DUBAI: A Russian bank hit by US sanctions will be forced to cease operations in Abu Dhabi, the United Arab Emirates’ central bank said Friday.
MTS Bank, which had earned an Emirati licence last year, was among more than 200 entities and individuals targeted by a wave of sanctions last month on the first anniversary of Russia’s invasion of Ukraine.
The UAE central bank said in a statement that “it has been decided to cancel MTS Bank’s Abu Dhabi licence… and close the branch” in the Emirati capital “within six months”.
“This decision comes after considering the available options regarding the new status of MTS Bank, and taking into account the sanctions risks associated with the bank after the designation.”
Moody’s downgrades Signature Bank to junk, places six US banks under review
During the six-month period to “wind down its operations”, the Russian bank would be barred from opening new accounts and carrying out any transactions apart from clearing prior obligations, the central bank said.
It had announced in late February it was “studying… the available options” after the US measures.
Senior US officials visited earlier this year for talks with UAE authorities, including the central bank, on evasion of sanctions on Russia and Iran as well as money laundering and financing of groups deemed “terrorist”.
The UAE has maintained a neutral stance towards Russia’s war.
Iran, Russia link banking systems amid Western sanction
The oil-rich Gulf monarchy and its financial hub Dubai have attracted Russian professionals and businesspeople fleeing the impact of Western sanctions since the invasion in February 2022.
Some 1.9 million passengers flew in from Russia last year, Dubai Airports CEO Paul Griffiths told AFP in February, more than twice as many as in 2021.
The Russian influx has been linked to a boom in property and rental prices. The real estate sector accounts for about a third of Dubai’s economy.
In March 2022, the UAE was placed on a money laundering “grey list” by the Paris-based Financial Action Task Force, making it subject to greater scrutiny.
Comments