Sberbank, a major player in Russia's letter of credit (L/C) market is amongst 10 new Russian entities now on the EU's sanctions list which also features 54 more individuals.

Russia's largest lender has already been disconnected from the Swift bank messaging system, which curtails its ability to conduct letter of credit (L/C) business.

Food and fertiliser excepted

The addition of Sberbank to the EU's sanctions list would freeze its assets in the west and prevent all transactions except financial operations for trade in food and fertiliser.

The orderly wind-down of operations, including correspondent banking relations, with Sberbank, is allowed, reportedly for six months.

Impact of invasion

Sberbank Europe Group, headquartered in Vienna, was liquidated following Russia's invasion of Ukraine.

Gazprombank, a subsidiary of the state-owned energy company Gazprom and a key bank for Russia's energy conglomerates selling oil and gas into European markets, has not been added to the EU sanctions list and has been allowed to stay connected to Swift.

Russia's finance ministry is the principal shareholder of Sberbank, owning 50 per cent of the bank's authorised capital plus one voting share, with the remaining 50 per cent held by domestic and international investors.

A Council of the EU press release on the maintenance and alignment package in which Sberbank has been added to the sanctions list with links to additional resources can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.