At least 38 businessmen or officials linked to Mr. Putin own dozens of properties in Dubai collectively valued at more than $314 million, according to previously unreported data compiled by the nonprofit Center for Advanced Defense Studies. Six of those owners are under sanctions by the United States or the European Union, and another oligarch facing sanctions has a yacht moored there. For now, they can count themselves lucky.
Since the invasion of Ukraine, much of the world has imposed sweeping sanctions on Russian financial institutions and the circle around Mr. Putin, and even notoriously secretive banking centers like Switzerland, Monaco and the Cayman Islands have begun to cooperate with the freezing of accounts, seizing of mansions and impounding of yachts.
While the United Arab Emirates has long been an investment destination for wealthy Russians, it’s now more appealing because it’s one of the countries that’s maintaining relations with their country. The flow of Russian money into the UAE through cash transfers and crypto wallets picked up as tension between Russia and Ukraine escalated, people with direct knowledge of the matter said. That has accelerated over the past two weeks, according to the people, who asked not to be identified.
That comes as the UAE is under pressure to do more about tracking the money that enters the country. The Financial Action Task Force, a Paris-based organization set up by the G7 countries to combat money laundering, on March 4 put the UAE on its “gray list” of jurisdictions that don’t do enough to uncover illicit funds. The FATF warned two years ago it may take action, yet the decision resonates even more now.
The UAE may be the most conspicuous in its position, if only because it currently holds a rotating seat on the United Nations Security Council. The Emiratis abstained from an American-backed resolution denouncing the invasion, declining to criticize Russia. And Emirati officials have reassured Russians that their authorities will not enforce sanctions unless mandated by the United Nations — where Moscow’s veto ensures against it.
The Center for Advanced Defense Studies, a Washington-based nonprofit that collects data on global conflicts, found that Putin allies owned at least 76 properties in Dubai, either directly or under the name of a close relative, and said that there were likely many others who could not be identified.
Interviews in recent weeks with dozens of diplomats, bankers, lawyers and illicit-finance experts suggest such efforts are unlikely to change Dubai’s reputation as a place where one can do business with minimal interference. The tracking of Russian money — across the world, not specifically the UAE — was a major concern raised by member states at the FATF’s plenary last week, people familiar with the matter said.
The UAE ranked in the top 10 for financial secrecy in the latest annual assessment conducted by the London-based Tax Justice Network. That put the country among the likes of Bolivia and Liberia and above Switzerland, the Cayman Islands and Cyprus.
Indeed, the Emiratis have shown a desire to cooperate, especially given the potential reputational damage to Dubai. In June 2020, Dubai police raided the penthouse apartment of the Nigerian influencer Ramon Olorunwa Abbas, known as “Hushpuppi.” A month later, he was brought to the US on fraud charges. He has since pleaded guilty, according to a court filing.
Yet the pressure to do more has only intensified in recent months. Senior executives at several large international banks said they told the UAE government that the country was headed for the FATF’s gray list. Their firms are now bearing the cost, having to spend more time and money on compliance while under greater threat of fines by regulators in Washington, they said.
There’s also the risk of complicating relationships with long-time allies. Support for U.S. and European counter-terrorism operations in the Middle East historically afforded the Emirati leadership leeway when it came to cracking down on money laundering in Dubai, according to current and former diplomats familiar with the matter. That’s now changing.
The US Treasury Department sent two senior delegations to the UAE late last year to deliver a warning to the country, saying it weakened Washington’s sanctions programs. The country’s supporters argue that if Dubai fully clamped down, another jurisdiction that’s less aligned with Western interests would take its place.
Moscow has been quietly building closer ties to the UAE and other Western-leaning Arab states for a decade, seeking to capitalize on complaints about Washington.