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Wednesday, April 17, 2024

USA. The US Sanctions Authority (OFAC) is interested in Raiffeisen Bank in Russia

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The US Sanctions Authority has launched an investigation into Raiffeisen Bank International. The bank is among the few European financial organizations that remain in Russia after the country’s attack on Ukraine. OFAC asked Raiffeisen for details of its presence in Russia as well as partially occupied Donbass, Ukraine and Syria, including transactions and activity of some clients, Reuters learned.

Raiffeisen Bank confirmed it received a request in January from the US Treasury Department’s Office of Foreign Assets Control (OFAC) to clarify the details of certain transactions. Reuters reported that the bank’s presence in Russiapartially occupied DonbassUkraine and Syria.

Raiffeisen still remains in Russia

OFAC requested a response by February, but Raiffeisen’s lawyers negotiated an extension to that deadline. They undertook to send their answers in three deadlines: in April, May and June. Raiffeisen told Reuters in a statement that he was fully cooperating with OFAC.

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The bank has no criminal record in the past, but the January request for information worries European financial supervisors. Raiffeisen is of great importance in the Russian financial system and is one of two foreign banks included in the list of 13 systemically important credit institutions of the Russian Central Bank. Almost a year after starting war in Ukraine, Raiffeisen is among the few European banks that remain in Russia. As a result, he met with criticism from investors. The bank explained that its exposure in Russia was limited.

Raiffeisen posted a net profit of around €3.8 billion last year, largely thanks to its €2 billion profit from its Russian operations. In the meantime, Russian citizens have deposited more than 20 billion euros with the bank.

Possible sanctions

The US Treasury Department imposes sanctions and penalties on those entities that violate the law. Its most severe sanctions tool is the freezing of US assets and exclusion from access to US dollars – vital to international trade and finance.

The strongest sanction tool in OFAC is the SDN list (Specially Designated Nationals And Blocked Persons List). Assets held in the United States are then frozen and American companies or individuals are prohibited from dealing with listed entities.

In this way United States influence the enforcement of their sanctions abroad. Alternatively, OFAC may also resort to less stringent measures, such as imposing fines and sending warning letters for sanction violations.

Reuters recalled that after Russia invaded Ukraine, the US cut off Sberbank from processing payments through the US financial system. Its European branch, based in Vienna, had to close down.

Read also: More sanctions on Russia. Ten entities on the list

Main photo source: TATYANA MAKEYEVA / Reuters / Forum

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