Russian companies in the United Arab Emirates are under the watchful eye of local banks. The reason for this was pressure from the United States, which intensified the fight against sanctions evasion.
“Bloomberg” writes about it.
The UAE attracted a large number of Russian companies in the first year of the full-scale war in Ukraine, and Russian entrepreneurs easily learned to navigate the local banking system. However, it is now becoming more difficult for the Russians to bypass the sanctions, because the Arab Emirates do not want to take risks due to increased US pressure.
Money transfers — sending funds to Russia or transferring cash to third countries — now take longer. Banks require more documentation and sometimes block funds, demanding justification for the transfer or questioning the origin of the money.
In recent months, Emirati authorities have sought to close gaps in sanctions compliance as they seek to remove the UAE from the list of countries subject to increased oversight by the Financial Action Task Force. From now on, UAE banks require more information from current and potential customers from Russia and conduct checks related to sanctions lists.
The change in the UAEʼs policy has hit small businesses particularly hard — lenders have begun to pay attention to the ratio of risks and rewards. Some large Russian companies are now exploring alternatives — for example, moving business to other Gulf countries.
- The United Arab Emirates did not introduce sanctions against Russia.
- In September 2023, the US imposed sanctions on a transnational network that helps manufacture drones in Iran. The US has imposed sanctions against five organizations and two individuals in Iran, China, Hong Kong, Turkey and the UAE.