The desert oasis thwarts efforts to isolate Russia’s billionaires

MTS is a unit of Russian telecom giant Mobile TeleSystems, which was controlled by billionaire oligarch Vladimir Yevtushenkov before the start of the Russian invasion last year. The tycoon has since been sanctioned by Britain.

Officials said the decision would meet growing demand from Russian expats in the Gulf state who want access to their home country’s banking market. The bank will open a physical branch in Dubai, subject to approval by the Central Bank of Russia.

Russian billionaires and entrepreneurs are flocking to the UAE.

Russian billionaires and entrepreneurs are flocking to the UAE.Credit:one

It comes after Sberbank was forced to close its offices in Abu Dhabi late last year due to sanctions.

The UAE has refused to follow the western sanctions regime imposed on Russians with ties to the Kremlin, essentially making it a safe haven.

These warm relationships have been a boon to the Emarati economy in recent years. In October, UAE ruler Sheikh Mohammed Bin Zayed Al Nahyan, at a meeting with Putin in Saint Petersburg, said trade between the two countries had grown to US$5 billion (US$7.2 billion) over the past three years. dollars), adding that there are about 4,000 companies with Russian roots in the Gulf state.

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Valentina Matvienko, a senior Russian politician, also noted last October that the UAE is the top Arab destination for Russian investment and the largest Arab investor in Russia.

It is therefore not surprising that Russians have sought refuge in the UAE. After the war in Ukraine, many super-rich Russians faced asset confiscations in other cities like New York, London, and Paris, and had few other places to go.

Interest in Dubai has led to a huge surge in relocations over the past year, with real estate agent Betterhomes reporting that Russians are now the largest group of non-resident buyers.

In 2022, they accounted for 15 percent of the company’s transactions, ahead of Britons at 12 percent, Indians at 11 percent, Italians at 7 percent and French at 4 percent.

According to the company, Dubai recorded a total of more than 86,000 residential property sales transactions last year, beating the previous record of 80,000 set in 2009. Properties worth about 208 billion dirhams ($81 billion) were sold last year, a Increase of almost 80 percent compared to 2021, while prices increased by 11 percent.

Russian oligarch and former Chelsea owner Roman Abramovich is among those seeking refuge in the UAE.

Russian oligarch and former Chelsea owner Roman Abramovich is among those seeking refuge in the UAE.Credit:AP

Tamara Getigezheva, Managing Director of Mira Estate, a luxury real estate company in Dubai, said: “The war in Ukraine and the impact of sanctions on Russian speakers and their establishments have prompted wealthy investors to flee their countries and seek sanctuary in Dubai .

“[Russian] Billionaires and entrepreneurs are flocking to the UAE in record numbers, leading to a surge in demand for real estate. Most homebuyers are looking for ready-made units and waterfront real estate.”

However, the UAE’s willingness to accept Russian money is beginning to raise alarms in the West.

Earlier this month, Brian Nelson, the US Treasury Department’s undersecretary for terrorism and financial intelligence, said the US was determined to aggressively enforce Russian sanctions in “permissible jurisdictions” that continue to do business with Russian companies.

Visiting the region in recent weeks, Nelson addressed the issue of the MTS banking license and raised concerns about “financial connectivity with Russia, even through unsanctioned banks,” even though the bank is not subject to sanctions financial times reported.

Despite Nelson’s comments, the White House appears to have taken a softer approach in forcing the UAE to crack down on Russia amid broader western demand for oil.

Last July, following a meeting between President Joe Biden and the UAE’s Sheikh Mohammed in Saudi Arabia, a joint statement said: “President Biden recognized the UAE’s efforts to strengthen its policies and enforcement mechanisms in the fight against financial crime and illicit money flows. “

Calls by activists to blacklist the UAE have so far fallen on deaf ears. Oligarchs like Vladimir Potanin, one of Russia’s richest men, have docked their superyachts in Dubai, while the state has become a popular destination for Russian tourists who have trouble reaching other countries. Abramovich’s private jet has also been grounded in the state for months.

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Whether Abramovich and the Beckhams will become neighbors again – both have owned prime properties in west London – remains to be seen.

But the UAE’s attempt to woo wealthy Russians and their money shows no signs of slowing down. And right now, the West seems hesitant or powerless to do anything about it.

Telegraph, London

https://www.smh.com.au/business/the-economy/the-desert-oasis-thwarting-efforts-to-isolate-russia-s-billionaires-20230215-p5cklw.html?ref=rss&utm_medium=rss&utm_source=rss_business The desert oasis thwarts efforts to isolate Russia’s billionaires

Brian Lowry

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