UAE, Qatar ban funding trade with Iran

04 Feb 2012

(MENAFN) Bankers said that the central banks of UAE ordered lenders to halt financing trade with Iran, following international sanctions imposed on the country over its controversial nuclear program, Reuters reported.

The Gulf has a long history of trade with Iran, especially in Dubai where there is a large Iranian trading community.

About 8,000 Iranian traders are registered in Dubai, and re-export trade between Iran and the UAE totaled USD5.32 billion in the first half of 2011, according to the UAE’s customs authority.

The UAE’s central bank ordered financial institutions two years ago to freeze Iran-linked accounts belonging to firms targeted by United Nations sanctions.

Qatar’s central bank made the same move recently ordering lenders to stop providing credit for Iranian trade, according to a senior Doha-based banker.

Gulf banks had been expected to fill a funding gap for the import of grains, which the nation is heavily dependent on, left by European lenders banned from financing trade by EU sanctions, and the new move cuts another source of credit for a country struggling under Western economic sanctions imposed over its nuclear program.

The European Union in January agreed to ban oil imports from Iran and freeze its central bank’s assets, aimed at forcing the country to stop its nuclear program, which is said is aimed at producing an atomic weapon.