Several large banks in the United Arab Emirates have begun closing the accounts of Russian companies and individuals due to the risk of secondary Western sanctions, the news outlet Vedomosti reported on Monday, citing businessmen working in the UAE.
The sources, whose identities are not disclosed in the article, told Vedomosti that in September tier-one UAE banks, such as First Abu Dhabi Bank, Emirates NBD, and Abu Dhabi Commercial Bank, largely purged their ties to Russia. It thus became virtually impossible to carry out transactions with Russia using these banks. This happened after Russia’s Ak Bars Bank, which used to be the main channel for Russia-Emirati payments, came under US sanctions.
Second-tier institutions have allegedly so far treated Russian companies and individuals more loyally, but have demanded that these clients purchase additional banking services or put extra funds on their accounts.
The sources also complained that it has recently become next to impossible to open a new account with the country’s larger banks. Many applications from Russian residents are returned after the first compliance check.
The sources attributed the problem to sanctions. According to one businessman, his company’s account was closed after it was discovered that one of the products he was importing had appeared on a EU sanctions list. Some also said banks may be wary of a decree signed in December by US President Joe Biden enabling punitive measures against financial institutions outside US and EU jurisdictions that continue to work with Russia. The regulation specifically targets lenders that facilitate transactions related to the Russian military-industrial complex.
According to analysts briefed by the news outlet, it is still possible for Russian residents to run a business successfully in the UAE, but certain criteria must be met. For instance, the business activity itself should not fall under sanctions; the company should not be linked to ‘politically exposed persons’ in Russia such as government officials, top managers of large Russian companies or banks; and it should not deal with products under Western sanctions, especially dual-use goods that could be employed by the military.
A Vedomosti source close to the Kremlin said the government is aware of the problems faced by Russian businesses in the UAE, but doesn’t consider them critical or unsolvable.
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