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As the Ukraine war approaches the one-year mark, the United States is ramping up efforts to choke off Russia’s economy and it has set its sight on the Middle East.
A top US Treasury official arrived in the United Arab Emirates (UAE) on Monday to warn the regional business hub that helping Moscow evade sanctions wouldn’t be without consequences.
Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, met with senior government officials from several UAE ministries, where he discussed “rooting out evasion of US sanctions, particularly on Russia and Iran,” as well as the US’ “commitment to take additional actions against those evading or facilitating the evasion of sanctions,” according to a statement.
The US Treasury earlier warned that “individuals and institutions operating in permissive jurisdictions,” including in the UAE and Turkey, risk losing access to G7 markets for doing business with sanctioned entities or not conducting appropriate due diligence against illicit finance.
G7 countries include Canada, France, Germany, Italy, Japan, the UK and the US.
The Gulf state has walked a tightrope between Washington and Moscow since the start of the Ukraine war last February, opting to remain neutral as it sees the world order moving toward multi polarity.
The US has repeatedly called on its Middle Eastern allies to support its efforts in slowing the Russian war machine, but a public threat of consequences against a close ally like the UAE is rare.
“What we’re seeing now is a bit more about messaging to the region and indicating the seriousness of these sanctions,” said Justine Walker, global head of sanctions, compliance and risk at the Association of Certified Anti-Money Laundering Specialists (ACAMS). The US is trying to say, “If you are going to do business with Russia, then you do business with Russia but you don’t do business with us,” she told CNN.
Since the war, the UAE has become the top Arab destination for Russian investors, with the Gulf state’s real estate market surging as Russians flock into Dubai and Abu Dhabi.
The US has previously sanctioned entities and individuals in the UAE for sanctions evasion. More recently, it sanctioned two UAE-based air transportation firms for collaborating with a sanctioned Iranian firm to transport Iranian UAVs (unmanned aerial vehicles), personnel, and related equipment from Iran to Russia.
A Friday statement published on the UAE state news agency WAM said that, during the visit, US and UAE officials discussed enhancing cooperation with regards to “ongoing sanctions programmes and associated designations of key networks around the world.”
The two sides also discussed combating money laundering and the financing of terrorism both locally and internationally, added the statement.
Russia is already under a barrage of sanctions from the US, along with the UK and the European Union. But most of those are primary sanctions, which only apply within the territory of the sanctioning country.
For instance, if a Russian bank is under primary US sanctions, it cannot operate in a US market. The bank can still, however, work with a UAE or Turkish bank.
Sanctioned countries often stay afloat by finding loopholes to conduct business outside the US. Washington plugs that loophole by imposing secondary sanctions, which punish parties conducting commercial activities with the sanctioned entities – even when the activity takes place outside US territory.
Such sanctions force countries and entities to choose between the sanctioned nation or the US, but not both.
A senior US official told CNN that the US “will continue to use our authorities and all tools at our disposal to crack down on sanctions evasion that supports Putin’s war machine.”
Asked if the US is effectively imposing secondary sanctions on Russia by asking the UAE to crack down on business with the country, the official said “no.”
The US sees Russia circumventing sanctions by moving trade through the Middle East, as well as trading directly with the region, said Walker.
As the US dominates the global economy, secondary sanctions have often been effective in causing economic damage to the sanctioned country. But Walker sees their imposition in this case as unlikely, noting that it would be “serious diplomatic escalation in tensions” between the UAE and the US.
The UAE has invested tens of billions of dollars in the US economy, mostly through its sovereign wealth funds. In 2020, investors from the UAE accounted for about $45 billion of investment flows to the US, according to Abu Dhabi’s state-backed The National newspaper. That’s a 65% rise from the previous year.
Bilateral trade between the US and the UAE exceeded $23.03 billion in 2021. The US’ sixth largest trade surplus globally is with the UAE, and the close economic partnership between the two states supports more than 120,000 American jobs, according to the UAE embassy in Washington, DC.
“We are doing a lot of services for the Americans. They should be grateful to us rather than come up with this language,” said Abdulkhaleq Abdulla, a UAE political science professor, referring to the US’ warning about G7 markets. “American sanctions are American sanctions. They are not UN sanctions and countries can pick and choose. We have dealings with 190 different countries, and Russia is one of them.”
Abdulla says the US Treasury concerns are not new and that Washington knows “very well that we (the UAE) have healthy, ongoing conversations on everything, including these sanctions.”
“The UAE is as vigilant as any country, monitoring every single dollar that comes in, every single transaction – be it Russian or otherwise,” Abdulla told CNN, adding that the UAE “should not be singled out” for having an open financial market.
The US official told CNN that while Washington is “focused on some critical issues” it sees in the UAE and Turkey, the two countries “are not being singled out.”
“This is a conversation we are having with many partners and other countries around the globe,” added the official.
Karen Young, senior research scholar at Columbia’s Center on Global Energy Policy, said the US is unlikely to publicly chastise the UAE due to the two countries’ cooperation on other files such as relations with Israel and energy, but added that the economic benefit to the UAE from the surge in business from Russians is nevertheless too important to jeopardize.
