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Washington has warned Raiffeisen Bank International the lender is at risk of having its access to the US financial system curtailed because of its operations in Russia, said a person with direct knowledge of the correspondence.
Washington could invoke national security grounds against the Austrian bank, according to a letter from deputy US Treasury secretary Wally Adeyemo dated May 6. The warning mentioned an executive order issued by the White House in December 2023, authorising secondary sanctions on foreign financial institutions conducting transactions involving Russia’s military industrial base.
The letter underlines the concerns which have led the Vienna-based lender to fall into the crosshairs of the US administration. Among western banks, Raiffeisen has the largest operations in Russia. Its unit in the country paid more than €400mn in taxes to the Kremlin last year, according to a Financial Times investigation.
The US Treasury warning, first reported by Reuters, explicitly raised concerns about plans for an asset-swap plan which Raiffeisen abandoned two days later.
The transaction would have entailed the bank trading some of its assets stranded inside Russia for a stake owned by Russian oligarch Oleg Deripaska in the Austrian construction company Strabag. The founder of leading aluminium producer Rusal and its parent energy company En+ has been on the US sanctions list since 2018.
Raiffeisen had said the deal was compliant with EU and US sanctions regimes because it was transacting with Russian companies that were not connected to Deripaska and it had not dealt with him to buy a stake in Strabag.
Deripaska, who was one of the few oligarchs to offer guarded criticism of President Vladimir Putin’s invasion of Ukraine, was charged with violating sanctions in an unrelated case in 2022. He declined to comment on the charges in an interview with the FT last year.
The letter stated the swap deal would expose the bank to substantial sanctions risk, as a result of the involvement of sanctioned persons, the person with knowledge of its content said.
The US Treasury declined to comment.
When the asset swap was abandoned, the bank said: “In recent exchanges with the relevant authorities, RBI has been unable to obtain the required comfort in order to proceed with the proposed transaction.”
The US sanctioned one Russian individual and three Russia-based companies on Tuesday on the grounds they had co-ordinated with Deripaska over “an attempted sanctions evasion scheme” to unfreeze $1.5bn of shares belonging to the oligarch.
The US Treasury, which did not mention Raiffeisen directly, said Deripaska co-ordinated with Dmitrii Beloglazov, the owner of financial services firm Titul, to sell the oligarch’s frozen shares in June last year. Titul then acquired Deripaska’s frozen shares through two other holding companies, Iliadis and Rasperia.
Those two Russia-based companies also set up another firm, Atmosphere, in Ust-Labinsk, Deripaska’s home town, earlier this year. The company’s director, Igor Khokhlov, is a former policeman in a nearby town, according to Russian credit records publicly available online.
Deripaska has wielded outsized influence in Ust-Labinsk, where he moved his tax residency in 2016 under a highly unusual deal that gave him a say in how some of his taxes are spent.
Khokhlov and Ksenia Potapova, the director of Titul and Iliadis, did not immediately respond to requests for comment.
“This balderdash isn’t worth the time,” Deripaska said in a statement sent via a spokesperson. “While the horrific war in Europe claims hundreds of thousands of lives every year, politicians continue to engage in their dirty games. I strongly believe that we need to do everything we can to establish peace, not serve the interests of warmongers.”
Ilya Shumanov, head of Transparency International Russia, said the links to Deripaska’s home town suggested the oligarch was the ultimate beneficiary of the scrapped deal with Raiffeisen.
“They are not careful enough about details. It looks very strange,” he said.
According to the person who read the correspondence, Adeyemo’s letter also raised concerns about reports of Raiffeisen’s expansion in Russia. The bank posted 2,400 job ads between December and mid-April, many of which state the bank was looking to grow in the country.
The lender said then the advertisements “do not reflect the measures” it had taken “to reduce its Russian business, nor do they correspond to the future plans for the Russian business”.
Raiffeisen said it has “significantly reduced” activities in the country and taken broad measures to mitigate the risks from sanctions. The bank “will continue to work towards the de-consolidation of its Russian subsidiary”.
