Stuart Levey, Treasury undersecretary for terrorism and financial intelligence, said Western banks had reined in dealings with Iran in the light of successive U.N. Security Council resolutions, but argued there was potential scope for the insurance sector to get tougher.
"I think that is something that is worth looking at and we are in discussions about that," Levey told Reuters in an interview during a European trip including talks with officials in Belgium, Austria, the Netherlands and Germany.
"Have we applied all the prohibitions in the U.N. Security Council resolutions that apply to financial services to Iran? Have those been applied to insurance, and have insurance companies grappled with the issue?" he said.
Levey declined to detail specific measures which the sector could take in its dealings with Iran. "We are still in discussions with our allies about these issues," he said.
Let's leave aside, for the time being, how these sanctions are being perceived in Persia itself, although that is probably a mess in itself. But the effects of the sanctions are certainly being felt among those Iranians trying to make the nut outside of the country.
Home / News / World
Crackdown squeezes Iranians in Dubai
US policy hurting small businesses
Two men passed by the main branch of Bank Melli Iran, the National Bank of Iran in Dubai, United Arab Emirates, in July. (Kamran Jebreili/Associated Press)
By Farah Stockman
Globe Staff / September 15, 2008
Email| Print| Single Page| Yahoo! Buzz| ShareThisText size – + DUBAI - This freewheeling boomtown has always been the place where Iranians go to escape US sanctions. Since US laws stopped the sale of American products to Iran in the 1980s, Iranian traders have made the short boat ride here to buy what they want. When the US Treasury banned key Iranian banks a year ago, Iranian businessmen flocked here, to the financial capital of the Middle East, to open new bank accounts.
But in recent months US pressure has prompted a crackdown in the United Arab Emirates, Iran's largest trading partner and home to some 450,000 Iranian citizens.
After visits from President Bush, Vice President Dick Cheney, and Treasury undersecretary Stuart Levey, UAE officials have dramatically reduced the number of business licenses to Iranian citizens, according to US officials and a Globe analysis of business statistics.
Less than 1 percent of the 10,800 businesses registered in Dubai during the first three months of 2008 had an Iranian partner, according to an analysis of statistics from Dubai Chamber of Commerce, down from about 6 percent in 2007 and 2006.
In addition, authorities in the trade-free zones have begun to refuse to register Iranian work visas, and most international banks in the UAE have stopped opening new accounts for Iranians, according to interviews with more than a dozen Iranian businessmen.
US officials have praised the recent actions of the UAE, seeing the crackdown as a victory for US policy, which seeks to use economic pressure to persuade Iran's regime to halt its controversial nuclear program.
"The UAE is taking steps to be vigilant," said Levey, a key architect of the banking sanctions, who has traveled to Dubai eight times about the issue. "They have a challenge there and they are starting to grapple with it."
But while aimed at crippling Iranian banks and corporations connected to the regime, the policy also punishes small businesses owned by individual Iranians who have no political connections and are often at odds with their government.
"It's a difficult balance," said Ethan Chorin, a specialist on Middle Eastern economies at the Center for Strategic and International Studies, a Washington-based think tank. "You want to keep the regime under pressure and you want to do it in such a way that you are not targeting . . . the little guys."
The Iranian regime issues lucrative monopolies to a vast empire of parastatal companies, and controls an estimated 85 percent of Iran's economy. But many of the Iranian businesses in Dubai are run by small traders from Iran's tiny, struggling private sector that is often at odds with officials in Tehran.
Ali Reza, a former student at the University of Tehran, came to Dubai after the government harassed him for participating in student protests. He found work at a small company owned by an Iranian that exported rice and mineral water to Iran.
The company struggled to survive as it tried to compete against politically connected figures who received special subsidies and customs exemptions from the Iranian regime, Reza said.
But the real blow came in October, when Bush announced sanctions against Bank Melli and Bank Saderat, two top Iranian banks where the company kept its funds. As banks around the world cut off dealings with those banks, Reza's boss was unable to obtain credit to buy more supplies. He went bankrupt and fled Dubai in February, Reza said, adding that he knew of two dozen other small Iranian companies that also folded at that time.
Unless your social circle extends that far, it's hard to tell if these guys in Dubai sympathize at all with Ahmedinejad and his goals. Most likely they're determined to stay afloat regardless of who's in power, hence Dubai. With the body blows we're dealing to their livelihood, however, it's hard to see them becoming friends of America.
But hey, Bush and Cheney have only been there for eight years. Can we expect them to know anything about soft power?