{"id":1711,"date":"2022-03-11T17:07:17","date_gmt":"2022-03-11T17:07:17","guid":{"rendered":"https:\/\/worabia.com\/news\/2022\/03\/11\/why-is-the-uae-a-hot-spot-for-russians-dodging-sanctions-2\/"},"modified":"2022-03-11T17:07:17","modified_gmt":"2022-03-11T17:07:17","slug":"why-is-the-uae-a-hot-spot-for-russians-dodging-sanctions-2","status":"publish","type":"post","link":"https:\/\/worabia.com\/news\/top-trends\/1711\/","title":{"rendered":"Why is the UAE a hot spot for Russians dodging sanctions?"},"content":{"rendered":"
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On its website, Dubai-based Russian Emirates lifestyle magazine offers readers a choice of frequently asked questions. They include daily questions about where to find Russian food in the UAE and whether there are Russian-speaking doctors there. But by far the most popular question in the Russian-language magazine is this, with over 83,000 views: “Can I get UAE citizenship?”<\/p>\n

In the last two weeks – that is, since Russia invaded Ukraine and as a result the Western nations imposed sanctions – the readership of the Russian Emirates website has almost doubled to almost 300,000 views in one week.<\/p>\n

This is a trend that is likely to continue, experts say, as Russians look for ways to avoid sanctions and secure their wealth. Some are probably also trying to escape what they see as an increasingly dangerous political situation at home.<\/p>\n

An oil industry expert who visited the emirate of Dubai this month told DW about a tangible change in the atmosphere there. “There is a sense that this is an incredible change in the game, in terms of the inflow of funds into Dubai as a result of the withdrawal of the Russians. [their country] and seeking financial shelter, “they said.<\/p>\n

Elsewhere, there have been reports of private jets of Russian oligarchs flying back and forth from Moscow to Dubai. A Ukrainian newspaper has reported suspicions from the local intelligence service that the oligarchs were moving private property to Dubai for security.<\/p>\n

Open source researchers using maritime traffic sites have spotted several superyachts moored in Dubai as well. Because the UAE has not imposed the same harsh sanctions on Russia, superyachts are safe there.<\/p>\n

Invisible increases?<\/h2>\n

Despite the long-term security relationship with the US, the UAE has tried to avoid taking part in the Russia-Ukraine war and has not imposed sanctions. <\/p>\n

As a result, Russian-speaking business advisers in Dubai have told the international media that there has been a huge increase in requests for information from inside Russia.<\/p>\n

“There is growing concern that Dubai will indeed become an even bigger hub for Russian oligarchs’ money,” said Jodi Vittori, a professor at Georgetown University in Washington and an expert on corruption, illegal financing and government corruption.<\/p>\n

The flow of illegally earned Russian profits has been washing away Dubai since the late 1990s, added Vittori, who had previously been assigned to NATO’s anti-corruption task force.<\/p>\n

But it will be difficult for anyone to say how much growth there can be now. “Because most of it will not be visible,” Vittori explained.<\/p>\n

This is because the UAE authorities do not actually collect the relevant information, said Maira Martini, a researcher at Transparency International.<\/p>\n

“Corruption investigators mainly had to rely on documents that leaked when they were going to find out who owns what in the UAE,” Vittori explained.<\/p>\n

Genuine improvements?<\/h2>\n

Thanks to increased scrutiny by organizations such as the Financial Action Task Force or the FATF, a global watchdog for money laundering, there have been some recent changes to the rules, Martini said.<\/p>\n

Earlier this month, after a year of scrutiny, the FATF placed the UAE on the so-called “gray list”, which means “a jurisdiction under increased scrutiny”.<\/p>\n

<\/div>\n

The UAE had come up with a number of new rules to better control potentially illegal funding, although Martini and Vittori agreed that they had not actually done much to enforce those rules.<\/p>\n

“Now, if you start a company in the UAE, they will eventually ask you who is really behind it,” Martini told DW.<\/p>\n

“Despite most company ownership rules, it would still be easy to hide wealth in the UAE,” Martini said. The UAE, for example, has 39 different company registries in its seven emirates. “How can this be an effective system?” Martini was arguing. “It’s a mess.”<\/p>\n

There are also more than 40 of what are known as “free zones” in the UAE, mainly in Dubai, where foreigners can locate (or relocate) companies.<\/p>\n

“And with real estate or venture capital, no one is going to ask you questions,” Martini said.<\/p>\n

Buying real estate in the UAE is comparatively frictionless and offers investors a residence visa, without the need for local sponsorship. The bureaucracy of buying an apartment or starting a business is minimal and cash is king, the researchers found.<\/p>\n

Investing in real estate worth about $ 272,000 (\u20ac 185,000) gives the buyer a three year UAE visa. Investing about $ 1.36 million (\u20ac 1.18 million) buys a five-year visa. Ordinary upper-middle-class Russians, who want to avoid their own government taking over their business or collapsing financially in their homeland, may well have the funds to build a safe haven here as well.<\/p>\n

The Organized Crime and Corruption Reporting Program, a global network of investigative journalists, manages a database that includes foreign assets declared by Russian politicians under Russian law. In the UAE, only 62 properties – including garages, apartments and apartment buildings – are registered.<\/p>\n

Why the UAE?<\/h2>\n

Of course, the UAE is not the only place where wealthy people escaping sanctions could hide money. There are 23 countries on the FATF blacklist, including Pakistan, South Sudan, the Cayman Islands, Yemen and Morocco. However, some of these nations are now supporting efforts to cut Russia off financially, and there are other reasons why the UAE remains attractive.<\/p>\n

“It’s a unique location,” Vittori explained. “It’s not a crossing point like the Cayman Islands, it’s more of a stopover for illegal funding.”<\/p>\n

Dubai also has a lot of what Vittori calls “net money”. Many multinational companies operating in the Middle East are based here and operate legally.<\/p>\n

“No one invests in ‘dirty money’ sites because everyone knows it is dirty. It is very obvious,” Vittori said. “So it is the combination of clean and dirty that makes Dubai so attractive.”<\/p>\n

Dubai has also long been a popular visa-free holiday destination for Russians, attracting about 730,000 Russian tourists in 2019, before the pandemic limited travel. About 100,000 Russian-speakers are believed to be living in the UAE at present, with about 40,000 from Russia and the rest from post-Soviet countries.<\/p>\n

The political situation is also favorable. Each of the UAE emirates is governed by a monarchy based on tribal power. Human rights activists describe the emirates as authoritarian, with no real political opposition, and where civil society, freedom of speech and the free press are being violated.<\/p>\n

Privacy, stability, speed<\/h2>\n

That means less control by journalists or activists, Vittori said, while at the same time there is comparative political stability.<\/p>\n

“They may not care about the stability of their home, but when it comes to where they keep their money, kleptocrats and corrupt people care about law and order,” added Transparency International’s Martini.<\/p>\n

He believes there are two other main reasons why the UAE is an excellent haven for illicit profits.<\/p>\n

First, the secrecy surrounding economic transactions and, second, the fact that the UAE “does not cooperate too much with other countries on these issues,” he said.<\/p>\n

The FATF reported that Dubai received about 300 requests for foreign assistance between 2013 and 2018, but only acted on 89 of them.<\/p>\n

“[UAE authorities] “They are very slow and certainly not precautionary.” “If, for example, a person moves there naturally, it would be very unlikely to be extradited. “All these qualities make it very, very attractive to those who want to avoid sanctions or hide wealth.”<\/p>\n

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Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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