Aborted asset-swap deal at Austria’s Raiffeisen Bank International (RBI) leads to US sanctions.

Following an aborted asset-swap deal that Austria’s Raiffeisen Bank International (RBI) the US has indeed imposed sanctions on

• Three entities and
• An individual involved

These parties were involved in an “attempted sanctions evasion scheme” connected to Deripaska.

• https://home.treasury.gov/news/press-releases/jy2337

The timeline and bad actors

1. In June 2023, Deripaska coordinated with
2. Russian national Dmitrii Aleksandrovich Beloglazov (Beloglazov),
3. the owner of Russia-based financial services firm Obshchestvo S Ogranichennoi Otvetstvennostiu Titul (Titul), on a planned transaction to sell Deripaska’s frozen shares in a European company.
4. Within weeks of this coordination, Russia-based financial services firm Aktsionernoe Obshchestvo Iliadis (Iliadis) was established as a subsidiary of Titul.
5. In early 2024, Iliadis acquired Russia-based investment holding company International Company Joint Stock Company Rasperia Trading Limited (Rasperia), which holds Deripaska’s frozen shares.

Sanction details E.O. 14024

1. Beloglazov, Titul, and Iliadis were designated pursuant to E.O. 14024 for operating or having operated in the financial services sector of the Russian Federation economy.
2. Rasperia was designated pursuant to E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Iliadis.
• https://ofac.treasury.gov/faqs/topic/6626

The scheme

1. This scheme is consistent with typologies highlighted by the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force in a March 9, 2023 Global Advisory.
• https://home.treasury.gov/system/files/136/REPO_Joint_Advisory.pdf
2. As noted in the REPO Task Force Global Advisory, sanctioned Russian individuals leverage complex ownership structures to disguise their connections to particular assets or entities and use enablers to aid evasion efforts.
3. A March 7, 2022 Financial Crimes Enforcement Network (FinCEN) Alert also identified certain red flags, including the use of corporate vehicles to obscure ownership and source of funds and the use of third parties to shield the identify of sanctioned persons, to assist financial institutions in identifying potential Russian sanctions evasion attempts.
• https://www.fincen.gov/sites/default/files/2022-03/FinCEN Alert Russian Sanctions Evasion FINAL 508.pdf

Summary and Conclusion

• The US Treasury’s Deputy Secretary, Wally Adeyemo, reportedly warned RBI that its access to the US financial system could be curbed due to its continued presence in Russia.
• This warning was related to RBI’s controversial Strabag deal, which was later scrapped under heavy pressure.
• This move by the US is seen as a serious threat against RBI, which is under heavy regulatory pressure to come up with an exit plan from Russia.
• The bank will take a massive hit, as Russia made up 38% of its net profits in 20231. RBI has been unable to access its profits there because of Russian central bank restrictions
• The sanctions are seen as a move to curb Russian money flowing through Raiffeisen and other Western banks, which has been seen to blunt the effectiveness of US sanctions.

Source

• https://www.intellinews.com/us-hardens-stance-on-rbi-in-russia-sanctions-strabag-related-companies-325551/

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