"MTS Bank Makes Historic Move: Russia's Largest Mobile Operator Receives UAE Banking License"

The United Arab Emirates (UAE) has approved a banking license for Russia’s MTS Bank, marking a historic move that could potentially add to concerns among Western nations over the UAE's emergence as a financial haven for Moscow. The license, granted by the UAE central bank, would fulfill the growing demand for financial services from Russian expatriates living in the Gulf state.

With tens of thousands of Russians settling in the UAE, particularly in Dubai, over the past 12 months to escape financial restrictions in Europe or avoid military conscription in Russia, many have faced difficulties opening bank accounts, including corporate facilities, at local lenders. MTS Bank is the first foreign bank to receive a license in the UAE in several years.

The decision to grant the license has drawn attention from the US and European nations, who have grown cautious of the UAE's financial dealings with Russia following the latter's invasion of Ukraine. Last week, US Treasury Under-Secretary for Terrorism and Financial Intelligence, Brian Nelson, raised concerns over the Russian bank's license during a visit to Abu Dhabi.

The UAE has been placed under enhanced supervision by the Financial Action Task Force (FATF), the global anti-money laundering watchdog, since last year. Abu Dhabi officials aim to demonstrate that they have tightened financial compliance and increased criminal enforcement to eventually be removed from the FATF's grey list, a decision set to be made in February.

The presence of assets belonging to sanctioned Russian oligarchs in the UAE has sparked worries of deeper illicit financial links between the two nations, but Abu Dhabi authorities reject these claims and endeavor to halt financial flows from sanctioned Russian entities while not discriminating against non-sanctioned companies and individuals.

The UAE, frustrated with perceptions of US detachment in the Middle East, has been rebalancing its relationships with a multipolar view that includes Russia and China, both of whom have made aggressive moves in the region. The license granted to MTS Bank would ease access to bank accounts for Russians and open a new channel for the flow of money into the UAE.

Ilya Filatov, the bank’s chair, visited the UAE last week to prepare for the bank's rollout of services in the coming months, stirring rumors and excitement among the UAE's Russian community. One banker commented, “This is going to be a game-changer.”