International Trade Law News

Published by Jacobson Burton Kelley PLLC

Elena McGovern, a Research Associate with the Southwest Asia/Gulf Program at the non-profit Henry L. Stimson Center, recently wrote an excellent analysis of the United Arab Emirate's export control system in light of the recently signed U.S. -UAE civilian nuclear cooperation agreement. The article, entitled "Export Controls in the United Arab Emirates: A Practical Manifestation of a Strategic Dilemma," appeared in the most recent edition of WMD Insights, sponsored by the U.S. Defense Threat Reduction Agency (DTRA).

McGovern's article naturally focuses on the UAE's close proximity to and relationship with Iran. For example, the article notes:

While much of the continued laxity in UAE export controls and border security is due to a lack of capacity, allegedly opaque UN sanctions, and overdue attempts at course correction in an environment where skilled smugglers have been operating for decades, another major element in the equation is the absence of political will. Implementing export controls and border security measures is bad for business, especially for a country that relies so heavily on laissez-faire economic policies. Tightening the spigot on re-exports risks driving business elsewhere – not only to other developing ports in the Gulf, but to other locations, including China and Singapore – and stifling the UAE’s booming economic growth. With regard to direct UAE-Iran business, it has been difficult preventing these stricter policies from negatively affecting legitimate bilateral trade, a mainstay of the economies of both the Emirates and Iran.

any sweeping attempt at course correction runs the risk of upsetting fragile regional security dynamics. This is undesirable due to the UAE government’s wish to preserve the strategic balance between the United States and Iran and the belief that it neither has the ability to affect political change in Iran today nor the stomach to be in open opposition to a potentially nuclear-armed Iran in the future. Given these realities, it is therefore possible to understand why, when explaining the limits to the UAE’s willingness to restrict trade with Iran, Sheikh Lubna al Qasimi, the Minister for Economy and Planning, said: “At the end of the day, Iran is still a neighbor.”

Labels: Export Controls, Sanctions; Iran