Dubai officials are appealing to the Government for guidance about trading with Iran as exports to one of the emirate's biggest markets shrink.
Export of goods from Dubai to Iran were falling "day by day," said Hamad Buamim, the director general of the Dubai Chamber of Commerce and Industry.
"Iran is a major market for Dubai businesses. A quarter of total volumes of exports and re-exports go to Iran," he said. "But with the further measures taken during 2011 and early this year, this share is shrinking down day by day."
For years, Dubai has been a gateway to Iran for goods including grain and cars.
But tightening UN, US and EU sanctions against Iran are strangling the flow of goods.
One of the biggest challenges for Dubai traders has been obtaining letters of credit or other financing to pay for shipments. Reuters reported this month that the UAE Central Bank had told lenders to stop financing trade with Iran.
Mr Buamim said the chamber was appealing to the UAE Government on its members' behalf about the problems they faced.
"We are saying [to the Government] how difficult the situation is for companies," he said. "The biggest challenge is that foreign companies can export to Iran. This is what nobody really understands, but there is a mechanism with certifications. We don't have access to that."
The chamber is still encouraging its members to trade with Iran as long as they do not breach international sanctions, he said. But the variety of sanctions and measures imposed since last year meant there was a lack of understanding about business dealings with Iran, he said.
"The problem with the sanctions is that they are not very clear," he said. "Initially they related to the nuclear sector, but recently the sanctions have widened to the whole of the financial services."
The UAE has come under increasing pressure to close its links to Iran's financial system after the US in November ruled the entire Iranian banking system including the central bank as a "primary money-laundering concern". As a result of the action, financing trade with Iran was "almost impossible if you are Iranian", Morteza Masoumzadeh, a member of the executive committee of the Iranian Business Council in Dubai and the chairman of Jumbo Line Shipping Agency, said last month.
As many as 8,000 Iranian traders and trading firms are registered in Dubai.
In the first half of last year, re-exports from the UAE to Iran rose by 36 per cent from the same period a year earlier to Dh19.5 billion (US$5.3bn), according to the latest data from the UAE Customs Authority.
Data that tracks the more recent volume of exports from Dubai is not yet available.
The total value of Dubai chamber members' global exports and re-exports rose by 4.7 per cent last month compared with January last year. But the percentage rise is smaller than the 15 per cent rise in members' exports for all of last year.
twitter: Follow our breaking business news and retweet to your followers. Follow us
