The Impact of the New Economic Sanctions of the Collective West Countries on the Russian Banking Sector
Hadir H. Shubbar, Furaijl Hussein Basim, Rakhmonov Abubakr
The article examines the new sanctions of the countries of the collective West against the banking sectors of Russia, the impact of sanctions on banks and clients of banks in Russia, as well as measures of support for the banking sector by the Russian government under sanctions pressure. New restrictions and sanctions were introduced against the Russian banking sector in 2022, which are many times greater in scale than the sanctions imposed in 2014 and subsequent years. The measures themselves were also unprecedentedly harsh. Since the sanctions were imposed, many foreign banks have simply stopped cooperating and closed correspondent accounts of Russian banks. Most often, this behavior is not due to legal restrictions, but is more related to concerns about the imposition of fines and other measures of influence. Banks' concerns are understandable: there are already precedents for bringing to justice violations of sanctions regimes. Russian clients also face difficulties in passing the compliance procedures of foreign banks. So, when making payments through correspondent accounts, such banks request additional information confirming that the operation does not fall under sanctions restrictions, while often indicating a fairly short time for execution, and if they are violated, they simply "deploy" the operation. Such restrictions entail a serious risk of violation by the parties of their obligations, delays in payment and non-fulfillment of contracts.
Keywords: Russia banking sector, Economic sanctions, Western countries, The Ukrainian conflict, SWIFT
