US sanctions on UAE entities and individuals jump

US sanctions on entities and individuals based in the United Arab Emirates (UAE) have jumped to roughly 507, with 125 names added this year, Compliance Corylated research reveals. The UAE is now among the countries to have the most entities and individuals subject to sanctions.

Many of the new UAE designations come as the US Department of the Treasury clamps down on Russia-related sanctions evasion, analysis of Office of Foreign Assets Control (OFAC) data shows. However, sanctions on entities and individuals in the UAE span 30 OFAC programmes.

Many designations arise from Iranian and terrorism programmes, as well as a significant number derived from identified under the Foreign Narcotics Kingpin Designation Act, transnational crime organisations (TCO), and Magnitsky sanctions programmes.

US visit

The US sent Brian Nelson, Treasury under secretary for terrorism and financial intelligence, to the UAE in February to convey “Treasury’s focus on rooting out evasion of US sanctions —  particularly on Russia and Iran and their proxies” — and to highlight President Joe Biden’s “recent executive order, which authorises the targeting of foreign financial institutions facilitating transactions that benefit Russia’s military”. 

Shortly after Nelson’s visit, Ukrainian media reported on Russian intelligence that banks in the UAE had begun to close Russian business and personal bank accounts. The UAE was removed from the Financial Action Task Force’s grey list on February 23.

UAE dual use exports to Russia increase

Figures from the United Nations’ Comtrade database show UAE exports to Russia ballooned, starting in 2021 when they reached $1.4 billion and rose to $4.5 billion in 2023.

Also in 2023, the UAE exported $2.41 billion in electrical and electronic equipment; $784.8 million of machinery, nuclear reactors, and boilers; $166.8 million of aircraft and spacecraft; $166.3 million in vehicles; and nearly $100 million in “footwear, gaiters, and the like”, according to Comtrade data.

Arctic LNG-2 connection

When Novatek, Russia’s second-largest natural gas producer was hit with US sanctions in August 2023, it quickly turned to the UAE to circumvent them, writes Ilia Shumanov, director at Arctida, a non-profit that advocates for transparency and sustainability in the Russian arctic.

Keeping equipment flowing to Novatek’s Arctic LNG-2 project was critical to its success, and a lifeline came in the form of Waterfall Engineering in Abu Dhabi, which was registered in August 2023, Shumanov reported. “In the last three months of 2023, its volume of deliveries to Russia amounted to 103.6 million euros, but in the next quarter (January to March 2024) it increased more than threefold, to 313.2 million euros.”

He added: “Too rapid growth and narrow specialisation of the company made it an easy target [for the US to spot] . In August 2024, Waterfall Engineering was on the US sanctions list. This is a warning to others: hide-and-seek games will not last long.”

Arctic LNG-2, Waterfall Engineering, and linked entities described in Shumanov’s report, show why the UAE has become so important to Russia’s ability to evade sanctions. Shumanov ultimately links the scheme to Gennady Timchenko and Leonid Mikhelson, close allies of President Vladimir Putin, explaining that Arctic LNG-2 brings Timchenko and Mikhelson big profits that enable them to maintain their influence with Putin.

Drug Kingpins, Transnational Crime Organisations

The US has sanctioned 15 individuals and 11 entities under the narcotics “kingpins” (SDNTK) programme, along with 13 individuals and 13 entities under the TCO designation. The latter includes six  members of the Kinahan Organised Crime Group (OCG), which was designated in 2022. The UAE authorities froze the Kinahans’ assets, however, the International Consortium of Investigative Journalists reported in May the freeze may have been ineffective. Furthermore, a February Bellingcat report demonstrated OCG head Christopher Kinahan frequently posting Google restaurant reviews, primarily in Dubai.

For more UAE sanctions data visualisation visit the video page.