Banks from "friendly" countries are increasingly refusing to handle payments from Russian companies - Kostin
MOSCOW. April 11 (Interfax) - Banks in "friendly" countries have started to refuse Russian companies' payments with increasing frequency since the end of 2023, VTB CEO Andrey Kostin said.
"After the tightening of the secondary sanctions regime at the end of last year, the number of refusals to make payments from compliance control without explanation has increased sharply. This has to do, first of all, with banks in friendly jurisdictions," Kostin said at the congress of the Association of Russian Banks.
"If a year ago we were faced with the task of excluding SDN participants from transaction routes and not using SWIFT, now geography itself (Russia) is becoming the central problem.
As soon as goods go somewhere or come from somewhere, the "stop" light comes on, regardless of the loyalty of a particular bank or jurisdiction and the sanction status of the Russian participant in the transaction," he said.
Among possible solutions to this problem, Kostin noted the development of payment infrastructures in third countries, as well as the use of affiliated banks and various kinds of agency schemes, within which payments can be made, including using cryptocurrencies.
Agency models are effective, but "not always completely transparent from the standpoint of current Russian legislation," as well as legal and financial control, he said.
"There are two main types of schemes on the market today. Large exporters, as a rule, use a network of trusted traders. All others, including the largest banks, turn to the services of independent intermediary companies. Most likely, in the short term this channel will remain the most in demand," Kostin said.
Therefore, in his opinion, the creation of a special product for conducting settlements using financial intermediaries is relevant for banks. However, the launch of a product of this type is associated with a number of risks in the legal field.
"As in the case of the legalization of parallel imports, we will have to make forced temporary changes to the current legislation and practices, first of all, to Federal Law 115 [On Combating the Legalization of Proceeds from Crime and the Financing of Terrorism], and to other normative and regulatory acts," Kostin said.