Dubai: the last safe haven for rich Russians
The UAE’s neutral stance on Ukraine has seen the wealthy jetting in to sit out the war in luxury. Joe Shute reports
In the bathroom of Dubai’s Caviar Kaspia restaurant, a statuesque Russian blonde woman reapplies her make-up from a Gucci handbag and checks her diamonds in the mirror. Anastasia, as she introduces herself, is new in town, having moved to Dubai with her husband she describes simply as a “businessman”.
Moscow is home, she says, but they have arrived in the desert emirate to see out the Ukraine war. The couple are staying in one of Dubai’s most exclusive addresses: the Bulgari residences, a man-made horse-shoe shaped island where annual rentals average around £300,000 a year.
“There are so many Russians here that it feels like home,” she says, laughing, as she sweeps her perfect blonde locks away from her face.
The United Arab Emirates (UAE)
– of which Dubai is one of seven principalities – has been one of the few countries to adopt a neutral stance on Russian aggression and host couples like Anastasia and her husband.
Even Roman Abramovich has been spotted looking at houses on Dubai’s Palm Jumeirah, a man-made island where five-bed apartments cost up to £8 million.
Last month, the UAE abstained on a UN Security Council vote deploring the Kremlin’s invasion, and while it supported a later non-binding General Assembly vote calling on Russia to withdraw its forces, the country steadfastly refuses to pick a side.
Back in the Caviar Kaspia, home of the “largest vodka selection in Dubai”, the clink of shot glasses rings out with the words “nazdorov’ye”: the Russian toast to good health.
Upstairs, behind a sliding door, bottles of champagne and vodka adorn the tables of a speakeasy style bar. Here, 125g of Almas caviar costs more than £5,000, while vodka starts at £300 a bottle. As western sanctions bite in Russia and queues for staples like sugar and buckwheat evoke memories of the USSR, here in Dubai, explains Anastasia, “life is good”.
With even traditionally secretive banking boltholes like Switzerland – which in the Second World War was happy to remain neutral and receive looted Nazi gold – the Cayman Islands and Monaco cooperating with the seizure of Russian-owned assets, suddenly Dubai has become a safe port in the economic storm. Quite literally in the case of the oligarch super yachts that have been spotted coming into berth in recent weeks.
The latest to enter the Gulf State’s waters is the 225ft Hermitage, owned by Russian metals magnate Anatoly Sedykh and worth an estimated £55m.
Then there’s the £121m Madame Gu, belonging to
“Putin’s favourite industrialist” billionaire Oleg Deripaska, who has recently been added to the list of British-sanctioned oligarchs.
Experts at VesselsValue, which analyses the maritime and aviation sectors, say other super yachts are en-route to Dubai, including another belonging to Deripaska (a £44m vessel named Clio), and Sergei Galitsky’s £162m Quantum Blue, which comes equipped with a spa, gym, cinema and elevators. It is not just wealthy Russians fleeing to Dubai, but Ukrainians, too. This week a luxury yacht belonging to Ukrainian mining billionaire, Kostyantin Zhevago, recently named in antioligarch laws introduced by the country’s president, Volodymyr Zelensky, docked at the Bulgari yacht club. The yacht’s name, Z, has proven particularly unfortunate given that it has become the Kremlin’s symbol of war.
While many western destinations have banned Russian air traffic, Dubai is still welcoming passengers.
FlyDubai visits eight Russian locations, while Emirates ferries passengers from St Petersburg and Moscow to Dubai several times each day. A stream of private jets continues to alight on the desert runways. Last week it was reported that following Putin’s speech pledging a “selfcleansing” of Russian society, four hurriedly took off from Moscow en route to Dubai.
The culture shock of leaving the Russian winter for the broiling heat is more than offset by the lifestyle awaiting new arrivals. Caviar Kaspia is one of a dozen high-end restaurants and nightclubs operated in Dubai by Russian company, the Bulldozer Group. The city’s exclusive restaurants are booming with the new influx of trade and waiting lists are common.
