Cash Does Not Smell

Russian banks circumvent sanctions via the UAE: new scheme for transferring millions of dollars to China exposed

The subsidiary of the Moscow Credit Bank uses the infrastructure of Mashreq Bank (UAE) (not subject to sanctions) to transfer funds to China, Turkey and the EU. An agreement worth more than 2 million US dollars with a Chinese company has been disclosed, despite international restrictions.

Despite the large-scale international sanctions imposed on the financial system of the Russian Federation after its full-scale invasion of Ukraine, Moscow continues to find loopholes to circumvent the restrictions. One of the most effective tools is the banking infrastructure of the United Arab Emirates.

According to the received information, Russian banks, in particular the sanctioned Moscow Credit Bank (ICC), actively use their subsidiary structure – bank «Blank» (not subject to sanctions) – to transfer funds through the Emirati bank «Mashreq». International payments made through these channels, particularly to China, allow the Kremlin to maintain financial ties in strategically important industries, including rare earth metals.

Financial corridor between Moscow and the Emirates

Bank «Blank» acts as an intermediary for direct conversions of Russian rubles into UAE dirhams. Transactions are carried out on average during 5–12 working days, which allows Russian companies to withdraw funds outside the sanctions jurisdiction under the guise of supporting small and medium-sized businesses.

The most worrying thing is that this financial scheme goes beyond the UAE. It covers China, Turkey and individual countries of the European Union where funds are sent through the same tools – with minimal risk of detection by Western financial monitoring systems.

Key to China: «Mashreq» account and Chinese banks

The parent company of the bank «Blank» has correspondent account (Nostro) at «Mashreq» bank, which makes it possible to directly conduct transactions in US dollars without the involvement of Western banks. Through this mechanism, funds are sent to the largest Chinese banks such as:

• Industrial and Commercial Bank of China (ICBC) (not subject to sanctions)
• Agricultural Bank of China (ABC) (not subject to sanctions)

Later, after a formal internal audit, the amounts are transferred to local banks in the PRC. The scheme helps to avoid Western control on financial flows, casting doubt on Beijing’s claims of compliance with sanctions discipline.

In most cases, transactions reach the final recipient in the PRC within 14 working days, even despite the stated measures to strengthen financial monitoring.

Agreement worth more than 2 million US dollars in the field of rare earth metals

The case that was documented as part of the investigation is particularly revealing.

In May 2025, a Russian company specializing in trading rare earth metals, spent payment in the amount of more than 2 million US dollars to a Chinese company Shandong GuoMing Import and Export CO. LTD (not subject to sanctions). The operation was implemented with the assistance of the Russian bank «Blank» and through a subsidiary branch of the Emirati bank «Mashreq», which is called «CITIBANK NA» (not subject to sanctions).

According to sources, the payment was made under the guise of an agreement with food or agricultural goods – thus the companies mask sensitive operations, related to critical resources.

Global consequences and responsibility of partners

This case demonstrates not only availability of a well-established infrastructure for circumventing sanctions, but also the financial complicity of banks in the UAE and China in providing shadow channels for financing Russian exports.

Although the UAE officially declares neutrality in Russia’s war against Ukraine, in practice, its banking system is increasingly involved in schemes that undermine Western sanctions regime. Similarly, China, despite its statements of restraint, provides critical support by tolerating such transactions.

Despite the efforts of the international community, Russia continues to adapt effectively, finding weaknesses in the global banking system. If there is no decisive and coordinated response to such actions, the effectiveness of sanctions as an instrument of international pressure will be at risk.

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