International

Russian Tycoons Turn To This Saudi Royal For Penthouses, Cars In UAE

Outside the United Arab Emirates, Sheikh Mansour bin Zayed Al Nahyan is best known as owner of English football champion Manchester City. At home, he’s deputy prime minister and a powerful member of the royal family.

But Sheikh Mansour also has a behind-the-scenes role that’s become increasingly important in recent months: Helping manage relationships with wealthy Russians looking to move money into the UAE, according to several people familiar with Abu Dhabi’s engagement with Russians, who requested anonymity as the information isn’t public.

While Sheikh Mansour has long been involved in cultivating UAE-Russia relations, the importance and complexities of that position have grown since Russia’s invasion of Ukraine, the people said.

Even as the US, EU and other countries have blitzed Russia with thousands of new financial restrictions, making it the world’s most-sanctioned nation, the UAE hasn’t imposed any. Officials in the Middle Eastern nation have taken the stance that Abu Dhabi respects international law but isn’t required to follow measures implemented by specific countries and that the UAE has the right to adopt its own policies, several people familiar with their thinking said.

Other US allies, including Israel and India, have taken a similar position.

That approach, though, has fueled concern among some Western officials who are worried about holes in their own sanctions programs. Earlier this month, Deputy US Treasury Secretary Wally Adeyemo voiced Washington’s worries about Russian tycoons moving assets to the UAE in a call with UAE officials, two people with knowledge of the discussions said.

Senior government officials, rich businessmen and finance executives from Russia are increasingly approaching Sheikh Mansour and his office for help managing UAE government processes, several of the people said, adding that Russians have grown more interested in investing in the Middle Eastern nation since the invasion of Ukraine.

Some are shopping for penthouses in Dubai, while others want to buy luxury cars or need help setting up bank accounts and financial firms, they said.

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The Ministry of Presidential Affairs, led by Sheikh Mansour, has provided greater assistance since the invasion, the people said.

UAE officials consider Sheikh Mansour’s efforts to be part of the government’s broader strategy to attract global business and maintain strategic ties with the East and the West, according to several of the people.

The Russia-UAE relationship is particularly relevant given their cooperation within the OPEC+ alliance of oil-exporting nations, they said.

Still, Sheikh Mansour’s continued work demonstrates the delicate balancing act that UAE officials are attempting to pull off. On the one hand, they want to keep welcoming the flow of Russian money, some from tycoons but a large chunk from ordinary citizens with no ties to the Kremlin. On the other hand, they’re sensitive to how that’s viewed by Western allies who’ve ramped up sanctions on Vladimir Putin as well as a swathe of Russian individuals and companies.

“We have this clash of our friends and allies,” said Abdulkhaleq Abdulla, an Emirati academic based in the UAE. “We don’t want to go out of our way to displease Washington but we also won’t bow down to them. There are plenty of oligarchs with investments in the West, too.”

The Ministry of Presidential Affairs didn’t return calls seeking comment and the UAE Ministry of Foreign Affairs declined to comment. Efforts to reach Sheikh Mansour through Manchester City and his offices weren’t successful. A spokesperson at the US Treasury Department declined to comment.

Earlier this year, a spokesperson at the UAE’s Executive Office of Anti-Money Laundering and Countering the Financing of Terrorism told Bloomberg that the country will continue to pursue deeper collaboration with foreign partners on monitoring international flows of money.

Billionaire Royal

A brother of the UAE’s de facto ruler Sheikh Mohammed bin Zayed and National Security Adviser Sheikh Tahnoon bin Zayed, Sheikh Mansour, 51, is one of the country’s most powerful royals. Before the invasion of Ukraine, he accompanied MBZ to various meetings with Russian firms. In 2019, he was present when MBZ met Putin in Abu Dhabi.

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MBZ remains the final authority on high-level diplomatic relations with Putin and Russia, the people said.

A billionaire in his own right, Sheikh Mansour is chairman of the UAE central bank. He also sits on the board of other firms including state oil giant Adnoc and sovereign wealth fund Abu Dhabi Investment Authority, which oversees more than $800 billion, according to data compiled by Global SWF.

At home, he’s a patron of athletics, backing popular events from football to horse racing and long-distance running. Since he took control of Manchester City in 2008, the club has returned to prominence, winning a slew of trophies and becoming one of the world’s most valuable football franchises.

More Visits

Russians ranked fourth among Dubai’s tourists in the first two months of 2022 with about 137,000, more than double the year prior though lower than pre-pandemic levels, according to the Dubai government.

Even as the UAE has held off on placing sanctions on Russia, some Emiratis including Khaldoon Al Mubarak, chief executive officer of sovereign wealth fund Mubadala Investment Co., and Yousef Al Otaiba, the UAE Ambassador to Washington, have sought to reassure US, UK and European officials.

At a finance conference in Dubai last month, Al Mubarak said Mubadala, which has significant US exposure, will avoid investing in Russia for now, becoming the first Middle East wealth fund boss to offer public comments on the war. The move was purely commercial and shouldn’t be considered a political decision, according to a person familiar with the matter.

Mubadala, where Sheikh Mansour is vice chairman, said in an emailed statement that it had paused any further investment in Russia “given the situation,” but didn’t provide further details.

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Still, Western officials have welcomed the comments from Mubadala, considering it evidence of the UAE’s concern about secondary sanctions on anyone conducting business with sanctioned Russian entities, according to some of the people.

“The US government has illicit finance watchers on high alert and have told the UAE they’re watching closely, not wanting to trap anyone, more to prevent it,” said Kirsten Fontenrose, who was senior director for Gulf affairs at the White House’s National Security Council during the Trump administration.

Delicate Diplomacy

The UAE stands to benefit from its more welcoming posture toward Russian money, but it’s drawn scrutiny in the past for inflows tied to individuals sanctioned by other nations. The government is under increased pressure since the Paris-based Financial Action Task Force, a global anti-money laundering body, placed the nation in March on its “gray list” for not monitoring money coming into the country strictly enough.

Relations between the UAE and the US have recently soured. The UAE and Saudi Arabia want the US to do more to counter missile attacks from Iranian-backed Houthi fighters in Yemen. The two Gulf countries, meanwhile, have so far rebuffed Washington’s requests to hike oil production and reduce prices.

Jodi Vittori, a professor at Georgetown University who studies the nexus of financial flows and US national security, said disagreements over sanctions policy will remain a thorny topic.

“If the world cracks down further on illicit Russian flows and that’s a foundation of these economies, the US may have to accept that they’ll have less leverage in these diplomatic relationships moving forward,” she said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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