A Russian bank on the U.S. sanctions list has won a court petition to seize some of the assets of the Russian subsidiaries of western banks.
Handelsblatt reports that a Russian court has seized 12.3 million euro in assets from the Russian subsidiaries of Commerzbank and JP Morgan Europe. Handelsblatt refers to a court case with a decision published on the Internet on April 26, 2024. In the decision, the court finds partly in favor of TransCapitalBank. The suit was based on damages to TransCapitalBank because of American sanctions introduced in 2022.
The court decision reads “The application is motivated by the fact that on April 20, 2022, in relation to the Plaintiff, U.S. Department of the Treasury Office of Foreign Assets Control (OFAC), blocking sanctions were introduced, expressed in the inclusion of the Claimant in the so-called SDN list [Specially Designated Nationals and Blocked Persons List – ed].”
The move comes at a complicated time for western banks that are still operating in Russia. On the one hand, as the Financial Times reported on April 29, western banks still operating in Russia have generated large amounts of income that cannot be removed from Russia, and despite claims that they are cutting back are paying higher taxes as business climbs. Raifeissen Bank paid a record 464 million euro in taxes in Russia.
Busy lawyers
Meanwhile, lawsuits against western banks from Gazprom are bouncing through Russia’s courts as well. Gazprom subsidiary RusKhimAlyans is suing Deutsche Bank and Commerzbank for failure to pay. Deutsche Bank claims that the current sanctions regime makes such payments impossible, though company officials concede that the probability of the Russian court accepting that argument is minimal. In October 2023, Deutsche Bank wrote in its quarterly statement that it had set aside a provision of 273 million euro in case they lose the court case.
Despite the tensions with the West, Russian courts are not brazenly stealing assets. Gazprom was told on April 24 by a court to end a case against UniCreditBank. In this case and in others, Gazprom is looking to be compensated for the arrested development in May 2022 of an LNG terminal. A British court also ruled on a claim by UniCredit ordering law suit against RusKhimAlianz from suing it, as the contract between the companies stipulated that contractual issues would have to be settled in court in France.
