FINANCIAL ANALYST SAID CAPITAL STILL FLOWING

S E C R E T SECTION 01 OF 02 IRAN RPO DUBAI 000068 SIPDIS SIPDIS E.O. 12958: DECL: 11/21/2017 TAGS: PGOV PREL ECON IR EFIN SUBJECT: FINANCIAL ANALYST SAID CAPITAL STILL FLOWING REF: A. RPO DUBAI 0035; B. ABU DHABI 1823 RPO DUBAI 00000068 001.2 OF 002 CLASSIFIED BY: Ramin Asgard, Acting Director, Iran Regional Presence Office, Department of State. REASON: 1.4 (d) 1.(S) Summary: A former Central Bank of Iran (CBI) employee and analyst for an American financial management firm in Dubai discussed with Econoff current pressures facing Iranians both in Iran and Dubai. The former banker told Econoff that a Tehran-based friend -- who produces a monthly economic newsletter for clients -- felt it necessary to meet with the Ministry of Intelligence (MOIS) about his work after hearing rumors that the Iranian authorities were "after him." The same friend reportedly approached the same Dubai-based financial analysts for assistance in moving $80 million out of Iran, with more to follow. The contact claimed to Econoff not to know who the $80 million belonged to. Not wanting to get involved in the money transfer, the analyst reportedly referred the friend to the British arm of the American firm, feeling compelled to help Iranians without implicating the US company. The analyst echoed claims we have heard from other Iranians that they are facing greater difficulties obtaining work visas, business permits, and financing in Dubai - and that escalating real estate prices are driving them to alternative locations like Bulgaria (real estate market information to be reported septel). End summary. Mitigating MOIS suspicion -------------- 2.(S) A long-time IRPO contact and former employee of the Central Bank of Iran, now working as a financial analyst for an American financial company in Dubai, described to Econoff new pressures that friends are facing in Iran. One friend is an economist and produces a monthly for-fee business newsletter (NFI). The friend reportedly heard rumors that the Iranian authorities "were after him," because of what he was writing in his publication. In an effort to mitigate the situation, he reportedly called the Ministry of Intelligence (MOIS) and set up a meeting to go over his product. The MOIS allegedly told him what he could and could not report on; in particular he was advised to cut all political analysis of Iran and not produce an English version of his product. Capital outflow from Iran -------------- 3.(S) The analyst said that as an incentive to business, Iran recently passed a bill allowing exporters to keep 10% of their profits outside the country. Exporters are creating false invoices, claimed the analyst; by overstating invoice totals, greater amounts can be left overseas. The analyst then said that this same friend in Iran recently asked for assistance in moving money around of Iran, initially mentioning the sum of $30 million, then upping it to $80 million, with more to follow. The analyst claimed they would not help, not wanting to jeopardize their employment with an American company, but referred him to the British arm of the financial management firm. The analyst claimed not to know who the $80 million belonged to. The contact did not want to break any US laws but at the same time felt compassion for Iranians and understood their plight. Reportedly all the analysts' friends, associates, and family members have left Iran, "if they could." 4.(S) The analyst claimed that the economist friend in Iran had data showing that $200 billion was transferred out of Iran last year. (Note: Similar figures have been quoted in the press, but IRPO has not been able to confirm their accuracy. Endnote) Dubai making life difficult for Iranians -------------- 5.(S) The analyst repeated what other Iranians have recently said, that some Iranians are having difficulty obtaining work visas in Dubai. One Iranian who works for an Iranian general services and trading company (with a silent Emirati partner) complained that ever since President Ahmadinejad visited Dubai May 13 (ref A),it has become harder for Iranians to obtain business licenses. His company is reportedly still waiting on approval to move into the real estate market. (Note: It is not known if the UAE has officially changed its policies regarding work visas for Iranians, but has indicated interest in tightening up on Iranian travelers. Endnote) RPO DUBAI 00000068 002.2 OF 002 6.(S) A November 16 news article in Dubai's Gulf News said that UAE-based banks have largely stopped issuing letters of credit for trade financing involving Iran-based companies. One banker reportedly told Gulf News that there is no UAE legal requirement for banks to take such measures but that they are acting on the basis of their own "risk perceptions and assessment." In an October 29 meeting with Under Secretary of Treasury for International Affairs David McCormick, UAE Central Bank Governor Sultan Nasser Al-Suwaidi said he believed the US and UN sanctions were having an impact on Iran and Iranian businesses in the UAE, claiming that the UAE had seen a decline in financial transfers from Iran in August. Al-Suwaidi attributed the decline to two possibilities: either the Iranians were retrenching economically, or were diverting their business away from the UAE and GCC countries (ref B). Anecdotally, Dubai-based bankers have complained about the chilling effect of UAE Central Bank guidance on doing business with Iran (presumably the UNSCR 1737 and 1747 guidance) on their business with Iranian companies. 7.(S) Comment: The claim that MOIS is putting restrictions on economic publications is believable. IRPO contacts working in a similar consulting field have told IRPO that to reduce government suspicion; they publish their international travel and speaking engagements on their website and take care to mention their activities to specific contacts who they know are likely to brief the government. Nonetheless, their subscription-only newsletter continues to be produced in English and contains political analysis. 8.(S) Comment cont: We have heard claims for several months that the UAE has periodically cracked down on residency visas and business licenses for Iranians, although there has been no policy pronouncement from the UAEG. We have also heard that Iranians are looking to CIS countries to invest in the real estate market, partly due to the rising costs in Dubai (to be reported septel). The Gulf news report on Dubai limiting financing for Iran, if true, also lends credence to a relative decline in the hospitable business climate for Iranians in Dubai. 9.(U) This message was cleared by Embassy Abu Dhabi. ASGARD BURNS