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dubai – central bank The United Arab Emirates (UAE) has canceled the license of Russia’s MTS Bank Abu Dhabi, citing “sanctions risks”, as the West tightens the stranglehold on Moscow following its invasion of Ukraine.
According to a press release on Friday, the UAE bank plans to close the Russian bank’s operations within six months from the date of the decision. MTS affiliates are not permitted to open new accounts and enter into transactions unless prior obligations are liquidated during this period.
“This decision was made after considering the options available regarding the new status of MTS Bank and taking into account the sanctions risk Associated with the bank after designation,” the release said.
The development comes after mounting pressure from the United States to end trade relations with Russia.
In February, the U.S. and U.K. extended Western sanctions to Russia’s MTS, leaving the UAE’s central bank to consider options with the bank, which was licensed last year.
Earlier that month, the U.S. took a stand during a regional tour. Brian Nelson, the U.S. Treasury Undersecretary for Terrorism and Financial Intelligence, told Emirati officials during a visit to the UAE that their deepening financial ties with Moscow have hindered its efforts to isolate Russia, according to Bloomberg.
Gulf Cooperation Council (GCC) countries, including the UAE, have taken a neutral stance amid Western sanctions against Russia, which began a war on Ukraine more than a year ago.
The region’s largely impartial stance gives it economic and political opportunity and welcomes Russian wealth.
It allowed the UAE and Saudi Arabia to act as negotiators for the exchange of two prisoners between the United States and Russia in December, state news agency WAM reported.
Since February 17, 2019, the UAE has also entered into an ongoing reciprocal visa-free travel agreement with Russia, which allows valid passport holders who do not intend to work or study in the UAE or Russia the right to stay in each country for a period of Time visa-free for 90 days.
Izzat Dajani, CEO of Dubai-based Middle East and North Africa investment management and corporate advisory firm IMCapital Partners, told Al-Monitor in December that the UAE’s policies have helped strengthen the country’s real estate market and other foreign direct investment sectors.
“Ukraine and russian war Very good for the real estate market here. People point to the UAE as a safe haven, a place where they can be welcomed,” he said at the time.
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