U.S. to sanction one of Russia’s largest banks - media

The last of Russia's large state-owned banks, Gazprom, which retains access to SWIFT and settlements in major world currencies, will be subject to new U.S. sanctions.

This is reported by Nikkei with reference to officials familiar with the issue, reports Ukrinform.

The administration of U.S. President Joe Biden is considering the possibility of designating Gazprombank (GPB), the third-largest bank in Russia by assets, which serves as a hub for gas settlements with Europe. According to sources, Gazprom will be banned from any transactions with American banks. A decision on sanctions will be made by November-end, of which the U.S. has informed its G7 partners, the publication's sources, including high-ranking European officials, said.

The Moscow Times notes that Gazprombank, which is one-third directly owned by Gazprom and another 40% by its pension fund, has not yet come under strict Western restrictions: in the U.S. it is only prohibited to raise capital on the debt market, although under its top managers and subsidiary IT company are subject to blocking sanctions. In the European Union, GPB also avoided "blacklists", and only the UK introduced blocking sanctions against the bank.

As a result, the bank was able to become one of the main "custodians" of the giant reserves of foreign currency that the Kremlin collected abroad after the Central Bank's assets in the West had been frozen. As of mid-2024, according to Janis Kluge, a researcher at the German Institute for International Security Problems, these shadow reserves have reached $180 billion. In his opinion, this money can be used to pay for critical imports or support the ruble exchange rate if the situation in Russian economy radically worsens.

Since early 2023, GPB has had issues with dollar transactions after the American JPMorgan Chase Bank and Bank of New York Mellon (BoNY) closed its correspondent accounts. The bank's website states that it currently offers transfers in euros, Chinese yuan, and Kazakhstani tenge.

A few years after Vladimir Putin came to power, the bank came under the influence of the closest friends of the Kremlin leader, Yuriy Kovalchuk and Nikolay Shamalov.

As Ukrinform reported earlier, in September, the U.S. government imposed sanctions on Russia over illegal financial transactions with the DPRK in order to strengthen cooperation.

Thus, the U.S. laid down restrictions against the Russian MRB-Bank (MRB) operating in occupied South Ossetia, TMSR-Bank and its manager, Bank of the Russian Financial Corporation JSC, Stroitrade LLC, as well as Timer Bank JSC.