Citing such failings, the Financial Action Task Force, an influential money laundering watchdog, placed the UAE on its “grey” list on Friday.

A thriving colony of Russians in Dubai has made it a welcoming alternative to gathering places for oligarchs like London’s Kensington district or the French Riviera. the Russian Business Council, a Dubai-based nonprofit, estimates that there are around 3,000 Russian-owned Emirati businesses. The Russian Embassy in the United Arab Emirates said around 100,000 Russian speakers live in the country. About a million Russians visit every year. A Russian broadcaster, Tatiana Vishnevskaya, has built his career on promoting life and business in Dubai. New property developments are popping up “like mushrooms on a sunny day after rain,” she recently told a tourism industry website.

A Russian company, the Bulldozer Group, owns a dozen high-end restaurants and nightclubs in Dubai, including the local outpost of Cipriani. Caviar Kaspia, a Franco-Russian nightclub, boasts of the “largest selection of vodka in Dubai”.

As in the current campaign against Russia, Dubai has resisted previous US-led sanctions against Iran, as of 2006. Although the United Arab Emirates and Iran are opponents in regional politics, Dubai and Iran are a short boat ride across the Strait of Hormuz and share business and family ties dating back centuries.

But after six years, pressure from Washington and the emirate of Abu Dhabi has forced major financial institutions in Dubai to better comply with sanctions, said Esfandyar Batmanghelidj, an economist at the European Council on Foreign Relations. Yet since 2019, when Abu Dhabi began reopening diplomatic contacts with Tehran, Emirati trade with Iran has quietly resumed, he said.

“They can calibrate it and raise it and lower it,” Mr. Batmanghelidj added.

Emirati officials, seeking to get off the “grey” money laundering list, are already promising new transparency measures. These measures could also limit the ability of sanctioned oligarchs to hide assets or move money into Dubai.

The cut of some Russian institutions from the international electronic bank transfer system, called SWIFT, has already made it harder for them to do business with Dubai. And if Washington threatens to restrict Emiratis’ access to the US financial system – as during the early years of sanctions against Iran – it could motivate the Emiratis to cooperate more.