x Abu Dhabi, UAETuesday 25 July 2017

RAK free zone refuses Iranian companies

The Ras al Khaimah Free Trade Zone has stopped issuing licences to new Iranian companies and is observing international trade sanctions against the country, its chief executive says.

The Ras al Khaimah (RAK) Free Trade Zone has stopped issuing licences to new Iranian companies and is observing international trade sanctions against the country, its chief executive says. Security regulations were in place across the zone to ensure Iranian trading companies already operating there were not breaching the sanctions, said Oussama el Omari.

"We are observing international sanctions and not allowing new (Iranian) companies, and working with the UAE Government according to rules and regulations," Mr el Omari said. "We have a few Iranian traders registered here already and they are cleared and we are doing our due diligence to make sure companies are qualified. We have our own security system and the UAE security system." RAK offers one of the most convenient opportunities for trade between the UAE and Iran because it is situated just 80km across the Strait of Hormuz.

International pressure has intensified in recent months for the UAE to clamp down on illicit exports to one of its largest trading partners. EU sanctions came into force this week. They include a restriction on the supply, sale or transfer of equipment or goods that could be used in developing Iran's alleged nuclear weapons programme. The UN Security Council last month approved new measures on financing and military goods, limiting letters of credit for shipments to Iran.

The latest restrictions appeared to have had some success after Iran said on Monday it was ready to return to talks on a nuclear fuel swap. Morteza Masoumzadeh, the head of the Iranian Business Council in Dubai, said he was not surprised by RAK's decision to refuse applications from new Iranian companies. "RAK was looking to offer benefits to attract Iranian companies in the past," Mr Masoumzadeh said. "Now perhaps it's not in their favour to do so due to sanctions so they have changed their viewpoint."

There are about 200 Iranian companies operating within the RAK free zone, a spokeswoman said. With a bustling shipping port and an international airport, RAK is an important centre for re-exports bound for Iran, but Dubai's trade volumes remain higher. Jebel Ali Free Zone in Dubai, one of the biggest free zones in the country, still accepted applications from new Iranian companies, a spokeswoman said yesterday.

Iran was the UAE's fourth-biggest trading partner in the first quarter of the year, with re-exported goods accounting for much of that, figures from the Ministry of Foreign Trade show. But in a sign the effects of international sanctions may be starting to squeeze trade volumes, export value from Dubai businesses to Iran declined by 8 per cent last month compared with June last year, according to data from Dubai Chamber of Commerce and Industry.

Machinery and mechanical and electrical appliances have accounted for about 30 per cent of the total onward sales of goods to Iran in recent years, followed by transport equipment. tarnold@thenational.ae