America's financial war on Iran
By Mark Gregory
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American influence
So is American financial pressure as effective a tool as US officials claim?
Dubai is a good place to find out - a rich Gulf city that is Iran's economic gateway to the world.
A quarter of Dubai's population are Iranian and much of Iran's trade goes through Dubai. The relationship is similar to China's link with Hong Kong.
Iranian businesses in Dubai are universally reluctant to talk about such a sensitive topic. They risk offending either the Americans or the government in Tehran, more or less whatever they say.
Much Iranian economic activity is channelled through Dubai
It took several days of intensive effort to find a few brave souls willing to speak openly.
Barmak Besharaty is an Iranian with an American passport. His business is to arrange huge loans for property deals and he works closely with international banks.
For customers from Dubai, Pakistan, Britain, or any of 70 other nationalities operating in this Middle East entrepot, there is no problem. But when it comes to persuading banks to stump up loans for Iranian customers, he says it is a different story.
"I won't say Iranians can't raise money at all, but the difficulty level has been raised substantially," he observes.
Mr Besharaty cites a specific example, claiming that the Dubai office of HSBC, the world's fourth biggest bank, is refusing to give loans to Iranians.
"They do more business in the United States than in Iran," he says.
"And the United States says, 'If you want to operate here without difficulty, it would be more prudent for you to not do business in Iran.' And I think that HSBC listens to that."
Interestingly, when this was put to HSBC they did not exactly deny it.
The bank's head office in London issued a statement: "At the present time, all financial institutions do need to be careful about the business they do in Iran.
"There are sanctions in place from several bodies, notably the United Nations, and any bank that is, as we are, committed to abiding by all of the regulations that apply to us has to be cautious."
Legal loophole
Nasser Hashempore is another Iranian prominent in business in Dubai. He is a senior figure in the Iranian Business council, a lobby group.
Mr Hashempore says Iranian businesses are all worried about US financial pressure, but so far, they are finding ways round it.
Mr Hashempore confirms that many Iranian firms are barred from doing deals in dollars, but they cope by switching to euros or yen instead.
He also says that many Iranian companies are able to pass themselves off as local Dubai businesses, which means they can get loans and letters of credit from international banks.
Under Dubai law, foreign enterprises are required to have a local business partner, nominally with a 51% stake in the firm.
These partners are usually paid a fee and play no active role in running the business, but for legal purposes, the firm can say it is locally-owned and thus avoid American financial pressure.
Difficult situation
Faranak Mahmoudi is a rare example of an Iranian woman with a senior role in business. She has lived in Dubai since 1990 and specialises in advertising and promotions.
Her clients include well-known European consumer products companies who want to tap into the Iranian market.
"Actually, nobody is taking 'American pressure' seriously yet," she says. "In fact, I see more investment from foreign companies in Iran. I've never had so many requests for media campaigns in Iran as I've had during the last two months."
Iranian firms in Dubai are putting up a brave face, but it is clear that they fear America's financial squeeze could get a lot worse.
The key to Iran's prosperity though is its oil and gas sector. Iran is an oil economy. It has the world's second-largest confirmed oil reserves and huge quantities of untapped natural gas.
But it desperately needs energy investment.
The obvious way to strangle the economy is to hit the vulnerable oil and gas industries. And yet, for international energy companies, Iran is potentially a mouth-watering prize.
European energy giants - including Shell, Spain's Repsol and Total of France - are eyeing up big up Iranian deals, as are Chinese and Malaysian oil firms. But in so doing, they all risk alienating the US, the world's only super-power.
Most oil companies do business in the US - and that would be under threat if they get too close to Iran.
Hence, oil firms are in a difficult situation, observes David Kirsch, a former official at the US State Department who now works for a Washington consultancy, PFC Energy.
"You've already seen some local calls in the US for protests against oil companies, Shell in particular, for their investments in Iran," he says.
"These could become far more widespread, particularly if politicians in Washington seize upon these investments as a rallying call."
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Pertinent Links:
1) America's financial war on Iran
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