Analysts said the move would have little impact on the estimated $8 billion in trade between the UAE and Iran.

The 40 companies that were shut down reportedly had been found to be trading strategic dual purpose goods, good which could be used in both civilian or military production, and other dangerous material. The UN has barred these goods as part of sanctions against Iran over its alleged nuclear program.

On June 9, the United Nations Security Council slapped on Iran a fourth round of sanctions which now bar dealings with firms linked to the Iranian Revolutionary Guard Corps.

Christian Koch, director of international studies at the Gulf Research Center in Dubai, told The Media Line that the crackdown was part of a national strategy.

"This is certainly one step, although the commitment to enforce United Nations sanctions has been there from the very beginning," Koch said.

"There is awareness within the United Arab Emirates that there are Iranian front companies set up in the free zones. This is a concerted move to try to undermine those companies involved in possible illegal transactions," Koch added. "It is also to see what companies are actually doing what, and closing those down that are not doing anything."

An estimated 400,000 Iranians live in the United Arab Emirates and the trade flow between the two countries is worth some $8 billion annually.

"In the latest official figures from the UAE authority for 2009, we can see that imports from Iran was negligible but total exports represented almost $8 billion," Philippe Dauba-Pantanacce, senior economist with Standard Chartered Bank, told The Media Line.

"With 92 percent of this being re-exports. This represents 13.2 percent of the total exports from the UAE." he said.

"I would certainly argue that the pressure on the UAE to put a lid on its commerce with Iran could put a strain on these exchanges but might also translate into a diminishing part of the actual trade translated into the official figures," Dauba-Pantanacce said.

But some, like Morteza Masoumzadeh, the executive deputy president of the Iranian Business Council in United Arab Emirates which represents many Iranian businessmen living in the UAE, are unconcerned about the crackdown.

"These forty or so companies represent we heard about in the media are not members of the Iranian Business Council in United Arab Emirates, therefore such crackdowns do not bother us at all," Masoumzadeh told The Media Line.

"We came to the United Arab Emirates 30 years ago when the Iranian Revolutionary Guard did not even exist then," he said pointing out the long-standing economic ties between the two countries.

"Until two years ago, Iran used to be the first trading partner for the UAE. It has since declined and it is now number three," Masoumzadeh said "Saudi Arabia is now number one.”