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Lawmakers Advance Measures that Would Increase Scrutiny of Russian Banks, Officials
By Colby Adams
printThe House Committee on Foreign Affairs advanced amended legislation Tuesday that would require U.S. officials to report on banks linked to the embezzlement of Ukrainian assets. Introduced by Rep. Ed Royce (R-CA), the Ukraine Support Act would require the Obama administration to regularly submit public reports to Congress identifying foreign financial institutions "in direct or indirect control" of Ukraine's assets without the country's approval as well as banks controlled by Russian officials linked to last month's invasion of the Crimean peninsula. The bill, which committee members considered a day after a related Senate measure cleared a key procedural hurdle, largely...
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At its highest levels, Russian corruption over the past 20 years has been disguised by networks of shell companies and facilitated by foreign banks willing to turn a blind eye to state embezzlement, according to Karen Dawisha, a political science professor at Ohio-based Miami University.
The expansion of Western sanctions targeting Russia will require banks to closely vet additional types of credit and transactions tied to financial, energy and defense firms, according to attorneys.
Military clashes in Ukraine are complicating behind-the-scenes efforts by some EU nations to prevent new sanctions and roll back existing financial restrictions targeting Russia.
With the blacklisting of three Russian financial institutions Tuesday, the United States has targeted nearly a third of the assets controlled by the federation's banking sector, according to a senior U.S. official.
Threatened U.S. sanctions against large swathes of Russian businesses would likely target defense and financial firms ahead of energy companies if imposed, according to experts.
U.S. officials have no plans to negotiate Russia's compliance with an anti-tax evasion law that takes effect this summer and could impose stiff monetary penalties on nonparticipating financial institutions.
U.S. sanctions against 17 Russian individuals and companies, including three banks and the head of one of the nation's largest energy companies, will raise more questions than answers for compliance officers.
Although sanctions on Russian nationals and companies might seem fairly innocuous at first blush, compliance departments at European banks are finding the task of identifying designees unusually difficult, say legal experts.
Plans by Russia to develop an independent payment network could limit the U.S. government's window into illicit finance in the federation, say analysts.
In announcing sanctions against Russian politicians and one bank Thursday, U.S. officials made clear that American financial institutions should prepare for more, and soon.
Diplomatic tension over Ukraine has raised doubts that the United States will attend an upcoming Moscow plenary of the world's largest anti-money laundering task force, say current and former officials.
International banks are bracing for economic sanctions against Russian officials beyond those announced Monday by Western nations, according to compliance officers.
A U.S. Senate committee voted Wednesday to grant the White House the power to impose sanctions on corrupt Russian officials and buoy Ukraine's economy through conditional loans.
As the Obama administration weighs punitive measures against Russia, part of its calculus will be the degree to which Russian officials can undermine U.S. national interests, including sanctions against Iran.
The Obama administration is "actively" considering designating Russians linked to the invasion of Ukraine under a 2012 human rights law, according to a U.S. State Department official.
The Ukrainian government is likely to pass anti-money laundering legislation in 2010 to avoid inclusion on an international blacklist, but will do little to enforce the laws, according to analysts.