UAE indicates full compliance with US sanctions on Iran

A trading dhow lies at anchor in Dubai Creek. Dubai, the UAE’s business hub, has traditionally been a major trading partner with Iran. (Reuters)
Updated 19 November 2018
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UAE indicates full compliance with US sanctions on Iran

  • The US announced on Nov. 5 a series of sanctions targeting Iran’s banks, shipping sector, national airline and 200 individuals
  • UAE’s trade with Iran, which is expected to decline further, fell to $17 billion in 2017 from a peak of $20 billion in 2013

DUBAI: The United Arab Emirates is fully complying with sanctions imposed this month by the United States on Iran even though it will mean a further drop in trade with Tehran, said a UAE economy ministry official.

Abu Dhabi, the political capital of the UAE federation, has taken a tough stand on Tehran, although Dubai, the country’s business hub, has traditionally been a major trading partner with Iran.

Washington announced on Nov. 5 a series of sanctions targeting Iran’s banks, shipping sector, national airline and 200 individuals after President Donald Trump pulled the United States out of an international nuclear deal with Tehran.

“We are implementing the sanctions,” Abdullah Al-Saleh, undersecretary for foreign trade and industry, said in an interview in Dubai.

 

The UAE is enforcing the US sanction regime “as it is published by the United States,” Al-Saleh said, adding that the relevant authorities would ensure compliance.

Al-Saleh said the UAE’s trade with Iran is expected to decline this year and next year due to the sanctions, after falling to $17 billion in 2017 from a peak of $20 billion in 2013.

Most trade consists of re-exports via Dubai to Iran, which lies across the Gulf.

The sanctions are part of a wider effort by the Trump administration to diminish Iranian influence in the Middle East.

The UAE is among US allies in the Gulf region that staunchly oppose Iranian foreign policy and swiftly backed Washington’s decision. It is also a member of a coalition that is opposing the Iran-aligned Houthi group in Yemen’s civil war.

Compliance will mean UAE companies do not face difficulties in the United States, and the UAE government will look to boost trade with other markets such as Africa and Asia to offset the impact of the sanctions on its own economy, Al-Saleh said, repeating an existing government policy to diversify trade.

Trump’s administration has threatened those who continue to do business with Iran with the prospect of losing access to the US market, although it has given temporary exemptions to eight importing countries to keep buying Iranian oil.

The European Union, France, Germany and Britain, which are trying to save the nuclear deal, have said they regret the US decision and will seek to protect European companies doing legitimate business with Tehran.

FASTFACTS

The US has given temporary exemptions to eight importing countries to keep buying Iranian oil.


India names Modi demonetization backer as cenbank head

Visitors are seen standing next to a logo of the Reserve Bank of India (RBI) at the bank's head office in Mumbai on December 5, 2018. (AFP)
Updated 12 December 2018
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India names Modi demonetization backer as cenbank head

  • Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization

MUMBAI: Ex-finance ministry official Shaktikanta Das took charge of the Reserve Bank of India on Tuesday, in a swift appointment expected to ease a dispute with the government as it pushes for looser credit rules ahead of a general election.
The announcement by Prime Minister Narendra Modi’s administration came just a day after Urjit Patel resigned from the post, following months of clashes between the two institutions over lending curbs and how to deploy the central bank’s surplus reserves.
Pressure on the RBI to take immediate steps to boost the economy, including a transfer of the excess reserves to the government, could well rise after Modi’s ruling Bharatiya Janata Party (BJP) suffered likely election losses in three key states on Tuesday.
Das — a high-profile backer of Modi’s controversial 2016 move to scrap high-value currency notes, known as demonetization — will serve a three-year term as governor, effective immediately.
RBI watchers said they expected the 61-year-old, who retired last year as secretary of the department of economic affairs having previously served on the RBI’s board, to put relations between the Mumbai-based bank and the finance ministry in New Delhi on a stabler footing.
Investors will also look closely at his ability to hold up against outside influences after recent efforts by the Modi government to gain greater control over the central bank’s regulatory powers.
“The incoming governor will have to work hard to prove that he has his own independent mind,” said Deepak Jasani, head of retail research at Hdfc Securities.
Investors said any openly political appointee with little macro-economic experience, would not sit well with financial markets that already sold off following the BJP’s election setbacks.
But Ashish Vaidya, executive director and head of trading at DBS Bank in Mumbai, said he expected India’s debt and currency markets to react positively.
“He is a bureaucrat...We expect the RBI to take a pragmatic approach under him, be pro-growth and change its stance going ahead given that inflation has come off sharply,” he said.
Finance Minister Arun Jaitley told Reuters partner ANI that the government acknowledged the bank’s independence.
“Government will fully support the RBI and coordinate with it in areas where consultations of government are required to make sure India’s economy benefits from both government policy decisions and areas which fall within domain of the RBI,” ANI tweeted, quoting Jaitley.

SWIFT APPOINTMENT
Pronab Sen, India’s former chief statistician, said he was surprised by the speed of Das’s appointment.
“If you have a situation where a position as important as the governor of the RBI is filled within 24 hours of the resignation of the incumbent, that will raise eyebrows,” Sen told Reuters.
“People are going to say, clearly this guy had already been identified. And, the situation was created where Urjit Patel had to quit.”
Das — widely seen as a contender for the top RBI job after Raghuram Rajan’s term ended in 2016 — did not answer calls from Reuters to his mobile phone.
RBI officials who have worked with him closely said Das was likely to be more inclusive in the decision-making process than Patel.
“He has a balanced approach and is good at consensus building,” said a former deputy governor. .”..We have had our fair share of differences. But he has always been solution-centric rather than festering on those differences.”
Das worked in the finance ministry under both Modi’s government and the previous coalition led by the main opposition Congress party and was also involved in drafting the Insolvency and Bankruptcy code aimed at protecting small investors.
He came under fire for his pro-demonetization stance and was the most vocal bureaucrat at the time Modi withdrew the high-value bank notes to fight tax evasion.
Das last year criticized the methodology of global rating agencies and sought a sovereign rating upgrade for India.