ABU DHABI // The UAE is taking sanctions against Iran "very seriously", a top US Treasury official has said during a regional tour aimed at strengthening support for the penalties against the Islamic Republic.
The UN Security Council passed a new round of sanctions against Iran in June, the same month the US passed its own sanctions that also targeted the Islamic Revolutionary Guard Corps (IRGC), a powerful militia that is said to increasingly assert control over aspects of Iran's political and economic policy.
Stuart Levey, the undersecretary for terrorism and financial intelligence at the US treasury department, is visiting the UAE, Bahrain and Lebanon to meet officials and private sector businesses. His visit follows an announcement on Friday of new regulations by the treasury department that would effectively bar foreign entities from the US financial system if they deal with companies affected by UN and US sanctions.
"I think there is a real recognition that we're at a new stage here," Mr Levey said of the latest round of sanctions. "The new resolution is significant in scope, it contains a lot of provisions that require real intensity for appropriate implementation. The impression I have is that these new obligations and the new stage the diplomacy has entered is being taken very, very seriously here."
While the UAE was taking this round of sanctions seriously, a "unique challenge" exists in the form of historic and commercial ties between the UAE and Iran, he said.
"We also understand that when it comes to this particular issue that there is a unique situation that the UAE confronts," said Mr Levey.
"In the sense that there are historical ties between the UAE and Iran, commercial ties between the UAE and Iran, familial ties between the UAE and Iran, that make the issue of Iran a sensitive one but also one where it is very important for us to have a deep dialogue about how we proceed."
Iran was the UAE's fourth-biggest trading partner in the first quarter of the year behind India, China and the US. Non-oil exports of Dh173 million from the UAE to Iran were overshadowed by re-exports of Dh2.4 billion.
As part of the implementation plans for the sanctions, the US is stressing the need for UAE businessmen to observe heightened vigilance in dealing with Iranian businesses, some of which may be front companies associated with the IRGC.
"What we've seen over time is a concerted effort by Iran to evade sanctions and that puts innocent businesspeople in the UAE at risk of being involved in illicit conduct that they don't want to be involved in," said Mr Levey.
That illicit conduct involves using money to fund Iran's nuclear programme, arms transfers that violate UN resolutions and the funding of terrorist groups.
There is significant evidence, for instance, that the Quds Force, an elite unit of the IRGC, helps fund the Taliban, said Mr Levey.
Part of the plan would be stronger cooperation between the US and the UAE to identify these front companies.
"Commerce with Iran requires extraordinary vigilance," he said. "Iran has used channels of legitimate commerce, by which I mean banking, shipping, trans-shipment. They have used all these facially legitimate methods to facilitate illicit conduct.
"Any place where there is commerce with Iran, there's a risk. I think the UAE takes the risk of illicit activity very seriously and very much wants to take the necessary steps to protect itself from that illicit activity.
"Has there ever been an illicit transfer through here? It sort of goes without saying. I'm just saying the UAE is taking steps and has demonstrated ... they have always taken these concerns very seriously."
The US says the sanctions were necessary after Iran rebuffed attempts at engagement with the administration of President Barack Obama.
Mr Levey, when asked about the general situation of terror financing through the Gulf, also said efforts to combat the financing of al Qa'eda has led to unprecedented pressure on the group.
Mr Levey had criticised Saudi Arabia in 2007 for failing to prosecute individuals identified by the US or the UN as terror financiers.
While the situation has been improving, the threat had not been eradicated.
"The most important fact is that al Qa'eda is under very significant financial stress, that they are in the worst financial position that they have been in years and that there is a strong sense of urgency in terms of continuing to prevent financial resources to go to al Qa'eda," he said.
Still, the risk of terror financing has not been eliminated and requires continued cooperation from countries in the region, he added.
kshaheen@thenational.ae
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Dubai works towards better air quality by 2021
Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.
The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.
These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.
“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.
“We’re in a good position except for the cases that are out of our hands, such as sandstorms.
“Sandstorms are our main concern because the UAE is just a receiver.
“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”
Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.
There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.
“There are 25 stations in total,” Mr Al Daraji said.
“We added new technology and equipment used for the first time for the detection of heavy metals.
“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Fourth Arab Economic and Social Development Summit
As he spoke, Mr Aboul Gheit repeatedly referred to the need to tackle issues affecting the welfare of people across the region both in terms of preventing conflict and in pushing development.
Lebanon is scheduled to host the fourth Arab Economic and Social Development Summit in January that will see regional leaders gather to tackle the challenges facing the Middle East. The last such summit was held in 2013. Assistant Secretary-General Hossam Zaki told The National that the Beirut Summit “will be an opportunity for Arab leaders to discuss solely economic and social issues, the conference will not focus on political concerns such as Palestine, Syria or Libya". He added that its slogan will be “the individual is at the heart of development”, adding that it will focus on all elements of human capital.
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