OROn the runway at Dubai Airport, halfway down its main runway, a small terminal has been doing brisk business this month. The daily flights have thrown out dozens of Russians, many of them among the wealthiest figures in Vladimir Putin’s inner circle.
A brief VIP welcome and limousine ride later, and the oligarchs are in a world that cares little about Moscow’s invasion of Ukraine or attempts to punish Putin, and has instead willingly embraced its enablers.
Perhaps more than anywhere else in the world, Russian oligarchs and other cash are welcome in Dubai, along with their riches, which are flooding the United Arab Emirates in unprecedented numbers, often by discreet means.
The UAE has not followed Western governments in using sanctions as retaliation for the invasion of Ukraine. Bankers, estate agents, car dealers and marinas report extraordinary demand for homes, sports cars and moorings as affluence settles into an oil-rich monarchy that has charted its own course in Putin’s Russia. and is not afraid to expose blatant tensions. with the US in doing so.
Transactions, from elite property sales to leases, are largely done in cryptocurrencies, but some have been direct transfers from Russian financial entities linked to sanctioned tycoons, a regional intelligence source told the outlet. Observer. Such moves undermine US and EU sanctions on allies of Russian leaders and are a powerful lure for the next tier of Russian businessmen who fear the same fate.
real estate agents in Dubai are reporting one of the biggest bull markets in history, as Russian investors snap up apartments on sight, either buying them outright or paying a year’s rent in advance. “It’s been amazing,” said Alan Pinto, leasing consultant at Espace Real Estate in Dubai Marina.
“A radical number of Russian investors are buying units. Even the tenants; We have had a lot of calls. They transfer your funds through crypto. They have a middleman who will do it for them and then the cash goes to the owners.”
Rumors are widespread among real estate agents in Dubai that the billionaire and former owner of Chelsea Football Club, roman abramovich, is in the market for a luxury base on the city’s coveted waterfront. One of his planes has been a regular visitor to the airbase, and a yacht linked to him has been moored in the nearby waters of the Gulf.
Abramovich’s properties they are being scrutinized around the world, including in the French territory of St Barts in the Caribbean, where he is a major owner of luxury homes on Gouverneur Bay, near resorts owned by other oligarchs.
He is believed to have financed substantial improvements to public facilities, including roads and car parking, and gained favor with local authorities.
“It will be the same in Dubai,” said a real estate agent who sold two luxury properties, valued at up to $20 million, to Russian investors in the last three weeks. “They know how to deal with local authorities and be good neighbors.
“A lot of the new investors are very discreet,” Pinto said. “They will never buy directly, they get companies to do it for them.”
As the oligarchs’ jets continue to travel between Moscow and Dubai, so do commercial flights. There are no signs that the flow of money between the two cities is slowing and there has been little local reaction to a move in early March by the global financial crimes watchdog, the Financial Action Task Force, to put the Emirates United Arabs in their “grey” listmeaning that the provenance of some money in the UAE could be considered opaque.
Among bankers, power brokers and global tycoons, the UAE has long been known as a receptive investment environment that asks few questions. A residence permit and a bank account can be obtained within 30 days of registering a company. Permanent residence can be purchased for the price of a luxury villa: about $1.5 million.
Employees of major banks may soon sign up.
Goldman Sachs was one of the first US banks to announce the closure of your Russian business. It had around 80 employees in Moscow before the conflict, about half of whom now relocate to Dubai. A small number of JP Morgan’s 160 employees in Moscow are also moving, though many employees are still in Russia, moving operations there. The easy availability of Dubai visas is understood to have played a role in the choice to relocate.
Private bank Rothschild, whose wealth management unit has decided to stop accepting new Russian clients, is also said to be moving some of its Russia-based staff to the Emirates. The bank did not respond to a request for comment.
The UAE government has claimed to have taken significant steps to regulate the inflow of money. His quick embrace of Russian wealth at a time of global scrutiny of Putin’s financial czars may put that claim to the test. But even more open to challenge is the relationship between the United Arab Emirates and Washington, as Emirati leaders grow closer to China, which as well as being a geopolitical rival is emerging as the potential center of an alternative financial system.
China’s cross-border payment system, Cips, is being mooted as a replacement for Swift, a development that could change the nature of global finance and dilute the impact of sanctions on Russia. While such a move does not seem likely, at least in the short term, Emirati leaders have not been shy about showing their displeasure with US President Joe Biden, who they believe has walked away from a long-standing strategic partnership, at a time when that Putin has been prepared to embrace them.
The war in Yemen has widened the gap. In January, Houthi forces claimed responsibility for an apparent drone strike in Abu Dhabi that killed three people and set off flames at an oil storage site.
“They have been particularly upset about Yemen and the fact that they did not receive a phone call from Biden after Abu Dhabi was attacked by Houthi-installed drones and rockets,” said an expat in Dubai with knowledge of the government’s position.
Julien Barnes Dacey, head of the Middle East and North Africa program at the European Council on Foreign Relations, said: “At first glance, the UAE seems to think they can get around US sanctions, but it may be too soon. so that they have internalized what this Western campaign of sanctions against Russia really means.
“It’s hard to know how much fits into the recent sense of Emirati coverage, and whether they are actively seeking to send a message to Washington that they are frustrated with the US position in general and are happy to go their own way. .”
In Dubai, the bling is back. Boulevards that were silent during the peak of the pandemic are buzzing with the roar of sports cars, some driven by locals, others by young Russians.
Towering over them is the tallest building in the world, the Burj Khalifa, which shines like a giant Disney castle with all sorts of light shows. A Russian family is taking pictures of the building at sunset. “Soon it will be red, blue and white,” one of the visitors tells his Emirati host, referring to Russia’s tricolor flag. “I’ll fix it,” the host replies with a laugh.