European banks resume transactions with Russian bonds so clients can close positions - FT

MOSCOW. Aug 18 (Interfax) - European banks, like U.S. banks, have resumed transactions with Russian bonds, the Financial Times reported.

At the beginning of June, the U.S. Treasury Department tightened the interpretation of the sanctions regime regarding Russian debt, barring investors from the United States from buying Russian sovereign and corporate bonds on the secondary market. The department's new clarifications essentially halted trading of Russian debt.

But at the end of July, Treasury's Office of Foreign Assets Control (OFAC) said that it was granting a license to give banks a three-month window for transactions with Russian bonds so that they can help clients close positions in these bonds. European regulators also eased the conditions for such transactions for their banks in order to reduce the risks of their clients.

UBS, Barclays and Deutsche Bank have again allowed their clients to sell Russian bonds following similar actions by U.S. banks JPMorgan, Bank of America, Jefferies and Citigroup, the Financial Times reported. However, other banks, such as Credit Suisse and HSBC, are still staying away from transactions with Russian debt, fearing associated risks.

The OFAC license allows banks to carry out trades with Russian bonds in the interests of U.S. citizens to reduce their risks, even if these transactions include the purchase of bonds, the paper said.

All of the banks mentioned by the Financial Times declined to comment officially, but sources informed about their actions told the paper that the decision to resume transactions with Russian debt was not motivated by a desire to earn a profit; it is supposed to help clients reduce risks in line with the rules of sanctions. One employee of a bank that has resumed trading of Russian bonds said that this was done for clients who want to divest these assets, and the amounts of these transactions are not large.