Closing bank accounts of Russian citizens in the UAE in 2024

In 2024, UAE banks began closing accounts of Russian citizens. This news is causing serious concern among Russians building international businesses, raising many questions and causing uncertainty. Antwort Law seems necessary to understand this issue in such a difficult situation. Let's look at the possible reasons for the Russian citizens' accounts being closed in UAE banks.

In their ongoing quest to meet global security standards, UAE financial institutions are continually improving their anti-money laundering (AML) processes and policies. Every year, banking procedures become more complex and responsible. As a result, factors are being identified more and more often that can lead to the freezing of accounts until their final closure.

1) Inconsistency of company license types: UAE banks strive to comply with strict regulations and requirements in financial activities. If a company has mixed kinds of licenses or uses them for purposes other than their intended purpose, this can create legal and economic risks for the bank. For example, if a company registered as a trading company suddenly begins to carry out transactions typical of financial institutions, this may raise the bank's suspicions;

2) Incorrect financial documentation: Complete and accurate documentation must be provided during banking transactions. Please comply with these requirements, such as providing only an invoice number with a corresponding contract or other necessary documents, to avoid problems with the transparency of financial transactions. Banks tend to avoid risks and may close the accounts of companies that do not provide complete financial statements;

3) Ignoring bank requests and not responding promptly: Banks may routinely request customer information to maintain AML and anti-money laundering compliance. Failure to respond to such requests or failure to provide the required information within the required time frame may be considered a violation, which will ultimately result in the blocking and closure of the account;

4) Insufficient verification of counterparties: banks carefully monitor transactions and business partners of clients to eliminate possible financial risks and comply with legislation. If the client's counterparties are on high-risk lists or associated with sanctions, this may negatively affect the account's status. Regular updating of data on counterparties and timely informing the bank about them can prevent such situations;

5) Lack of AML policy and necessary documents: Companies operating in consulting, IT or finance must strictly adhere to an AML policy. Failure to provide appropriate documentation and compliance with this policy may be considered a serious violation and may be grounds for account closure;

6) Dealing with sanctioned goods and countries: UAE banks strictly regulate trade in goods and services associated with sanctions or high risks. If a company is engaged in this type of activity or has business ties with countries that are the sanctions target, this may lead to negative consequences.

It is important to remember that each case is individual, and the bank's decision to close an account may depend on many factors. Our Antwort Law team is ready to provide expert support and assistance in legal analysis and developing an action strategy to minimize negative consequences for entrepreneurs. At Antwort Law, we are prepared to help our clients navigate these situations and offer the best solutions to save their accounts and businesses.

Lidia Ivanova

International lawyer
Antwort Law