* UAE moving to tighten role as Iran economic lifeline
* Business group official sees decline in Iran businesses
* Chamber of Commerce expects bilateral trade to be hit (Adds Iran-UAE chamber of commerce, paragraphs 3, 18)
By Fredrik Dahl
DUBAI, July 6 New sanctions on Iran are expected to complicate life further for Iranian businesses based in the United Arab Emirates, home to the regional trade hub Dubai, and may force some to close down, one of their representatives said.
Morteza Masoumzadeh, vice president of the local Iranian Business Council, also told Reuters he believed the UAE authorities would impose more restrictions after the latest wave of international punitive measures against Iran.
In Tehran, the head of an Iran-Emirates Chamber of Commerce said the UAE had taken steps beyond last month's United Nations resolution and predicted bilateral trade would fall.
Thousands of Iranian companies and businessmen operate in Dubai, and many of them are involved in the multi-billion-dollar re-export trade with the Islamic Republic across the Gulf.
But the UAE, a U.S. ally, has signalled a tightening of its role as a trading and financial lifeline for Iran after the U.N. Security Council imposed a fourth round of sanctions on June 9 on the major oil producer over its disputed nuclear programme.
"I predict a further decline in Iranian businesses in the UAE and other countries doing direct trade with Iran, like Turkey, Malaysia etc," said Masoumzadeh.
"This will make it even much worse than before, there is no question about it," he said on Monday, when asked about the impact of the new sanctions on Iranian businesses in the UAE.
His comments were in contrast to statements by Iranian officials in Tehran dismissing the latest measures. President Mahmoud Ahmadinejad has called them "pathetic". [ID:nLDE66202N]
Previous sanctions have hurt Iranian business activities by making it more difficult to get vital trade finance, such as letters of credit, after the United States targeted two Iranian state banks with branches in Dubai three years ago .
The latest U.N. resolution calls for measures against new Iranian banks abroad if a connection to the nuclear or missile programmes is suspected, as well as vigilance over transactions with any Iranian bank, including the central bank.
"I'm sure that from now on ... trade transactions in foreign currencies such as the euro and (UAE) dirhams will become more difficult," said Masoumzadeh, who rejects any idea that Dubai is a centre for illicit trade with Iran.
U.S. President Barack Obama signed into law sanctions on Iran's vulnerable petrol imports last week, further stepping up pressure over nuclear work which the West suspects is aimed at making bombs -- something Tehran denies. [ID:nN01170802]
Iranian aviation officials accused the UAE, Germany and Britain on Monday of refusing to refuel Iranian passenger planes in response to the tougher U.S. measures, but this was later denied by the country's Foreign Ministry. [ID:nLDE6650PS]
Iran and the UAE have close economic and historic relations but with Tehran facing growing Western pressure, its ties with Dubai have drawn scrutiny from Washington.
In 2009, Dubai's re-exports to Iran -- goods originally from Europe, Asia or elsewhere and then sold on to Iran -- rose 4.8 percent to 21.3 billion dirhams ($5.8 billion).
In a possible sign of tougher times ahead, an Abu Dhabi banking source said last week the UAE's central bank had told banks to freeze any accounts belonging to dozens of Iran-linked firms targeted by the latest U.N. sanctions.
"I have no doubt that more restrictions will be applied towards Iranian businesses by the UAE authorities," said Masoumzadeh, who has a Dubai-based shipping business.
Masoud Daneshmand, the Iran-Emirates Chamber of Commerce head, said Iranian businessmen were unhappy about the UAE's actions, Iran's ISNA news agency reported. "Trade between Iran and the Emirates will be reduced in coming months," he said. (Additional reporting by Ramin Mostafavi in Tehran; Editing by Alistair Lyon, Samia Nakhoul and David Stamp))
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