The United Arab Emirates (UAE) is now considering freezing billions of dollars of Iranian assets held in the Gulf state, a move that could curb Tehran’s access to foreign currency and global trade amid the conflict between Iran and the U.S., Israel, according to a Wall Street Journal report from Thursday.
UAE authorities are weighing measures ranging from freezing the assets of UAE-based shadow companies to a sweeping financial crackdown on local currency exchanges, which are used to move money outside of formal banking channels, the WSJ report stated.
Frozen Assets, Seized Ships
Dubai is a crucial financial corridor for Iranian businesses and those seeking to bypass Western sanctions. Shell companies registered in Dubai’s free zones have been used as a mask for the Iranian origin of oil and commodities, according to CNBC.
If the UAE chooses to move on Iran’s shadow-financing empire, a key target would be accounts connected with the Islamic Revolutionary Guard Corps.
UAE policymakers are also considering direct naval action, which would include seizing Iranian ships operating in regional waters. This would mark a significant escalation of economic and maritime pressure on Iran, straining the already fragile shipping routes around the Gulf region, CNBC reports.
Authorities in the UAE have also warned Iran about the measures currently under consideration. However, it is still unclear whether the UAE government will ultimately proceed with implementing these punitive actions.
Rethinking Stance
Officials from the UAE have confirmed their decision to stick to a defensive posture with Iran instead of aligning with the U.S. military action, in view of its “long-standing policy of good neighbourliness” and commitment to the Charter of the United Nations.
However, post-Iranian strikes on the expatriate business community and international investors in Dubai, Abu Dhabi is considering potential counter-measures, such as freezing of assets.
(With inputs from Reuters)
