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Raiffeisen acknowledges OFAC investigation into Russia and Ukraine business

Raiffeisen Bank International (RBI), based in Austria, says it received a request for information from the United States Treasury Department's Office of Foreign Assets Control (OFAC) regarding its commercial activity in Russia and Ukraine.

In a Friday investor press release, the bank described the OFAC concerns as "generic," and said the regulator wanted it to clarify business and associated practises "kept by RBI in light of current developments relating to Russia and Ukraine."


The RBI stated that OFAC informed it that no specific transaction or business activity precipitated the request. The bank stated that it is "completely working" with the government.


Reuters reported on Friday that OFAC wanted "information of [the bank's] exposure in Russia, the partially occupied Donbas, Ukraine, and Syria, including concerning the transactions and activity of particular clients," citing an anonymous source.


According to the announcement, the RBI "maintains rules and procedures that assure compliance with all applicable embargoes and financial penalties" and has "developed monitoring and screening technologies to ensure compliance with these policies, including all applicable sanctions."

OFAC did not respond to a comment request.


Following Russia's invasion of Ukraine in February 2022, major financial institutions including as Goldman Sachs, JPMorgan Chase, and Deutsche Bank announced their withdrawal from the Russian market. Others, such as Citi and Commerzbank, have committed to stop accepting new business in the nation and limit their exposure by discontinuing product lines, closing locations, and relocating workers based in Russia to other regions.


According to a post on RBI's website, the bank had around 13.7 billion euros (US $14.6 billion) in exposure in Russia as of December 31, 2021. The bank also has €2.67 billion (US $2.8 billion) in exposure in Ukraine, where it had 2.9 million customers and 6,600 staff. According to RBI market figures, the overall number of employees in Ukraine will fall to 5,455 by December 2022.


In March 2022, RBI Chief Executive Johann Strobl revealed in a press release that the bank was "evaluating all strategic options" for its business in Russia, including "a carefully controlled exit from Raiffeisenbank in Russia."


The RBI stated in recent financial disclosures, including the bank's preliminary results for 2022, that "[E]arnings from Russia and Belarus cannot be disbursed."


According to Reuters, Raiffeisen had a net profit of over €3.8 billion (US $4 billion) last year, mostly due to more than €2 billion (US $2.1 billion) in profit from its Russia division. According to the article, Russian savers have deposited more than €20 billion (US $21.3 billion) with the bank.

By fLEXI tEAM

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