US starts inspection of Raiffeisen Bank’s Russian-related business

Raiffeisen Bank logo

Raiffeisen Bank logo

The report also mentioned that the scope of the inspection of the Austrian lender, which plays a crucial role in the Russian economy, has also been broadened.

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As the agency noted in response to the journalists’ questions, the bank said it has received a request from the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) in January to “clarify the payment business and related processes supported by the RBI, in light of recent developments, connected with Russia and Ukraine.”

The publication, citing its own sources, reported that the OFAC asked Raiffeisen to provide details of its activities in Russia, the partially occupied Donbas, Ukraine and Syria, including transactions and activities of certain clients.

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The U.S. sanctions authority wanted a full response from the bank by February 2023, but Raiffeisen lawyers agreed to an extension, pledging to respond to questions in three pieces of information to be sent in early April, May and June.

Reuters noted that a spokesman for the U.S. Treasury Department has declined to comment.

Raiffeisen told Reuters in a statement that it is fully cooperating with the OFAC and understands that the request was not prompted by a specific transaction or business, but to verify compliance with sanctions.

A bank representative said he was “confident that the information provided to the OFAC will satisfy their request,” adding that the questions asked were “general in nature.”

The publication adds that Raiffeisen is deeply rooted in the Russian financial system and is one of two foreign banks on the Russian Central Bank’s list of 13 “systemically important credit institutions,” underscoring its importance to Russia’s economy, which is suffering from Western sanctions.

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As Austria’s second largest lender, Raiffeisen also supports much of that country’s economy and has large operations in Eastern Europe. According to an Austrian official, Austrian authorities are closely monitoring the situation at Raiffeisen and its business in Russia because of the importance of the bank.

Reuters stressed that nearly a year after Moscow launched what it calls a “special military operation” in Ukraine, Raiffeisen is one of the few European banks remaining in Russia.

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