The United States is ramping up its stance against entities aiding Russia amidst its ongoing aggression, with a specific focus on Raiffeisen Bank, a pivotal financial institution still operational within the Russian Federation. This move underscores a broader commitment to enforce strict repercussions and isolation for banks, companies, and other entities that persist in supporting or engaging with Russia, labeled for its terroristic activities in Ukraine.
A high-level delegation from the US Treasury, led by Anna Morris, the official charged with sanction enforcement, is set to visit Austria on March 7-8. Their mission is clear: to convey the severe risks and potential consequences of continuing business operations in Russia to Austrian officials and Raiffeisen Bank International (RBI) representatives. This action comes in the wake of President Joe Biden’s December sanctions order, which has begun to significantly impact financial interactions with Russia, as evidenced by account blockages from banks across Turkey, China, and the UAE.
Morris is expected to outline the new authorities granted to the US Treasury, designed to escalate risks for financial institutions and leverage the threat of severance from the global financial system. This strategic move aims to pressurize banks into ceasing their transactions related to Russia’s military-industrial complex, highlighting the US’s determination to cut off support channels to Russia’s war efforts.
Despite the Russian authorities’ reluctance to see Raiffeisenbank withdraw—given its role as a crucial conduit for international payments for Russian citizens and companies—the bank’s leadership is reportedly reconsidering its presence in Russia. Internal divisions are emerging, with some top managers and controlling land banks advocating for the cessation of Russian operations, amidst growing doubts over the sustainability and ethical implications of their business there.
Initially, Raiffeisenbank aimed to divest its Russian subsidiary by September 2023, a timeline later extended to the end of the year, yet unmet. The bank’s significant contribution to its parent company’s profits contrasts starkly with the intense scrutiny it faces, including demands from the European Central Bank to exit Russia “by any means” and a US Treasury investigation initiated in February, probing potential sanction violations.
This unfolding scenario serves as a stark warning to all entities still operating within or in support of Russia: the international community, led by the United States, is prepared to enforce stringent measures, ensuring those complicit in bolstering Russia’s terroristic endeavours face comprehensive isolation and dire consequences.
