The desert oasis is a stumbling block to Putin’s attempts to isolate his regime

If you want to avoid the limelight, a series of islands that look like giant palm trees jutting out into Gulf may not be the best hideaway.

David and Victoria Beckham have a seven-bedroom home in Dubai’s Palm Jumeirah. This has been a magnet to the most ostentatious members the global elite.

This exclusive spot could be home to Roman Abramovich, a man who made his mark in English football.

After being sanctioned for his connections to Vladimir Putin, the ex-owner of Chelsea was reported to have been house hunting along Palm Jumeirah.

Abramovich isn’t the only one looking for refuge in the United Arab Emirates after Russia’s war with Ukraine.

After the region was made a refuge for people fleeing from sanctions, Russians are now the largest foreign buyers of Dubai property.

There are increasing concerns about the desert oasis providing financial sanctuary for oligarchs and potentially becoming a gatekeeper to cash from Moscow, which could hinder efforts to isolate Putin’s government.

These fears were further heightened when it was revealed that MTS Bank, an Russian lender, received a banking license from the UAE central bank.

MTS is part of Russian telecoms giant Mobile TeleSystems. It was owned by Vladimir Yevtushenkov, a billionaire oligarch. Since then, the UK has sanctioned the tycoon.

Officials informed that this decision would satisfy growing demand from Russian expats living in the Gulf state, who want to have access to their country’s banks. In the meantime, approval is required from Russia for the bank to open a branch in Dubai.

This comes after Sberbank closed its Abu Dhabi offices at the end of last year due to sanctions.

The UAE refused to comply with the Western sanctions regime against Russians who have links to the Kremlin. It is now considered a safe haven.

These close ties have been a blessing for the Emarati economy over recent years. At a meeting in Saint Petersburg with Putin, Sheikh Mohammed Bin Zayed Al Nahyan, UAE ruler, stated that trade between the two countries had doubled to $5bn (PS4.1bn), over the past three years. He also said that about 4,000 Russian-rooted companies are working in the Gulf state.

Valentina Matvienko (a senior Russian politician) also stated last October that the UAE was the top Arab destination for Russian investment and the largest Arab investor.

It is, therefore, not surprising that Russians have fled to the UAE for refuge. Many super-rich Russians were forced to flee from the Ukraine war because their assets were taken in New York, London, and Paris.

Dubai’s interest has led to a large increase in relocations in the last year. Betterhomes, a property broker, reports that Russians now make up the largest group of non-resident buyers.

They accounted for 15% of the company’s transactions in 2022, surpassing Britons (12pc), Indians (11pc), Italians (7pc) and French (4pc).

According to the firm, Dubai saw more than 86,000 residential sales transactions last year. This surpasses 2009’s record of 80,000. Last year saw the sale of approximately 208 billion dirhams ($PS46bn) in property, a nearly 80pc increase compared to 2021 and a 11pc rise in prices.

Tamara Getigezheva is the chief executive of Mira Estate in Dubai. She stated that “The war in Ukraine, and the impact of sanctions against Russian-speaking individuals, and their establishments, have caused wealthy investors to flee their country and seek refuge in Dubai.

“Russian billionaires and entrepreneurs are flocking to Dubai in record numbers. This has led to an increase in real estate demand. Many homebuyers want ready-to-go units and waterfront properties.

The West is starting to be concerned by the UAE’s readiness to accept Russian money.

Brian Nelson, US Treasury Under-secretary for Terrorism and Financial Intelligence, stated earlier this month that the US is determined to enforce Russian sanctions in “permissive juridictions”, which allow Russia to continue doing business with it.

Nelson, who was visiting the region recently, raised the question of the MTS bank licence. Even though the bank is not subject to sanctions, Nelson expressed concern about “financial connection with Russia, even via non-sanctioned banks”.

Despite Nelson’s comments, it appears that the White House took a more gentle approach to force the UAE to clamp down on Russia in the face of greater Western demand for oil.

After a meeting between President Joe Biden in Saudi Arabia and Sheikh Mohammed of the UAE, a joint statement was issued last July. It stated: “President Biden recognized the UAE’s efforts to strengthen policies and enforce mechanisms in the fight against money laundering and financial crime.”

Campaigners calling for the UAE to be blacklisted have not been heard. Russian oligarchs, including Vladimir Potanin (one of Russia’s most powerful men), have docked super-yachts in Dubai. In contrast, the state has been a popular destination for Russian tourists trying to reach other countries. Abramovich’s private plane has been grounded in the state since months.

It remains to be seen if Abramovich or the Beckhams will become neighbors again. They both own prime west London real estate.

The UAE’s efforts to attract wealthy Russians is not slowing down. The West appears unwilling or powerless to stop it at the moment.