The US sanctions were supplemented by two Russian credit institutions – Ak Bars and Sinko-Bank

The American sanctions list was replenished with two Russian credit organizations, Ak Bars and Sinko-Bank – different in scale and profile, but similar in terms of the foreign exchange settlement business. The latter, according to lawyers, may be the subject of attention of US authorities, even if ties are built with banks from friendly jurisdictions. For bankers, this is a risky but profitable business that is actively developing among market participants not covered by sanctions.

Ak Bars Bank, which is in the top 25 in the Russian Federation by assets, and Cinco Bank, which is in the third hundred, are included in the blocking sanctions list USA, announced the US Office of Foreign Assets Control (OFAC).

As the US authorities clarify in press releasenew sanctions on the financial sector of the Russian Federation “are intended to limit the ability to use connections with the international financial system.”

Both Russian banks (according to data before the closure of information about shareholders, Ak Bars was under the control of Tatarstan, Sinco Bank belonged to an Israeli citizen) were actively conducting business in the field of foreign currency payments. In particular, Ak Bars had direct correspondent relations with banks in China, the UAE and Turkey; transfers in the currencies of the CIS countries were available to it.

Since the spring of 2022, Cinco Bank began offering to open accounts and make payments in Chinese yuan. To date, payments in liras, drams, tenge, sums, soms, and somoni have been available to its clients. It was planned to launch settlements in dirhams. The bank positioned itself as a bank for exporters and importers, while emphasizing on its website that this activity was “without the risk of sanctions.”

In “Ak Bars” noted, that “if the conditions for conducting currency transactions change, the bank will inform about this additionally.” Sinko-Bank did not respond to Kommersant’s request.

There are still banks in the Russian Federation that, including due to their special situation, retain freedom of action. For example, the SDN list still does not include Rosselkhozbank (but the bank is under EU sanctions and is disconnected from SWIFT) and Gazprombank.

RSHB is considered as a bank for servicing grain transactions. In March 2022, GPB became authorized to open special ruble accounts for foreign buyers to make payments for gas supplies. Large foreign banks without Russian beneficiaries are also relatively safe.

At the same time, according to lawyers, in order to fall under sanctions, it is enough to be, firstly, just a Russian bank, and secondly, to expand the range of currency payments.

Artem Kasumyan, a lawyer at the Delcredere Bar Association, explains that activities in the Russian financial sector due to US Presidential Decree No. 14024 in itself is sufficient for sanctions. Tomashevskaya & Partners partner Andrey Shpak adds that the American regulator “can focus on assessing the role of a particular bank in servicing payments of Russian companies, including those with friendly countries.” For example, he clarifies, Ak Bars had a reputation as a bank specializing in settlements in dirhams, and individual banks that were subject to sanctions before it were actively expanding the range of settlement currencies.

One of the bankers believes that the model of sanctions risks is as follows: firstly, the presence of public information about the possibility of conducting international payments, secondly, the atypical growth of business volumes in this segment, thirdly, the presence of large clients from the sanctions lists or from industries , adjacent to those already fully sanctioned (for example, the military-industrial complex).

In general, the introduction of sanctions is aimed “both at an attempt to block an established channel for international payments in currencies alternative to the dollar” and “to intimidate possible counterparties of other Russian banks,” notes Andrey Shpak Head of International Practice of Uppercase Legal Ratmir Proskurnov, in addition, sees the risks of getting caught subject to sanctions in the future not only of Russian banks, but also of persons associated with asset management, which play a key role in the financial services sector of the Russian Federation.

Olga Sherunkova, Anna Zanina