Local firms risk punishment over trade with Gulf neighbour

Businesses in the UAE risk being shunned by the United States if they do business with Iran, a US commerce department official has warned.

Individuals or firms with connections to the US and trading with Iran were most vulnerable to having action taken against them, David Mills, the assistant secretary for export enforcement at the US department of commerce, said on a visit to the UAE.

Potential steps taken by the US government might range from sanctions against a company or civil penalties, he said.

"When you analyse the situation from a very practical perspective, there are very few business opportunities [with Iran] that are worth the cost today," Mr Mills said. Dubai has long been a gateway for the passage to Iran of a wide range of goods including grain, cars and electronics.

The tightening of sanctions against Iran by the US, the European Union and the United Nations in recent months threatens to choke off some of the flow.

US officials are redoubling their efforts to ensure that firms comply with the sanctions.

The restrictions on trade with Iran were numerous and complex, said Mr Mills. Medicine, medical devices and agricultural goods are among the narrow range of items allowed to be exported or re-exported to Iran under US rules.

US citizens or those working for US companies or US affiliates trading other goods with Iran were likely to be breaking the sanctions.

Businesses may even fall foul of the sanctions if the goods are denominated in US dollars or involve a US or US-affiliated financial institution, Mr Mills said.

US officials are particularly keen to prevent any US-made software and electronics from reaching Iran or Syria.

The US commerce department took action against Info Tech, a company based in Ras Al Khaimah, in December after it supplied Syria with internet-filtering devices made by Blue Coat Systems, a Web-security firm in California.

Info Tech was banned from receiving or transferring items that fall under US export control laws.

Foreign companies wanting to re-export US goods must inform the supplier of the final destination of the goods and the citizenship of the people receiving the items, said Mr Mills.

"Suppose your company in the UAE were to place an order to an affiliated company in the United States, obtain the goods and then, without informing the US company, to re-export those goods to Iran or Syria, your company in the UAE would be liable to a civil penalty," he said.