MTS Bank in Abu Dhabi (Photo credit: WAM Agency)
The United Arab Emirates is studying “available options” after a Russian bank, which was given a license to operate in the Gulf state, was targeted by US sanctions imposed on the first anniversary of Russia’s invasion of Ukraine.
White House Press Secretary Karine Jean Pierre announced on 24 February that “the United States will implement sweeping sanctions against key sectors that generated revenue for Putin, go after more Russian banks, Russia’s defense and technology industry, and actors in third party countries that are attempting to backfill and evade our sanctions.”
MTS Bank, approved for its license last year, was one of more than 200 entities and individuals targeted with recent sanctions by the US government.
“The Central Bank is studying now the available options regarding the new status of the bank, and appropriate decision will be taken in due course, considering the obligations incurred by the branch during the previous period,” said a statement issued by the official WAM News Agency.
The UAE maintained a neutral stance toward the war and has attracted large numbers of Russian professionals and businesses seeking a wealth haven to circumvent the western embargo.
Russians were the biggest international buyers of UAE real estate last year, while Dubai, the UAE’s financial hub, has seen Russian air passenger traffic more than double since the war began.
The sanctions imposed on MTS Bank follow the visit of the US Treasury Department’s top sanctions official to Turkiye and the UAE last month.
Brian Nelson, the Undersecretary for Terrorism and Financial Intelligence, issued a warning to countries and corporations that they could lose access to G7 markets if they do business with entities subjected to US sanctions.
Undersecretary Nelson’s trip followed a string of warnings issued last year by Treasury officials as Washington sought to increase pressure on Turkiye to enforce US-imposed sanctions.
Nelson also directed criticism at the UAE during his visit there, noting the “poor sanctions compliance” in the country. Washington has previously imposed sanctions on UAE-based companies over Iran and Russia-related sanctions evasion.
According to the Soufan Center, wealthy Russians have been able to use the UAE to evade the effect of US and EU sanctions due to the “free-wheeling economic climate long promoted by UAE leaders as well as its vibrant gold trade,” while “the lax enforcement of Russia sanctions reflects the view of UAE leadership that Russia remains a significant actor in the Middle East region, particularly Syria.”
At the same time, the UAE remains a significant US security and economic partner, contributing to selective US enforcement of sanctions regarding Russia in the Gulf emirate.