Iran's Dubai Connection
The Islamic Republic bypasses U.S. sanctions with goods and money shipped through the Persian Gulf emirate.
By Kambiz Foroohar
On a sweltering mid-October evening, horns blare as pickup
trucks at Dubai Creek wharf jockey to deliver cargo bound for
Iran. Televisions, cartons of toothpaste, car parts,
refrigerators and DVD players stretch for about a mile on the
dock along the murky waterway that snakes to the Persian Gulf.
“We’ll take anything as long as you pay us,” says Ali, a
24-year-old Iranian deck hand in an oil-stained T-shirt, as he
pulls down a blue tarpaulin covering air conditioners, tires and
tea bags headed for the port of Bandar Abbas, 100 miles (160
kilometers) across the Gulf. “We’ve taken American stuff --
printers, computers, everything.”
Years before the world turned its attention to Dubai’s
financial crisis, the second largest of the seven states in the
United Arab Emirates was amassing clout -- and money -- as
Iran’s back door to the West, Bloomberg Markets magazine
reported in its March issue.
Iran’s biggest non-oil trading partner provides a stream of
household items -- from diapers and mobile phones to laptops and
washing machines -- as well as illicit items such as aircraft
parts and computer chips that the U.S. says have nuclear and
military uses.
The U.S. forbids American companies from sending anything
to Iran, with limited exceptions, such as medical supplies, and
has pressed other nations to stop doing business with the
country. The Justice Department has prosecuted foreign companies
that sell American goods with military uses to Iran.
‘Offshore Business Center’
The U.A.E. was the biggest importer of U.S. products in the
Middle East and North Africa, the Government Accountability
Office said in December 2007. It ships out as much as 80 percent
of the material -- and as much as a quarter of that heads to
Iran, says Jean-Francois Seznec, a professor at Georgetown
University’s Center for Contemporary Arab Studies in Washington.
From 2005 to 2009, trade between Dubai and Iran tripled to $12
billion, according to the Dubai Chamber of Commerce. Iran’s main
exports to Dubai are nuts, carpets and petrochemicals.
“Dubai is Iran’s offshore business center,” says Afshin
Molavi, a fellow at the Washington-based New America Foundation,
which analyzes public policy. “Dubai plays a huge role in
Iran’s economy.”
Dubai’s porous borders enable Iran to snub the West. The
Islamic Republic has disregarded United Nations Security Council
demands that it cease work on its nuclear program, which the
U.S. and its allies suspect is geared to giving Iran nuclear
weapons. The U.S. State Department charges that Iran’s regime
backs terrorist groups, including the Taliban in Afghanistan and
Hamas in the Palestinian territories.
Close Economic Ties
Imports from Dubai are helping to grease the economy at a
time when the Iranian government is struggling to keep a lid on
a growing demand for democracy.
Iran’s footprints are everywhere in Dubai. About 8,000
Iranian businesses, and at least 1,200 trading companies,
operate in the emirate, according to the Iranian Business
Council, a Dubai-based group that promotes economic ties.
The sprawling Iranian Club offers outdoor sports
facilities, a stadium, a hotel, a theater and a restaurant with
some of the best Persian food in town. Dubai doesn’t enforce the
wearing of Islamic hijab for women. Inside the club, women wear
the covering clothing and headgear to conform to rules in Iran.
Clocks for Tehran and Dubai, a half hour apart, hang next to
pictures of Iran’s former and current supreme leaders,
ayatollahs Ruhollah Khomeini and Ali Khamenei.
‘Absolute Sieve’
“You can get anything you want, and you can ship anything
you want to Iran,” says Morteza Masoumzadeh, an IBC director
and owner of a shipping company that transports goods between
Iran and Dubai. “Every company in Iran is either here or has
representatives here.”
Lisa Prager, a partner in the Washington office of law firm
Wilson, Sonsini, Goodrich & Rosati and a former deputy assistant
secretary at the Department of Commerce, agrees.
“Dubai is an absolute sieve,” says Prager, who has
investigated smuggling in the emirate.
Sultan Bin Nasser al-Suwaidi, governor of the U.A.E.’s
central bank, and Saeed Abdullah Al-Hamiz, head of banking
supervision, didn’t return e-mails or phone calls seeking
comment. Hamad Buamim, director general of the Dubai Chamber of
Commerce and Industry, declined interview requests. Yousef Al
Otaiba, the U.A.E.’s ambassador to the U.S., declined to comment
through a spokesman.
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