The United Arab Emirates (UAE) has been mulling cutting off Iran's access to its billions of dollars' worth of assets held in the Gulf state, the Wall Street Journal has reported on Thursday.
The move comes amid the ongoing war between Iran on one side and the United States and Israel on the other. Iran has carried out major airstrikes in the Gulf region, including on targets in the UAE. While the UAE has sought to balance its relationship with the US and Iran, the strikes have had an adverse effect on UAE-Iran relations.
This move by the Emirates is supposed to curtail Tehran's access to foreign currency as well as global trade networks, at a time when the economy of the country has been rapidly deteriorating.
The ongoing military conflict has put immense pressure on the Iranian economy as well. As per the report by the WSJ, the Emirati authorities have warned Iranian officials that such a move was under consideration.
The report has cited people familiar with the discussions. There has been no consensus so far, however, on whether or when the move might be implemented, the newspaper has reported.
The US-based think tank, Atlantic Council, says that Dubai has been an important financial corridor for Iranian businesses, seeking to bypass Western sanctions. It allows them to sell oil abroad and channel the proceeds into military programs and regional proxies.
The free zones in Dubai provide the much-needed mask to Iranian oil and commodities, hiding their origin. At the same time, currency has also been moved across borders, bypassing the conventional banking oversight.
The United States has been critical of the Emirates for falling short of stated commitments on enforcement and dismantling these networks.
Also Read | Dubai May Have Only 10 Days Of Fresh Food Left As Iran War Threatens To Choke Supplies: Report
The Iranian attacks on the UAE
Iran has targeted more than 1,000 drones and missiles against targets in the UAE, as part of their retaliation against the US-Israel aggression. Infrastructure has been damaged extensively in Dubai, in such strikes, including the Dubai International Airport and the popular Fairmont Hotel, apart from residential and tourist areas.
UAE, however, has stuck to a defensive posture, deciding not to join the US and Israel in attacking Iran, consistent with its "long-standing policy of good neighbourliness, de-escalation and its firm commitment to the charter of the United Nations," as per the Ministry of Foreign Affairs.
However, the damage done by the Iranian strikes, including rattling expatriate businesses and international investments, has now prompted the UAE to examine a range of potential countermeasures, including the freezing of Iranian assets in the country.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
