US Imposes Sanctions on Final Major Russian Bank Linked to SWIFT
Washington has introduced fresh sanctions targeting Gazprombank, which serves as Russia's main financial institution for energy transactions. Read Full Article at RT.com
TroibNews 
The recent sanctions imposed by Washington focus on Gazprombank and six of its foreign subsidiaries, effectively prohibiting them from engaging in dollar transactions. This announcement was made by the Office of Foreign Assets Control (OFAC) on Thursday. Gazprombank, Russia’s third-largest bank and the primary institution for energy-related transactions, was the last major Russian bank to maintain access to the SWIFT interbank messaging system.
Following the escalation of the Ukraine conflict in 2022, the UK and Canada had already placed sanctions on Gazprombank. However, the US had previously refrained from doing so because the bank was utilized by EU countries to facilitate payments for Russian gas. OFAC justified its action by stating that Moscow was leveraging Gazprombank as a “conduit to purchase military materiel.” As a result of these new measures, the bank is now barred from conducting new transactions within the dollar-based financial framework, and its assets in the US have been frozen.
OFAC indicated it has issued new general licenses permitting US residents to continue transactions related to Gazprombank to ease the transition away from cooperation with the bank. These licenses will enable diplomatic banking transactions and will also cover activities pertaining to agricultural commodities and medicine.
In response to the sanctions, Gazprombank asserted that its operations within Russia will remain unaffected, emphasizing that all of its cards, including those linked to foreign payment systems, will function as usual. However, the bank cautioned that UnionPay cards might cease to work outside the country.
In addition to Gazprombank, over 50 small to medium-sized Russian lenders, such as BCS Bank and state-owned DOM.RF, as well as approximately 40 Russian securities registrars and 15 financial officials, are also included in the new restrictions. OFAC stated that the goal of these actions is to further limit Russia’s engagement with the international financial system.
“Today’s sanctions targeting Russia’s largest remaining non-designated bank [Gazprombank], as well as dozens of other financial institutions and officials in Russia, will further diminish and degrade Russia’s war machine,” Treasury Secretary Janet Yellen remarked late on Thursday. She added that this “sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military.”
OFAC additionally issued a warning to international financial institutions against joining Russia’s System for Transfer of Financial Messages, a rival to SWIFT. OFAC claimed that Moscow is using this system to “evade sanctions and fund its war effort,” mentioning that secondary sanctions could target foreign financial bodies that choose to participate.
Moscow has consistently criticized Western sanctions as unlawful, contending that they have not succeeded in destabilizing the Russian economy or isolating the country from the global financial sphere. Instead, it argues, these measures have had unintended consequences for the states that imposed them.
Mark B Thomas contributed to this report for TROIB News
Following the escalation of the Ukraine conflict in 2022, the UK and Canada had already placed sanctions on Gazprombank. However, the US had previously refrained from doing so because the bank was utilized by EU countries to facilitate payments for Russian gas. OFAC justified its action by stating that Moscow was leveraging Gazprombank as a “conduit to purchase military materiel.” As a result of these new measures, the bank is now barred from conducting new transactions within the dollar-based financial framework, and its assets in the US have been frozen.
OFAC indicated it has issued new general licenses permitting US residents to continue transactions related to Gazprombank to ease the transition away from cooperation with the bank. These licenses will enable diplomatic banking transactions and will also cover activities pertaining to agricultural commodities and medicine.
In response to the sanctions, Gazprombank asserted that its operations within Russia will remain unaffected, emphasizing that all of its cards, including those linked to foreign payment systems, will function as usual. However, the bank cautioned that UnionPay cards might cease to work outside the country.
In addition to Gazprombank, over 50 small to medium-sized Russian lenders, such as BCS Bank and state-owned DOM.RF, as well as approximately 40 Russian securities registrars and 15 financial officials, are also included in the new restrictions. OFAC stated that the goal of these actions is to further limit Russia’s engagement with the international financial system.
“Today’s sanctions targeting Russia’s largest remaining non-designated bank [Gazprombank], as well as dozens of other financial institutions and officials in Russia, will further diminish and degrade Russia’s war machine,” Treasury Secretary Janet Yellen remarked late on Thursday. She added that this “sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military.”
OFAC additionally issued a warning to international financial institutions against joining Russia’s System for Transfer of Financial Messages, a rival to SWIFT. OFAC claimed that Moscow is using this system to “evade sanctions and fund its war effort,” mentioning that secondary sanctions could target foreign financial bodies that choose to participate.
Moscow has consistently criticized Western sanctions as unlawful, contending that they have not succeeded in destabilizing the Russian economy or isolating the country from the global financial sphere. Instead, it argues, these measures have had unintended consequences for the states that imposed them.
Mark B Thomas contributed to this report for TROIB News
