Puttin’s and Russian Army’s wallet banks, among the excluded from the SWIFT system

The EU Council announced today the list of banks that shall be affected by the SWIFT cut from 12th March 2022, in aplication of the Council Regulation (EU) 2022/345 published on the official Journal of the European Union today.

The list included in the Annex XIV of the regulation lists the following entities: Bank Otkritie; Novikombank; Promsvyazbank; Bank Rossiya; Sovcombank; VNESHECONOMBANK (VEB); and VTB BANK.

“It shall be prohibited as of 12 March 2022 to provide specialised financial messaging services, which are used to exchange financial data, to the legal persons, entities or bodies listed in Annex XIV or to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIV,” the new Article 5h to be inserted in the previousapproved and published Council Regulation (EU) Nº 833/2014, which is ammended by the one published today.

The EU Council Regulation Nº 833/2014 included the restrictive measures in view of Russia’s actions destabilising the situation in Ukraine adopted by the EU Council on 27 February 2022.

About the Banks affected by the SWIFT cut

Headquartered in St. Petersburg, Bank Rossiya is the financial entity where Sergei Pavlovich, one of the Russian oligarchs sanctioned by the European Union by the war in Ukraine, keeps his assets. Roldugin is part of Putin’s network financial scheme. In fact this Russian businessman is known as in Moscow as “Putin’s wallet”.
Bank Rossiya is considered as the personal bank of Senior Officials of the Russian Federation. Since the illegal annexation of Crimea, this entity has opened branches across Crimea and Sevastopol, thereby consolidating their integration into the Russian Federation.

Promsvyazbank is a Russian State-owned bank, which provides financial support to the Russian defence sector and the Russian Military, which is responsible for the massive deployment of Russian troops along the border with Ukraine and for the presence of Russian troops in the Crimean peninsula.
Promsvyazbank is directly instructed by the President of the Russian Federation, Vladimir Putin, and therefore provides financial and material support to Russian decision-makers responsible for the destabilization of Ukraine and the illegal annexation of Crimea. Promsvyazbank operates as well in the Crimean Peninsula.
Peter Mikhaylovich Fradkov (President of Promsvyazbank) is one of the Russian oligarchs sanctioned by the EU by the war in Ukraine.

Bank for Development and Foreign Economic Affairs (Vnesheconombank -VEB-) is a Russian State corporation created by the Russian Government with the following objectives: fostering competition and diversification in the Russian economy, and promoting investment.

The development bank provides investment, foreign trade, insurance and advisory support for projects in and outside Russia. Its projects include developing infrastructure, innovation, Special Economic Zones, environmental protection, and providing support for exports of Russian goods and services, as well as for SMEs.
VEB has been entrusted by the Russian Government with some specific tasks servicing the debts of the former USSR and the Russian Federation, as well as trust management of Russian citizens’ accumulated pension assets.

This institution operates in the following sectors: aerospace, ship-building, electronics, nuclear industry (including nuclear power), heavy transport, special and power engineering; metallurgy (production of special steels); wood processing; defence; agriculture; strategic computer technologies and software; information and communications technology; and medical technology and pharmaceuticals.

Established in October 1990 by the RFSFR State Bank and Ministry of Finance to service Russia’s foreign economic transactions and promote the country ’s integration into the global economy, Vneshtorgbank (VTB; Foreign Trade Bank) conducts all types of banking transactions in Russian roubles and foreign currencies.
Owner of the 60,93% of the capital equity of VTB, The Russian Government is the main shareholder of this bank who is an open joint stock company.
The Ministry of Finance of the Russian Federation holds 100% of Type 1 preference shares, and the Deposit Insurance Agency holds 100% of Type 2 preference shares of the Bank. The aggregate stake of the Russian Federation (through the Federal Agency for State Property Management and the Ministry of Finance), and the Deposit Insurance Agency is 92.23% of the Bank’s share capital.

