As retaliation for Vladimir Putin’s invasion of Ukraine, the United States, the U.K. and the European Union have begun aggressively sanctioning the country. It’s been cut off from the Olympics and any Western entertainment company you could name.
They’ve also begun seizing the yachts, houses and other assets of Russian oligarchs who are listed as being close to Putin, the Kremlin on the invasion itself.
Now, wealthy Russian businessmen are now flocking to the United Arab Emirates, and especially Dubai.
No Sanctions In Dubai
The UAE has not cut ties with Russia, and it abstained on a U.S.-led resolution to condemn the invasion of Ukraine at the U.N. Security Council.
It is not sanctioning anyone affiliated with Russia, and is still welcoming direct flights from Moscow.
So this explains why Roman Abramovich, an oligarch who owns Chelsea Football Club, has recently been spotted house hunting in the Palm Jumeirah, a manmade island filled with luxury houses.
Abramovich is being eyed by the U.S. for aggressive sanctions, after receiving them from the U.K. and the European Union.
Ukraine President Volodymyr Zelensky has reportedly advised President Joe Biden to hold off sanctioning Abramovich, who he said could act as a go-between with Russia to negotiate peace.
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Russian businessmen are also attempting to move assets to the UAE, and jets belonging Abramovich and other high-profile Russian oligarchs have been spotted in the area, Bloomberg reports.
U.S. Treasury officials have raised concerns that CIPS — the Chinese international yuan payment system — may be being used to route money to the UAE and circumvent U.S. sanctions, now that Russia has been kicked off the SWIFT global transaction messaging system.
But many Russian businessmen with legitimate sources of revenue and no ties to the state government are worried about being caught in the crossfire, and are trying to restructure ownership of their assets so as not to be sanctioned.
The UAE Comes Under Fire
Putin’s actions and the Russian oligarch’s migrations to the UAE is bringing unwanted attention to the country’s unofficial open door policy.
The Financial Action Task Force, a global financial crimes watchdog group, has placed the country on its gray list, alongside Panama and South Sudan, saying it doesn’t do enough to prevent the influx of money from criminal syndicates, or to stop illicit money laundering that goes towards funding terrorism.
In response, the UAE government stated it had a “strong commitment” to working closely with FATF on areas for improvement.
The UAE seems to be actively courting the Russian tourists and taking measures to make them feel right at home.
In addition to a number of glitzy hotels and nightclubs that facilitate many a glamorous evening excursions, Russian style ice cream is available at the La Mer beachside development, and other Russian-style staples have been found in local grocery stores.
