One of the United Arab Emirates' (UAE's) leading bankers is expecting a slowdown in documentary credit business soon as a result of the US-led war on Iraq while an Australian company says its letters of credit (L/Cs) have been stalled because the authorities suspect its products could be used in the production of weapons of mass destruction.

Impact imminent

Banks in the UAE will not escape the negative effects of the war on Iraq, according to one of the country's leading bankers.

"There will be an impact of the war on banks," according to Anis Al Jallaf, managing director and chief executive of Emirates Bank International Ltd (EBI). Thus far, the level of documentary credit business in the UAE has remained strong.

Slowdown

"The impact may be seen after a month or so," he says. "Although companies are opening L/Cs and guarantees as before, we are seeing a slowdown in business," he reports.

In the longer term, Al Jallaf is confident that the Gulf's banking sector will remain buoyant enough for EBI to grow. The bank plans to open more electronic mini-retail outlets in the UAE this year and according to Al Jallaf, the bank's operations in Saudi Arabia will start this year in Riyadh where a location has been identified.

Dual use

Meanwhile a Melbourne company has been banned from exporting a scientific instrument because of fears it could be used to make weapons of mass destruction.

The mass spectrometre is worth A$331,000 and measures atomic mass 10-times

faster than existing technology.The instruments can be used in medical research, cancer treatment and water analysis.

Banned

But managing director of GBC Scientific Equipment, Ron Grey, says the Australian authorities have banned him from exporting the equipment to Iran.

"Exactly at this moment I have L/Cs held up one into China and another one for spare parts into Iran to the tune of A$430,000 and a further A$2million worth of orders that I have not even bothered to process," he said.

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