UAE Banks Block Russian Transactions for Chinese Electronics, Russian Media Reports

Banks in the United Arab Emirates (UAE) have been rejecting transactions from Russian companies seeking electronic components and consumer electronics from China since early August, according to pro-Kremlin outlet Kommersant on August 28.

The reported reason for this is the risk of secondary sanctions, the outlet claimed.

Kommersant's sources, who remain unnamed, indicate that Russian firms had been using UAE-based entities to transfer funds to China for goods to be shipped directly to Russia. Now, transactions for products that do not pass through the Gulf country are being blocked, the outlet stated.

According to these sources, the restrictions were imposed at the initiative of China.

Last week, the US introduced a new set of sanctions targeting Chinese and Russian companies due to their support for Moscow's aggression. In response, Chinese institutions have begun reducing their business dealings with Russia to avoid or mitigate the impact of these trade restrictions.

Notably, several major Chinese banks have started blocking transactions for electronics due to concerns over secondary sanctions. Most recently, in June, the Russian branch of the Chinese state-run Bank of China ceased accepting payments from Russian banks.

Western countries have also reportedly increased pressure on the UAE to prevent Russian entities from circumventing sanctions. The UAE is believed to be a key conduit for sanctioned dual-use goods, such as electronics, being sent to Russia.

Throughout Russia's full-scale war, the UAE has maintained economic and cultural ties with Russia but has also forged new trade agreements with Ukraine.