Banks are asked to mitigate responsibility for the execution of sanctions

11 may 2022
Banks are asked to mitigate responsibility for the execution of sanctions

The National Council of the Financial Market fears that the ban on implementing Western sanctions may completely cut off Russian banks from working with foreign counterparties. This is stated in the letter of the organization to the State Duma, which was reviewed by Izvestia. Continuing to work with sub-sanctioned persons will lead to the fact that Russian banks themselves will fall under secondary sanctions.

In April, a bill was submitted to the State Duma that provides for Russian residents to be liable, including criminal, for the execution of anti-Russian sanctions imposed by foreign countries and international organizations. But banks play the role of technological intermediaries when transferring funds from one person to another and do not invest evil or good intent in these actions, believes the head of the National Council of the Financial Market Andrey Emelin. In their regard, we should not talk about the execution or non-execution of sanctions at all, he insists.

In addition, in order to fulfill such restrictions, financial organizations will have to completely abandon interbank settlements on correspondent accounts opened on the territory of the European Union and the United States, Emelin warns. Banks will have to terminate all correspondent agreements and close all such accounts. This, in turn, may complicate currency conversion.

Refusal of such settlements and secondary sanctions imposed on all banks of the country will only increase pressure on Russia, Emelin warns. In this regard, he proposes to withdraw banks from the new bill.

In 2018, when a similar bill was already submitted to the State Duma, State Duma Speaker Vyacheslav Volodin stated that there should be no criminal prosecution for the implementation of foreign sanctions. This initiative was then criticized by both the Russian Union of Industrialists and Entrepreneurs (RSPP) and the head of VTB. As a result, four years later, this novel was adopted without mentioning responsibility for the implementation of sanctions.

Draft Law No. 102053-8 "On Amendments to Article 201 of the Criminal Code of the Russian Federation (in Terms of Strengthening Responsibility for Abuse of Authority in Order to Execute a Decision of a Foreign State, a Union of Foreign States or an International Organization on the Introduction of Restrictive Measures against the Russian Federation)"