Since Russia’s invasion of Ukraine, the massive flow of Russian riches stashed offshore has gone only one way: away from houses in London, New York, and other once-welcoming cities to avoid the new “iron curtain” of Western sanctions. As Russian billionaires and kleptocrats sought another safe haven, they discovered it most notably in Dubai. Despite being a reportedly important US partner in the Middle East, the UAE has done more than any other country to assist Russian kleptocrats in evading US-led sanctions over the Ukraine war.

For years, the UAE has had a dirty money problem due to the Gulf monarchy’s tolerance for entering foreign riches in whatever shape or form. From Turkish crime leaders to over-sanctioned Middle Eastern authoritarians to Iran’s Revolutionary Guards, the Emirates have emerged as one of the world’s major money launderers. Nonetheless, unlike Panama, the Cayman Islands, or the British Virgin Islands, luring filthy foreign wealth is not only a profit-making ploy for the UAE. It has become an essential component of its policy to safeguard corporate interests through overseas influence networks that blur the borders between business and diplomacy.

Wedged between Saudi Arabia and Iran, and troubled by worries of losing US support, the UAE has struggled to compete with its larger neighbors in more traditional foreign policy domains. To secure the federation of city states that comprise the Emirates, Abu Dhabi has had to use hard and soft power to build several levers of influence that benefit the affluent but traditionally tiny state.

In doing so, the UAE revolutionized statecraft by delegating important aspects of its foreign policy from massive, state-run bureaucracies and ministries to smaller networks comprised of state and non-state players, with commercial interests frequently clashing with national security. These various networks are effectively controlled and directed by three brothers in Abu Dhabi’s ruling family: Mansour bin Zayed al-Nahyan, a billionaire businessman and minister; Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser; and Mohammad bin Zayed al-Nahyan, Abu Dhabi’s crown prince and de facto ruler. Influential foreign dignitaries, commercial firms, banks, Washington lobbyists, and even think tanks are among the networks they have built to support Emirati interests, many of which are linked to Mansour’s investment portfolios or Tahnoon’s Office of Strategic Affairs.

Delegating and outsourcing the UAE’s foreign policymaking to these firms allows the Emirati government to maintain plausible deniability when establishing different dependencies abroad. The state-owned logistics multinational DP World is utilized to secure access to essential infrastructure like as ports in Djibouti, Berbera, Aden, and Dakar, providing the UAE with substantial political and economic power in those nations. The UAE does the same with its extensive worldwide financing networks. During the Saudi-led boycott of neighboring Qatar, the Emirates utilized their influence at Luxembourg-based Banque Havilland to fight a financial war against Qatar in order to weaken its currency. The UAE has also nurtured and supported networks of conservative and right-wing politicians and lobbyists in Brussels, London, and Washington to influence and sabotage government decisions.

Dubai’s position as a worldwide financial hub—but actually, a location where it is simple to do business and conceal your money, a Club Med for authoritarians and their financiers—is critical to the UAE’s murky business-meets-foreign-policy agenda. From luxury beachfront properties to gold, cryptocurrencies, and other shadowy financial services, the UAE has provided a range of investment opportunities to a cast of unsavory figures: Syrian regime financier Rami Makhlouf; Libyan warlord Khalifa Haftar; ousted Afghan President Ashraf Ghani, attempting to hide stolen public funds; members of ex-Kazakh strongman Nursultan Nazarbayev’s clan, seeking a safe haven for their

With no questions asked, the UAE provides the ideal package for anybody attempting to avoid sanctions for ill-gotten assets obtained via corruption, exploitation, or other illegal actions. For these powerful elites, the Emirates have become synonymous with their own family’s wealth and financial security, which the Emirati government can then use to broker other deals, shape attitudes and behavior, and obtain preferential treatment for the UAE in the countries of these elites in a global competition for influence and access.

The same may be said for hosting Kremlin kleptocrats. In a nation like Russia, where state and business networks are as entwined as they are in the UAE, most of the ostensibly private Russian money and equity leaving countries like London, Monaco, or Switzerland is very certainly linked to President Vladimir Putin. According to The New York Times, at least 38 businesspeople and officials linked to Putin’s inner circle and subject to Western sanctions possess 76 homes valued more than $314 million in Dubai alone. This list contains those directly associated with Putin’s war activities.

Ruslan Baisarov, one of Russia’s wealthiest businessmen and the principal funder of Chechen leader Ramzan Kadyrov, and Alexander Borodai, Russia’s previous separatist leader in Ukraine’s Donetsk area, both possess multimillion-dollar residences in the Emirates. Kadyrov, whose Chechen militants have been charged with war crimes in Ukraine, and who serves as the Kremlin’s de facto Middle East ambassador, has a personal relationship with Abu Dhabi’s crown prince, Mohammad bin Zayed. It comes as no surprise that he has at least one lavish property in Dubai, which he often visits.

Mansour and his office have increased efforts to entice Russian tycoons and oligarchs to join their compatriots on the shores of Dubai since the beginning of Russia’s war against Ukraine, because he understands how important their networks can be not only in managing bilateral relations with Moscow, but in advancing mutual interests in the region. Russia and the UAE share a dread of democracy and civil society mobilization, instead embracing Middle Eastern “authoritarian stability.”

In Libya, the UAE combined its official and unofficial networks with the Kremlin’s. The Wagner Group, a renowned Russian mercenary gang, has operated in Libya from Emirati facilities near al-Khadim and al-Jufra. In their unsuccessful effort to conquer Tripoli in 2019, Haftar’s self-styled Libyan National Army used UAE-sponsored militia networks with Russian mercenaries. The Pentagon later claimed that the Wagner Group was funded by Abu Dhabi at the time.

All of this explains why the UAE is unconcerned about the reputational repercussions of becoming such a public center for filthy money. Despite recently being added to an international watchdog’s money-laundering “grey list,” the Financial Action Task Force, it is unlikely that the Emirati government will clamp down on these deliberate flaws in its financial system, because it can strategically exploit them for leverage with influential partners and clients in areas of the UAE’s strategic interests. The potential provided by Russian money for the UAE in fostering connections that combine business and diplomacy, as well as building networks for both political and economic power, far outweigh any image issues in the West. With the Kremlin’s kleptocracy reliant on the UAE to protect itself from Western sanctions, Abu Dhabi will almost certainly be able to curry favor with Moscow soon.