Many international media outlets have recently documented the main methods used by dealers in the trade of raw materials or fuels, and Moscow as well, to exploit and circumvent loopholes in the Western sanctions regime imposed on Russia. These roads often pass through two countries, namely Switzerland, and in particular the United Arab Emirates.
Several media and non-governmental organizations revealed, most notably Global Witness GlobalWitness In late March, that Inc Paramount dmc bad ParamountDMCC Headquartered in Dubai and established in 2020, it has become the fourth largest merchant for Russian oil in the Asian region since imposition Sanctions on Russian energy exports In December 2022. This company is not Russian, but what is remarkable is that its name is very close to naming another commercial company that is also active in the oil field, which is ParamountSA Based in Switzerland.
And there is Also in Switzerland Company headquarters openMineral AG It specializes in buying gold, which does not buy it directly from Russia, which would have been inconsistent with the European sanctions imposed on the trade in precious metals approved in August 2022.. But firm open Mineral Ltd based Abu Dhabij It is affiliated and 100 percent owned by the Swiss parent company, which is buying Russian gold, as revealed newspaper FinancialTimes on April 17.
“The New London of the Russian Rich”
Perhaps the common point between these two companies is the Switzerland-UAE axis, which seems to be a preferred option for those seeking to circumvent the sanctions imposed on Russia.
On the other hand, Western countries, led by the United States, did not delay in taking action to confront this situation. Since the beginning of March, the major Western powers issued warnings to both Switzerland and the UAE, reminding the two countries of the need to do more to contribute effectively to the sanctions regime.
For more: The European Commission proposes fixing the price of Russian oil and imposing new restrictions on trade with Moscow
“But Switzerland and the UAE are not the only ones that allow, either about knowledgeable or notBCircumvent the Western sanctions regime“ According to Maria Shagina, an expert on the international sanctions regime at the International Institute for Strategic Studies, It is a think tank based in London. Explain it in this context usually “We talk more about China and India. But Switzerland and the United Arab Emirates are playing an increasing role (...) AndEspecially the UAE, which has become a crucial element for Moscow in trying to evade sanctions.
For her part, she explains Emily Routledge specialized in the economy of the Gulf countries at the Open University in Britain, that since the beginning of theThe casting processRYeh RussianH BUkraine On February 24, 2022, “Dubai has become the new London of wealthy Russians with ties to Vladimir Putin.”
Indeed, thousands of wealthy Russians have settled in the Emirates since the beginning of the war. But they didn’t come to the wealthy Gulf emirate just to enjoy the sun and peacehomes Luxury with sea view. In his article in John magazine Afric JeuneAfricaSebastien Bossuis, a specialist in relations between Europe and Middle Eastern countries at the Free University of Brussels and author of the book “The United Arab Emirates, towards Fatah the world.” In just over a year, the Russians living in Dubai managed to and Abu Dhabij From “the re-establishment of about 300 companies to resume their business,” and since then, this country has become for them a new safe haven.
Moscow has also done whatever it takes to ensure that this honeymoon with the Emiratis continues. Emily explains Routledge: “Investments of public companies have increased and oligarchy And even ordinary Russian citizens in this region in a big way.” Even Vladimir Putin made a personal effort to show his interest in this relationship, during the visit of UAE President Sheikh Mohammed bin Zayed Al Nahyan to St. Petersburg in October 2022, which received great media coverage. The Russian president was keen to sit next to the crown prince Abu Dhabi And “not at the other end of a long table (as he has done with most of the visitors he has received since the outbreak of the war)”, notes the same spokeswoman.
The UAE was also responsive. And confirm Emily Routledge that ita Officially neutralH In the conflict and “we must not forget that the United Arab Emirates provided more than $ 100 million Manalhelp thehumanity for Ukraine”, howevera to rejectT In return, he imposed sanctions on Russia in the wake of the invasion of Ukraine.
