UAE Tightens Scrutiny on Russian Firms Amid Pressure From US - Bloomberg
Russian firms based in the United Arab Emirates are coming under greater scrutiny from local banks as the Gulf state faces increased US pressure to tackle sanctions evasion and ramps up efforts to get off a global organization’s watch list.
The UAE attracted a flood of Russian money in the first year after President Vladimir Putin ordered troops into Ukraine, with firms finding banking quick and easy to navigate. That process has gradually grown more arduous, with rejections increasingly common, because the UAE is showing less appetite for sanctions-related risk and pushing to get off the so-called gray list, according to more than half a dozen business owners and consultants interviewed by Bloomberg, who asked not to be identified as such information isn’t public.
Money transfers — whether for companies repatriating funds to Russia or moving cash to a third country — have also been subject to greater oversight and now take more time, the people said. Some banks are demanding more documentation, and at times blocking funds, while seeking justification for the transfer or questioning the origin of the money, they said.
In the initial aftermath of Russia’s invasion of Ukraine, UAE officials hewed to policies that attracted a surge of inflows from high net worth individuals. In recent months, officials have looked to close perceived gaps in sanctions compliance, the people said, as the UAE seeks to be removed from a list of jurisdictions subject to more oversight maintained by the Financial Action Task Force, a group that aims to combat global money laundering.
In the meantime, the US, UK and European Union have ramped up pressure on Emirati officials to tackle illicit flows and close channels used by Moscow to skirt trade sanctions and finance the Kremlin’s war machine. This month, the Biden administration targeted several UAE-based shipping firms, part of a crackdown on non-compliance with its oil price cap.
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