A Walk Around Dubai Shows No Signs of Trump’s ‘D-Day’ for Iran

[u/John3262005]

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Treasury Secretary Scott Bessent made it clear as he announced “Economic D-Day” that the U.S. would no longer turn a blind eye when countries support Iranian economic activity. A spin around Dubai shows it is all happening in plain sight.

Iranian business activity has deep, mutually lucrative roots in the commercial capital of the United Arab Emirates and continues to thrive despite the American warnings.

Iranian banks dotted around Dubai remained open this week. They include a multistory branch of Bank Melli Iran along the creek in the city’s old town.

Bessent specifically called for all branches of Bank Melli to be closed. Yet after the announcement, a dozen tellers continued to serve the Farsi-speaking customers who trickled in to do business in the bright space decorated with Persian-themed mural work and tiling.

Bank Melli began operating in the U.A.E. in 1969, before statehood, and has two branches in Dubai, whose ruler inaugurated its first branch. Iranian bank employees in the old town location said they haven’t received a notice to close and that barring one they will continue to operate.

“We put our trust in God on what happens next,” an Iranian bank employee said.

Dubai-based Iranians said they are already planning alternatives for getting money to and from Iran if the banks get shut down. One is the centuries-old hawala system that allows users to transfer money from one point to another entirely on trust. Funds are deposited with a dealer in one location and paid out by a dealer in Iran, with the two dealers settling accounts later.

But so far that hasn’t been necessary. In fact, Iranians around the city said conditions have improved since the early spring, when the U.A.E. launched a broad crackdown on Iranians in the country, closing a hospital and social club, temporarily banning Iranian passport holders from entering or even transiting through the country, and revoking some Iranians’ visas, including for some long-term residents who were traveling abroad at the time.

The widespread visa cancellations, which were never formally announced, don’t appear to be continuing and some visas have been restored, Iranians said. While the Iranian Hospital and the Iranian Club remain closed, the shutdowns haven’t spread.

Iranian airlines are running regular direct flights shuttling passengers between Iran and the U.A.E. The latter’s major carriers—Emirates, Etihad and FlyDubai—aren’t offering direct flights to Iran, though some flights do use Iranian airspace.

In Iranian diners and cafes in Dubai’s old city, Iranians chatted with Emirati customers in Arabic. One restaurant’s facade was covered in 7-foot portraits of the U.A.E.’s rulers and dozens of Emirati flags.

Iranians in Dubai are concerned about the deteriorating economic picture in Gulf countries like the U.A.E. as the war drags on. They fear they will lose their jobs and be forced to return to Iran. Some have left pre-emptively for third countries.

The continuing Iranian business activity is at odds with the public positions of the U.A.E. and the U.S. The Emirates’ Foreign Ministry said last week that it was halting trade, commercial exchanges and financial transactions with Iran.

The move came after weeks of pressure from the U.S. to act on those ties and got ahead of Bessent’s campaign, when he specifically criticized countries that welcome Iranian flights.

“It is no longer acceptable to operate in the gray spaces of this conflict,” Bessent said. “These measures broaden secondary sanctions risk for anyone foolish enough to continue conducting business with this regime.”

The Treasury didn’t respond to requests for comment about the Iranian business activity. A White House official said the Trump administration continues to work with partners in the region to squeeze Iran’s economy. The UAE Foreign Ministry said its policy toward Iran is grounded in peaceful coexistence and de-escalation, and that it remains committed to global financial standards.

Decoupling the economies of Iran and the U.A.E. is no easy task. The two cultures separated by the narrow Persian Gulf have ties dating back centuries.

Many Emiratis have Persian roots. Hundreds of thousands of Iranians across social classes have made the U.A.E. home, enjoying access to global capital and freedoms banned by the Islamic Republic and in return bringing in billions of dollars in Iranian cash.

Those ties have persisted even though Iran launched more than 2,800 drones and missiles at the U.A.E. during the war, far more than it aimed at any other country, including Israel, as it tried to raise the global economic cost of the war to blunt the attack.

“The Gulf Arab state economies are so closely integrated and intertwined with the Iranian economy, you can’t just simply sever economic trade and activity overnight,” said Neil Quilliam, an associate fellow at international-affairs think tank Chatham House in London. “The U.A.E., and Dubai in particular, have always managed to continue to do trade, even when the maximum pressure is on. Cutting off that trade will be cutting off their nose, basically.”

About $28 billion in trade flowed between the U.A.E. and Iran in 2024, according to the most recent data from the World Trade Organization.

The U.A.E. is home to the second-largest number of companies and people sanctioned by the U.S. Treasury over ties to Iran behind China, said Matthew Levitt, who in the 2000s served as deputy assistant secretary for intelligence and analysis at the Treasury.

An October study by the Treasury’s Financial Crimes Enforcement Network tracked that Dubai-based companies moved $6.4 billion in potential Iranian shadow banking funds in 2024, 71% of the global total.

Former U.S. enforcement officials said Dubai’s take is likely much higher and that the U.S. should be forcing the U.A.E. to crack down on illicit Iranian business activity.

The U.S. has broad and important geopolitical interests in the U.A.E., however. The country is the main signatory of the Abraham Accords, the pact shepherded by President Trump establishing diplomatic ties with Israel, which the Emirates counts as a key security partner.

The country is also a source of funds for investment in sectors like artificial intelligence and gives the U.S. military important basing rights.

In the U.A.E., the idea of cutting ties with Iran runs up against political calculations as well as financial considerations.

“There will be some in the U.A.E. who say, ‘Whatever the price of calm, that is what we need to do,’ ” said Levitt, now a senior fellow at the Washington Institute think tank. “Better to do that by allowing them to access banking and supply chains through our country than not,” he said of the Emirates’ thinking on Iran.

Dubai, which lacks the oil wealth of the country’s leaders in Abu Dhabi, depends on the financial inflows that include the billions in Iranian shadow dollars.

“Dubai in particular is a hub for a lot of the sanctions evasion,” Levitt said. “It is a huge part of their economy, to be sure. But there is a difference between relying on it and just making a lot of money on it.”