Prices at the Pumps - May 15, 2024 #saltwire #pricesatthepumps #gaspricesLONDON/FRANKFURT - The U.S. Treasury has warned Austria's Raiffeisen Bank International that its access to the U.S. financial system could be restricted because of its Russian dealings, according to a person who has seen a letter detailing the threat.
RBI's reluctance to pull back has increasingly frustrated U.S. officials aware that their sanctions have not been as effective as hoped. Sanctions enforcement agency OFAC launched an inquiry into RBI at the start of 2023.To unlock funds frozen in Russia, RBI had planned to buy a stake in construction group Strabag from a company the Vienna-based group identified as being controlled by Russian tycoon Oleg Deripaska.After repeated U.S.
Banks including RBI also say that exiting Russia is a complicated process, and that they cannot just sell up. U.S. sanctions denied Russian banks access to the SWIFT global payment system. That has made lenders like RBI a payment lifeline to hundreds of Russian companies. In its letter to RBI, Deputy Treasury Secretary Wally Adeyemo made reference to President Joe Biden's executive order authorising U.S. secondary sanctions on foreign financial institutions that conduct significant transactions involving Russia's military-industrial base.Richard Portes, a professor of economics at the London Business School who has studied sanctions, said curbing RBI's access would be"hugely damaging".
Secondary sanctions target foreign people or companies doing business with those already under U.S. sanctions.
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