Aiming to keep money flowing in the global economy even as it enforces sanctions against some Russian targets, the United States federal government has reportedly asked several large banks to continue working with some Russian firms.
The move has drawn criticism from some members of Congress in the months since Russia launched its invasion of Ukraine, while at the same time being requested by the Biden administration, Bloomberg reported Monday (Nov. 7).
The administration wants banks like JPMorgan and Citi to continue providing services to some Russian firms with strategic value in order to avoid damaging the global economy, according to the report.
Banks have been asked to continue enabling the flow of money to sectors of Russia’s economy that have not been sanctioned. This includes services like U.S. dollar settlement, payment transfers and trade finance offerings.
At the same time, the banks must deny services to banks, people and entities that have been sanctioned — and fined if they do not comply — in an attempt to deny Russia the funds it needs to continue with its invasion of Ukraine.
In one case, this led to a bank being asked by the Biden administration to continue working with a Russian entity while it faced sanctions from the European Union, the report said.
Beyond the sanctions that have been designed to rock Russia to its economic foundations lie some fundamental hard truths for enterprises around the globe — namely, that it is hard to find out who is on sanctions lists, and who’s not, nsKnox Chief Operating Officer Nithai Barzam told PYMNTS’ Karen Webster in a May interview.
“When you are onboarding a counterparty, you want to make sure that in addition to all the other things, you are looking into whether or not they are appearing on sanctions lists,” Barzam said at the time.
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