Raiffeisen Bank International Under Observation by U.S. Sanctions Authorities

PeopleOther ♦ Published: March 11, 2024; 20:21 ♦ (Vindobona)

Raiffeisen Bank International (RBI), a prominent financial institution based in Austria, is the focus of the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) due to its ongoing business relationship with Russia. OFAC has contacted the bank to request details of its transactions and processes related to Russia.

Austrian RBI still has to justify its Russian business. / Picture: © Wikimedia Commons; salech hcelas, CC BY 3.0 (https://creativecommons.org/licenses/by/3.0/deed.en)

RBI confirmed that it has received questions of a general nature from OFAC aimed at clarifying the bank's payment transactions in light of the current developments between Russia and Ukraine. Despite the intense scrutiny, the bank assures that no specific transaction or business activity triggered the request and that it is cooperating fully, as reported by "DerStandard".

These developments come to the fore after an outstanding financial year for RBI in 2022, in which the bank made a profit of €3.6 billion, almost triple that of the previous year. A significant portion of this success stems from the bank's Russian business.

Meanwhile, the US authorities have signaled that they are seeking to intensify their monitoring of financial institutions with links to Russia. James O'Brien, responsible for coordinating sanctions at the U.S. State Department, emphasized the freezing of assets in the Russian banking sector and hinted at further possible measures.

The RBI also faced challenges when the Ukrainian National Agency for Corruption Prevention (NACP) blacklisted it as a "sponsor of war". The bank reiterated its desire to continue the dialog with the NACP to achieve its removal from this list.

The institution made a profit of 1.3 billion euros in 2023 through its Russian subsidiary and participated in a loan program for Russian conscripts, highlighting its position in Russia. RBI states that as a legal entity registered in Russia, it must follow Russian laws.

Despite the RBI's denial that there had been specific threats of sanctions from the US Treasury, the stock market reacted with concern, as reported by ORF. RBI shares recorded a temporary slump of over twelve percent on the Vienna Stock Exchange and ultimately closed down 5.5 percent.

RBI maintains its policies and procedures to comply with all applicable embargoes and financial sanctions and emphasizes the importance of continued communication with regulators. According to the RBI, this exchange has been regular since the beginning of the war in Ukraine and recently took place at an expert level with the U.S. Treasury in Washington.