US to threaten Austria with sanctions over economy ties with Russia

By Al Mayadeen English
Source: Agencies
7 Mar 2024 10:33

A US Treasury official will visit Vienna to convey warnings to Raiffeisen Bank International of US sanctions over continuing financial relations with Russia.

A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, United States, in July 2023. (AFP)

The United States will warn Europe's last major bank in Russia this week from continuing to do business with Moscow, Reuters reported on Thursday, as Washington pushes for tighter sanctions on Russia after all previous measures proved to be inadequate to weaken the country's economy as desired.

Austria's Raiffeisen Bank International (RBI) is one of the few international banks that did not cease its operations with Russia and continues to operate inside the country following the start of the conflict in February 2022.

Anna Morris, a US Treasury official responsible for disrupting financial access of actors deemed by Washington as a "national security threat," will push Austrian banks to examine their exposure to Russia and "take mitigation measures".

The treasury official will convey the US' new sanctions oversight and authority that "heightened risks for banks," and request they "protect themselves from trade related to Russia's military-industrial base, or risk being cut off from the US financial system," the US embassy in Vienna stated on Wednesday.

The visit follows an executive order from US President Joe Biden last December, strengthening "US sanctions authorities" against financial institutions that help Russia circumvent American sanctions.

Morris will visit government officials and companies to discuss penalties and money laundering.

Testing Western resolve

RBI said it had often held talks with regulators regarding sanctions, noting that it always obliged by the relevant rules.

The US continues to face opposition from most of the European country's officials, some defending the bank's position, despite Austria supporting Ukraine.

Officials told Reuters that the reluctance to completely cut ties with Russia is driven by the idea that restoring ties with Moscow remains possible.

While Italy's UniCredit also maintains a presence in Russia and is hesitant to withdraw, RBI's size and significance have turned it into a litmus test for Western determination to sever connections with Russia.

RBI had planned to separate its Russian operations, which offer crucial payment services to numerous companies in the region, in response to pressure from global regulators. However, with two years having passed since the start of the conflict, there has been little progress on this front.

According to a source speaking to Reuters, Russian authorities have communicated to RBI, which serves approximately 2,600 corporate clients, 4 million local account holders, and employs 10,000 staff, their desire for the bank to remain operational due to its facilitation of international payments.