Visiting US officials to focus on Iran

Seeking new round of UN sanctions, US Secretary of State and Treasure officials will make case against Tehran to Gulf nations.

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WASHINGTON // US officials heading to the region this week are expected to highlight their efforts to impose stiffer sanctions on Iran and counter its influence across the broader Gulf region. In the UAE, Neal Wolin, the deputy Treasury secretary, will split his time between the capital and Dubai. He will focus on Iran and measures enacted by the US Treasury to target the Iranian Revolutionary Guard Corps (IRGC), while also seeing the leadership of Dubai's economy as it navigates a US$22 billion (Dh80.8bn) debt restructuring with international and domestic banks.

Mr Wolin's visit to the UAE coincides with a visit by Hillary Clinton, the US secretary of state, to Saudi Arabia and Qatar, where she will address the US-Islamic World Forum. "Iran will be the centrepiece of the visit," said Cliff Kupchan, an Iran analyst at Eurasia Group, a political-risk consulting firm, noting that co-operation with Gulf partners is "central to any sanctions". US concerns over Iran's nuclear programme increased last week when the Islamic republic announced the production of its first batch of nuclear fuel enriched to a level of 20 per cent, bringing it closer to the 90 per cent enrichment required for nuclear weapons.

Though Washington has cast doubt on the Iranian claims, Robert Gibbs, the White House press secretary, said Iran's actions, including rejecting a compromise to send its low-enriched uranium abroad in exchange for fuel to power a peaceful medical research reactor, have left it increasingly isolated. The international community, he said, was now "more unified than at virtually any other point in the past many years".

The US is seeking a fourth round of UN sanctions against Iran but China, which holds a veto on the UN Security Council and has deep economic ties with Tehran, has resisted. Mr Gibbs said last week he believed China would ultimately play a "constructive role" in the effort to mete out stiffer penalties against the Islamic republic. "They worked with us, again, very constructively on the UN resolutions dealing with North Korea," he said. "It's certainly not in [China's] interest economically to have an arms race in the Middle East."

Existing UN sanctions ban exports of technologies that can be used for both military and civilian ends. They also limit the travel of officials connected to Iran's nuclear programme, and have frozen some Iranian assets. The US has a stricter sanctions regime including a ban on all trade with Iran by US companies and citizens. Washington hopes that a tougher set of UN sanctions will be matched by the EU and Arab countries.

Iranian traders in Dubai have said that any tightening of UN sanctions would hit their businesses hard. As many as 1,200 Iranian companies operate in the emirate, and trade between Dubai and Iran tripled to more than $12bn in the four years to last year, according to figures from the Dubai Chamber of Commerce. And about $2.8bn of petroleum products pass through the UAE to Iran every year, making up nearly 75 per cent of the country's imports of refined fuel.

Traders fear stricter sanctions may hamper their operations by making it even harder to obtain credit. Kimberly Ann Elliott, a sanctions expert at the Center for Global Development, a think tank based in Washington, said she believed Mrs Clinton would spend some of her time in the Gulf seeking to build support for tougher sanctions and encouraging a continued clampdown on transshipment of US-sanctioned goods.

Mrs Clinton may also be looking for assurances from Saudi Arabia and other oil producers that they will step up production to help offset any disruption in global oil supply resulting from sanctions on Iran, Ms Elliott said. Such assurances may be crucial to securing Chinese support. "Part of it is informing [Gulf states], letting them know what's going on and trying to get their support just as kind of good diplomacy," she said of Mrs Clinton's visit to the region. "You want to make sure they are supportive and in the fold on this."

The visits come as the US Treasury last week took further action to implement existing US sanctions against Iran's IRGC by designating a general and four companies affiliated with the corps as proliferators of weapons of mass destruction (WMD). Under an executive order signed by then-president George W Bush in 2005, the US can freeze the assets of any individual or company identified as a proliferator of WMD.

The new sanctions target the IRGC's Gen Rostam Qasemi, who is also the commander of Khatam al Anbiya Construction Headquarters. The sanctions would freeze the assets of four companies owned or controlled by Khatam al Anbiya, or which act on its behalf: Fater Engineering Institute, Imensazen Consultant Engineers Institute, Makin Institute, and Rahab Institute. The US Treasury cited the growing presence of the IRGC in Iran's financial and commercial sectors, including extensive economic interests in the defence, construction and oil industries. The profits from those endeavours fund the IRGC's illicit activities, including weapons proliferation and support for terrorism, the Treasury claimed.

"Exposing Khatam al Anbiya subsidiaries will help firms worldwide avoid business that ultimately benefits the IRGC and its dangerous activities," Stuart Levey, the US undersecretary for terrorism and financial intelligence, said last week. Congress too has sought to tighten the economic measures against Iran. A bipartisan group of US senators last week introduced legislation to punish Iranian officials deemed to be responsible for human rights abuses. Under the legislation, Barack Obama, the US president, would be required to compile a list of Iranian human rights abusers who would then be subjected to targeted sanctions, including a visa ban and financial restrictions.

The Senate last month followed the House in approving sanctions targeting an array of companies that facilitate Iran's petrol trade, including shipping and insurance companies. If the measure becomes law, Mr Obama would be required to sanction such companies or else seek a waiver not to do so. The Obama administration has sought greater flexibility in choosing when to impose sanctions and has expressed concerns about the impact the oil sanctions would have on other nations including India, France, the Netherlands and several Gulf countries.

During his visit to the region, Mr Wolin is expected to talk about US-backed efforts to combat "illicit finance", the Treasury said. In addition, Mr Wolin will in Abu Dhabi meet Sultan al Suwaidi, the Governor of the Central Bank, Sheikha Lubna Al Qasimi, Minister of Foreign Trade, and ministry officials. He also will visit the Abu Dhabi Investment Authority and the Abu Dhabi Investment Council for meetings, the Treasury said.

In Dubai, he is scheduled for meetings with Mohammed Abdullah al Gargawi, Minister of Cabinet Affairs, and Sheikh Ahmed bin Saeed Al Maktoum, the chairman of Emirates Airline and head of the Dubai Supreme Fiscal Committee. He also will meet Mohammed al Shaibani, the chief executive of the Investment Corporation of Dubai, and Ahmed Humaid al Tayer, the Governor of the Dubai International Financial Centre.