The authorities claim that because RIM's handsets send encrypted data to servers hosted outside the UAE, they cannot effectively monitor communications, with grave consequences for national security.
This, they say, renders RIM in breach of local laws.
Now I am not going to comment on RIM's decision to refuse to comply with the law.
We can rave all we like about freedom of speech, but freedom of speech is a Western concept and the last decade has shown us all, in no uncertain terms, that we cannot impose our cultural agenda on the Middle East.
But the security and human rights issues aside, let's take a look at some of the business ramifications of this decision.
The UAE, in particular Dubai, has made billions out of creating a safe, productive haven for international businesses in an unstable part of the world.
Considering the utter helplessness of most businessmen when without their BlackBerries, I believe this decision is short-sighted and petty, and must be reversed for the good of the business community.
Dubai is in serious economic trouble, with debts up to its eyeballs, and if its authorities want to pursue this course of action, then they will ultimately lose money and business to competing states that are just itching to see the UAE lose face.
Just like it did last year, when the government was caught attempting to sneak spyware onto BlackBerry handsets and soundly humiliated as a result, I expect and hope the Emirates will back down soon.