VTB is the owner of Guta Bank (one of the main retail banks in Russia), Promstroybank (PSB, is the main shareholder of the Cypriot RCB Bank and operates the joint Pochta Bank project with Russian Post (mass retail segment). The VTB merged with the Bank of Moscow in 2016.

VTB became the first Russian bank to receive a banking licence in China and India, and operates through its branches there since 2008.
The VTB group’s investment business is operated through VTB Capital in Russia and VTB Capital PLC (formerly VTB Europe) outside Russia.
VTB Group is a global provider of financial services, comprised of over 20 credit institutions and financial companies operating across all key areas of the financial markets. This enables the group to facilitate international partnerships and promote Russian companies aiming to engage with global markets.
VTB Group operates a large international network across CIS countries: Armenia, Belarus, Kazakhstan and Azerbaijan, has subsidiary and affiliated banks in the United Kingdom, Germany, Switzerland, Hong Kong, Georgia, Angola, VTB Bank branches in China and India, VTB Capital branch in Singapore and VTB Bank (Europe) branch in Austria.

Positioned as the bank of the Russian industry and high technologies, Novikombank was established in 1993 and is headquartered in Moscow.
Among the bank’s customers are high-tech companies from the machine-building, oil and gas, and aeronautical engineering industries. Novikombank’s shareholder and key partner is the State Corporation Rostec.

As a Rostec’s core bank, Novikombank serves more than 700 of the State Corporation’s entities and holding companies, managing their investment flows. One of the primary collaboration vectors between Rostec and Novikombank is the establishment of corporate settlement centers for Rostec’s holding companies and a Consolidated Corporate Treasury for the State Corporation itself.

Specifically, Novikombank collaborates with VEB.RF on the Project Finance Factory, with Russian Export Center on programs to support Russia’s exports, and with the Russian Small and Medium Business Corporation to develop programs to extend loans to the country’s small and medium businesses. The bank signed agreements with the Industrial Development Fund, for concessional loan support, and with the Monocities Development Fund, to carry out investment projects in single-industry municipalities.

The bank operates the following business: services for corporate clients; lending; retail business; Operations in financial markets; international operations and interbank business; and regional business.

Otkritie Financial Corporation Bank (former NOMOS Bank) was established in 1993 and is the parent company of Otkritie FC Banking Group.
Okritie FC is the largest private held bank of Russia and operates in the following business sectors: corporate banking, trade finance, precious metals, private banking and investment banking.
Otkritie FC Banking Group offers a wide range of banking products and services to corporate, small business and retail clients. As at 31 March 2014, Otkritie FC Bank served approximately 18,000 corporate customers, 140,400 small business clients and approximately 3,2m retail customers, including private banking clients.

Further economic restrictive meassures entering into force today

The same EU Council regulation 2022/345 also bans:

a) Investing, participating or otherwise contributing to future projects co-financed by the Russian Direct Investment Fund.

This ban has just two exceptions: Projects under contracts singned before 2 February 2022 that may be authorised under certain circumstances by the competent Authotrities; and ancillary contracts needed to execute the agreements signed before 2 Fabruary 2022.

b) Selling, supplying, transferring or exporting euro denominated banknotes to Russia or to any natural or legal person, entity or body in Russia, including the Government and the Central Bank of Russia, or for use in Russia.

Today’s decisions complements the package of measures announced by the High Representative after the video conference of EU Foreign Affairs Ministers of 27 February. Such package also includes the provision of equipment and supplies to the Ukrainian Armed Forces through the European Peace Facility, a ban on the overflight of EU airspace and on access to EU airports by Russian carriers of all kinds, a ban on the transactions with the Russian Central Bank, and the prohibition for state-owned media Russia Today and Sputnik’ to broadcast in the EU.

Image over the headline.- Ukraine and EU flags.© European Union.

Related Eastwind links:

The Central Bank of Russia takes urgent measures to paliate Ruble’s fall, national reserves freeze and SWIFT exclusion: Some comments on how effective the counter measures may be

The United States and EU Commission commit to exclude several Russian banks from the SWIFT inter banking code system: Devastating effects on Russian economy but not at no no cost

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