Countries ‘violating’ Iran sanctions hit UAE trade, says billionaire

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A prominent UAE billionaire has slammed the uneven enforcement of Western sanctions on Iran, saying countries in violation of the rules are drawing business away from the Emirates.

Abdul Aziz Al Ghurair said some nations are “getting away with” doing business with Iran, adding that the issue was today brought to the attention of a senior official of the US Department of State.

“We don’t like [it] when we respect the sanctions, and other countries violate the sanctions, and the trade gets shifted from the UAE to other countries,” said Mr Al Ghurair.

The issue was raised today during a private meeting with Jose W. Fernandez, Assistant Secretary for Economic and Business Affairs at the US Department of State, said Mr Al Ghurair.

Mr Fernandez declined to comment when asked about Iran, although other members of the UAE delegation confirmed that the issue had been raised.

“We value the relationship with the US, and we respect any international sanction on any country,” said Mr Al Ghurair. “But the interest of the UAE business community should be taken into consideration.”

Mr Al Ghurair declined to specify which countries he believes to be in violation of Western sanctions on Iran.

“There are plenty of countries. Everybody knows which countries are violating and they’re getting away with it,” he said. “We are a strategic partner with the U.S. – so please help us. If you apply this sanction, apply it across the board. Or allow us to do business with our partners.”

The executive added that he believes that “doing genuine business [with Iran] should be allowed”.

“They are our neighbors,” he said. “Sending them bananas, and oranges and apples, and washing machines should be allowed. It’s not a sanction item. But our traders are finding it very difficult to do business with Iran because of the remittance and currency.”

Western sanctions are having a significant impact on trade between Iran and the UAE, according to statistics issued this month.

Trade between the two countries fell by nearly a third to Dh25bn in 2012, down from Dh36bn ($9.8bn) a year earlier, according to figures quoted by the Financial Times.

An official at Dubai Customs said the decline was prompted by last year’s drop in the value of the Iranian riyal, as well as reluctance among UAE-based banks to fund trade, the newspaper reported.

Mr Ghurair is one of the richest business executives in the UAE, with a family fortune estimated at $2.9 billion in 2012, according to Forbes. Mr Al Ghurair is head of Mashreq, one of the largest banks in the country.

Mortgage caps

Mr Ghurair is also chairman of the UAE Banks Federation, which has been actively engaged in the proposed caps on mortgages in the UAE.

The UAE Central Bank in December announced plans to limit mortgages to 50 percent for foreign buyers and 70 percent for UAE nationals, in a move designed to prevent the property market overheating.

Many banks protested against the plans, and the UAE Banks Federation submitted a series of softer rules on mortgage lending on residential properties.

Local banks had demanded that the mortgage cap should be set at 60 percent of the value of a property for foreigners who are first-time buyers, and 80 percent for local citizens.

Mr Ghurair confirmed that the central bank had signaled it would agree to softer limits.

“We met with the governor [of the UAE Central Bank], and I asked what’s happening on the mortgage cap. And he said that, ‘in general, we will go along with the UAE Banks Federation’. [They will] fine tune it, but generally they have accepted our proposal.”

Mr Ghurair said he expects the implementation on the mortgage caps to happen in the “second half of this year”.

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