The UAE has canceled the license of Russia’s MTS Bank, giving the lender six months to complete operations in the country, citing “sanctions risks” associated with the bank.
The decision comes as the UAE faces pressure over US concerns that the Gulf country is providing an economic bailout to Russia amid its invasion of Ukraine.
In a statement on Friday, the UAE Central Bank announced that it had “decided to cancel the Abu Dhabi license of MTS Bank, to terminate its operations within six months from the date of the decision…. and close the branch”.
During the six-month period to “wind down its operations”, the bank would be prohibited from opening new accounts and carrying out any transactions other than clearing previous obligations, the central bank said.
MTS Bank, which has branches in Moscow and Abu Dhabi, was included in a sanctions list imposed by the US Treasury in February as part of a US crackdown on Russian sanctions evasion.
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Friday’s announcement is a step back from the UAE, which initially defended its decision to grant MTS a license after the US nomination, saying the bank “contributed to supporting legitimate trade between the two countries and servicing the Russian community in the UAE “.
Economic ties between the UAE and Russia have increased since the invasion of Ukraine. Russians were the top buyers of real estate in Dubai last year. The flashy Emirate has attracted everyone from Russian oligarchs to tech workers looking to protect their assets from sanctions and escape the Russian military draft.
Meanwhile, non-oil trade between the two grew 57 percent in the first nine months of 2022, breaking all records.
In a sign of Washington’s frustration, US officials expressed unusual public concern that Russia was able to evade sanctions and export controls as a result of its economic ties with its ally, the UAE.
Earlier in March, a senior US Treasury official labeled the UAE a “focus country” for the US, as it seeks to strangle Russia’s ties to the global economy.
“We are particularly concerned about increases in trade with Russia on the types of goods that can be used on the battlefield and those that are assisting designated Russian entities,” said Elizabeth Rosenberg, Treasury’s assistant secretary for terrorist financing and crimes. financial.
The UAE has sought to defend its position as the region’s main business and trade hub amid concerns about financial regulations. In March 2022, the Paris-based Financial Action Task Force placed him on a money laundering “grey list”, subjecting him to increased scrutiny.
Like its larger neighbour, Saudi Arabia, the UAE has moved closer to Russia and China in recent years as part of a more independent foreign policy streak.
Washington has sanctioned Emirati companies for helping Iran evade sanctions. Abu Dhabi’s talks with Washington to acquire the F-35 fighter jet broke down over concerns that Beijing would gain access to sensitive US technologies.