Citing such failings, the Financial Action Task Force, an influential money-laundering watchdog, on Friday put the United Arab Emirates on its “gray” list.
A thriving colony of Russians in Dubai has made it a welcoming alternative to oligarch gathering spots like London’s Kensington neighborhood or the French Riviera. The Russian Business Council, a Dubai-based nonprofit, estimates that there are about 3,000 Russian-owned Emirati companies. The Russian embassy in the United Arab Emirates has said that about 100,000 Russian-speakers live in the country. About a million Russians visit each year. A Russian broadcaster, Tatiana Vishnevskaya, has built a career out of promoting life and commerce in Dubai. New real estate developments pop up “like mushrooms on a sunny day after the rain,” she recently told a tourism industry website.
A Russian company, the Bulldozer Group, owns a dozen upscale restaurants and nightclubs in Dubai, including the local Cipriani outpost. Caviar Kaspia, a French-Russian night spot, boasts of the “largest Vodka selection in Dubai.”
As in the current campaign against Russia, Dubai resisted earlier American-led sanctions against Iran, starting in 2006. Although the United Arab Emirates and Iran are opponents in regional politics, Dubai and Iran sit a short boat ride away across the Strait of Hormuz, and share trade and family ties going back centuries.
But after six years, pressure from Washington and the emirate of Abu Dhabi forced greater compliance on sanctions from Dubai’s big financial institutions, said Esfandyar Batmanghelidj, an economist at the European Council on Foreign Relations. Yet since 2019, when Abu Dhabi began reopening diplomatic contacts with Tehran, Emirati trade with Iran has quietly risen again, he said.
“They can calibrate it and turn it up and down,” Mr. Batmanghelidj added.
Emirati officials, seeking to get off the money-laundering “gray” list, are already pledging new transparency measures. Those steps could also limit the ability of sanctioned oligarchs to hide assets or move money in Dubai.
Cutting some Russian institutions off the international system for electronic bank transfers, called SWIFT, has already made it harder for them to do business with Dubai. And if Washington threatens to restrict Emirati access to the American financial system — as during the early years of the Iran sanctions — that could motivate the Emiratis to cooperate more.