EU sanctions three foreign banks for using Central Bank of Russia's Financial Messaging System to circumvent restrictions
MOSCOW. Feb 24 (Interfax) - The European Union has, as part of its new package of sanctions, banned EU companies from conducting transactions with three foreign banks that have used the Central Bank of Russia's Financial Messaging System (SPFS) to circumvent EU sanctions.
The ban includes the Belarusian banks BelVEB and Belgazprombank, as well as the VTB Bank branch in Shanghai.
SPFS is the Russian equivalent of SWIFT, which provides seamless transfer of financial messages both inside and outside Russia.
"Two of the entities are incorporated in Belarus and connected to the SPFS, using it with the deliberate intention of circumventing our measures. One entity is a branch of a listed Russian bank incorporated in China, which also participated in activities also aimed at circumventing our sanctions," the EU said.
By way of derogation, EU member states may authorize the execution of transactions with BelVEB for the repayment of export credits guaranteed and for transactions which are necessary for divestment from Russia or the wind-down of business activities in Russia by August 26, 2025.
The execution of contracts concluded before February 15, 2025 until August 26, 2025 or until their expiry date, whichever is earlier for beneficiaries located in the European Union, may also be authorized.
The European Union banned EU banks operating outside Russia from using SPFS in June 2024. The U.S. Treasury's Office of Foreign Assets Control (OFAC) issued a warning in November about the risk of sanctions for non-U.S. financial institutions that join the SPFS. OFAC said it would view joining SPFS following the publication of this warning as a "red flag" and was prepared to undertake aggressive measures against foreign financial institutions that take such action.
The SPFS emerged in response to the first round of anti-Russian sanctions in 2014. The number of SPFS participants reached 556 at the end of 2023, and 159 of them were non-residents from 20 countries.
The Central Bank of Russia has previously published a detailed list of system participants on its website, but it was removed in April 2022 after a new round of sanctions.
