How the UAE Can Contribute to America’s War Effort Through its Banking System

As London convenes a coalition to promote a diplomatic solution to the standoff at the Hormuz Strait, the United Arab Emirates is pushing a more muscular approach, including a crackdown on Islamic Republic accounts in its banks.Dubai has long been Tehran’s favorite hub for laundering cash and bypassing American and global sanctions. UAE banks held Islamic Revolutionary Guards Corps accounts, while a shadowy, Islamic-based money transferring system, known as hawala, flourished in the Emirates.Since February 28, though, the UAE has been hit by some 2,500 ballistic missiles and drones from Iran. Abu Dhabi, one of America’s staunchest Gulf allies that maintains formal relations with Israel, is emerging as one of the most hawkish voices against the Iranian regime in the region. Yet, its ties to the Islamic Republic are complicated. “I worked on Iran and led Iran sanctions for years,” a former sanctions strategist at the Department of Treasury, Miad Maleki, tells The New York Sun. “It was natural for Emiratis to have security concerns when it came to cracking down on Iranian regime activities there. But now that security threat is already there.”This week, Abu Dhabi has arrested “dozens of money changers tied to financial entities linked to Iran’s Revolutionary Guards, and shut down associated companies and closed their offices,” the London-based Iran International is reporting. Last month Emirati officials reportedly announced a freeze on all Iranian assets in its banks. This week the UAE shut down the Iranian hospital at Dubai and denied visas to Iranians who wish to visit the country — including operators of the shadowy money trail that has allowed the IRGC to bypass dollar-based banking transfersAfter the Wall Street Journal reported on Wednesday that the UAE is set to become the first Gulf country to actively join America and Israel in combat, an Abu Dhabi official denied the report, telling the newspaper that it backs “collective international efforts” to open the Hormuz Strait.As it seeks such global support, including at the United Nations, the UAE might contribute to the war more by seizing Iranian assets. Iranian and IRGC bank accounts, though, represent “a very significant part of Dubai’s business market, so economically, financially, it’ll have an effect on Dubai’s economy,” Mr. Maleki says. The Emiratis are adamant that their economy and financial institutions can withstand the Iranian onslaught. “The UAE banking sector is in a very strong state,” the head of global banking at Dubai’s Standard Chartered, Henrik Raber, told the Emirates-owned newspaper The National . “We have a lot of liquidity.” Britain, meanwhile, gathered a conference of 35 countries for virtual consultation on Thursday. The goal, Prime Minister Keir Starmer said, is to “assess all viable diplomatic and political measures we can take to restore freedom of navigation, guarantee the safety of trapped ships and seafarers and to resume the movement of vital commodities.”On Wednesday the UAE ambassador to the United Nations, Mohamed Abushahab, asked in a letter that Secretary General Antonio Guterres and the president of the UN Security Council take “immediate action” on Hormuz. The UN needs to “ensure the safe and secure navigation and navigational rights and freedoms in and around the Strait of Hormuz,” Mr. Abushahab wrote.The Gulf countries “cannot accept that the situation remains as is” in the Hormuz Strait, the UN ambassador of Bahrain, Jamal Fares Alrowaiei, told reporters Wednesday. Bahrain, a UAE neighbor, serves as the UN Security Council’s president for the month of April. Late last month it circulated a proposed resolution to authorize the use of force to ensure freedom of navigation in the strait.The draft encountered strong opposition from Beijing and Moscow, and France is negotiating with Bahrain in an attempt to soften any language that would authorize military force in the strait. Before President Trump addressed the nation Wednesday, he called President Mohammed bin Zaid al Nahyan of the UAE. They reportedly spoke about Hormuz, and Washington’s expectations that the countries in the region would contribute more to free navigation there. Abu Dhabi, though, might do more by denying funds to what it now knows is its fiercest enemy.

How the UAE Can Contribute to America’s War Effort Through its Banking System

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