Ukraine Removes Raiffeisen Bank International from the List of "War Sponsors"

PeopleOther ♦ Published: December 17, 2023; 17:43 ♦ (Vindobona)

The Ukrainian government has temporarily removed Raiffeisen Bank International (RBI) from the controversial list of "war sponsors". This step follows intensive bilateral talks and consultations with representatives of the European Commission. RBI, which was previously criticized for its business activities in Russia and the recognition of the self-proclaimed Donetsk and Luhansk People's Republics by its Russian subsidiary, is now no longer suspected of supporting the Russian war of aggression.

Ukraine softens criticism of RBI's Russian business after pressure from the Austrian government. RBI is to be removed from the list of "international sponsors of the war". / Picture: © Raiffeisen Bank International AG / S. Klimpt

The decision to "suspend" RBI's status came after reports of pressure from the Austrian government. Insiders claim that the removal of the RBI from the list was a condition of Austria's agreement to new EU sanctions against Russia. However, this has not been officially confirmed. Austrian Chancellor Karl Nehammer rejected a direct link between the removal of the RBI from the list and the latest EU sanctions decisions.

The list of "war sponsors" was introduced by Ukraine to denounce companies that continue to do business in Russia after the Russian invasion. RBI, as the largest Western bank in Russia, had difficulties disengaging from its business there. CEO Johann Strobl had stated that a complete withdrawal by the end of the year was unlikely, as possibilities for a sale had to be explored first.

The previous status of RBI has been "suspended", the National Agency for the Prevention of Corruption (NASK) of Ukraine announced, according to Observers suspected a connection with the latest EU decisions to support Ukraine.

Austrian government supports RBI

It was reported by insiders that Austria had long wanted to have Raiffeisen Bank International removed from the Ukrainian list of "international sponsors of the war". The federal government made this a condition for agreeing to new EU sanctions against Russia.

As reported by the newspaper "Kurier", Foreign Minister Alexander Schallenberg openly criticized the list compiled by the Ukrainian anti-corruption authority as "arbitrary" at a ministerial meeting in Kyiv, according to an insider. The government had also voiced its concerns in talks with EU representatives and diplomats in recent weeks. Representatives of the RBI met with representatives of the Ukrainian authorities. Most recently, the Hungarian OTP Bank, among others, was removed from the list.

According to ORF, EU diplomats reported that Austria had pushed for the removal from the list. According to insiders, the federal government made this a condition for agreeing to new EU sanctions against Russia. Austria had entered a review reservation before agreeing to the package. Federal Chancellor Karl Nehammer justified this on Friday by stating that the latest version had only been handed over on Thursday. However, the decision on the sanctions package was made with Austria's consent. "The sanctions have therefore also been adopted. The RBI was not an issue in the Council of Heads of Government yesterday," said Nehammer. A Council spokeswoman explained that Austria had withdrawn this "scrutiny reservation" and agreed to the conclusions. This cleared the way for a formal decision by the EU ministers.

Import ban on diamonds

The twelfth package of sanctions against Russia provides for the introduction of an import ban on diamonds and a tightening of the price cap on Russian oil exports to third countries, which has had little effect recently. Trade restrictions are also planned for other goods as well as punitive measures against individuals and organizations that support the Russian war of aggression against Ukraine.

In contrast to the UK, the EU had not previously imposed an import ban on diamonds from Russia. For a long time, this was mainly due to resistance from Belgium, where the Flemish port city of Antwerp has been one of the most important diamond centers in the world since the 16th century. Russia, in turn, is considered the world's largest producer of rough diamonds. In 2021, the state diamond miner Alrosa had revenues of 332 billion roubles (around 3.41 billion euros).

The previous sanctions package came into force in June. It included, for example, an instrument against the circumvention of sanctions that had already been imposed. A far-reaching ban on imports of crude oil, coal, steel, gold, and luxury goods as well as punitive measures against banks and financial institutions have been in place for some time.