Reports indicate that banks in the United Arab Emirates (UAE) are implementing stringent measures, restricting transactions with Russia and initiating the closure of accounts held by both corporate entities and individuals.
Citing concerns over the potential imposition of secondary sanctions, this development was first disclosed by “Vedomosti,” which cited insights from businessmen operating in the UAE and a representative from the “Business Russia” association.
Furthermore, tax and legal consultants have corroborated these findings, underscoring a growing trend within the banking sector.
Despite the awareness of this issue within the Russian government, sources close to the Russian Cabinet have downplayed its severity, deeming it resolved.
According to a representative from “Business Russia,” UAE banks are presently refraining from accepting funds originating from Russia and are halting the processing of outbound payments.
Notably, these financial institutions are also closing accounts held by companies owned by Russian citizens, often citing reasons that lack transparency.
The tightening of banking policies towards clients with Russian citizenship commenced in the autumn of 2023, coinciding with financial institutions ceasing to accept payments from Russia.
Sources have revealed that alternative measures, such as involving a bank in Hong Kong in the payment chain, were sought.
However, as of February 2024, cooperation with the Hong Kong bank has ceased, prompting transactions to transition to cryptocurrency.
For companies with Russian beneficiaries that do not engage in transactions with Russia, navigating banking services has become increasingly complex, as per sources familiar with the matter.
Reports from “Vedomosti” highlight that UAE banks initiated restrictions on Russian clients even before the announcement of secondary sanctions by the United States in December 2023.
Analysts suggest that this preemptive move may be attributed to the significant presence of foreign shareholders in prominent credit organisations.
Sources interviewed by the publication have indicated that while it remains possible for individuals or legal entities from Russia to establish accounts in UAE banks, the procedural requirements have become more stringent.
Moreover, personal connections with local elites have been cited as potentially expediting the account opening process.
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