However, the Emirati position does not surprise experts specializing in this region. Andreas Craig, a specialist in the Middle East at Imperial College London, says: “The UAE has used its capabilities very strategically for years. harbourand its financial and logistical centers to facilitate trade with countries and also with non-state actors, whether they are subject to sanctions or not.” Thus, countries like Venezuela were able to benefit from this situation even before Russia.
Re-export to Russia
The facilities offered by the Jebel Ali port in Dubai, especially the possibility of re-exporting products, are considered as a huge temptation weapon launched by the UAE authorities in favor of regimes that have been economically excluded by the international community. In this context, you see a newspaper Financial Times that the UAE’s export of electronic equipment to Russia ten times more than what was done during the past year is a blessing for Moscow. Even the source of these products may originally be companies located in countries that have banned trade with Russia since the beginning of the war. Commenting on the matter, James said O’Brien Head of the International Sanctions Coordination Office in the United States, during Visit to Dubai last March: “Our main demand is that my work stopat Re-export’That products to Russia’ “.
But for the UAE, it is “the central element in its strategy to become a major mediator on the international stage. We must realize that thanks to this offer, it was able to Abu Dhabi developing an overall impact far greater than that of a country of this size”, says Andreas Krieg.
The UAE is also accused Regardless of the material trade thessential And the material and Russian fuels. And here tEnter Switzerland on line the game.
Historically, material dealers settled thessential or key oil styled Glencore Glencore or Vitol Vitol on Swiss soil. So when I decided to bjRen should do like the rest of the European Union and impose sanctions on imports of oil and raw materialsH Russian is like gold, “blew A wave of panic in Geneva,” according to the NGO Global Witness In its report on circumvention and circumvention of sanctions against Russia.
However, some of the fuel merchants quickly discovered a loophole: this ban is only related to companies whose headquarters are located in Switzerland. FKat Their idea: Why Branches of companies established in a country that has not joined the international sanctions regime… such as Dubai, are not used aAnd AbuAntelope?
From there, branches of the company appeared in the Emiratesat Mother in switzerland like ParamountDMCC or openMineral Ltd. This case is an example of the great difference between punishments on the way SwissH and those that jI adopted it European Union, which specifically provides for the prohibition of subsidiaries.
On the other hand, the commitment compulsory The only thing stipulated in Swiss law is that the subsidiary company must be 100 percent independent from the parent company. Tsay Maria Shagina, who worked for a long time in Geneva: “The whole problem comes from the Swiss authorities’ refusal to define precisely what an independent subsidiary is, an ambiguity that could be exploited.”
For their part, the Swiss authorities responded, in contact with France 24, to this issue by saying that “the measures adopted by (Switzerland) are fully compatible with those in force in Europe, even if they were not formulated in exactly the same way.”
But that does not preclude the fact that these discrepancies in wording are what allowed, for example, a company ParamountDMCC By selling Russian oil above the famous base price of $ 60 a barrel stipulated in European sanctions, while a company cannot ParamountSA, based in Switzerland, do so. For a gold traderopenMineral Ltdhe was able to buy Russian gold for tens of millions of dollars, while the openMineral AG by doing so.
These shortcomings show the limitations of the sanctions regime in place since Toward year in an attempt to strangle Russia economically. In this context, Tyler explains costra Specialist in economic sanctions at Harvard and the University of Nottinghamthat it no doubt “that moves At first it was fastthis means thatH did not Complete thinkingin All cases. Now, must theHe made sure to apply the rules better.”
The question today is What ifWashington could not have put enough pressure on these countries to harden their rules. As for Switzerland, there is indeed pressure from financial circles that “fear that… scare exaggeration customers wealthy From other countries, like China,” says Maria Shagina.
As for the Emirates, Shagina explains that The only existential threat to hima He comes from Iran. so It can be said simply that the United States or Israel will not hesitate to protect the Emirates whatever pdd Olegarru The Russians who are there.” Therefore, finding the means of pressure will not be easy.
Amine Zerrouati/Sebastien Saybet