Israel and Sudan finalize peace agreement draft, Israeli foreign minister says
Israel and Sudan have finalized the text of a peace agreement to be signed “later this year,” Israeli Foreign Minister Eli Cohen said on Thursday.
- Background: Sudan was part of the original Abraham Accord normalization agreements between Israel and the UAE, Bahrain and Morocco brokered by the administration of former US President Donald Trump. But after a military coup in Sudan in October 2021, the final steps of the process with Khartoum were stalled.
- Why it matters: Cohen said that the signing would “serve as an opportunity for the establishment of relations with other countries in Africa as well as the strengthening of existing ties with African countries.” The agreement comes after Israel swore in the most right-wing government in its history in December, leaving its new Arab allies in an awkward spot.
Top Iranian filmmaker goes on hunger strike in prison
Iranian film director and screenwriter Jafar Panahi went on a hunger strike in the notorious Evin prison to protest his detention, according to the activist group Human Rights Activists News Agency (HRANA).
- Background: Panahi is one of Iran’s most influential filmmakers. He is a Cannes film festival award winner and director of movies such as “The White Balloon,” “The Circle” and “No Bears.” In 2010, the director was sentenced to six years in prison and banned from filmmaking for 20 years, as well as from leaving the country. This verdict was upheld on appeal. On July 11, 2022, Panahi was arrested in front of Evin prison to serve his sentence, HRANA reported.
- Why it matters: According to the Artistic Freedom Initiative (AFI), a New York-based human rights organization, Panahi’s sentence is from a decade ago and according to Iranian law, the statute of limitations for the execution of his sentence has expired. But the Iranian judiciary refused to review his case and let him free, AFI reported.
Norway police ban Quran burning protest after Turkey summons Oslo envoy
Norwegian police on Thursday banned a planned anti-Islam protest including the burning of a copy of the Quran for security reasons, hours after the Turkish foreign ministry summoned Norway’s ambassador to complain, Reuters reported. “Burning the Quran remains a legal way to express political views in Norway. But this event cannot be carried out for security reasons,” Oslo police said in a statement, citing intelligence it had received.
- Background: A group of protesters planned to burn a copy of the Quran outside the Turkish embassy in Oslo on Friday, police said, echoing similar demonstrations last month in Sweden and Denmark. Earlier on Thursday, Ankara strongly condemned the anti-Islam group’s plans, which it said was a “provocative act,” a source from the Turkish foreign ministry said, adding that the ministry had asked for the demonstration to be called off. The police can only ban a demonstration if there is a danger to the public.
- Why it matters: A protest including burning a copy of Quran last month near the Turkish embassy in Stockholm by an anti-immigrant Danish-Swedish politician from the far-right fringe drew strong condemnation from Ankara. Sweden and Finland applied last year to join NATO after Russia invaded Ukraine, but faced unexpected objections from Turkey and have since sought to win its support.
What to watch
Ankara will not tie Congress’ approval of the sale to Turkey of F-16 fighter jets to Sweden’s accession to NATO, Ibrahim Kalin, spokesman for the Turkish presidency, told CNN’s Becky Anderson on Wednesday. He added that Turkey is “not without any options.”
“We will support Swedish entry into NATO when they fulfill their promises and deliver on the terms that we agreed together,” he said.
On Thursday, a bipartisan group of senators said the US Congress cannot support the $20 billion sale of the jets to Turkey until Ankara ratifies the NATO memberships of Sweden and Finland, Reuters reported.
Watch the interview with Kalin here.
Saudi Arabia: #Stop_AlWaqie_Channel
A Saudi television channel has found itself under fire after a reality show featured scenes of young male contestants acting affectionately with each other.
An Arabic hashtag calling for the closure of Al Waqie TV went viral on Twitter after the scenes were broadcast on the reality series “The Business,” which follows 40 young Saudi men living in one house and competing for a cash prize. Inspired by the American reality TV show “Big Brother,” viewers can vote for and eliminate contestants online.
Homosexuality is illegal in Saudi Arabia and the government has of late cracked down on LGBTQ symbols and banned Hollywood films that show same-sex couples. In the clips that caused the controversy, some contestants are seen embracing and showing signs of affection.
One Twitter user wrote: “It’s very sad and dangerous that the ideas of satanic organizations reach children’s programs.”
“Frankly, I saw clips and was shocked, even if we take them for good faith and intention. You are on a program in front of women and young viewers, you must be disciplined and with limits. You don’t take the situation lightly,” tweeted another user.
But not everyone had the same opinion, some Twitter users defended the men and said their actions were misunderstood.
One user wrote: “By God, you are strange people,” referring to critics of the show. “Now someone hugging their friend and showing affection is a crime.”
Another account used the hashtag to promote the pro-LGBTQ phrase “love is love.”
Several Twitter users in Saudi Arabia called on the authorities to shut down the TV channel and the program.
The show, which is in its second season, has around 41 million views on YouTube, the channel said on its Instagram account.
The channel didn’t respond to CNN’s requests for comment.
By Dalya Al Masri