UAE says not flouting ally sanctions as its economy warms to Russia

WSJ claims the UAE is benefitting from the war in Ukraine, providing a refuge for Russian money.

UAE putin
UAE President Sheikh Mohammed bin Zayed Al Nahyan, seen here with Russian President Vladimir Putin, has tried to remain friendly with both Russia and Ukraine amid the ongoing war [File: UAE Presidential Court/Handout via Reuters]

The United Arab Emirates has said it is careful not to violate sanctions imposed by its Western allies on Russia over the war in Ukraine, after a Wall Street Journal (WSJ) report claimed the country was aiding Moscow by providing an outlet for Russian money.

A UAE official, however, said the country has a robust process to deal with sanctioned people and companies, and is in close contact with the United States and the European Union about the war’s implications for the global economy.

The official, quoted by the outlet, added that Emirati banks monitor compliance with sanctions imposed on Russia to prevent violations of international law.

“The ongoing global climate has led to financial and investment inflows to the UAE, given the country’s reputation as a stable global investment hub,” the official said. “We will continue to take these responsibilities extremely seriously, especially given the current geopolitical landscape.”

The WSJ said an influx of Russians pouring into the UAE has attracted the attention of some of the Gulf country’s main banks, including Emirates NBD, Dubai’s main government-owned bank, which is recruiting Russian bankers to set up a unit dedicated to managing money from wealthy Russians.

It also reported that local banks have opened thousands of accounts for Russians, although Emirati officials have said local banks avoid sanctioned individuals in order to maintain correspondent banking relations with US banks that clear dollar transactions.

According to the outlet, tens of thousands of Russians have moved to the UAE, and especially Dubai, in the past year, turning the Russian-speaking community into one of the most visible in the country of roughly nine million people.

This also reportedly includes some of the Russian elite, namely Igor Sechin, a confidant of Russian President Vladimir Putin who runs a state oil company, who was recently in Dubai on business despite being blacklisted by the US and much of Europe.

Moreover, Western bans on Russian oil have redirected Moscow’s biggest export to the UAE, which, the outlet claimed, buys it at discounted prices and either resells it or refines it into products sold at market rates.

This has led to a significant surge in the incoming flow of foreign currency after the Ukraine war, but the UAE’s dealings with Russia are generally believed not to conflict with Western sanctions, even as they may irk Washington and its allies.

Source: Al Jazeera