Transcript [00:00] Hey everyone, there's a news item that [00:02] broke just a few hours ago today on [00:04] Wednesday that is massive. It is a [00:08] massive story and I think most people [00:10] are going to scroll right past it [00:12] without understanding how big it [00:13] actually is. Okay, so here's the [00:15] headline. Let me pull this up here. The [00:18] headline is [00:20] UAE halts trade ties with Iran and says [00:24] it was targeted with missiles. Okay, so [00:26] the UAE halting trade ties. Let's just [00:28] take a look at a a at the top detail of [00:31] the story. The United Arab Emirates said [00:33] it is halting all trade and financial [00:36] transactions, [00:38] trade and financial transactions with [00:40] Iran, increasing economic pressure on [00:42] the Islamic Republic soon after accusing [00:44] Iran of launching ballistic missiles [00:46] toward the Emirates. Okay. Now, why is [00:49] this so massive? What's so massive about [00:52] it? That's what we're going to get into. [00:53] On the surface, it reads just like [00:54] another Gulf tension story. Iran fired [00:57] some missiles. is one of the Gulf States [00:58] is upset. The UA is upset. They're [01:00] cutting ties. We've seen headlines like [01:03] that before, but I want to explain why [01:05] this is different. That's what this [01:06] video is about. Why this move right here [01:10] actually matters more than almost [01:12] anything else that's happened on all of [01:14] the economic pressure front against Iran [01:16] in this war. [01:18] Yes, that's what I'm arguing. And I want [01:20] to connect it to what Scott Bessant said [01:23] just uh what was it about a week ago or [01:27] uh or five days ago or so, right? This [01:30] we probably saw this headline. Yeah, [01:31] here it is. August 14th, Bessant says US [01:35] to apply measures never seen on Iran. I [01:37] made a video about it. How Scott Bessant [01:39] was saying that next week, that's now [01:41] that next week there's going to be some [01:43] massive moves that are going to, you [01:45] know, be bigger economic pressure than [01:47] anything we've ever seen. and we're all [01:49] kind of waiting for the headlines. Uh, [01:51] and maybe this is related. That's uh, [01:54] you know, I I think they're connected. [01:57] So, let's start with what the UAE [01:58] actually announced. [02:01] The Emirati Foreign Ministry said that [02:02] they're halting, as I read to you, all [02:05] trade and financial transactions with [02:08] Iran. They're not just tightening [02:10] sanctions enforcement. They're not, this [02:12] isn't like just condemning an attack. [02:13] Oh, you struck us. They are cutting off [02:17] all trade and financial transactions. So [02:19] what does that mean? [02:22] And this came just hours after President [02:25] Trump [02:27] had a direct call [02:30] with uh the Emirati ruler. Here we go. [02:32] It's unclear if the United States played [02:33] a role in the Emirates's decision to [02:35] halt trade with Iran. The announcement [02:37] came hours after a call from President [02:39] Trump to the Emirati ruler, Shik [02:41] Muhammad bin Zed. And then it also says [02:43] here at the end, in a call on Tuesday, [02:45] that's yesterday, Secretary of State [02:47] Rubio and the Emirates National Security [02:50] Adviser Sheik Taknun bin Zed discussed [02:53] US UAE coordination, [02:56] US UAE coordination to hold Iran and its [02:59] terrorist proxies accountable for [03:02] ongoing attacks, [03:04] according to State Department spokesman [03:06] Tommy [03:08] Pigot. [03:10] Okay, so we're talking about some [03:12] increased level of coordination. Trump [03:14] is talking to uh MBZ. [03:18] Rubio is talking to their national the [03:20] Emirates National Security Adviser and [03:22] then boom, along comes this [03:25] announcement. And I still haven't [03:26] explained to you how massive this [03:28] announcement is. [03:31] Now, here's what so people are going to [03:32] miss this because they don't understand [03:33] what the UAE is, what it actually is to [03:37] Iran. Okay, so let's take a deep breath, [03:39] get something to drink, sit down, and [03:42] here we go. The UAE is not just a random [03:46] trading partner with Iran. It's not just [03:48] another trading partner. Dubai has been [03:52] Iran's main artery to the global economy [03:55] since the 1970s, okay? It's 50 miles [03:58] across the Gulf. And the UEA has [04:00] functioned for decades as basically a [04:03] free port for Iranian trade. Even while [04:05] the rest of the world would sanction [04:06] Tehran into the ground, the UAE would [04:09] facilitate their trade. You might wonder [04:10] why they do this. The UAE does it [04:12] because they have a lot to gain [04:13] financially and they it gives them a lot [04:16] of centrality to the to how currency [04:19] moves in the region. They