UAE boosts trade with Iran after eased restrictions: report

Financial Times quoted executives as saying that the UAE has in recent months rolled back limits on corporate registrations and the issuance of visas to companies from Iran, which remains subject to tough US sanctions.

Iranian financiers are also exploring how to enhance bilateral trade by creating financial mechanisms to fund legitimate transactions, the report added quoting the sources.

While China is Iran’s premier trade partner, the UAE is the second largest. Trade between Iran and the UAE has recovered from a pandemic slump of $11bn in 2020/2021 to $24bn in the 12 months ending in March, according to Iranian data.

The increase surpasses the $22bn recorded in 2012 before US-led sanctions started to bite. Iranian officials have said they are now targeting a further increase in bilateral trade towards $30bn in the next two years.

“Pressure from the UAE central bank has decreased and some Emirati banks have started opening bank accounts,” said Masoud Daneshmand, a former head of the Iran-UAE Chamber of Commerce. “Currently, some Iranian companies which used to be in the UAE but had become inactive have become active again. Some new companies have also started business.”

In diplomatic exchanges, Iranian officials have been asking their Emirati counterparts to find new mechanisms for financing trade, according to people briefed on these conversations.

“Our economic relationship with Iran has long been of major importance,” said the UAE’s economy ministry. “The UAE’s trade with Iran is conducted in full compliance with global rules and standards.”

Some Iranian companies and banks have used trustees in the UAE who can act as a proxy for cross-border transactions as a way of sidestepping the current restrictions.

“When goods come from Europe and Canada to Iran’s market, an Emirati pays for them and Iranians pay the Emirati,” said Daneshmand.

For years there have been self-imposed restrictions on business with Iran, but these have been gradually eased in recent years, a UAE-based businessman said. “There’s a sense of more openness.”

MP/PR