Iran General NewsDubai dhow captains defy U.S. sanctions with shipments to...

Dubai dhow captains defy U.S. sanctions with shipments to Iran

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Bloomberg: Sailors with skin baked to leather by the Persian Gulf sun stack Hewlett-Packard Co. laser-jet printers alongside a 40-foot wooden dhow in Dubai Creek as Ali Reza, an Iranian merchant, watches them sweat. By Glen Carey and Tarek al-Issawi

July 10 (Bloomberg) — Sailors with skin baked to leather by the Persian Gulf sun stack Hewlett-Packard Co. laser-jet printers alongside a 40-foot wooden dhow in Dubai Creek as Ali Reza, an Iranian merchant, watches them sweat.

From his base in Dubai, the second-biggest member of the United Arab Emirates, Reza ships General Electric Corp. refrigerators and other American-branded products to Iran, even though re-exporting them is banned under U.S. sanctions. Within days, the printers will be snapped up by buyers in Iran.

“Anything made in America is popular,” Reza, 55, says as his crew prepares for another voyage.

The illicit trade takes place in one of the world’s most guarded waterways. Hundreds of dhows, traditional Arab sailing vessels, weave their way past U.S. warships that have patrolled the oil shipping lanes in the Strait of Hormuz for almost three decades. These days, the military is more occupied with intercepting weapons than desktop computers.

U.S. sailors are focused on securing oil flows from the region as tensions in the Gulf increase because of Iran’s nuclear program and the war in Iraq.

“We’re not looking for commercial products; if there aren’t terrorists or weapons onboard, they’re free to go,” says Lieutenant John Gay, a spokesman for the Bahrain-based U.S. 5th Fleet. “It’s not our mission.”

Navigating Customs

In Dubai Creek, boats ranging in size from 100 to 1,000 tons load goods for shipment to the Iranian ports of Bandar Abbas and Qeshm. The dhows, fitted only with sails until the 1960s, now use motors and occasionally harness the wind to quicken the journey.

Once cleared by local customs officials, the vessels cast off for their journey, which can take as long as four days, in groups of three or four for safety.

Customs laws in the United Arab Emirates mean that officials only look at the port of origin for a cargo. With most of the U.S. goods coming through Asia, there are no legal grounds to seize them, says Marwan Ali Hasan, an inspector in Dubai.

“We don’t confiscate goods based on brands, American or otherwise,” Ali Hasan says. “We follow the manifest. If it’s an American brand manufactured in another country, we release it.”

The U.S. imposed unilateral sanctions on Iran after the 1979 Islamic revolution, which toppled the American-backed Shah. Militants later stormed the U.S. embassy and held 52 Americans for 444 days.

Goods, technology or services “may not be exported, re- exported, sold or supplied, directly or indirectly” to Iran, according to guidelines from the U.S. Treasury Department.

The Persian Gulf has been on a war footing for more than two decades. Iran was at war with Iraq for most of the 1980s, and Saddam Hussein’s invasion of Kuwait in 1990 prompted U.S.-led intervention.

A Living Wage

Tensions in the region and the presence of the U.S. Navy mean little to ship captains and their crews, who rely on income from cross-Gulf trade to support families back in Iran.

Saleh Moheshnowi and his five crewmen live on their boat in Dubai’s Port Rashid and earn as much as 2,000 dirhams ($800) a voyage, depending on the size of the cargo. That’s about twice the monthly salary for a professional in Iran, where the official unemployment rate has doubled in the past decade and the government began rationing gasoline this year.

“I have been sailing for 35 years,” Moheshnowi, 52, says onboard his wooden vessel, cluttered with pots, pans and a butane stove for cooking. “I have to work on the boat because there is no job for me in Iran.”

The biggest threats to business, dhow captains say, are the changeable weather and Iraqi criminal gangs that occasionally intercept dhows when they stray too far from one another in protective convoys.

Pirates Ahoy

The U.S. military inadvertently provides protection for dhows plying the Gulf. Coalition forces are charged with guarding Iraq’s offshore oil facilities and check vessels sailing through the Strait of Hormuz for weapons.

“The pirates and the weather are our enemies,” says Mohammed Ali Hussein, a 35-year-old boat captain who makes the journey to Iran about once a month. “If we’re lucky, our route will take us near Iraqi oil installations. That is a safe area.”

In March, 15 Royal Navy sailors and marines were arrested by Iranian forces while searching a merchant vessel in disputed waters. The sailors, from HMS Cornwall, were under orders to intercept boats suspected of transporting weapons. They were released April 5 after two weeks in detention.

The U.S. Navy, which has two battle groups in the Gulf, each of which includes an aircraft carrier, submarines and supporting battleships, knows that the dhows are passing its warships laden with American goods.

Moheshnowi, drinking water from a plastic cup in the 100- degree heat, says U.S. sailors have boarded his vessel, and checked his cargo and documents. “They are just looking for terrorists,” he says.

Back on the waterfront, Hussein says the rewards outweigh the risks, and prays that his faith will sustain him.

“We have no insurance,” he says. “God is our insurance.”

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