Another favoured haunt for the Russian elite is Nammos at the Four Seasons Hotel, and the Jumeirah Zabeel Saray beach resort where Sonia Plotnikova, daughter of Vladimir Plotnikov, an MP of Putin’s party, recently posted a photograph online.
Russian models and influencers such as Lara Lepp and Alina Charova regularly share social media updates from glamorous Dubai locations. There are even fur coat boutiques in a city where temperatures reach 50C.
Over the past decade or so, Russian money has increasingly washed up in Dubai. Even prior to the latest influx, there were around 100,000 Russianspeakers in the UAE. According to recent data compiled by the US-based Centre for Advanced Defence Studies, nearly 40 Russian citizens who are “politically exposed, sanctioned, or allegedly associated with illicit activity” own a total of 80 properties worth an estimated £240m across the UAE.
One estate agent, who has worked in Dubai for the past 15 years, estimates demand from wealthy Russians has spiked by 250 per cent since the war. He says clients will pay in cash and happily pay rent of £10,000 a week.
Aside from the Bulgari residences, where three-bedroom villas sell for £40m, Bluewaters is another manmade island which has become a favourite for the Russian elite. One recently-settled oligarch there is paying £165,000 rent per year on a sea-view family home, soon to be increased to £205,000 as agents capitalise on the surge in interest.
Alan Kaye, a British estate agent based in Dubai, says inquiries from Russians are on the rise, with many choosing to “rent high-end property for a few months while they see what’s happening”.
This month the UAE was added to a “grey list” of jurisdictions subject to extra monitoring by the Financial Action Task Force (FATF). The global finance crime watchdog insists the UAE had made a “high-level political commitment” to work with it on anti-money laundering and counter-finance terrorism measures, and some experts believe the scrutiny will deter the flow of Russian money.
“There is an increasing focus by the US government on banks in Dubai and
‘The oligarchs like Dubai because the banks are relaxed about taking Russian money’
UAE”, said John Sandweg, former chief legal officer of the US Homeland Security Department. “The US will be very aggressive against any Dubai or UAE bank that acts as a safe haven for dirty Russian money or illicit funds linked to the Russian state.”
Nonetheless, The Daily Telegraph understands a number of banks in Dubai and UAE have been marketing their services to wealthy Russians. In 2019 the UAE also introduced a “golden visa” programme, granting long-term residency to wealthy investors.
“The oligarchs like Dubai because the banks here are relaxed about accepting Russian money and don’t ask too many questions,” said one Dubai based businessman on condition of anonymity. “It is very easy for the Russians to set up shop in Dubai.”
Other Russians are seeking to invest in cryptocurrencies in order to keep it away from the authorities. Dubai has rapidly established itself as a leading crypto hub and in recent weeks traders have reportedly been “deluged” with requests to liquidate billions of dollars in Bitcoin and other digital currencies.
For those used to living in the shadow of Putin’s Russia, the controversies surrounding Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum may also be easier to stomach. Sheikh Mohammed has faced heavy criticism over last week’s mass sackings by Dubai-owned P&O Ferries, while last October it was reported he would no longer be invited to the Royal box at Ascot after a judge ruled he hacked the phones of his ex-wife and a Tory peer acting as her lawyer.
Last week, following a lengthy legal battle, the High Court in London ruled the Sheikh had abused his former wife to an “exorbitant degree”. One of the Sheikh’s daughters, Princess Latifa, who has fled the country, has also previously accused her father of trying to hold her hostage.
Should western countries seek to come for their assets, the new wave of Russian exiles may find an ally in Dubai’s legal system.
In 2020, a senior judge in Dubai rejected an attempt from the ex-wife of Russian billionaire and Putin ally, Farkhad Akhmendov, to seize his £300m super yacht, ruling the £450m divorce agreement which had previously been agreed in the British courts was in fact contrary to Sharia law. The couple eventually settled.
As the new exiles sip champagne, no doubt they will be braced for similar turmoil. But for now the good times are rolling, and Dubai remains Moscow’s playground in the desert.