MOSCOW—Wealthy Russians are trying to move some of their wealth from Europe to Dubai as a result of Western sanctions, while crypto companies are being warned they must comply with sanctions on Russia and Belarus.
The sanctions are a result of the Russian invasion of Ukraine.
“Dubai, the Persian Gulf's financial and business center, has long been a point of interest for the very rich. And the United Arab Emirates' (UAE's) refusal to take sides between Western allies and Moscow has suggested to Russians that their money is safe there,” Learning English noted.
The UAE, which over the years has deepened its ties with Russia, has not agreed to observe sanctions put in place by Western nations. Its central bank has so far not issued guidance regarding Western sanctions.
In many cases, wealthy Russians are seeking to move money that is now in Switzerland or London, a senior banker at a large Swiss private bank and a lawyer familiar with the matter told Learning English.
The lawyer, who is based in Dubai, said his firm had received questions about how quickly it could move large amounts of money—hundreds of millions of dollars—to the Gulf Arab state.
Warning for Crypto Companies
Meanwhile, the United Kingdom’s Financial Conduct Authority’s (FCA) is warning companies in the crypto sector that it expects them to comply with sanctions imposed against Russia and Belarus.
“We are working closely with partners in government and law enforcement both here and abroad, including regulatory authorities, to share intelligence and act to prevent sanctions evasion, including through crypto assets,” the FCA said. “We also remain ready to act in the event of sanctions breaches.”
There have been concerns from the regulatory body that cryptocurrency technology could be used by Russians to get around existing economic sanctions levied against it for its ongoing invasion of Ukraine, UK Tech News said.
No Differentiation
The FCA has stated it does not differentiate between cryptoassets and any other assets, therefore it considers circumventing economic sanctions with crypto illegal under the Money Laundering Regulations (MLRS) and the Anti-Money Laundering Act of 2018.
In a joint statement, the FCA, the Bank of England and the Office of Financial Sanctions Implementation say they “remain ready to act in the event of sanctions breaches.”