Media reports making the rounds say that Wealthy Russians are stepping up their effort to move their funds from Europe to Dubai. The move is probably designed to evade Western sanctions placed on them over the war in Ukraine.
The news seen on Russia Today quoted a Reuters report, which in turn cited financial and legal sources in the Gulf state of United Arab Emirates.
According to Reuters’ sources, Russian citizens have been moving their funds from Switzerland and the UK to Dubai, after the former two nations sanctioned Russia and threatened to freeze the assets of prominent Russian businesspeople and politicians.
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An unnamed lawyer based in Dubai told the outlet his firm had received a number of enquiries from Russian entities about shifting “very significant funds” to Dubai. Several reportedly involved hundreds of millions of US dollars.
Another source, a senior private banker, said Russian customers with accounts at private banks elsewhere were opening accounts with the same bank’s UAE branch or with local banks. They noted that the number of Russian customers had recently increased. Other sources said they had seen a recent growth in Russian investments in the region’s real estate.
The UAE Foreign Ministry, the Government of Dubai Media Office, and the Central Bank are all said to have provided any response at the time of this publication.
In an apparent reaction to the fund movements, the Financial Action Task Force based in Paris last week put the UAE on its “grey list” of countries that are subject to increased monitoring. A source told Reuters this means the country’s banks will have to proceed with caution when it comes to welcoming Russian money if they wish to avoid EU penalties themselves.
The Financial Action Task Force (FATF) defines itself as the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit that was held in Paris in 1989. Recognising the threat posed to the banking system and to financial institutions, the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member States, the European Commission and eight other countries.
The United Arab Emirates’ recent refusal to condemn Russia’s military operation in Ukraine at the United Nations Security Council appears to have been interpreted by Russia’s rich as an invitation.
UAE and Dubai in particular has been a very popular with Russian tourists over the past several years, with Russians being among the most numerous visitors and buyers of property in the emirate.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