don't want to [04:20] give that up and Iran is the biggest [04:22] economy there. [04:24] Now, in in 2024 alone, 2024, [04:30] trade between the UAE and Iran was worth [04:32] roughly $28 billion. [04:36] And the UAE was actually Iran's largest [04:38] source of imports. [04:41] The UAE was Iran's largest source of [04:44] imports because it they're using the UAE [04:46] ports. There's a whole Iranian merchant [04:49] community, a big Iranian merchant [04:52] community living in the UAE in Dubai. [04:55] Tens of thousands of Iranian-owned [04:57] businesses. But it's not just trade and [04:59] goods. That's actually the smaller part [05:01] of the story. The real story is how Iran [05:04] moves money through the UAE. And once [05:07] you understand this, you'll understand [05:09] why uh when it said in this story that [05:12] they're halting that the UAE announced [05:14] that they're halting trade and financial [05:16] transactions. That's why I was like, "Oh [05:19] my gosh, this is huge. I have to make a [05:21] video about it." And it's much bigger [05:23] than it sounds. [05:25] So, there are basically four or five [05:27] different channels here. Number one is [05:30] something called Hala. Hala is a [05:32] fascinating network. These are informal [05:35] money brokers and you've got them in [05:37] Thran's uh Ferdosi exchange district and [05:41] you've got their counterparts in Dubai. [05:44] And here's the part that people don't [05:45] understand about the movement of money [05:48] in this network. No money actually [05:51] crosses the border. None. Let me give [05:53] you an example of how this actually [05:54] works. Hala, that's what it's called. [05:58] Say someone in Tehran needs $100,000 to [06:01] show up in Dubai. maybe to pay a [06:04] supplier, maybe to move it onward out of [06:06] Dubai somewhere else. Okay, they want [06:09] money to move from from Thran to the UAE [06:13] so then it can go freely out into the [06:15] into the world, right? Because the UAE [06:16] is a friendly country to everybody. So [06:18] what does he do? What does this guy do? [06:20] He walks into a broker's office in in [06:23] the Ferdosi [06:25] exchange district in Tehran. He hands [06:28] over the equivalent of $100,000 [06:31] in Iranian realals in cash right there [06:34] on the spot. That broker [06:37] then picks up the phone and calls his [06:40] counterpart in Dubai and he says, "Pay [06:43] out $100,000 [06:45] to this person." And within about 48 [06:48] hours, someone in Dubai will hand over [06:51] $100,000 in cash or deposit it into an [06:55] account to whoever was supposed to [06:57] receive it. But the money never [06:59] transfers from Tehran to Dubai. It's [07:02] just someone in Dubai making a payment. [07:05] There's no wire transfer. There's no [07:06] bank transaction at all. Nothing crosses [07:09] a border. So nothing can show up on [07:11] anyone's radar. There's nothing to [07:13] track. [07:15] The money that was collected in Tehran [07:17] stays there in Tehran with the Iranian [07:19] broker. The money that got paid out in [07:21] Dubai comes out of the Dubai broker's [07:24] own reserves. Okay. So, how do the two [07:26] brokers settle up with each other? How [07:28] does the $100,000 get paid? How does it [07:30] get transferred? They don't move cash [07:33] back and forth every time. They let it [07:35] net out over time through trade. So the [07:39] Terron broker owes the Dubai broker now. [07:42] So that debt gets settled the next time [07:44] there's a shipment of goods going the [07:47] other way, say electronics or car parts [07:50] headed into Iran, and the invoice on [07:52] that shipment will absorb the [07:55] difference. [07:57] Multiply that by thousands of [07:59] transactions a month, and the books [08:01] balance out through trade flows instead [08:04] of bank transfers. So there's no there's [08:06] no money trail. There's no paper trail [08:08] on money. That's the whole trick. [08:11] There's no transaction for a bank or a [08:13] or a regulator who's watching the flow [08:16] of money ever to see because there is no [08:18] flow of money. [08:20] As far as the banks are concerned, the [08:22] banking system is concerned. Nothing [08:24] happened. Okay, this is called the hala [08:26] system. These networks uh advertise [08:29] openly on Instagram. They coordinate on [08:31] WhatsApp. We're talking hundreds of [08:33] millions, sometimes over a billion [08:34] dollars a year moving through a single [08:37] corridor this way for about a one to 5% [08:40] fee. And this is used also to fund [08:42] kisbala. There's a lot of money that [08:44] moves around through these hala [08:45] networks. [08:47] Now, there was a Wall Street Journal [08:48] investigation back in November. That's [08:51] you know what what is like uh [08:54] 10 months ago, nine months ago that [08:57] actually