We look at how the latest UN Sanctions against Iran have affected trade and logistics in the region.
The Arabian dhow is a ship steeped in mercantile history, its sails once facilitating trade between the Arabian Peninsula, Persia, India, and East Africa. More recently, some dhows have fallen victim to the times - as “ghost fleets” float idle in Dubai’s ports, a symbol of declining trade and changing regulatory winds. The changing regulations are from a sanctions regime put in place against Iran by the United Nations Security Council. Iran, one of the most industrialized countries in the Gulf, has been affected directly by the trading ban imposed by the UN on over 150 companies, impacting key economic sectors. The sanctions are not just taking their toll only on Iran, but also on its key trading partners and shipping companies. The logistics industry, which moves these goods around, has been consequently affected.
The United Arab Emirates, for instance, is a major trading partner with Iran. According to the Iranian Business Council (IBC) - UAE, imports from Dubai had climbed from $1.2 billion in 2002 to a mammoth $13 billion in 2008, the last year before the toughest set of sanctions took effect. Last year, that figure had dropped back to $8 billion and, according to IBC, looks destined to slip to $6 billion in 2010. The Gulf News has reported that shipments from Dubai represented up to 15 per cent of Iran's total imports, with commodities shipped to Iran through Dubai including animal or vegetable fats and it’s derivatives, plastics, electrical goods, aluminum and related products, paper and pulp products, printed media and furniture.
Besides its impact on key hubs, the new regulations have also affected logistics companies. Importantly, new regulations mean that any entity facilitating trade with Iran, in any form, could be targeted; companies failing to comply could face a possible seizing of assets and restricted access to US markets. For most logistics companies, the issue is further complicated by new measures to stop the use of Iranian vessels that have been re-registered in other countries. The US authorities have issued a list of some 155 ships that may not carry American-origin goods and upon which freight forwarders and shippers may not charter or book cargo. This list can be found at: http://www.treas.gov/.
Read more regulations from past issues:-
1. New Europe Transport and Haulage Rules
2. New Regulations Set to Ease Ash Crisis