U.S. pressures UAE to approve tough new trade limits, cites Iran shipments : By Ted Bridis

August 31, 2007 - WASHINGTON – The Bush administration is pressuring the United Arab Emirates to crack down on companies believed to be smuggling equipment to Iran to build explosive devices killing American soldiers in Iraq and Afghanistan. The UAE's legislative body, the 40-member Federal National Council, is quietly considering such a proposal, but its prospects are uncertain. The White House has expressed its concerns publicly and through diplomatic channels in Washington about troubling shipments to Iranian front companies operating in Dubai. The UAE is among the world's largest shipping hubs for international commerce, and is located just across the narrow Strait of Hormuz from Iran. The countries have been trading partners for centuries. Much of Iran's trade flows through Dubai, which also ranked as the top export destination in the Middle East last year for American companies with $12 billion worth of goods. The U.S. effort is part of the administration's broader campaign to contain Iran amid tensions over its alleged pursuit of nuclear weapons and support of the Iraqi insurgency. Just this week, President Bush said, “Iran's actions threaten the security of nations everywhere.” UAE officials in Washington and Dubai did not respond to telephone messages and e-mails from The Associated Press over three days requesting comment. Dubai business executives have protested the U.S. pressure as an affront. “The regulation of re-exports should be established by the UAE without the threat from the U.S.,” the director general of the Dubai Chamber of Commerce and Industry, Hamad Buamim, wrote in a letter to the Bush administration obtained by the AP. “Only the UAE is able to judge the balance of concerns for re-export relative to national security against the risk of the trade moving to another re-export location.” U.S. intelligence agencies have collected evidence that at least 11 individuals and companies operating in the United Arab Emirates are smuggling electronic components and devices – sometimes through Iran – to build explosive devices used to ambush American soldiers in Iraq and Afghanistan. The U.S. government effectively banned trade with them. The White House said its proof was based on “specific and articulable facts,” which it did not describe publicly. The companies include microelectronics manufacturers and industrial suppliers.
Partly to pressure the United Arab Emirates, the U.S. has proposed new restrictions on companies doing business in countries the White House would designate as “destinations of diversion concern.” Those countries, which were not identified in the proposal, would include prominent shipping hubs with lax export laws. Companies shipping products through such countries would face tougher reviews for export licenses. The Dubai chamber, which represents 88,000 companies, has bristled at the idea. It said it would be ineffective and inappropriate.
Buamim urged the U.S. months ago to withdraw the proposal “while we continue to quietly negotiate in this area.” Buamim said the chamber does not believe the UAE would be included under the U.S. proposal, although he complained the criteria was too vague. “Any country could be put into any category at any time,” Buamim said. The dispute highlights the conflicted relationship between the United States and the UAE. The administration considers the emirates a close ally, especially on military matters in the Middle East. But Dubai was forced last year to abandon plans for Dubai-based DP World to take over significant operations at six major U.S. seaports amid intense national criticism. “They have been getting a lot of pressure from the U.S. government,” said Arthur Shulman of the Washington-based Wisconsin Project on Nuclear Arms Control, a nonprofit group that supports limiting shipments that could be used for nuclear weapons or missiles. “The UAE clearly have their own interests, and one of those interests is promoting trade and transshipments with few restrictions.” The companies and individuals the Bush administration identified as shipping electronic components and devices for explosive devices killing U.S. troops in Iraq and Afghanistan are: Al-Faris of the UAE; Ali Akbar Yahya of Dubai; Amir Mohammad Zahedi of the UAE; Sayed-Ali Hosseini of Dubai; Mayrow General Trading of Dubai; Micatic General Trading of Dubai; Majidco Micro Electronics of Dubai; Atlinx Electronics of Dubai; Micro Middle East Electronics of Dubai; F.N. Yaghmaei of Dubai; and H. Ghasir of Dubai.