Because of its Russian business: Raiffeisen receives another visit from US officials

The conversation will be about RBI’s Russian subsidiary bank and questions related to the Russia sanctions will be discussed.

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Anna Morris, a top U.S. Treasury Department official who deals with illicit international money flows and countries such as Russia and North Korea, will be in Vienna on March 7 and 8. In addition to the RBI, she will also meet representatives of the Austrian financial sector and government authorities. In the talks, the US authority also wants to discuss the powers of a new sanctions authority, which was introduced by US President Joe Biden in December. The background is that Russia is circumventing sanctions and continuing to procure important goods for its war production through third countries, explained the US Embassy. The new authority would target those financial institutions that conduct or facilitate significant transactions or provide any service related to Russia’s military-industrial base. The authority has also contacted other banks, it said.

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A spokesman for Raiffeisen Bank International confirmed the discussions. “The RBI regularly exchanges ideas with national and international authorities on the topics of sanctions and compliance. Such a dialogue will also take place this week,” the financial institution said. The RBI also states that it has comprehensive sanctions compliance and of course adheres to all applicable sanctions.

Financial institutions should take action

According to the embassy, ​​the Americans want to ensure that the banks understand the possible consequences of the sanctions. Financial institutions should take measures to refrain from military transactions. Otherwise, the financial institutions would risk being excluded from the US financial system, the US authorities warned. “Morris will explain the new authority to the Austrian financial sector and call on them to evaluate the extent to which there is a threat from related business activities and, if necessary, to take appropriate remedial measures.”

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The Ministry of Finance is looking forward to the meeting calmly. “The ongoing exchange with representatives of international partners is a daily practice,” said the ministry upon request. “As part of the visit to Vienna, the representative of the US Treasury will, as far as we know, meet representatives of the Ministry of Finance as well as other authorities and companies in order to discuss general issues such as money laundering and sanctions.”

RBI has often had to answer questions

The RBI has often had to answer questions from the Americans. At the beginning of 2023, the Office of Foreign Assets Control (OFAC), which is responsible for monitoring and implementing sanctions, requested information about the bank’s business in Russia. According to RBI, the request was general in nature and not triggered by any specific transaction or business activity. Nevertheless, the letter from the US authority worried the European financial regulators responsible for monitoring the Vienna institute.

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RBI has been active in Russia for 30 years and is the largest Western bank in the country, ahead of Italy’s UniCredit. The Russian business remains the largest single source of income. Since the outbreak of the war in Ukraine, the RBI has been examining options for exiting the country. Bank boss Johann Strobl is working on a sale or spin-off of the business, but the plans are making slow progress. Recently there was no longer a schedule.