On November 21, the U.S. Treasury Department announced a major package of sanctions against the Russian banking system. Sanctions were imposed against Gazprombank, more than 50 international Russian banks, more than 40 Russian securities registrars and 15 Russian financial officials.
Gazprom PJSC is among the owners of Gazprombank, as well as companies associated with it and the Russian government. OFAC stated that Gazprombank is a channel for Russia to purchase military equipment for its military actions against Ukraine. However, it was this bank that was used for payments for gas supplied to the countries of the European Union.
Gazprombank was also used by ordinary Russians who left Russia. The fact is that the bank issued cards of the Chinese Union Pay payment system, which is supported by banks in 181 countries around the world. Among them are Egypt, Turkey, Thailand and others.
Union Pay was in demand by Russians because the Visa and Mastercard payment systems left Russia.
Immediately after the US imposed sanctions, Gazprombank sent a message to its customers saying that difficulties with Union Pay bank cards abroad could be expected.
OFAC has also added more than 50 small and medium-sized Russian banks to the sanctions list to prevent Russia from abusing the international financial system to pay for the technology and equipment it needs to support its war against Ukraine.
Some of these banks play a significant role in important sectors of the Russian economy. For example, sanctions were imposed on JSC Bank Dom RF. This bank specializes in mortgage and corporate lending to construction companies. As of July 1, 2024, the mortgage portfolio of Bank Dom RF amounted to 652.6 billion rubles (about 6 billion euros). The project financing portfolio has reached 6.4 trillion rubles (about 60 billion euros).
Among the banks that have been sanctioned, there are banks owned by well-known businessmen. For example, Finstar Bank, which belongs to businessman Oleg Boyko. Oleg Boyko holds the 109th position in the rating of Russian billionaires for 2024 compiled by Forbes magazine. His fortune is estimated at $1.2 billion. Oleg Boyko is the founder and head of Finstar Financial Group, an international group of companies with assets under management worth about 2 billion US dollars and offices in Cyprus, Serbia and the UAE. Oleg Boyko is on the sanctions lists of Ukraine and Australia.
New US sanctions have also hit foreign banks that have opened branches in Russia. MB Bank, a bank with headquarters in Moscow, Russia, was added to the sanctions list. MB Bank, also known as Mir Business Bank, is the Russia-based wholly-owned subsidiary of Iran’s Bank Melli Iran.
