In August, banks in the United Arab Emirates began blocking payments for electronic components and consumer electronics from Russian companies, market participants said. According to them, until now the UAE had been the main point of payment for equipment imported from China for Russian importers, but recently the risks of secondary sanctions have complicated the work of this commodity-money chain.
Since the beginning of August, banks in the UAE, in particular Dubai, began rejecting payments for electronics from Russian companies, a representative of a large electronics distributor told Kommersant. “About 10-20% of all laptops go through supply channels in the UAE to Russia, while for other categories of goods the share can reach 30%,” says Kommersant’s source.
He clarifies that they began blocking transactions in cases where the paid electronics from other countries do not arrive in the UAE. “Russian organizations used companies in the UAE as a way to transfer funds for electronics to China, but the goods themselves were immediately sent to Russia,” explains Kommersant’s source. According to him, making payments through the UAE was due to the lowest possible commission - 1-3%. The refusal to make payments is due to the risk of secondary US sanctions for Emirati banks, which Chinese banks previously faced, says a Kommersant source.
Due to sanctions risks, Chinese banks began blocking payments for electronic components from Russian organizations in the spring. Later, Russian electronics manufacturers began making payments to China using Asian companies.
Problems with paying for goods through banks in Dubai began about a month ago, confirms Oleg Osipov, CEO of Beshtau (an electronics manufacturer), the blocking is initiated by the Chinese side.
“Electronics are not produced in Dubai itself, they are imported from China. After the start of military action in Ukraine, many Russian organizations created their own companies in Dubai, through which they made payments for electronic components to China,” he explains. By the end of 2023 alone, about 1,000 Russian companies opened in the UAE.
The founder of the Jacky’s brand, Guseyn Imanov, also knows about the problems with paying for consumer electronics and components through banks in Dubai. According to him, Russian companies have found a way to conduct financial transactions, but with an increased commission: “Problems with direct payment through Chinese banks remain, so by November-December of this year there may be a shortage of consumer equipment and components that were paid for through these countries, and prices may rise by 8-10%.”
Oleg Osipov also says that Chinese banks have begun to request data from Dubai organizations on the origin of funds received by them, as well as a customs declaration on what exactly was taken out of the country.
According to his estimates, due to the increase in logistics chains and financial schemes, the cost of electronic components in the Russian Federation will increase by 5% by December.
"The Chinese side is not very fond of conducting transactions through third countries," Vitaly Mankevich, chairman of the all-Russian public organization "Russian-Asian Union of Industrialists and Entrepreneurs" (RASPP), explains to Kommersant. "Such a reaction from the UAE could have been expected, since after the latest package of sanctions from the US at the end of August, Deputy Secretary of the US Treasury Wally Adeyemo said that the US intends to prosecute countries that cooperate with Russia. It is quite possible that those who ensure trade between Russia and China through Dubai are starting to play it safe," he explains.
Since the beginning of August, banks in the UAE, in particular Dubai, began rejecting payments for electronics from Russian companies, a representative of a large electronics distributor told Kommersant. “About 10-20% of all laptops go through supply channels in the UAE to Russia, while for other categories of goods the share can reach 30%,” says Kommersant’s source.
He clarifies that they began blocking transactions in cases where the paid electronics from other countries do not arrive in the UAE. “Russian organizations used companies in the UAE as a way to transfer funds for electronics to China, but the goods themselves were immediately sent to Russia,” explains Kommersant’s source. According to him, making payments through the UAE was due to the lowest possible commission - 1-3%. The refusal to make payments is due to the risk of secondary US sanctions for Emirati banks, which Chinese banks previously faced, says a Kommersant source.
Due to sanctions risks, Chinese banks began blocking payments for electronic components from Russian organizations in the spring. Later, Russian electronics manufacturers began making payments to China using Asian companies.
Problems with paying for goods through banks in Dubai began about a month ago, confirms Oleg Osipov, CEO of Beshtau (an electronics manufacturer), the blocking is initiated by the Chinese side.
“Electronics are not produced in Dubai itself, they are imported from China. After the start of military action in Ukraine, many Russian organizations created their own companies in Dubai, through which they made payments for electronic components to China,” he explains. By the end of 2023 alone, about 1,000 Russian companies opened in the UAE.
The founder of the Jacky’s brand, Guseyn Imanov, also knows about the problems with paying for consumer electronics and components through banks in Dubai. According to him, Russian companies have found a way to conduct financial transactions, but with an increased commission: “Problems with direct payment through Chinese banks remain, so by November-December of this year there may be a shortage of consumer equipment and components that were paid for through these countries, and prices may rise by 8-10%.”
Oleg Osipov also says that Chinese banks have begun to request data from Dubai organizations on the origin of funds received by them, as well as a customs declaration on what exactly was taken out of the country.
According to his estimates, due to the increase in logistics chains and financial schemes, the cost of electronic components in the Russian Federation will increase by 5% by December.
"The Chinese side is not very fond of conducting transactions through third countries," Vitaly Mankevich, chairman of the all-Russian public organization "Russian-Asian Union of Industrialists and Entrepreneurs" (RASPP), explains to Kommersant. "Such a reaction from the UAE could have been expected, since after the latest package of sanctions from the US at the end of August, Deputy Secretary of the US Treasury Wally Adeyemo said that the US intends to prosecute countries that cooperate with Russia. It is quite possible that those who ensure trade between Russia and China through Dubai are starting to play it safe," he explains.
