By Charles Kennedy of OilPrice.com
The United Arab Emirates (UAE), which has become an attractive destination for Russian business after the invasion of Ukraine, has increased checks and enforced stricter banking rules on Russian companies amid rising U.S. pressure on the UAE to help clamp down on sanctions evasion.
Russian companies, which initially enjoyed easy money transfers and business dealings in the UAE, especially in Dubai, are now facing tougher rules and the need for more documents and proofs, entrepreneurs and consultants have recently told Bloomberg.
The UAE is looking to come off the so-called ‘grey list’ for financial crimes of the Financial Act Task Force (FATF). Therefore, the Gulf state is unwilling to be linked with risks related to sanctions, including the Western sanctions on Russian businesses, money transfers, and the energy industry.
The banking for Russian firms in the UAE has become more difficult, and the number of rejections from UAE banks have increased, according to Bloomberg’s sources.
The clampdown on Russian firms in the UAE comes as the West is considering toughening up the sanction enforcement on evaders of the price cap on Russian oil, almost none of which now trades below the ceiling of $60 per barrel.
Last month, the United States took a tougher stance on the sanctions against Russia and sanctioned two vessels for violating the price cap.
Just last week, the U.S. imposed sanctions on three maritime companies based in the UAE and three vessels owned by the companies for shipping Russian oil sold above the price cap.