The EU’s foreign ministers will impose two new rounds of sanctions on Iran on Monday to address growing concerns in the Gulf and Europe over Iranian drones.
Two separate sanctions packages, one aimed at human rights violations and another at Iran’s drone transfers to Russia for use in its war in Ukraine, are expected to be adopted on Monday, EU diplomats said.
“Our approach is to increase pressure,” said an EU diplomat.
It will be the third time in less than two months that Brussels has punished Iran for its brutal repression of anti-government demonstrators. This included the hanging on Thursday of a 23-year old man accused of wounding a member of the pro-regime Basij militia three months ago.
Activists say more than 500 people have been killed since the protest movement began on September 16, with least 18,000 detained.
The UK on Friday in parallel announced sanctions against 10 Iranian officials and 20 other people from different countries.
The EU also adopted a first package of sanctions aimed at Iranian drone transfers to Russia on October 20.
Sanctions include travel bans, asset freezing and forbidding EU citizens and companies to make funds available to Iran.
Britain’s Ministry of Defence said that for the first time in three weeks, there have been reports of attacks by Iranian drones on Ukraine.
“It is likely that Russia exhausted its previous stock of several hundred Shahed-131s and 136s and has now received a resupply” said the ministry on Twitter.
Earlier this week, White House national Security Council spokesman John Kirby said that Russia continues to use Iranian drones “to hit civilian targets and kill innocent Ukrainians nearly every day”.
An EU diplomat said that European foreign ministers will have a lengthy discussion on Iran on Monday “for the first time in a very long time”. It will include “the impact of Iran’s destabilising actions in its regional environment and on European security”.
The diplomat added that the EU would take a “series of actions” in addition to adopting new sanctions.
“We’re talking about how to avoid the circumvention via Iran of sanctions imposed on Russia,” they said.
“We’re talking about how we can react to limit military support given by Iran to Russia. We are talking with our partners in the Gulf about how we can help them to face such actions.”
The diplomat declined to give further details before the announcements are made public on Monday.
The diplomat’s statements come three weeks after the EU Commission President Ursula von der Leyen gave a speech in Bahrain indicating that the use of Iranian drones on European soil had been a game-changer for the continent.
She said that Europe wanted to strengthen its engagement in the Gulf region via closer co-operation on maritime security to ensure safe shipping lanes.
In her speech, she referenced a drone attack on November 16 on an oil tanker off of Oman, which western officials have attributed to Iran.
“Several Gulf countries have been warning for years about the risk that Iran feeds rogue nations around the world with drones,” she said.
Ms von der Leyen said that it took Europe “too long to understand” that it should work on preventing Iran from developing both nuclear weapons and more conventional weapons such as drones.
Europe and the Gulf “should work on a co-ordinated approach to Iran — with a broader focus than nuclear,” she added, referring to the 2015 Iran nuclear deal.
“Gulf security matters to Europe, as Europe's security matters to the Gulf,” she said.
This is one of the reasons that the EU will soon appoint its first special representative for the Gulf, she added.
“Let us join forces for our collective security,” said Ms von der Leyen.
Reports that Brussels’s choice may be Italian diplomat Luigi Di Maio have caused controversy in the Gulf.
The former Italian foreign minister in 2021 triggered a diplomatic crisis between Italy and the region over a weapons deal.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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Fixtures
Tuesday - 5.15pm: Team Lebanon v Alger Corsaires; 8.30pm: Abu Dhabi Storms v Pharaohs
Wednesday - 5.15pm: Pharaohs v Carthage Eagles; 8.30pm: Alger Corsaires v Abu Dhabi Storms
Thursday - 4.30pm: Team Lebanon v Pharaohs; 7.30pm: Abu Dhabi Storms v Carthage Eagles
Friday - 4.30pm: Pharaohs v Alger Corsaires; 7.30pm: Carthage Eagles v Team Lebanon
Saturday - 4.30pm: Carthage Eagles v Alger Corsaires; 7.30pm: Abu Dhabi Storms v Team Lebanon
MATCH INFO
Euro 2020 qualifier
Fixture: Liechtenstein v Italy, Tuesday, 10.45pm (UAE)
TV: Match is shown on BeIN Sports
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”