UAE banks 'rejecting Russian payments for China goods': report

UAE banks are reportedly rejecting payments from Russian companies attempting to buy Chinese electronics, according to reports.

Russian businesses have been hard-hit by Moscow's invasion of Ukraine, with many countries refusing to do business with Moscow due to the threat of US secondary sanctions, particularly with the trade of dual-use goods such as electronics, according to Russian pro-government Kommersant newspaper.

Following this, Russian companies reportedly used UAE entities as a conduit to purchase Chinese goods and transfer money. 

The New Arab cannot verify the reports. The UAE has previously denied increased trade with Russia since the 2022 invasion of Ukraine and insists it is fully complying with the US sanctions regime on Moscow.

A crackdown by the US on third parties supplying Moscow with dual-use goods has led to tighter domestic controls on companies dealing with Russian businesses due to concerns about secondary sanctions, including in China.

Abu Dhabi has reportedly sent instructions to domestic companies that only Chinese goods that arrive in the UAE will be permitted, effectively banning the use of the Gulf state as a conduit for such sales to Russia.

Russia is seeking consumer electronic goods from China and other countries, which could be converted for military purposes, including commercial drones, and used on the battlefields in Russia.

While Russia and China did considerable trade in dual-use items early on in the war, Beijing has cracked down on such transactions fearing secondary sanctions. according to reports.

Moscow has purchased Shahed drones and other military hardware from Iran, which have been used extensively in the Ukraine war.