traced Iranian oil sale [09:00] proceeds through Dubai exchange shops [09:03] all the way to Lebanon using this [09:06] mechanism. Okay. So, they move large [09:08] sums of money through this. [09:11] So that's one way that financial [09:14] transactions that that uh Iran depends [09:17] on the UAE. Number two, shell companies. [09:21] Now to understand this one, you need to [09:22] know what a free zone actually is. So [09:24] Dubai has these designated economic [09:28] zones. [09:29] One of them uh there's DMCC, which is [09:32] the Dubai multicommodities center. And [09:35] you have Jebel Ali which is a massive [09:37] port and industrial zone where the UAE [09:40] lets you register a company with minimal [09:43] disclosure requirements, right? You [09:45] don't need a you don't need a local [09:47] person to be your partner. Uh in many [09:49] cases you don't even need to show up in [09:51] person, right? And you register your [09:53] company there in one of these free zones [09:55] and you get tax breaks. And this is the [09:57] key part. You get a you get like [09:59] corporate secrecy that a normal onshore [10:02] company wouldn't get because it's a free [10:03] zone. They built these free zones to [10:06] attract foreign investment and [10:07] international trade. And on paper at [10:10] least, that's exactly what they do. They [10:11] definitely in invite foreign investment. [10:15] What type of trade it actually is is is [10:18] shady. That's the whole point. But that [10:20] same setup, the the fact that there's a [10:23] minimal disclosure requirements and it's [10:25] easy to incorporate. Uh there's very [10:28] minimal oversight and scrutiny over the [10:30] corporations there. It's a free zone, [10:32] right? So that setup is almost designed [10:37] to allow people to hide who actually [10:40] owns a company and that's what has [10:43] happened and the Iranians have used this [10:46] system a lot. So these free zones are [10:49] full of Iranian linked shell companies [10:51] that are used. Now a shell company is a [10:53] company that doesn't actually do [10:54] anything. It just it has income, it has [10:56] expense, but it's just money flowing [10:58] through a company that doesn't really do [11:00] anything. Okay? So there's there's full [11:02] [snorts] of there's tons of Iranian [11:05] shell companies that are used to uh to [11:08] mask to hide oil and prochemical sales [11:13] and launder the money back into the hard [11:17] currency for Tehran. [11:20] So one outlet, one media outlet [11:22] described Dubai as functioning almost [11:24] like a financial processor for Iranian [11:27] oil money. Iran Iranian oil money and [11:29] real conversions go in one end and clean [11:33] dollars or deirhams come out the other [11:35] end and on paper none of it ever touched [11:38] Iran. Okay, so you have hala, we have [11:41] the shell companies and now we have [11:44] number three which is gold. Dubai is one [11:47] of the largest gold trading hubs on the [11:49] planet and Iranian gold has reportedly [11:52] moved through it as a way to convert oil [11:54] revenue into something liquid and [11:56] exportable sometimes literally [11:58] reertified as UAE origin gold to hide [12:02] where it actually came from. So there's [12:03] the gold also. Number four is the [12:05] crypto. Now here I'm going to show you a [12:07] headline. [12:09] So u here this is from August 7th just [12:13] what is it a week and a half ago. US [12:15] sanctions Dubai crypto exchange for [12:18] aiding Iran's IRGC following a Reuters [12:21] report. [12:23] Okay, [12:25] so that was the that was the US Treasury [12:27] sanctioning a Dubaibased crypto exchange [12:30] called Shelbit founded by an Iranian [12:32] expat for running what Reuters and and [12:36] TRM Labs estimated was a 4 to6 billion [12:41] sanctions evasion operation moving money [12:44] for Iran central bank and directly to [12:47] IRGC. [12:49] They were moving money directly to IRGC [12:51] linked wallets, like wallets that were [12:54] linked, crypto wallets that were linked [12:56] to the Islamic Revolutionary Guard [12:59] Corps, the the regime in Thran. Now, [13:01] this thing was reportedly still [13:02] operating even during the strikes on [13:04] Iran back in February. So, we have the [13:07] crypto. Number five is the shadow [13:10] fleets. We've talked about these before. [13:11] Iran runs something like 400 aging oil [13:15] tankers that disable their tracking [13:17] transponders. They fly flags from other [13:20] countries like Liberia or Panama or [13:22] wherever. They put up a flag to claim [13:24] that the ship is carrying oil uh from [13:27] there and they do shipto- ship transfers [13:30] at sea. And a lot of that happens in [13:33] waters right near the UAE specifically [13:35] to hide where the oil is coming from and [13:37] then it gets sold to these Chinese [13:39] teapot refineries. [13:41] Okay. Okay. So, when you put all of this [13:43] together, put all everything I've [13:45] described so far together, the UAE is [13:48] not a just a trading partner of Iran, [13:51] okay? You're looking at Iran's entire [13:53] financial lifeline to the outside world [13:55] that runs through the UAE. [13:59] Now, let's go back to the Scott Bessant [14:02] headline. [14:04] So August 13th, Treasury Secretary Scott [14:06] Bessant went on record and said, and the [14:09] actual quote was, "Economic isolation [14:13] like the world has never seen before, [14:16] right?" And he said that that would be [14:18] combined with the continued blockade in [14:20] the straight of Hormuz that will keep [14:22] anything from going in or out of Iranian [14:23] ports. He called it a one-two punch. And [14:26] then he told reporters, quote, "Watch [14:28] this space for more announcements coming [14:31] next week." [14:33] So there was a lot of there was a lot of [14:35] speculation. [14:37] There was a lot of speculation in the [14:38] media uh about about all of this and u [14:44] you know about what what exactly he had [14:46] in mind. Some analysts were guessing [14:48] that it would be like new sanctions [14:50] designations, maybe pressure on chi on [14:52] the Chinese banks, that kind of thing. [14:55] because that, you know, and that's what [14:56] you'd expect. Oh, it's going to be [14:57] another round of sanctions and he's [14:59] just, you know, this is bluster. This is [15:00] going to be like nothing we've ever [15:01] seen. And here's my point, and I think I [15:04] think this is the piece that people are [15:05] missing. Everything that Scott Bessant [15:08] would be expected to do or has done in [15:10] the past, these types of sanctions or, [15:12] you know, going after the shadow fleets [15:13] or going after Chinese banks. [15:16] That's all aimed at the oil export side [15:19] of Iran's economy. We think that if we [15:20] choke out the oil, we've crushed their [15:22] economy. the Hermuz blockade, right? [15:26] Uh sanctions on various petrochemical [15:29] industries or individuals who are [15:31] dealing in oil. We saw that already a [15:33] little while back. That's all about what [15:36] leaves Iranian ports and how Iran gets [15:38] paid by third countries. And then [15:40] there's the blockade, which is [15:42] preventing goods from coming in uh and [15:45] forcing them to come in by land, which [15:46] is there's a lot less goods and it's far [15:48] more expensive. That's all real pressure [15:52] and but it's also pressure on a type of [15:56] sanctions that the Iranians are very [15:59] experienced at evading. Right? The the [16:02] oil sanctions, they know how to get [16:05] their oil out. They've been sanctioned [16:07] for decades, various points, more [16:09] sanctions, less sanctions. They're [16:11] experts at evading sanctions. So they [16:13] have the shadow fleets like as I told [16:15] you about like where they turn off the [16:17] transponders and they move the oil from [16:18] ship to ship. They have all that. Um [16:23] but what thei so the United States can [16:25] do more of that. [16:28] But what the United States cannot do on [16:30] its own is touch all the other aspects [16:34] of Iran's economy. The other half let's [16:37] say of Iran's economic survival. the [16:39] Hala networks, the shell companies, the [16:41] gold trade, the crypto exchanges, all of [16:44] that. [16:46] The US sanctions can't really deal with [16:48] that. But that lives in the UAE's [16:52] system. It's in its sovereignty. [16:57] Some of it's licensed, some of it's [16:59] unlicensed, but tolerated by UA regula [17:02] by UAE regulators. And but it moves it [17:05] all moves through UAE financial [17:07] institutions. So the best that that the [17:10] Americans can do on their own is like [17:14] designating Shellbit that uh that crypto [17:16] exchange as one entity that is going to [17:19] be sanctioned after a Reuters [17:21] investigation. [17:24] That's like whack-a-ole. [17:29] But what when you have the Hala exchange [17:32] houses and the shell companies [17:35] and the banks that are physically [17:36] located in the UAE, the United The [17:39] United States can't shut them down, but [17:41] the UAE can. The UAE can shut the door. [17:46] Think of it this way. They can shut the [17:48] front door, right? It they can issue [17:51] this one administrative order that hits [17:53] the exchange houses, the free zones, the [17:55] banks. That's categorically different [17:57] from anything that the Americans can do, [18:01] right? The the UAE has a different type [18:05] of power over the Iranian economy. [18:07] That's my point. Now, if it holds, if [18:10] they actually do this, if they actually [18:12] do what they're threatening here, right, [18:14] what was the language in the