Eastern Europe News

Ukraine Sanctions Russian Banks Operating In-Country

Ukraine, smarting from Russia agreeing to accept official government documents from the rebel-held areas of the east, slapped sanctions on Russia banks operating affiliates in what is left of the Ukrainian state.

“One-year sanctions, involving a ban on withdrawals of funds outside of Ukraine, were imposed on Sberbank, VS Bank, Prominvestbank, VTB Bank and BM Bank, all Moscow-based institutions with affiliate banks in Ukraine. Poroshenko’s decree came a day after a proposal to sanction the banks came from Ukraine’s National Security and Defense Council,” writes UPI.

The measures imposed will include restrictions on paying dividends and interest, removing money from Ukraine, and restrictions on profits and capital, all measures to make operating a bank all but impossible.

“We are disappointed by the decision of the Ukrainian authorities to impose sanctions on PJSC Sberbank (Ukraine) and consider this decision discriminatory, politically motivated and not caused by any actions of our subsidiary bank that violate the laws of Ukraine,” the official said.

“We appeal to the President of Ukraine to restore the law and order, to unblock the central and other divisions of the bank and provide normal conditions for the bank’s servicing of its clients. These are several tens of thousands of Ukrainian legal entities and more than a million private clients who are citizens of Ukraine,” the bank said, reports Russia state news agency TASS.

Former Russian Finance Minister Kudrin said the actions will actually hurt Ukraine more than Russia. “Russian banks play a significant role in the investment of the financial system of Ukraine, and such pseudo-patriotic prosecution (of subsidiaries of Russian banks – TASS) seriously worsens the financial system of Ukraine. In effect, the boomerang effect will happen,” Kudrin said.

“These are super-expensive steps to the detriment of Ukraine’s interests,” Kudrin said.

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