C O N F I D E N T I A L DUBAI 000148

SIPDIS

SIPDIS

NEA/ARPI BAGWELL AND MASILKO, EEB/ESC/TFS BONDY

E.O. 12958: DECL: 4/16/2018
TAGS: ECON PREL ETRD PGOV AE IR
SUBJECT: IRANIAN TRADE AND TRAVEL TO UAE INCREASINGLY DIFFICULT

REF: A. 2007 IRPO DUBAI 0068; B. IRPO DUBAI 0067

CLASSIFIED BY: Paul Sutphin, Consul General, Consulate Dubai,
DOS.
REASON: 1.4 (b), (d)




1. (C) Summary. During an April 6 visit by Steven Bondy, EEB's
Director of Terrorism Finance and Economic Sanctions Policy,
Hamad Buamim, Director General of the Dubai Chamber (DC),
formerly known as the Dubai Chamber of Commerce and Industry, DC
Advisor Abdullah Sharafi and JAFZA (the free zone subsidiary of
Dubai government owned Dubai World) Vice President Dr. Mohammed
Al Banna independently noted increased difficulties faced by
Iranian nationals seeking to visit and do business in the UAE.
End Summary.

Iranian travel to UAE is getting more difficult,

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2. (C) Hamad Buamim, Director General of the Dubai Chamber (DC),
formerly known as the Dubai Chamber of Commerce and Industry,
and Abdullah Sharafi, DC Advisor, commented that Iranians are
under more scrutiny when applying for tourism, residency and
work visas to the UAE and that over the past 6 months, visas
have become increasingly difficult for Iranians to procure (ref
A). Jafza Vice President Dr. Mohammed Al Banna also observed
that he has seen significant declines in UAE visas being given
to Iranian nationals seeking to visit or work in the UAE. He
said that while JAFZA serves as the sponsoring agency of
companies and individuals applying for business licenses and
residency permits, it was the UAEG that makes the determination
to approve or refuse applications.

And moving money is more difficult,

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3. (C) In conjunction with tightening visas, Sharafi noted that
over the past six months payments and other banking channels
were tightening and becoming more difficult for businesses to
negotiate. He stated many Dubai banks are now refusing to honor
letters of credit drawn on Iranian banks or for Iranian
businesses (ref B). He also noted that Euro denominat

ed funds
transfers to Iranians/Iranian businesses are becoming difficult
to execute. Both Sharafi and Buamim were quick to point out a
perceived inequity in that some (unnamed) European companies and
banks were still accepting Iranian letters of credit and
executing Euro fund transfers. They stressed that Iran is a
close neighbor (80 miles away), a major source of agricultural
produce for the UAE market and more importantly, a large market
with "many needs" presenting opportunities to Dubai businesses
(Note. Dubai non-oil exports to Iran topped $9.7 billion last
year. End note.)

And Iranians can't open a business at JAFZA

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4. (C) Jafza Vice President Dr. Mohammed Al Banna stated that
there are only 60-70 Iranian companies currently operating out
of the free zone (out of a total of some 2,000). In addition,
acceptance of Iranian applications to the free zone has been
indefinitely suspended, and all companies' applications are now
subject to extensive research on their holding and ownership
relationships before approval is granted.

But dual use products are a "grey area"

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5. (C) Sharafi and Buamim also complained that dual-use products
present a substantial grey area to local Dubai-based businesses.
Sharafi lamented that "it's such a big list, it takes several
days to go through, and everything is in there." Sharafi also
noted local business' concerns that they might be legally
implicated if a business they sell to turns around and
subsequently re-sells dual-use goods to an Iranian company.
Sharafi said that some US companies are now asking their UAE
agents to sign legal documents accepting responsibility should
US originated products inadvertently make their way to Iranian
markets. While some UAE traders are willingly signing such
documents, Sharifi said, others are reportedly hesitant to do

so. (Note: US Embassy Abu Dhabi officials plan to brief DC
members soon on OFAC's Specially Designated Nationals list and
US Department of Commerce's Commerce Control List of dual-use
products. End Note.)

Comment

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6. (C) Both Post and the Iran Regional Presence Office have been
hearing anecdotal stories of the increasing difficulties
experienced by Iranians seeking residential, work and visit
visas to the UAE; however, this is the first time we have heard
Dubai quasi-officials openly discussing restrictions on Iranian
visas and trade(DC is not officially part of the Dubai
governments, although it is heavily influenced by Dubai official
policy; JAFZA, while Dubai Government-owned, generally operates
as a private sector-type entity focused on profit, and is not a
policy voice for that government). While neither the DC nor
JAFZA are actively involved in UAEG visa policy, it is
noteworthy that they are commenting on the issue to USG
officials. Furthermore, their comments regarding difficulties
in funds movements and letters of credit confirm that sanctions
and concerns such as commercial and prudential risk are
effectively slowing down UAE-Iran trade. End Comment.
SUTPHIN