The Emirate of Ras al-Khaimah is smaller. Recently, it has gained a reputation as the "Las Vegas of Arabia" due to expensive projects such as the construction of luxury villas in the Gulf, large casinos and shipyards for the production of yachts. The main clients of this emirate, which together with six others make up the United Arab Emirates, come from Russia. Russians buy mansions that were offered for $5,5 million. They pay 20% of the purchase price in advance, writes the Wall Street Journal - in cash.
Western sanctions have launched a Russian gallop on the UAE. More than half a million Russians entered the Emirates last year - an increase of 60%. And it's not just tourists: many Russians have moved there with their businesses and assets, buying real estate and opening businesses, including people very close to the Kremlin.
Few other countries have benefited as much from sanctions against Russia as the Emirates. Russian money, oil, gold and rich emigrants are pouring into the Gulf. The Emirates is clearly particularly attractive as an alternative financial centre.
According to local reports, the Emirates is teeming with middlemen acting on behalf of sanctioned Russians and other companies. "The UAE has built an infrastructure where Russians can easily invest all their money either in cryptocurrencies or local currency," says Middle East expert Andreas Krieg of King's College London. "This also gives them access to international financial flows that they previously had in London or New York." And that's how they bypassed the sanctions."
The West is applying pressure
Representatives of the US, the EU and the UK recently appeared in the Gulf to call on the Emirates to take action against sanctions violations. Emiratis swear that their banks avoid sanctioned individuals.
But Russian money has apparently become too important for Dubai to turn down. The Emirates is becoming an alternative trade partner for Russia: exports to the Gulf state increased by 71% last year. These are primarily agricultural products, but also gold and precious stones.
After the invasion of Ukraine, many multinational banks, logistics companies and precious metals refiners stopped trading in Russian gold, which was usually shipped to London, the gold trading hub. The UAE is now a trading center for Russian gold. According to a Reuters report, the Gulf state imported 75,7 tons of Russian gold worth $4,3 billion last year, up from just 1,3 tons a year earlier.
In addition, the Emirates buy Russian oil at phenomenally low prices and use it for the domestic market, while selling more of their own oil derivatives at double the prices abroad. This trade is within the scope of the Western sanctions regime. Imports of Russian crude oil to the UAE tripled in 2022 to a record 60 million barrels, according to data from the "Kepler" agency, which specializes in raw material market analysis.
From a Western perspective, the so-called parallel import into Russia via the UAE is particularly problematic. Deliveries of electronic goods from the Emirates to Russia increased sevenfold and became the country's largest export category to Russia. Shipments of microchips increased 15 times. The Emirates also sold 158 civilian drones worth nearly $600.000 to Russia last year.
The Emirates has positioned itself as a neutral regional power, balancing its historically close ties to the West with increasingly close contacts with Russia and China. But the West is losing patience with its ally, which is helping Russia circumvent sanctions.
The United States fears that Dubai will become a shipping center for so-called dual-use goods such as electronics. According to the US Treasury Department, the UAE exports these goods from the US to Russia, including computer components that could also be used in the war against Ukraine.
The United States could therefore decide to introduce the so-called secondary sanctions that would limit the Emirates' ability to do business with the US or with the US dollar as a currency. However, Washington is reluctant to take such drastic measures. So far, it has added only individual companies in the Emirates to its sanctions list.
Washington is trying to bind the Gulf states more strongly to itself again. But both in Abu Dhabi and in Riyadh, it was not forgotten how the world power that was supposed to guarantee their security reacted after the violent attacks by Iran and its allied militias with unmanned aerial vehicles: not at all, that is. only rhetorical.
Now the Emirati air force wants to train alongside China's air force for the first time - a remarkable step for the tiny Gulf nation, which has long relied on US fighter jets and weapons. At the same time, the Emirates are parallelly involved in the anti-Silk Road and cooperate closely with Israel, the USA and India.
Recently, the anti-Western alliance BRICS (Brazil, Russia, India, China and the Republic of South Africa) announced that, in addition to Saudi Arabia, Iran and Egypt, they would also include the UAE. With growing ties to US rivals and growing economies like India, the Emiratis seem to believe that a new multipolar world order will emerge and the world will no longer be dominated by the US. Anwar Gargash, personal adviser to Sheikh Mohammed Bin Zayed, ruler of the UAE, said last year that Western hegemony over the international system was "counting its last days".
(WELT)
Translation: Mirko Vuletić
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