Banks in the UAE are stepping up pressure on Iranian firms by not opening letters of credit (L/Cs) for Iranian traders.

This marks a change of heart by some UAE banks, which had reportedly been writing L/C business with Iran, despite the refusal of banks in much of the rest of the world to do so because of sanctions on Iran.

Difficult circumstances

Most banks in the emirates have now stopped dealing with Iranian traders selling into Iran, a member of Iran's Chamber of Commerce Hamid Hosseini told a UAE newspaper.

He also reckons that only two or three local banks would now open L/Cs for Iranians and do so only "under very difficult circumstances".

Iran is under international banking sanctions over its nuclear ambitions and its alleged support of terrorist activity.

Suspicious transactions

Some UAE banks will still open bank accounts for Iranian firms, but these are reportedly under tight control and some customers' assets have been frozen, according to the banks because of "suspicious transactions".

International banks, meanwhile, are said to be refusing to open accounts for UAE-registered intermediary firms whose investors or chief executives are Iranian.

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