UAE BANKS CLOSE RUSSIAN ACCOUNTS

Major credit organizations of the United Arab Emirates (UAE) have limited settlements with the Russian Federation, fearing secondary sanctions. Banks are actively closing accounts for organizations and individuals.

To date, UAE banks do not accept funds and do not make payments in the opposite direction, Vedomosti writes. In addition, they close accounts for enterprises owned by citizens of the Russian Federation.

Difficulties for Russian clients in the UAE appeared long before the US president issued a decree on secondary sanctions at the end of 2023. After this decree, countries such as China and Turkey dramatically changed their attitude towards clients from the Russian Federation.

Throughout 2023, control over all clients associated with Russia was strengthened in the UAE. Since September, demonstrative "purges" have begun. Large banks have begun to reduce the number of accounts with Russian passports.

At that time, second-tier credit organizations were more loyal to organizations and citizens from the Russian Federation. However, it had to be paid for. Customers purchased additional services or increased their account balance.

Since September, it is no longer possible to pay from Russia, including in dirhams. It is now almost impossible to open an account with large banks.

Direct corporate settlements between the Russian Federation and the UAE are becoming increasingly difficult. Problems happen both on the side of correspondents and on the side of credit institutions in the UAE. A number of Russian banks with accounts in dirhams are unable to use them for business payments.

Problems are observed even in organizations with Russian beneficiaries who do not receive funds from Russia and do not transfer them to the Russian Federation. Often, transfers to an account in the UAE are not credited, returning to the senders. A number of banks request explanatory documents for almost every transaction. Payments may take a long time to transfer or completely refuse to make a payment without explaining the reasons. In some cases, they may even close the account.

Large banks are tightening their policies because of their structural ownership: the share of foreign shareholders in their capital is significant. Settlements with the Russian Federation have been stopped directly now because Ak Bars Bank, which was the main channel for payments, has been sanctioned.

However, those who already have an account with one of the UAE banks generally do not encounter denial of service at other banks. To open an account, you must not be associated with sanctions in any way, be ready to invest, place deposits or account balances. In addition, some UAE credit institutions may require not to make settlements with the Russian Federation, for example, for a year.

At the same time, the volume of trade between the Russian Federation and the UAE increased significantly last year, so everything is not as bad as it may seem due to individual episodes. A lot depends on the specific credit institution, the real connection to the state, the industry affiliation of the enterprise, etc.

If the organization is not under sanctions, and politically significant persons are not involved in its management, then a decision on opening an account can be found, although sometimes it takes up to six months to open.

The chances increase if you put the documents "on the right tables" and present the deal correctly. It would not be superfluous to communicate with a credit institution in Arabic and request Islamic financing products – the policy in the Emirates is very arbitrary. The easiest way is to take one of the sheikhs as a shareholder, but this method is not available to everyone.



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