Countries that allow Russian banks to open branches at risk of US sanctions – Financial Times

The White House is warning countries that trade with Russia of the risk of being subject to secondary sanctions if they allow Russian banks to open local branches to finance the supply of goods to the Russian military-industrial complex. 

Source: Financial Times

Details: It is noted that the US actions are aimed at closing the loopholes used by the Russian Federation, in particular, finding unclear ways to pay for dual-use goods needed for weapons production. 

US Deputy Treasury Secretary Wally Adeyemo said that Washington was ready to prosecute countries that allowed Russian banks to open branches in their jurisdictions to avoid Western sanctions, even if the bank itself was not under sanctions. 

Quote: "We will go after the branch they’re setting up, but also the other entities and the companies in your jurisdiction that work with them," Adeyemo said. 

In December 2023, President Joe Biden's administration issued an executive order warning foreign financial institutions that they were at risk of secondary sanctions if they conducted or facilitated transactions related to the Russian military-industrial complex. 

The US Deputy Treasury Secretary also added that after large banks in China, Türkiye and the UAE refused to cooperate with Russian counterparties, the US turned its attention to smaller banks in other countries. 

Background: The US and EU are increasing pressure on Austria's Raiffeisenbank so as to weaken its ties with Russia.

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