According to Tehran, the UAE's implementation of sanctions on Iran goes beyond what the UN has authorised, writes Rasha Saad The diplomatic row created as a result of press reports quoting the ambassador of the United Arab Emirates (UAE) to Washington as supporting the use of military force against Iran is a clear example of the complexity that has marked relations between the countries for decades. Last week The Washington Times quoted Ambassador Youssef Al-Otaiba as saying that he preferred a resort to military action to "living with a nuclear Iran". The newspaper, which described the statements as "unusually blunt", reported the comments were made during a conference in Colorado. Both countries were quick to contain the rift. UAE Assistant Foreign Minister for Political Affairs Tareq Al-Haidan said, "the statements came as part of general discussions held on the sidelines of an unofficial gathering in which Mr Otaiba was speaking and were taken out of their context," the UAE official news agency WAM reported. Al-Haidan was keen to stress that the UAE rejects the use of force as a solution to the Iranian nuclear issue and calls for a diplomatic solution through the International Atomic Energy Agency. "Iran is a neighbouring country and we maintain historic relations with it... the UAE respects and believes in the sovereignty of other states and in the principle of non-interference," Al-Haidan said. In Iran, MP Karim Abedi of the Majlis National Security and Foreign Policy Committee was quoted as saying that remarks attributed to Al-Otaiba were not true. Abedi explained that Iran enjoys good economic and commercial ties with the UAE and has no problem with any of its neighbouring Arab states. "Such news reports are nothing but propaganda meant to damage the Iran-Emirates relationship," the Mehr News Agency quoted Abedi as saying. Whether the statements attributed to the UAE ambassador were taken "out of context" or were just a slip of the tongue that reflects the genuine feelings of Gulf leaders, they are certainly an indication that tensions between both countries are on the rise. For long Iran has been both a political threat to the UAE as well as other Gulf countries, notably Saudi Arabia, and a significant trading partner. However, since last month, Iranian shipping boats and containers were seen stacked in Dubai port. The unusual scene came as sanctions against Tehran over its nuclear drive became tougher. The UN Security Council on 9 June approved a fourth round of sanctions on Iran. They include restrictions on financial transactions, a tighter arms embargo and authority to seize cargo suspected of being used for Iranian nuclear or missile programmes. Additional and unilateral sanctions that target energy and financial sectors were imposed later by the US and the European Union. Trade between Iran and Dubai, traditionally major trade partners, was negatively affected by the latest sanctions, officials of the Dubai-based Iranian Business Council (IBC) were quoted as saying. Morteza Masoumzadeh, IBC director, noted that customs authorities over the past few months have adopted a new system to check every shipment that passes via the emirates to Iran. The IBC estimates a possible decline in the level of trade between Iran and Dubai to about $6 billion this year from $8 billion in 2009. Trade had earlier reached a peak of $12 billion in 2008, according to the IBC. Over the past year, the number of Iranian-owned businesses in Dubai has fallen to 8,000 from 8,400 because of the effect of the financial crisis and sanctions, according to the business group. The UAE is home to around 400,000 Iranian citizens. The UAE Central Bank has also asked banks and financial institutions in the emirates to freeze 41 accounts blacklisted by the UN for being linked to Iran's ballistic missile and nuclear programmes. The bank said the move was made in compliance with the 9 June UN Resolution. Moreover, the Dubai Financial Services Authority (DFSA) called for vigilance in dealings with Iranian entities, including an "increased level of diligence over transactions involving the Central Bank of Iran." DFSA said banks should conduct risk assessment measures and due diligence on Iranian counterparts. They should also treat all transactions with Iranian domiciled clients as "high risk". In a tit for tat reaction, Iranian officials decided last week to significantly reduce trade ties with the UAE following the measures. "The UAE has gone beyond the Security Council resolutions on Iran, so Iran [will] scale down trade ties with the UAE in the coming months," Masoud Daneshmand, head of Iran-UAE Chamber of Commerce, told the Iranian news agency ISNA. "We do not accept the UAE's behaviour," Daneshmand added. Dubai's change of heart towards Iran despite previous resistance to mounting pressure from the United States, the UAE's main military ally, and UAE member Abu Dhabi, who has a territorial dispute with the Islamic republic, may be a consequence of the financial crisis that took its toll on the Gulf region. Since the end of 2009, Abu Dhabi, the wealthiest UAE member and a close ally to the US, stepped in to relieve Dubai's financial crisis creating a change in the balance of power among UAE members. According to analysts, this may have led to Dubai's new stance. However, while the UAE, as well as other Arab Gulf states, is apprehensive about a nuclear Iran, it knows it must avoid a confrontation with Iran. Countries of the Gulf Cooperation Council (GCC) have long voiced their support for a diplomatic solution to the Iranian nuclear issue. The worst nightmare for GCC members is to have sectarian conflict spill out of Iraq and encompass the whole region. Security is thus their prime concern. They worry that a nuclear-backed Iranian government would feel emboldened to stir up fellow Shias in neighbouring countries, leading to civil unrest. During the 1980s, Gulf governments blamed Iranian-sponsored groups and protests for stirring riots in Saudi Arabia, Bahrain and other Gulf states. Informed Arab sources have revealed to Al-Ahram Weekly that some Arab governments are urging Arab Gulf countries to stop antagonising Iran over the nuclear issue, underlining that Gulf fears are based only on suspicions as yet unproven by the IAEA while Israel is known to possess nuclear weapons. "The worries of Gulf countries should be more focused on Israel with its 200 nuclear warheads that can actually reach their territories," one source remarked.
