As US seeks Iran nuclear deal, Iranian traders load up on Cheerios, Heinz ketchup

As US and European leaders fine-tune a new offer for Iran nuclear talks, Iranian traders are busy figuring out how to circumvent the sanctions Western powers hoped would push Iran toward a nuclear deal.

One of Iran's main trade routes runs through the emirate of Dubai, which has tripled its trade with Tehran in the past five years. Today, the United Arab Emirates is Iran’s top source of imports – far outweighing even China, its next-biggest trading partner.

While much of the commercial trade flows through the Jebel Ali Free Zone, everyday necessities are loaded onto small ships known as kashtis along Dubai’s Deira Creek.

On a recent sunny afternoon, hundreds of piles of miscellaneous goods stood along the creek. Everything from Cheerios, Heinz ketchup, and soy sauce to mattresses, car tires, and automotive parts could be found among the stacks, along with the odd piece of furniture or box of toys.

For several years now, Iranians have had to find ways to acquire their basic everyday necessities, but a fourth round of United Nations sanctions announced in June – followed by separate sanctions from the US and Europe – are more stringent than prior measures.

The UAE, which has excellent relations with the US and Europe – as well as Iran – has had the challenging task of keeping everyone happy. The sanctions have been widely criticized by both politicians and citizens in the region because they affect Iranians and not just their government. That said, the UAE enforces strict customs procedures, and the kashtis on Deira Creek are no exception.

US worried about dual-use goods

On any given day there are 50 to 60 of these boats – most shorter than 100 feet – along Deira Creek, in various stages of loading. Iranian crew on a few different boats confirmed that loading a boat can take an average of a month each, as all the goods don’t come from the same supplier in the UAE. For example, one boat might carry rice, cooking oil and ghee, and a few Sony TVs.

Once each boat is loaded in Dubai it must clear UAE customs before continuing on to Iran, a 12-hour journey from Dubai to the Iranian port of Bandar Abbas.

Officials from both the Dubai Customs office and the UAE Federal Customs Authority did not agree to repeated requests for interviews. One customs employee who wished to remain anonymous stated: “You can go and see what is on the boats. We have customs procedures in place for security reasons.”

But Jean-François Seznec of Georgetown University in Washington says that a governing principle of current US trade restrictions on Iran is whether goods could be used for nuclear development.

“The big fear of the US is that goods for dual use can enter Iran, but that’s very vague because anything can be of double use,” says Dr. Seznec, who specializes in the political economy of the Persian Gulf. “For example if you have a Microsoft computer, are you going to use it for personal use or for nuclear development? Of course the US is worried about anything, but ultimately the policy of the US is not to attempt to stop all trade with Iran, but instead its to make Iran extremely expensive, in order to push Iran towards its bankruptcy.”

'Who is losing? The American people.'

Indeed, the West has largely cast the latest round of sanctions as a hardship for Iranians. A top member of the Iranian Business Council (IBC) in Dubai concedes that US sanctions on Iranian banks have definitely affected Iran, but says sanctions on goods are affecting US producers who are losing business from a substantial Iranian market more than Iranians themselves.

“Frankly US sanctions have not affected Iranians that much,” says Morteza Masoumzadeh, the IBC’s senior vice president here. “It is absolutely senseless to apply sanctions to American products like ketchup and office printers. Who is losing here? The American people.”

Back on Deira creek, as boxes of everyday American food items are openly loaded onto the rickety kashtis, it’s clear that Iranians are finding ways to get the basics they need.

“If this is a problem for the US, then America should send their army to Dubai Creek to make sure no Heinz ketchup goes to Iran,” says Mr. Masoumzadeh. “On the creek you’ll find nothing to be used in nuclear energy, missile tech[nology], or uranium enrichment. These are all really normal foodstuffs and home appliances. Americans have banned selling them to Iranians so, no problem – Iranians will buy other brands.”