Skip to content Skip to Search
Skip navigation

UAE reviewing status of Russian bank MTS

The UAE granted a licence to Russia's MTS Bank only weeks ago Creative Commons/Epifantsev
The UAE granted a licence to Russia's MTS Bank only weeks ago

The central bank of the United Arab Emirates (CBUAE) has said it is assessing the status of MTS, a Russian bank to which it gave a licence only weeks previously.

Marking the first anniversary of the Russian invasion of Ukraine, the US Treasury and the British foreign office said that they were sanctioning MTS Bank, a subsidiary of Mobile TeleSystems, Russia’s largest mobile telephone operator. 

In a statement, the UK specifically identified MTS as being among four Russian banks along with 90 other Russian companies that it was adding to existing sanctions. The UAE granted a licence to MTS in early February.

The UAE central bank subsequently said on Friday that it was “studying the available options regarding the status of the new bank, and will take the appropriate decision in this regard at the time, taking into account the obligations incurred by the branch during the previous period.”

The UAE has insisted that it has licensed MTS to deliver services to the many thousands of Russian nationals and businesses who have come to the UAE following the Ukraine invasion.

The Financial Action Task Force (FATF), an international watchdog based in Paris, said that it was keeping the UAE on a so called grey list which requires financial institutions around the world to maintain higher due diligence on transactions emanating from the emirate and individuals resident in it.

FATF placed the UAE on the grey list in March last year. The federation has taken significant steps to counter accusations that it provides a safe haven for dirty money and questionable individuals from around the world. 

However, Brian Nelson, US Treasury under-secretary for terrorism and financial intelligence, raised the issue of the Russian bank’s licence on a visit to Abu Dhabi at the end of January and early this month.

The UAE has tried to maintain a neutral stance following the Russian invasion of Ukraine.

Essa Kazim, governor of Dubai International Financial Centre (DIFC), said it had seen little interest from Russian financial firms.

“There is no interest of Russian companies to come here – I have not seen any,” he said.

“In order for a Russian company to be licensed here, our regulator has to feel comfortable with their counterpart in Russia and that usually happens through signing memorandums of understanding to be able to share mutual information.

“That has not happened. And I don’t see that happening in the near future because the prerequisites are not still there.”

DIFC chief business development officer Salmaan Jaffery added: “There are no regulated Russian entities in the DIFC.

“Even before the current crisis, we’ve had no basis for working or accepting applications from the Russian central banks and they are below our risk appetite.”