A Russian court has ruled that a Korean bank must return millions of dollars to a sanctioned Russian client without the OFAC license.
The Arbitration Court of the Primorsky Krai, a region in the southeastern part of Russia, ruled on the dispute between Far Eastern Bank, a Russian bank, and Kookmin Bank, a South Korean bank. Far Eastern Bank demanded losses of 7.1 million dollars and 743 million won from Kookmin Bank.
In 2016, Far Eastern Bank opened an account with Kookmin Bank in US dollars. However, in 2022, OFAC, the US Treasury’s Office of Foreign Assets, imposed sanctions on Far Eastern Bank because of its support for Air Koryo, North Korea’s state-run airline.
Bank, in compliance with US sanctions, informed Far Eastern Bank about the closure of an account with cash balances of 7.157.179.81 USD and 743.006.868 KRW. Kookmin Bank noted that it was possible to return funds if the Russian bank obtained a special OFAC license.
Apparently, Far Eastern Bank decided to resolve the dispute through the Russian court. The court ruled that the place where the harm occurred (damage caused) was the Russian Federation and the defendant had information about that place.
