A Dubai Islamic bank with ties to the emirate's ruling family said Wednesday it stopped doing business with Iranian banks in December, shortly before the United States approved new sanctions targeting the country's financial system.
The decision by Noor Islamic Bank cuts off yet another of Iran's links to the international banking system. Noor appears to have acted — at least indirectly — in response to Washington's efforts to tighten the screws on Tehran.
"When we became aware, in December 2011, that unilateral U.S. sanctions were to be applied against a number of Iranian banks we took pre-emptive action to end our business relationships with Iranian banks licensed in the UAE," the Dubai bank said.
The Iranian economy is under increasing pressure from a growing series of U.S. and European sanctions aimed at thwarting its disputed nuclear program. Washington and its allies fear Iran is trying to develop nuclear weapons. Tehran insists the program is for peaceful purposes.
Dubai, just across the Persian Gulf from Iran, is a major Middle East banking and commercial hub and an important trading center for Iranian merchants. It is one of seven semiautonomous sheikdoms that make up the United Arab Emirates, a key U.S. ally in the Gulf.
A Noor spokesman declined to say how much business it had been doing with the Islamic Republic. The bank says it complies "with all UAE Central Bank and UAE government directives and international regulations, including those emanating from the UN, regarding sanctions on Iran."
A report Wednesday in The Wall Street Journal quoting unnamed officials suggested the bank had emerged as the largest handler of Iran's foreign oil receipts after other financial institutions stopped doing business with the country.
At the end of 2011, President Barack Obama signed into law a new set of sanctions that would penalize foreign financial institutions that do business with Iran's central bank, though they provide an exception for the handling of oil payments. Days later, at the start of January, the value of the Iranian riyal plunged against the dollar.
Noor was set up in 2007 and operates according to Islamic law, which generally prohibits the charging of interest. Dubai's ruler last year appointed one of his sons, Sheikh Ahmed Bin Mohammed Bin Rashid Al Maktoum, as the bank's chairman.
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