Reexport abuses

The Financial Times reports that Dubai is showing some willingness to play along with international controls designed to limit Iran's ability to develop nuclear weapons. An excerpt:

Mention sanctions to Iranians and their answer is, often, Dubai. As the US has tightened the squeeze on financial dealings with Tehran and other countries have slowly followed, Iranians have sought to do business through neighbouring Dubai, an open, free-wheeling emirate and transhipment hub that has long welcomed them.

But even Dubai, and the federal government in the United Arab Emirates, is now showing signs of unease as US pressure on banks to stop lending to Iran mounts and security concerns over the presence of a large Iranian community intensify.

Following the introduction of new export control laws, the UAE has stepped up the inspection of cargoes heading for Iran, confiscating last month a shipment that contravened United Nations sanctions aiming to hem in Iran's nuclear and missile programmes.

Some of the 350,000 Iranians in Dubai are also starting to face restrictions. Anecdotal reports suggest some have been unable to renew residence visas. Nasser Hashempour, vice-president of the Iranian Business Council of Dubai, says it is becoming almost impossible for new Iranian businesses to secure permits.
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The restrictions suggest that politics is finally intruding on business in the emirate, despite long-standing UAE government attempts to keep the two apart.
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with the large Iranian community promoting trade flows that make Iran the emirate's single largest trading partner, the UAE has been keen to also promote business with Iran.

The UAE government dismisses suggestions that the welcome to Iranians has cooled.

Instead, officials cite a combination of factors that could affect the business relationship.

First, the government's attitude is that it will not follow the US in adopting unilateral sanctions against Iran but will resolutely abide by UN Security Council resolutions, which have targeted three leading Iranian banks and the Quds Force of the Revolutionary Guard.

Second, concern over the UAE's reputation - particularly following the embarrassing discovery that front companies working for the A Q Khan illegal nuclear procurement network were based in the UAE - has led to tighter controls on re-export trade. "Export controls are not designed against Iran but they protect the reputation of this place," says an -official.

Some 40 companies have been shut down over transhipment offences, a few of them allegedly involved in shadowy Iranian-related business.