies doing business in Dubai, a gateway for the Iranian market to international goods, increasingly feel the heat from economic sanctions Western powers have imposed against their country because of Tehran's controversial nuclear program.

Trade between Dubai and Iran, which surged to 10 billion U. S. dollars in 2010, was feared to be squeezed this year as the United Arab Emirates (UAE) Central Bank has ordered its banks to stop funding trade finance with Iran, in order to comply with U. S. sanctions.

On Monday, U.S. President Barack Obama decided in an executive order to freeze all assets and interests of the Iranian government, the Islamic Republic's lender of last resort, and all Iranian banks within the U.S.

The Abu Dhabi-based daily The National recently cited Morteza Masoumzadeh, vice president of Iranian Business Council (IBC) in Dubai, that "even for rice shipments Dubai's banks stopped to issue letters of credit."

The devaluation of the Iranian currency, the riyal, also puts a burden on some 8,000 Iranian-owned businesses in Dubai.

Ahmed, a captain of an Iranian wood-ship, who lives of shipping imported clothes and textiles from Dubai's Port Saeed to Iran's port city Busher described how maritime traders suffer.

"Because of the latest round of sanctions the Iranian riyal declined by half in its value against the U.S. dollar compared to last October," he said. "Because Dubai's currency, the UAE Dirham is pegged to the dollar I can't afford to buy as many goods as before, it's a real burden on my business."

Busher, at the eastern coast of the Persian Gulf, is the city that harbors Iran's only operating civil nuclear reactor, built by Russian engineers.

Ahmed also said his small business became increasingly risky to conduct because of piracy problems.

"In recent months, I was threatened two times in Persian Gulf waters from armed pirates who demanded a large ransom from me. If I had refused to pay, they would have seized my ship," he said. " Piracy definitely picked up in recent years in the Gulf."

His small ship also needs refurbishment, as it is out of old wood and quite dangerous for usage.

"Currently I don't have the money to renovate. Business is down due to sanctions, so for my crew it's all about surviving in these rough times," he said.

Farid Tajbakhsh, head of Foreign Marketing at Iran Transfo Corporation, which manufactures tools and machines for the utilities industry, told Xinhua that financing international business became more difficult, as most Western banks stopped opening new business relations with Iranian firms and individuals.

Nevertheless, Tajbakhsh added, that Iranian firms still find ways to receive loans from banks abroad, without specifying.

Despite economic sanctions and increasing pressure, Iran Transfo did not shy away from participating at the 37th Middle East Electricity (MEE) fair and exhibition held between Tuesday and Thursday in Dubai.

"We have been participating for the last five years at the fair and the Gulf Dubai remains an important hub for Iran's industry to reach out to the world and attract new clients."

Besides Iran Transfo Corp., some 40 other Iranian firms were participating., but managers from the western countries avoid any contact to the Iranians at Dubai's MEE fair.

A manager from the UK whose firm was present at the fair said that he wanted to do business with the Iranian companies, "but the British government does not allow us to deliver our engines to Iran."

On the contrary, modern medical equipment from U.S. electronics giant General Electric is widely used in the Iranian Hospital in Dubai's Satwa district, one of the largest and renowned clinics in the sheikhdom. Medical goods, pharmaceuticals, food and beverages are exempted from international sanctions.

Editor:Zhang Rui |Source: Xinhua

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