Russian financial institutions are leveraging banking infrastructure in the United Arab Emirates to circumvent Western sanctions and maintain trade with major partners, particularly China. According to investigations, the sanctioned Moscow Credit Bank has been channeling transactions through its subsidiary, which operates via Mashreq Bank in the UAE, to move money to China, Turkey, and parts of the European Union.
Corridor between Moscow and the Emirates
The bank’s offshore subsidiary, informally known as Bank “Blank”, enables direct conversion of Russian rubles into UAE dirhams, with transfers usually settled within five to twelve working days. These transactions are often disguised as support for small and medium-sized businesses, concealing the true nature of cross-border payments. The scheme provides a way for Russian companies to bypass sanction controls, extending its reach across China, Turkey, and select EU states.
Chinese institutions as the end point
The mechanism relies on a correspondent (Nostro) account at Mashreq Bank, allowing direct U.S. dollar transactions without Western intermediaries. Funds are then sent to large Chinese banks, including the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC). After internal checks, the money is distributed through China’s domestic financial system. This process typically delivers funds to final recipients within two weeks, undermining Beijing’s public claims of observing international restrictions.
Example of a $2 million transaction
In May 2025, investigators uncovered a case in which a Russian rare earth metals exporter transferred more than $2 million to the Chinese company Shandong GuoMing Import and Export Co. Ltd.. The payment was routed via Bank “Blank” and through Mashreq’s subsidiary branch Citibank NA. Officially, the transaction was reported as involving food or agricultural products, a mislabeling tactic used to mask the transfer of critical raw materials.
Broader risks and international responsibility
The exposure of this network highlights how financial institutions in the UAE and China contribute to weakening the effectiveness of Western sanctions. While Abu Dhabi insists on maintaining neutrality in Russia’s war against Ukraine, its banking system has become a vital hub for shadow finance. At the same time, Beijing’s tolerance of such operations signals a tacit willingness to help Moscow sustain exports in strategically important sectors.