New York [18:15] Times again, right? It was [18:19] from the opening line, the UA said it's [18:21] halting all trade and financial [18:23] transactions with Iran. [18:26] all trade and financial transactions. [18:29] Question is, do they mean it? [18:32] If it holds, if they mean it, if it's [18:34] along the lines of what I'm describing, [18:36] this single move does more to cut off [18:40] Iran's actual cash lifeline, then pretty [18:44] much anything the Americans can do, [18:46] including the Hormuz blockade, [18:49] in my opinion. [18:51] So, when I look at the timing here, [18:53] let's look at the timing. Bessant makes [18:54] his declaration on the 13th, a week ago, [18:58] and he's telling everyone to watch for [19:00] for something massive coming next week. [19:03] And meanwhile, a few days before [19:05] Besson's announcement, we have the [19:08] sanctions on Shelbit, which is a crypto [19:10] exchange, which is one of the ways that [19:14] Iran [19:16] moves money [19:18] or gets access to money, right? So, you [19:20] have that. [19:22] And now we have the UA's announcement [19:24] coming hours after a direct call from [19:26] Trump to the Emirati leadership. I don't [19:28] think you have to be a conspiracy [19:29] theorist to say the coordination is [19:31] obvious. Now to be fair to the [19:34] reporting, the New York Times itself [19:35] says that it's unclear whether the US [19:37] played a role, right? The UAE does have [19:39] its own reasons to want to do this. It's [19:41] not just that the you this isn't just [19:43] the US's way of doing things, but it [19:47] sure looks a lot like there's [19:49] coordination here. I'll let you draw [19:51] your own conclusions. But I yeah, you [19:54] know, again, the timing makes it very [19:56] hard to see this as a coincidence. Now, [19:57] I want to be fair here because I don't [19:59] want to overstate this. I'm saying that [20:00] this is massive, but there's one big [20:03] caveat here. [20:07] There's there's previous there's prior [20:09] reporting from Iran International on an [20:11] earlier UAE crackdown on Iranian linked [20:14] money changers. [20:16] And even that partial crackdown didn't [20:18] fully stick. Right? These hala networks [20:21] are informal by design. [20:24] So, you know, and the Gulf States have [20:27] historically [20:29] threatened to shut them down, but not [20:30] really shut them down. They they they [20:33] only go so far, then they pull back. So, [20:37] even this declaration by the UAE is very [20:39] serious and it's a real structural [20:42] threat to the regime in Thran. But [20:44] whether the UAE actually enforces it, [20:47] you know, against the, you know, the [20:48] hala shops, the money changers, all of [20:51] that versus just the formal banktobank [20:54] and customs trade. That's the thing [20:56] then, you know, that we have to watch [20:57] like how how far is the UAE actually [21:00] going to go with this declaration. But [21:02] here's the bottom line. If there's any [21:04] truth to this declaration, if the UAE [21:06] actually follows through on shutting [21:08] down not just container shipments, but [21:10] the exchange houses, the shell [21:11] companies, the gold trade, the crypto [21:13] infrastructure, then you're talking [21:15] about tens of billions of dollars of [21:17] dollars a year in Iranian revenue at [21:19] risk. And you're talking about severing [21:21] what is by a wide margin Iran's [21:24] principal lifeline to hard currency. [21:26] Okay, that's that's uh again it's not [21:29] something that even years of American [21:31] sanctions on individual entities has [21:33] ever been able to accomplish [21:35] because again Washington was always you [21:38] know their sanctions on Iran always had [21:41] to do with oil and and and playing [21:44] whack-a-ole from the outside basically. [21:47] So that's why I think this headline is [21:49] much bigger than most people realize. [21:50] We're going to keep watching this one [21:52] closely, but this is not a static [21:54] situation and uh I'm sure there's going [21:56] to be updates in the days to come. Uh [21:58] thanks for watching. If you found this [22:00] uh useful, interesting, helpful, please [22:02] share it with someone. That's the best [22:03] thing you can do to help me. Drop a [22:05] comment. Let me know what you thought of [22:06] this. And uh please make sure that [22:09] you're subscribed not only to this [22:11] channel, but go over to Israel 365 News [22:13] YouTube channel. We just posted another [22:15] great interview yesterday with David Dud [22:18] of the Foundation for Defense of [22:19] Democracies. You don't want to miss the [22:20] content we're putting up there. Make [22:22] sure that you're subscribed there as [22:23] well. And uh yeah, stay in touch. Let me [22:26] know what you think. And thanks for [22:28] watching.
