U.S. slaps sanctions on Russia’s Gazprombank, other financial institutions

That’s according to an official notice released on Thursday by the Office of Foreign Assets Control at the US Treasury Department (OFAC), reports Ukrinform.

“Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took another major step in implementing commitments made by G7 leaders to curtail Russia’s use of the international financial system to further its war against Ukraine,” the U.S. agency noted.

The action includes the designation of Gazprombank, more than 50 internationally connected Russian banks, more than 40 Russian securities registrars, and 15 Russian finance officials. OFAC is also issuing an alert describing sanctions risks related to Russia’s System for Transfer of Financial Messages (SPFS), which the Kremlin created and uses to evade sanctions.

“Today’s sanctions targeting Russia’s largest remaining non-designated bank, as well as dozens of other financial institutions and officials in Russia, will further diminish and degrade Russia’s war machine. This sweeping action will make it harder for the Kremlin to evade U.S. sanctions and fund and equip its military,” said Secretary of the Treasury Janet L. Yellen. “We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine.”

Besides Gazprombank, OFAC designated six of its subsidiaries.

“Gazprombank is a conduit for Russia to purchase military materiel for its war effort against Ukraine. The Russian government also uses Gazprombank to pay its soldiers, including for combat bonuses, and to compensate the families of Russian soldiers killed fighting Putin’s brutal war against Ukraine,” the statement reads.

Luxembourg-based bank GPB International SA, Hong Kong-based GPB Financial Services Hong Kong Limited, Cyprus-based GPB Financial Services Limited and GPB-DI Holdings Limited, Switzerland-based Gazprombank (Switzerland) Ltd, and South Africa-based GPB Africa and Middle East Pty Ltd, wholly owned subsidiaries of Gazprombank, have all been sanctioned.

It should be noted that Australia, Canada, New Zealand, and the United Kingdom have previously sanctioned Gazprombank.

OFAC is also issuing an alert underscoring the sanctions risk for foreign financial institutions that join Russia’s System for Transfer of Financial Messages (SPFS), which is part of the financial services sector of Russian economy because of its role facilitating communication between financial institutions engaged in Russia’s financial system.

Further curtailing Russia’s connections to the international financial system, OFAC is designating more than 50 small-to-medium Russian banks to prevent Russia from abusing the international financial system to pay for the technology and equipment it needs to sustain its illegal and unjust war against Ukraine. Foreign financial institutions that maintain correspondent relationships with these banks should be aware that continuing to do so entails significant sanctions risk.

OFAC is aware that Russia has attempted to evade or avoid OFAC sanctions on the National Settlement Depository by requiring the transfer of certain securities to local Russian securities registrars. Today, OFAC designated more than 40 such registrars and has provided further guidance on securities held at or otherwise involving these registrars.

The U.S. is also designating 11 additional officials of the Central Bank of Russia, including those involved in maintaining Russia’s international financial connectivity or promoting alternate financial pathways that Russia can exploit to pay for much-needed equipment and technology.

Today’s action also includes designations of key Russian staff members at the already sanctioned VTB Bank PJSC branch in Shanghai, China (VTB Shanghai) and the sanctioned PJSC Sberbank of Russia branch in New Delhi, India (Sberbank New Delhi).