Swiss bank froze assets of Russians because of sanctions

One of the largest Swiss banks, Credit Suisse, froze Russian-related money worth roughly 5 billion Swiss francs to avoid US sanctions.

The step, which was reported in the bank itself, may lead to a further increase in pressure on Moscow.

The decision of Credit Suisse, which owned the planes returned by Russian businessman Oleg Deripaska, and who credited Russian oligarch Viktor Vekselberg prior to the imposition of sanctions, testifies to widespread fears in the banking environment about possible restrictive measures by Washington for working with Russian individuals sanctions.

For the Russian elite, such steps can mean the closure of an important source of funding and a place for the safe keeping of their fortunes in the billions of rubles.

“Credit Suisse works with international regulators wherever it does business in order to comply with sanctions, including sanctions relating to Russia,” said a bank spokesman, without informing the owners of blocked funds.

Switzerland has long been popular among wealthy Russians due to banking secrets, political stability and glamorous ski resorts such as Zermatt and St. Moritz, and therefore has become one of the most important places to store capital withdrawn from Russia.

According to the Central Bank of the Russian Federation, in 2017, about 6,2 a billion dollars or 14 percent of the total outflow of money from Russia was sent to Switzerland. This is almost three times more than what was sent to the United States.

The last series of sanctions was announced in April by Finance Minister Stephen Mnuchin to punish Russia for annexing the Crimea, participating in the war in Syria and “trying to undermine Western democracy.”

US President Donald Trump says he would like to improve relations with Moscow, but, despite his meeting with Russian President Vladimir Putin in July, relations between the two countries remain tense.

Earlier this month, members of Congress, where both chambers are controlled by Republicans, Trump party members, called for additional measures, including a bill on new sanctions "from hell", to neutralize the Russian "threat".

Although US sanctions do not apply to neutral Switzerland, its banks are forced to do the same, because they depend on access to the dollar and can be blacklisted by the United States for any failures.

Two competitors of Credit Suisse, the banks UBS and Julius Baer, ​​said they also comply with international sanctions, but refused to say whether they had taken similar steps.

“UBS observes worldwide at least the sanctions imposed by Switzerland, the UN, the EU and the US,” said a bank spokesman.

A spokesman for Julius Baer said that the bank “works with international regulators in the area of ​​sanctions.”

Credit Suisse's caution is partly due to previous negative experiences. In 2009, the bank paid the United States 500 millions of dollars in a settlement of a dispute with the US authorities in connection with deals with Iran under sanctions.

There are other cases of punishment of European banks. In 2014, the French bank BNP Paribas agreed to pay a record 8,9 billion dollars for violating the US sanctions regime against Sudan, Cuba and Iran.

The FINMA Swiss banking regulator does not require banks to comply with the regime of foreign sanctions, but states that they are responsible for minimizing legal and reputational risks.