UAE grants license to Russian bank, raising concerns over Abu Dhabi-Moscow ties

The United Arab Emirates approved a license for Russia’s MTS Bank to operate in the country, according to information on the UAE central bank’s website. 

The move risks heightening concerns that the Gulf state could become a financial haven for Russia as several Western states have imposed strict sanctions against Moscow over its invasion of Ukraine. 

MTS Bank is a subsidiary of Russia's largest mobile operator Mobile TeleSystems.

Granting Russia's MTS bank a license to operate in the #UAE directs even more financial flows from #Russia to the Emirates

An integral part of the UAE's network centric statecraft to become a key hub among often competing nodes

US treasury is concernedhttps://t.co/U1BephFO0p

— Dr Andreas Krieg (@andreas_krieg) February 8, 2023

The UAE is home to tens of thousands of Russians, many of whom moved to the UAE following Moscow’s invasion of Ukraine in an attempt to escape being conscripted into the Russian army or circumvent Europe’s financial restrictions. 

Many have complained about the difficulty with opening new bank accounts, according to the Financial Times. MTS is the first foreign bank in many years to receive a license to operate in the UAE and could meet the rising demand for banking services for Russians in the country.

Abu Dhabi’s financial ties with Moscow have strengthened since the invasion, causing alarm in the United States and other western countries.  

The US Treasury undersecretary for terrorism and financial intelligence Brian Nelson raised concerns about the bank during a visit to the UAE last week, and "conveyed broad concerns about financial connectivity with Russia, even via non-sanctioned banks," according to the FT. 

This comes as the UAE was placed on a list of countries being supervised by the Financial Action Task Force, an international anti-money laundering watchdog, last year.