April 16, 2024

Athens News

News in English from Greece

Due to the risk of US sanctions, UAE banks began to close accounts of Russian clients


Banks of the United Arab Emirates, not wanting to fall under secondary sanctions, limited settlements with Russia and began to close accounts of companies and individuals.

About it reports Russian publication Vedomosti, citing businessmen working in the UAE and a representative of the Business Russia association. The problem was confirmed by tax and legal consultants, the Russian government is aware of it, although they consider it uncritical and solvable, says a source close to the Cabinet of Ministers. A representative of Business Russia states:

“Currently, UAE banks do not accept money from Russia and do not process payments in the opposite direction.”

UAE banks, he says, continue to close accounts of companies whose owners are Russian citizens, “including for opaque reasons.” Banks of the United Arab Emirates began to tighten their policies towards clients with Russian citizenship in the fall of 2023 – credit institutions stopped accepting payments from Russia. The publication’s interlocutors say:

“We had to add a bank in Hong Kong to the payment chain, but since February 2024 it has refused to cooperate; settlements are now carried out in cryptocurrency. For companies with Russian beneficiaries that do not receive money from Russia and do not transfer it to Russia, the situation with banking services has become more complicated “.

The publication notes that banks introduced restrictions for Russians before the United States announced secondary sanctions in December 2023. Vedomosti sources suggest that this may be due to a significant share of foreign shareholders in large credit institutions. They say that it is still possible to open an account in UAE banks for individuals or legal entities from Russia, but the procedure takes longer, and personal acquaintances with representatives of local elites can speed it up.

Our publication previously reported that Banks in Turkey fear secondary sanctions The USA refuses to work with Russia. They are universally refusing to work with Russian banks, have severed correspondent relationships with almost all Russian credit institutions and have suspended payment processing without formally closing contracts. An exception is for subsidiary foreign banks in Russia.

The situation became more complicated last summer and sharply worsened after US President Joe Biden on December 22 issued a decree on secondary sanctions against foreign companies that are helping the Russian Federation in the war against Ukraine. This decree allows US authorities to disconnect foreign banks from the US financial system for violating sanctions against Russia.



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