Dubai-based Russian shipping company sanctioned
The European Union has slapped sanctions on a Dubai-based subsidiary of Russia’s state-owned shipping giant, as the West steps up efforts to stem Moscow’s use of the Middle East as an economic lifeline.
Sanctions were placed on Sun Ship Management, which the EU said is part of the Russian government-controlled shipping company, Sovcomflot. The decision freezes Sun Ship's assets in the EU and bans banks from financing the company.
According to the EU, Sun Ship is responsible for transporting more than 70 percent of Russia’s energy revenue. The company was established in Dubai in 2012. In April 2022, Sovcomflot transferred the management of 92 of its tankers and LNG carriers to Sun Ship, the Wall Street Journal reported previously, citing Russian shipping executives.
“Sun Ship has been operating as one of the key companies managing and operating the maritime transport of Russian oil,” the EU said. “The Russian Federation is the ultimate beneficiary.”
The UAE has emerged as a major economic hub for Russia amid the war in Ukraine.
Non-oil trade between the two grew by 57 percent in the first nine months of 2022, breaking all records. In December, Emirati Trade Minister Thani bin Ahmed al-Zeyoudi pledged to “push trade to even greater heights".
The Emirates has become an important staging ground for Russian energy. Last year, EU states banned Russian crude and G-7 countries instituted a $60 per barrel price cap. In February they followed up with a price cap and ban on Russian petroleum products. Russia’s state-owned energy giant, Lukoil, moved its trading operations to Dubai last year.
Western officials have been paying greater attention to the UAE’s economic links to Russia. The White House dispatched a treasury official to both Turkey and the UAE in February this year to pressure them to cut commercial ties with Russia.
On Friday, a Russian bank operating in the UAE was sanctioned by the US amid concerns that Moscow’s growing economic ties to the Middle East are helping it evade western sanctions, as the war in Ukraine enters its second year.