Ukraine looks to introduce 50-year sectoral sanctions against all Russian banks, NFIs

MOSCOW. Feb 22 (Interfax) - The National Security and Defense Council (NSDC) and Ukrainian President Vladimir Zelensky have backed proposals by the National Bank of Ukraine to impose sectoral sanctions against all banks registered or located in Russia, including the Central Bank of Russia, as all as insurance companies and non-bank financial institutions or NFIs.

Ukrainian media reported that a presidential decree of February 22 on the approval of the decision of the National Security and Defense Council "on the application of sectoral special economic and other restrictive measures (sanctions) against financial institutions of the Russian Federation" was submitted for to the Verkhovna Rada. According to the document, posted on the parliament's website, the sanctions would be imposed for 50 years.

They include 10 clauses, in particular: stopping transactions with assets owned by financial institutions of the Russian Federation, a ban on establishing business relations including correspondent relations, and a ban on transactions and investments in favor of financial institutions of the Russian Federation

This list also includes a ban on the purchase of securities and other financial instruments issued by financial institutions of the Russian Federation, with the exception of the disposal, including gratuitous, of securities in favor of the Ukrainian state.

In addition, sanctions include halting the fulfillment of economic and financial obligations in favor of financial institutions of the Russian Federation, including the transfer of dividends, interest and other payments, and halting the servicing of electronic payment instruments, including transfers, settlements and cash withdrawals, issued by financial institutions of the Russian Federation.

The decree also envisages canceling the registration and prohibiting new registrations by the National Bank of an international payment system operated by a financial institution of the Russian Federation, and its participants.

"To prohibit individuals and legal entities from carrying out operations or performing actions resulting in violations, avoiding the restrictions imposed," the document says.

In recent years, the Ukrainian authorities have adopted several packages of sanctions against Russian citizens and legal entities.

They decided in 2022 to expropriate the assets of Prominvestbank (PIB), owned by the state corporation VEB.RF, and 100% of the shares of International Reserve Bank (IR Bank), owned by Sberbank of Russia. Both Ukrainian banks had their licenses revoked before that, at the beginning of 2022.

A decision was made to revoke the license and liquidate the Ukrainian subsidiary of VTB Bank in 2018.