The United Arab Emirates has become a new safe haven for the wealth of Russia’s sanctioned rich, Swissinfo reports
Swiss sanctions against wealthy Russians and their businesses have forced them to move their money elsewhere, most notably the UAE, SwissInfo reported on Friday.
Although not an EU member, Switzerland abandoned its traditional neutrality last year and joined the bloc in adopting sanctions against Russian individuals, companies, and organizations and freezing Russian assets in retaliation for Moscow’s military operation in Ukraine.
According to Swissinfo, citing a study from the Boston Consulting Group (BCG), a “significant exodus of Russian assets” resulted in a $100 billion rise in wealth deposited in the United Arab Emirates last year. It marks the fastest annual growth of any offshore booking center, it noted.
The report pointed out that Swiss private banks were anxious that the trend not spread to clients from other countries. “The key is to persuade the wealthy elites that sanctions against Russia do not dilute Switzerland’s neutrality, which is a key selling point for rich people living in politically unstable countries,” Swissinfo wrote.
“Clients still believe, as do I, that Switzerland is a neutral country that follows the fundamental rules of neutrality,” Gregoire Bordier, president of the Association of Swiss Private Banks, told the outlet. “They are not questioning why sanctions target a certain group of people. The question is more ‘where are you going’ rather than ‘where are you now’,” he argued.
The refusal of UAE to condemn Russia’s military operation in Ukraine at the United Nations Security Council appears to have been interpreted by high net worth Russians as an invitation, according to media reports. Sources have previously told Reuters that Russian citizens have been moving their funds from Switzerland and the UK to Dubai, after the two nations sanctioned Russia and threatened to freeze the assets of prominent Russian businesspeople and politicians. In the second quarter of 2023, Russians became the third-largest property buyers in Dubai, having been the ninth biggest in 2021, according to data from real estate agent Betterhomes, as cited by the Wall Street Journal.
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