US Treasury announces sactions against Russian oligarch Vladimir Potanin’s Rosbank

Rick Steves

“By sanctioning additional major Russian banks, we continue to deepen Russia’s isolation from global markets. Today’s designations by the United States, together with actions taken by our international partners, will further inhibit the Putin regime’s ability to fund its horrific war against Ukraine.”

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced the reinforced sanctions against Russia’s war in Ukraine by targeting Rosbank and VTB Bank.

The US Treasury added 18 entities related to the Russian Federation’s financial services sector to the Specially Designated Nationals and Blocked Persons List (SDN List).

Wind-down transactions allowed until March 15, 2023

The goal is to sanction prominent oligarch Vladimir Potanin, his network, and more than 40 additional persons linked to the Government of the Russian Federal (GoR), in order to further limit the GoR’s ability to wage war.

Vladimir Potanin, known to be one of Russia’s richest men, acquired Russia-based commercial bank Rosbank earlier this year. Rosbank is a systemically important credit institution to the country’s government.

Treasury authorizes all transactions necessary to the wind-down of transactions involving Rosbank, or any entity in which Rosbank owns, directly or indirectly, a 50 percent or greater interest, through 12:01 a.m. eastern daylight time, March 15, 2023.

In addition, the wind-down of certain securities and derivatives transactions will be authorized through 12:01 a.m. eastern daylight time, March 15, 2023.

Certain blocked financial institutions are allowed to process energy-related transactions as well as the ones related to agricultural commodities, agricultural equipment, medicine, and medical devices.

The US Treasury is also adding 17 subsidiaries of VTB Bank, Russia’s second largest bank, to the list of sanctions. These include:

  • Aktsionernoe Obshchestvo SG-Development, a Russia-based entity engaged in real estate activities.
  • Embassy Development Limited, a United Kingdom-based entity engaged in financial activities.
  • Estate Management Company Limited, a Russia-based entity engaged in real estate activities.
  • ITC Consultants Cyprus Limited, a Cyprus-based entity engaged in management consulting services.
  • Joint Stock Company Citybike, a Russia-based travel and personal leisure company that rents consumer goods.
  • Joint Stock Company VTB Development, a Russia-based entity engaged in business and management consulting services.
  • Kordex Joint Stock Company, a Russia-based entity engaged in business and management consultancy activities.
  • Limited Liability Company VTB Commercial Finance, a Russia-based financial institution.
  • Limited Liability Company VTB Infrastructure Investments, a Russia-based entity engaged in business support service activities.
  • Megacom Limited Liability Company, a Russia-based entity engaged in the construction of buildings.
  • Obshchestvo S Ogranichennoi Otvetstvennostyu Dolgovoi Tsentr, a Russia-based entity engaged in business support service activities.
  • Obshchestvo S Ogranichennoi Otvetstvennostyu Proekt, a Russia-based entity engaged in real estate activities.
  • Obshchestvo S Ogranichennoi Otvetstvennostyu VTB Syryevye Tovary Kholding, a Russia-based entity engaged in non-specialized wholesale trade.
  • Ryabinovaya OOO, a Russia-based entity engaged in real estate activities.
  • VB-Service Company Limited, a Russia-based entity engaged in real estate activities.
  • VTB Leasing Joint Stock Company, a Russia-based entity engaged in financial leasing.
  • VTB Real Estate Limited Liability Company, a Russia-based entity engaged in real estate activities.

Brian E. Nelson, Under Secretary for Terrorism and Financial Intelligence, commented: “By sanctioning additional major Russian banks, we continue to deepen Russia’s isolation from global markets. Today’s designations by the United States, together with actions taken by our international partners, will further inhibit the Putin regime’s ability to fund its horrific war against Ukraine.”

Not to punish, but to bring about a positive change in behavior

“As a result of today’s action, all property and interests in property of the individuals above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt. These prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any blocked person and the receipt of any contribution or provision of funds, goods, or services from any such person”, said the statement.

“The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897. Detailed information on the process to submit a request for removal from an OFAC sanctions list.”

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