Hopes of a revival of trade ties between the UAE and Iran have been raised after Tehran and six world powers reached a landmark agreement yesterday to halt parts of its nuclear programme.
That, however, depends on whether the parties reach a more permanent agreement.
Trade between the UAE and Iran will decline to US$4.5 billion this year, from $8.5bn last year, dragged down by global sanctions on Iran, according to Hossein Asrar Haghighi, the executive vice president of the Iranian Business Council.
"[The easing of the sanctions] means more trade for exporting countries, and will have a positive effect on SMEs [small and medium-sized enterprises] and businesses, especially those in the import and export of petrochemical products from Iran," Mr Haghighi said.
"Those [businesses] who have migrated outside the UAE are likely to activate their set-ups here depending on how well-established they are and where they have gone."
The Iranian Business Council has a membership of about 150 companies, including SMEs. At its peak, it had about 390 members before sanctions were tightened.
Over the years, its member companies started establishing new bases in Russia, Iraq, Turkey, China and Turkmenistan.
Under the terms of the agreement struck yesterday in Geneva, Iran has agreed to a series of curbs on its nuclear industry, including the suspension of uranium enrichment beyond the level at which it can be used for weapons research. It would grant greater access to inspectors at its Natanz and Fordow nuclear sites, and suspend further development of its Arak nuclear plant.
In return, the international community has agreed to a "limited, temporary, targeted, and reversible relief" of sanctions.
The relief measures include a pledge to not impose new sanctions for a six-month period, and the suspension of certain sanctions on gold and precious metals, Iran's automotive sector, and its petrochemicals exports. Furthermore, the world community is permitting purchases of Iranian oil to remain at their current significantly reduced levels, and the repatriation of $4.2bn of funds from the sales to Iran.
The agreement will be valid for six months, during which the parties involved will attempt to negotiate a more lasting settlement.
Ramsey Jurdi, a Dubai-based partner with law firm Chadbourne & Parke, said although the transfer of funds would provide Iran with a significant cash injection, the effect of the suspension of sanctions was largely symbolic.
In the short term, they would not have a significant impact on Iran's trade flows, Mr Jurdi said.
"This move is not opening the door for any new business deals," he said. "What it is a freezing of the sanctions currently in place, and allowing a slow drip feed of money back into the country that's currently frozen abroad."
Any significant relief for Iranian businesses in the UAE would only come about when restrictions on Iranian banking activity are eased, according to Mr Jurdi.
"Right now those restrictions remain fully in place, and that will continue to be an obstacle to any new trade flows," he said.
Patrick Murphy, a legal director with Clyde & Co in Dubai, said the psychological impact of the landmark agreement was not insignificant, and might lead to an increase in trade in the medium term.
"It's a change in the mood, and from that perspective, it's a big thing," Mr Murphy said. "If you take it to the logical ends that both parties appear to want, I don't see any reason why you can't have a big uptick in trade."
Even a recovery of trade flows to pre-sanctions levels would represent a significant upturn, he said.
jeverington@thenational.ae
ssahoo@thenational.ae
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
COMPANY PROFILE
Name: N2 Technology
Founded: 2018
Based: Dubai, UAE
Sector: Startups
Size: 14
Funding: $1.7m from HNIs
Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
Most F1 world titles
7 — Michael Schumacher (1994, ’95, 2000, ’01 ’02, ’03, ’04)
7 — Lewis Hamilton (2008, ’14,’15, ’17, ’18, ’19, ’20)
5 — Juan Manuel Fangio (1951, ’54, ’55, ’56, ’57)
4 — Alain Prost (1985, ’86, ’89, ’93)
4 — Sebastian Vettel (2010, ’11, ’12, ’13)
COMPANY PROFILE
Founders: Sebastian Stefan, Sebastian Morar and Claudia Pacurar
Based: Dubai, UAE
Founded: 2014
Number of employees: 36
Sector: Logistics
Raised: $2.5 million
Investors: DP World, Prime Venture Partners and family offices in Saudi Arabia and the UAE
Seven tips from Emirates NBD
1. Never respond to e-mails, calls or messages asking for account, card or internet banking details
2. Never store a card PIN (personal identification number) in your mobile or in your wallet
3. Ensure online shopping websites are secure and verified before providing card details
4. Change passwords periodically as a precautionary measure
5. Never share authentication data such as passwords, card PINs and OTPs (one-time passwords) with third parties
6. Track bank notifications regarding transaction discrepancies
7. Report lost or stolen debit and credit cards immediately
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
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Zayed Sustainability Prize
Rashid & Rajab
Director: Mohammed Saeed Harib
Stars: Shadi Alfons, Marwan Abdullah, Doaa Mostafa Ragab
Two stars out of five
MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
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