To make transactions with banks under US sanctions, special bypass transactions will be required. This was announced on March 6 by the US Treasury.
As specified, the general license issued by the department excludes transactions involving sanctioned Russian banks “related to energy” from the restrictions. But this does not mean that US companies will be able to work with banks in this area.
“Energy payments can and should continue,” the agency stresses.
The published license permits what are “normally known as U-shaped transactions”. Within their framework, payments from foreign counterparties are processed through sanctions-free financial institutions in third countries. They go to the dollar account of a company from the Russian Federation in a sub-sanctioned bank. These transfers are allowed for VEB.RF, VTB banks, FC Otkritie, Sovcombank, Sberbank and the Central Bank of the Russian Federation that have fallen under US sanctions.
If a company buys oil from a Russian supplier, it sends him a dollar payment through an unsanctioned bank in a third country acting as an authorized intermediary. As a result, the sanctioned bank will be able to receive commissions from the Russian seller for such transactions. This was told to RBC by Brian O’Toole, a former senior adviser to the U.S. Department of the Treasury’s OFAC Sanctions Unit.
U-shaped deals were used by the US Treasury in sanctions programs against Iran and Cuba.
On February 28, the US Treasury banned transactions with the Central Bank of the Russian Federation, the Treasury and the National Welfare Fund. On February 24, Washington imposed sanctions on a number of Russian companies with state participation or organizations important for the economy, and on “two companies dominated by private capital.” The list includes Gazprombank, Alfa-Bank, Sberbank, Otkritie Bank, Sovcombank, VTB, Rosselkhozbank, Moscow Credit Bank (MKB) and Novikombank. Then other countries imposed sanctions against Russian banks.
At the same time, it became known that in addition to disconnecting Russian banks from the international payment system, the West could limit the ability of the Central Bank of the Russian Federation to support the ruble through international financial transactions.
On March 2, the European Union decided to disconnect VTB, Rossiya and Otkritie banks, as well as Novikombank, Prosvyazbank, Sovcombank and VEB.RF from SWIFT. In addition, it is forbidden to import euro banknotes into Russia, except for cases of personal use by individuals arriving in Russia, as well as by diplomatic missions and international organizations with legal immunity.
At the same time, the World Bank decided to immediately terminate all of its programs in Russia and Belarus. It is also reported that the World Bank Group has not approved new loans or investments in Russia since 2014.
Russia is facing new packages of sanctions due to the ongoing special operation to protect the residents of Donbass. The situation there escalated on February 17. In the Donetsk and Lugansk People’s Republics, heavy shelling by Ukrainian security forces was reported, including from heavy weapons. The republics announced a general mobilization, the evacuation of civilians to the territory of Russia, and also asked to recognize their independence. On February 21, Russian President Vladimir Putin signed decrees recognizing their sovereignty.
On February 24, the President of Russia announced an operation to protect the civilian population in the Donbass. Its goal, in particular, is to protect the civilian population of the Donetsk and Lugansk People’s Republics, as well as the demilitarization and denazification of Ukraine. According to the press secretary of the Russian leader Dmitry Peskov, the last two aspects pose a threat to the Russian state and people.
On March 6, it became known that Ukraine could soon get its own nuclear weapons. As military expert Igor Nikulin told Izvestia, Ukraine still has Soviet groundwork in science, so it is easier for it to create nuclear weapons than Iran or North Korea. In this regard, the Russian operation in the Donbass, the expert believes, turned out to be very timely.
For more up-to-date videos and details about the situation in Donbass, watch the Izvestia TV channel.