Wall Street Journal: Dubai has become a destination for Russian money and companies seeking sanctions without sanctions

London – “Al-Quds Al-Arabi”: The Wall Street Journal published a report prepared by Benoit Faucon and Worry Jones, in which they said that Russian money and companies were flowing to Dubai due to the low taxes and the absence of sanctions imposed by Western countries on the rich and Russian companies.

The authors said that Dubai has become the preferred international hub for Russian companies and wealthy people seeking refuge to run their businesses, protect their money and avoid the sanctions arising from the Russian invasion of Ukraine.

They pointed out that the largest Russian oil tank company has opened a store in Dubai, and rich Russians are investing in luxury apartments. Dubai also attracted merchant merchants, beginners and employees of Western companies that had left Russia.

Behind these moves is a decision by the UAE and its main commercial center not to impose US and European sanctions on Russia, as the UAE and Dubai try to maintain a neutral position despite their long security partnership with the United States.

The Russians who decided to move to Dubai found a vibrant and vibrant community of Russians numbering about 100,000 Russian speakers, and other benefits such as easy immigration laws and no income tax. And the pace of Russian tourism to Dubai has increased as flights with Moscow have not stopped. “Dubai has set appropriate conditions to attract Russians who want to seek safe haven for themselves, their families and their assets,” said Rasha Halawa, an economist at the Atlantic Council.

Western officials have asked the UAE to restrict trade with Russia, but without a response, while other countries such as Turkey and Kazakhstan welcome the Russians, and India continue to buy Russian oil. However, Dubai’s status as a nerve center for the flow of money has worried Western diplomats, specifically about the possibility of using the emirate as an escape route from sanctions.

“I do not ask them to be part of the sanctions,” German Economy Minister Robert Habeck said during a visit to the UAE in March, “but I do ask them not to take advantage of European and US sanctions. ” A spokesman for the UAE’s Foreign Ministry declined to answer questions from the newspaper, citing a government statement last week which “emphasized its commitment to working with the international community to tackle financial crime”. and remind businessmen of their duties with regard to the international sanctions program, “although the statement did not specifically mention the imposition of the sanctions it imposed. Countries on Russian and Russian companies. The newspaper quoted political analyst Abdul Khaleq Abdullah quoted as saying that the UAE’s openness to the Russians reflects the country’s neutral position, “when it comes to US and European sanctions, we are selective.”

Prior to the war in Ukraine, the Russian state-owned company “Sofcomflot” operated its business from St. Petersburg and from there oversaw its fleet of oil tankers, while managing its European bank accounts from Cyprus, and its fleet of 120 tankers to companies across the world leased. , including France’s Total Energy and Saudi Aramco. After the sanctions were imposed, the company could no longer work with insurance companies in Europe, as well as with banks and traders.

Current and former employees said the company has decided to move some of its operations to Dubai, where executives are confident the government will not impose sanctions on its subsidiaries. Sofocomflot did not respond to a request for comment. With a base in Dubai, the company can get services that keep its tankers afloat, including oil loading, maintenance, crewing and banking, shipping industry officials and sanctions experts said.

The arrangements have provided a lifeline to Russian oil exports, as oil companies such as state-owned Rosneft use the company’s tankers to ship crude oil, according to shipping data. Energy export sources make up 40% of the Russian budget. The newspaper notes that most of the people and companies that set up branches in Dubai are not subject to fines.

At the beginning of March, Sofia Kostunionina decided to move her start-up business, Speclab Limited, from Petersburg to Dubai; Because sanctions against Russia will prevent it from paying partners abroad. Her company relies on bringing people from all over the world to learn the language face-to-face or online, and if it had stayed in Russia, it would have closed its doors. “It took Sofia only a few weeks to open a branch in Dubai.” Many companies move their employees to Dubai because it is easy to transfer employees from Russia there, “she said. We do not have many options. ”

The newspaper said job search sites were looking for Russian-speaking people to work in hotels, restaurants and salons across Dubai. Workers in the Dubai financial sector said they were receiving requests from businessmen to move their operations from Western Europe, where European banks had closed Russian accounts. Banks in Dubai are helping Russian businessmen build themselves, although they are asking questions about potential customers to avoid individuals being sanctioned. A company working to help wealthy Russians move their assets to the UAE said it had not helped a single Russian customer since 2016, but after the invasion of Ukraine in February, it helped about 15 Russians who make up a third of its customers.

The company said the value of the assets – companies, money and other forms of wealth – that help transfer it to Dubai is $ 4.5 billion. They moved their residence in Russia, company records and bank accounts from Luxembourg, Cyprus, London and Zurich to Dubai.

VirtueZone, which helps build companies in the UAE, said its Russian customers, although they represent a small part of its operations, have doubled this year from last year. Western companies like Google and JPMorgan have also moved their Russian employees to Dubai. Russian wealth is also evident in Dubai, as the ship “Madame Gu”, owned by MP Andrei Sloch, was anchored in Dubai Harbor two months ago.

Dubai has turned into a busy runway for Russian planes, including that of Chelsea club owner Roman Abramovich. The Russians’ interest in Dubai has led to an increase in the demand for real estate there. At the beginning of the war, Russia prevented people from withdrawing only $ 10,000 in hard currency, an amount that increased to $ 50,000, but the Russians said they could send money to real estate developers’ accounts and meet their obligations to rent apartments and houses for sale in friendly countries.

Russian banks allow individuals to transfer hundreds of thousands of dollars into the accounts of real estate developers in the UAE. This has increased the demand for the purchase of real estate in buildings and skyscrapers under construction. In one of the skyscrapers under construction, 330 flats were sold, mostly to Russians.

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