The US has issued a warning to Austria’s top bank, Raiffeisen Bank International (RBI), threatening sanctions for conducting business in Russia. This warning comes after previous briefings with German lenders.
The US Treasury cautioned RBI that it could face exclusion from the US financial system if it was found to be supporting Russia’s military efforts.
In a press release on Thursday (7 March), the US Treasury delivered a stern message to RBI.
Anna Morris, a senior Treasury official, also held meetings with the Austrian government and RBI executives in Vienna on Thursday and Friday.
RBI declined to comment on the discussions with authorities but expressed its desire to disassociate itself from Russia’s military activities.
Ukraine’s National Agency on Corruption Prevention (NACP) has identified RBI as a sponsor of war in its blacklist of international entities.
RBI’s spokesperson stated, “Yes, RBI aims to engage in dialogue with NACP to be removed from this list.”
Ukraine’s NACP sanctions director, Agiya Zagrebelska, emphasized that RBI plays a significant role as a financial intermediary between the EU and Russia. She raised concerns about the bank’s involvement in the Russian market given the civil-military integration of the Russian economy.
RBI generated €1.3bn in profit in Russia last year, with nearly 10,000 employees in 490 branches. The bank also participated in a Russian program offering loan benefits to military conscripts.
Despite these developments, RBI stressed its commitment to complying with Russian laws.
According to Zagrebelska, the issue of EU firms supporting Russia’s war efforts extends beyond Austria’s borders. RBI is among the eight major EU banks still operating in Russia.
Other banks include Dutch lender ING, Germany’s Commerzbank and Deutsche Bank, Hungary’s OTP Bank, Italy’s Intesa SanPaolo and Unicerdit, and Sweden’s SEB.
Commerzbank revealed that US Treasury officials had informed German financial institutions about the new sanctions threat. Talks with banking associations included discussions with representatives from the Office of Foreign Assets Control (OFAC), the US Treasury’s financial intelligence unit.
The US Treasury acquired enhanced powers in December to address what it termed “Russian Harmful Foreign Activities.”
Commerzbank, which provides corporate banking services to German companies in Russia, stated that it prioritizes sanctions compliance and has implemented measures to mitigate risks associated with its Russia-related activities.
ING highlighted the potential consequences of the new US rules, emphasizing the importance of compliance with international sanctions laws to avoid sanctions or restrictions on accessing the US-dollar clearing system.
Despite these developments, ING assured that it adheres to all relevant sanctions laws and regulations.
The US Treasury’s threat against RBI reflects a broader trend of imposing sanctions on European entities, as seen in former President Donald Trump’s penalties on firms involved in the Nord Stream 2 gas pipeline project. The EU has issued regulations prohibiting EU firms from complying with extra-territorial US sanctions on Cuba and Iran.
The EU foreign service and Austria refrained from criticizing the US Treasury’s actions, emphasizing the autonomous nature of EU sanctions and their applicability only to EU entities and citizens.
