Lynne al-Nahhas
Last updated: 14 July, 2015

Iran merchants in Dubai eagerly await sanctions relief

Loading goods onto vessels anchored along Dubai Creek, Iranian sailors and businessmen await the long hoped-for lifting of Western sanctions against Iran to boost business between the Gulf neighbours.

Iran and world powers on Tuesday reached an accord in Vienna that would rein in its nuclear programme in exchange for an easing of the crippling sanctions against the Islamic republic.

Global oil prices plunged even as details were still emerging of the deal that would end a 13-year standoff, in the first sign of the huge economic impact of such a historic accord.

“If sanctions are lifted, our work will increase and it will become easier,” said Mohammed Hasan Zara, an Iranian captain at Dubai Creek, as he packed foodstuff, cutlery, and auto and computer parts onto a wooden dhow destined for southern Iran.

Since 2006, the UN Security Council has imposed four sets of sanctions against Iran over its suspect nuclear ambitions. The United States and European Union have enacted even tougher measures that target the country’s energy and banking sectors.

The sanctions have taken a heavy toll and affected historically strong trade ties with Dubai — home to a 400,000-strong Iranian community that runs a vast business network.

“We used to go twice a month to Iran and come back. Now we can’t even get enough cargo to go once every month,” said Zara, a trader who speaks Arabic and Farsi.

Hossein Haghighi, vice president of the Iranian Business Council in Dubai, recalls that some banks in the United Arab Emirates had closed down the accounts of Iranians in the country.”If the sanctions are removed, some banks will start opening accounts for Iranians and business will improve,” said Haghighi.

Emirati businessmen dealing with Iran — the UAE’s fourth-largest trading partner — had also faced restrictions, he added.

UAE Economy Minister Sultan al-Mansouri said last month non-oil trade with Iran amounted to $17 billion in 2014 but remains lower than the record $23 billion in 2011 before sanctions began to bite.

– Centuries-old ties –

Dubai has long been at the forefront of trade ties with Iran.

Its ruler Sheikh Mohammed bin Rashid al-Maktoum last year appealed for the sanctions against Iran to be lifted, complaining his emirate had suffered from the punitive measures imposed on its neighbour.

A hub for finance and transportation, Dubai is home to Jebel Ali Port, the biggest and busiest facility of its kind in the region which is expected to benefit enormously from a relaxation of the sanctions.

Haghighi said he expects trade between the UAE and Iran to surge by between 15 and 20 percent within the first year of the sanctions being lifted.

“There are more than 10,000 companies in the UAE which one way or another have Iranian ownership,” he said.

Most are active in the oil, gas and food industries.

This month, Dubai’s Emirates Airline announced it will launch in September a second route to Iran, with a new service to the city of Mashhad.

Trade between Iran and the UAE is centuries-old, despite a dispute over the ownership of small Gulf islands now controlled by Iran.

Following the 1979 Islamic revolution, many Iranians fled to Dubai, escaping the social restrictions enforced by Tehran’s new rulers.

Opposite the concrete wharf where Iran-bound goods await collection are the offices of Bank Melli Iran and Bank Saderat Iran — two Iranian lenders that are under the sanctions.

In a nearby bustling market, where Persian is a commonly spoken language, the scents of Iranian spices fill the air.

Mohsen Yousuf, whose family settled in Dubai 70 years ago, has also been keeping a close watch on the talks in Vienna.

“If the sanctions are lifted, people will be able to come here and open businesses,” says Yousuf, sitting in his shop that sells a range of Iranian goods, from tea to oil and spices like saffron.

Merchants are currently only allowed to bring in 20 kilograms (44 pounds) of spices every three months, he says.

“But, God willing, if the sanctions are lifted we can earn more… We could be allowed to bring up to 100 kilograms.”