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Last Updated: Friday, 10 March 2006, 11:53 GMT
Second Dubai firm in US port link
The port terminal in Baltimore
ISS suppliers services at Baltimore and other US ports
A Dubai-owned firm is already providing shipping services in the United States, it has emerged.

Inchcape Shipping Services, whose clients include the US Navy, has been owned since January by the United Arab Emirates investment firm Istithmar.

Fellow Dubai firm Dubai Ports World has agreed to cede control of US ports acquired in its takeover of P&O to a "US entity" after a political outcry.

The US Congress threatened to block the takeover on security grounds.

'Rigorous security'

Republican and Democrat politicians both claimed that the deal would make key US assets more vulnerable to terrorist attack.

However, as Dubai Ports World conceded the deal would not go ahead as planned, it emerged that Inchcape Shipping Services (ISS) has had extensive interests in the US for many years.

I would like to see us move toward really focusing on our critical infrastructure that is controlled, owned or operated by any foreign government
Senator Hilary Clinton

ISS arranges pilots, tugs and dock workers for shipping companies and works with the US Customs to ensure the smooth arrival and departure of vessels at ports such as New York, New Jersey and San Francisco.

ISS was bought by Istithmar, an investment firm ultimately owned by the Dubai royal family, for $285m in January.

Following the takeover, ISS maintained its global headquarters in London, where the firm's management is based.

In a statement, ISS said all its staff working at US ports were fully vetted and cleared before being employed.

"As a company, ISS has undergone rigorous external security checks, as well as having comprehensive internal policies on security," it said.

Dubai Ports World has not explicitly said it will sell the subsidiaries responsible for US ports although the White House has suggested that this will be the end result.

Despite this apparent concession, leading US politicians have called for a comprehensive review of ownership of key transport assets.

"I would like to see us move toward really focusing on our critical infrastructure that is controlled, owned or operated by any foreign government," Senator Hilary Clinton said on Thursday.

Public opinion

US public opinion was opposed to Dubai Ports World's takeover of US ports, leading critics to express concerns about rising Islamaphobia.

According to a recent opinion poll, many Americans hold increasingly negative views about Islam.

It is just assuming that if a company is from the Middle East it is de facto disqualified from investing in the United States
Daniel Griswold, Cato Institute

More than 45% people surveyed for a Washington Post-ABC poll said they had a negative view of Islam, up 7% since the 11 September 2001 attacks in New York and Washington.

Trade experts said the Dubai Ports World saga would set a damaging precedent for other Middle Eastern firms planning to invest in the US.

"It is just assuming that if a company is from the Middle East it is de facto disqualified from investing in the United States, and I think that is a terrible message to send," said Daniel Griswold, director of the Cato Institute's Centre for Trade Policy Studies.




BBC NEWS: VIDEO AND AUDIO
See the container ports at the centre of the controversy



SEE ALSO:
Dubai firm to 'transfer' US ports
10 Mar 06 |  Business
Q&A: US row over Dubai Ports
09 Mar 06 |  Business
Congress sets up fight with Bush
09 Mar 06 |  Americas
Court of Appeal backs P&O's sale
06 Mar 06 |  Business
High Court clears P&O's takeover
02 Mar 06 |  Business
Review agreed in P&O takeover bid
27 Feb 06 |  Americas


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