UAE banks are tightening control over financial transactions with Russia.Photo: dynasty-uae.
The United Arab Emirates, previously recognised as one of the key areas for circumventing international sanctions, has become the epicentre of a new wave of financial difficulties for Russian businesses. Following the introduction of additional US sanctions affecting more than 50 financial institutions, including Gazprombank, local banks have sharply tightened control over payment transactions with Russian companies. This could seriously change the way many businesses that have previously used the UAE as a major hub for international payments operate, Time Ukraine Israel reports, citing Liga.net.
Deterioration of the payment situation
According to business representatives and lawyers, the situation with payment transactions through the UAE deteriorated significantly in November 2024. Previously, the processing time for payments through Dubai banks ranged from 1 to 3 days, but now it has increased to two weeks, and in some cases can reach 30 days. The process becomes even more complicated when funds are simply “hung up” in the system or returned. According to Tatyana Alekseeva, CEO of Logita Trade, a transport company, many Russian companies have faced serious financial difficulties. In some cases, the money debited from accounts in the UAE at the end of November has not yet been transferred to accounts in Russia or back to the UAE.
Strict verification and rejection of transactions
The new sanctions have obliged UAE banks to increase their scrutiny of financial transactions, in particular through correspondent accounts, which have become the main target of scrutiny. These changes have led some credit institutions to stop servicing Russian clients as they fear secondary sanctions from the US and other Western countries.
Implications for payments in the energy sector
These sanctions also have a significant impact on international payments, in particular on energy payments. According to experts, the suspension of acceptance of Gazprombank’s UnionPay cards in banks in the three countries has become a serious problem for Russian customers. This complicates financial transactions and further limits the ability of Russian companies to conduct international business.
The current situation in the UAE’s financial sector suggests that Russian companies will have to significantly adapt their strategies to overcome the new sanctions barriers, otherwise they risk losing one of the main channels for international payments.
