Media reports UAE banks shutting down Russian accounts
Date
2/21/2024 6:16:14 AM
(MENAFN) In a move signaling growing concerns over potential secondary Western sanctions, numerous major banks in the United Arab Emirates (UAE) have reportedly initiated the closure of accounts held by Russian companies and individuals, according to a report by Vedomosti on Monday.
The sources, who opted to remain anonymous, revealed that tier-one banks, including First Abu Dhabi Bank, Emirates NBD, and Abu Dhabi Commercial Bank, took sweeping actions in September, severing ties with Russian entities and rendering transactions with Russia virtually impossible.
The catalyst for this banking exodus was reportedly the imposition of sanctions on Russia's Ak Bars Bank by the United States, which had previously served as the primary conduit for Russia-Emirati payments. As a result, tier-one United Arab Emirates banks opted to distance themselves from Russian connections, citing the looming risk of secondary sanctions from Western powers.
While second-tier institutions have shown a degree of loyalty to Russian clients, insiders allege that these banks are imposing new conditions, such as the mandatory purchase of additional banking services or the requirement for clients to bolster their account balances with extra funds.
Opening new accounts with larger United Arab Emirates banks has reportedly become an arduous task, with numerous applications from Russian residents being rejected after initial compliance checks. Sources suggest that the stringent measures stem from the broader context of sanctions, with one businessman revealing that his company's account was closed after a product he imported appeared on a European Union sanctions list.
Complicating matters further, concerns have been raised about the potential impact of a December decree signed by United States President Joe Biden. The decree empowers punitive measures against financial institutions outside United States and European Union jurisdictions that continue to engage in transactions related to the Russian military-industrial complex. This development has heightened the caution of banks in the United Arab Emirates, potentially contributing to the challenges faced by Russian entities seeking to maintain financial relationships in the region.
As geopolitical tensions persist, the preemptive actions taken by United Arab Emirates banks underscore the intricate dynamics between global financial institutions and the risk of sanctions, with broader implications for international business and economic partnerships.
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