UAE banks start blocking accounts of companies from Russia en masse
3 August 21:15
Russian business has faced a new wave of problems in the United Arab Emirates, which, after Russia’s full-scale military invasion of Ukraine, has become a major hub for parallel imports and financial ties between Russia and the outside world. In recent months, UAE banks have begun “cleaning up” Russian firms, the number of which has exceeded 4,000 in the country, and have tightened control over payments.
This was reported by "Komersant Ukrainian" with reference to Russian media.
According to media interlocutors, 20 to 30% of Russian companies in the UAE have faced inspections, restrictions on operations or direct account closures. Accounts are closed even if the client did not answer a call from the bank or did not send a letter at the specified time, said Maria Chumanova, managing partner of FTL Advisers. At the same time, banks have strict requirements – sometimes it is necessary to provide and certify up to 20 documents within a day.
In the UAE, they try to identify clients whose activities are loosely connected with this country or have nothing to do with it at all. Even “real businesses with completely legitimate activities and quite significant turnover are experiencing problems,” said Stanislav Danilov, partner at Pen & Paper.
In addition, lawyers say, banks are monitoring compliance with the sanctions: accounts are closed not only for companies that have been sanctioned, but also for those who work with counterparties included in the blacklists of the United States, the European Union and the United Kingdom.
According to the international company Uppercase, last year another 100 organizations with Russian participation were registered in the UAE, 2.5 times more than in 2023. Their total number in the country exceeded 4,000, although one in seven (14%) of the previously opened companies ceased operations in the country. Companies from the retail (26%), IT (21%), and manufacturing (14%) sectors most often opened businesses in the UAE.
