Russia rejected on Wednesday the return of UN sanctions on Iran, saying it does not recognise the snapback mechanism activated by western powers at the weekend.
"We do not recognise the snapback as coming into force," Russia’s UN ambassador Vasily Nebenzya said at a media conference marking the start of Moscow’s presidency of the UN Security Council for October. “We’ll be living in two parallel realities, because for some snapback happened, for us it didn’t."
Mr Nebenzya accused western states of breaching Security Council Resolution 2231, which endorsed the 2015 Iran nuclear deal, by seeking to reapply measures that expired in 2023.
He said the US and its allies had “forfeited a diplomatic solution” by pursuing “an illegal procedure” while ignoring Russian and Chinese proposals to extend the resolution to allow further talks.
Last week, the UN Security Council rejected a last-minute effort backed by Russia and China to delay for six months the reimposition of sanctions on Iran.
The vote on a draft resolution failed to secure the minimum nine votes needed in the 15-member Security Council.
Britain, France and Germany triggered the 30-day mechanism in August, accusing Tehran of breaching the 2015 nuclear deal aimed at curbing its atomic programme.
The European powers argue Iran has advanced uranium enrichment activities well beyond levels necessary for civilian use, eroding the milestone agreement.
Mr Nebenzya added that Russia and China, along with Iran, had sent letters to UN Secretary General Antonio Guterres urging him not to reinstate the sanctions committee or enforce measures that Moscow insists are no longer valid.
“Our western colleagues keep saying they are open for diplomatic solutions, although they basically killed diplomacy by triggering snapback,” Mr Nebenzya said.
The comments underline the deep split within the Security Council over Iran, with western nations pressing to restore international restrictions while Russia and China argue that no legal basis exists for their return.
As Mr Nebenzya was speaking to reporters in New York, US Secretary of State Marco Rubio announced on social media that Washington had begun implementing snapback sanctions against Iran.
Mr Rubio said the measures include new sanctions and export controls targeting 44 individuals and entities linked to Tehran’s nuclear, missile and military programmes. “As [US President Donald Trump] has made clear, we will deny Iran all paths to a nuclear weapon,” Mr Rubio wrote.
With the return of UN sanctions, Iran faces once more an arms embargo, a prohibition on uranium enrichment and reprocessing, and restrictions on activities tied to ballistic missiles capable of carrying nuclear warheads.
The measures also reinstate travel bans and asset freezes on dozens of Iranian individuals and entities, along with a ban on supplying materials that could support the country’s nuclear programme.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
