Sanctions Monitoring. Banking Sector

04 March 2022
Stepan Guzey
Partner
Ellina Izotkina

As of 3 March 2022, the following economic restrictions were imposed on the banking sector.

EU SANCTIONS

  1. Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, Vnesheconombank (VEB), and VTB BANK will be disconnected from SWIFT starting from 12 March 2022 1

    2. Such measures will also be applied to any legal person, entity or body registered in Russia that owns, directly or indirectly, more than 50% of the said financial institutions.

    Along with this package of sanctions, a ban was imposed on the sale, supply, transfer or export of euro denominated banknotes to Russia or to any natural or legal person, entity or body in Russia, including the government and the Central Bank of Russia.

  2. sanctions against the Russian Direct Investment Fund 2

    3. It is prohibited to invest, participate or otherwise contribute to projects co-financed by the Russian Direct Investment Fund.

  3. sanctions against Alfa-Bank, Bank Otkritie, Bank Rossiya, Promsvyazbank, and Vnesheconombank (VEB) 3

    4. In respect of the said banks, it is prohibited to directly or indirectly (including on their behalf) purchase, sell, provide investment services for or assistance in the issuance of, or any other dealing with any transferable securities and money market instruments with a maturity (1) exceeding 90 days issued after 1 August 2014 to 12 September 2014 or (2) with a maturity exceeding 30 days, issued after 12 September 2014 to 12 April 2022, or (3) issued after 12 April 2022.

    The same sanctions were imposed on legal persons owned for more than 50 % by the above banks.

  4. sanctions against the Central Bank of Russia4

    5. Transactions related to the management of reserves and assets of the Central Bank of Russia were prohibited.

  5. restrictions on deposits and sale of securities 5

It was prohibited to European banks to accept deposits from Russian nationals or natural persons residing in Russia, or legal persons established in Russia, if the total amount of deposits exceeds EUR 100,000.

Until 27 May 2022, credit institutions shall submit to the national competent authority of the EU member state in which they are located, or to the European Commission, a list of deposits exceeding EUR 100,000 belonging to Russian nationals or natural persons residing in Russia or legal persons established in Russia. They are obliged to update the information on the relevant deposits available to the competent authorities every 12 months.

The sale of euro denominated securities issued after 12 April 2022, or units in collective investment undertakings providing exposure to such securities, was also prohibited.

The listing of shares of any Russian state-owned companies with a participation share of more than 50% on European stock exchanges is prohibited.

US SANCTIONS

  1. sanctions against Sberbank and its 25 subsidiaries, according to which, starting from 26 March 20226:
    • opening and maintaining of correspondent accounts and payable-through accounts for or on behalf of the said foreign financial institutions;
    • acquisition of shares and debts of persons of the said financial institutions.
  2. sanctions against Credit Bank of Moscow, Gazprombank, Alfa-Bank, Russian Agricultural Bank, and Sberbank prohibited 7:
    • provision of debt financing (including the issuance of new loans and attracting of new investments) and any other operations with a maturity of 14 days, if such financing was raised after 26 February 2022 inclusive;
    • acquisition of shares and debts of persons of the said financial institutions.
  3. blocking sanctions (SDN List) with respect to VEB and its subsidiaries (including BelVEB, Prominvestbank, and VEB-Leasing), Promsvyazbank and its subsidiaries; VTB BANK and its subsidiaries; Bank Otkritie and its subsidiaries; Sovcombank and its subsidiaries; Novikombank; Eximbank of Russia; Russian Direct Investment Fund; RDIF Management Company, Russian Venture Company Management Company.

The US Treasury has issued a number of general licences that introduce exceptions to the above sanction regimes, in particular: