BNP Paribas is no longer providing letters of credit (L/Cs) to finance commodities trades involving sanctioned Russian banks, according to a report in the Wall Street Journal

Quoting people familiar with the matter, the newspaper says that the bank has even stopped providing L/Cs for commodities trades that are not proscribed by sanctions.

Sanctioned banks

The bank is reportedly not writing L/C business for trades involving the five sanctioned Russian state banks, (DC World News, 21 July 2014).

The sanctions, which are meant to target people and entities close to Russia's president, Vladimir Putin, do not forbid non-US banks participating in L/C trades.

Proscribed activities

They do however forbid non-US banks from lending to or raising finances for the sanctioned Russian banks.

Transactions involving L/Cs featured substantially in sanctions violations by BNP Paribas that earlier this year led to the bank receiving an US$8.9 billion fine, the largest ever imposed on a bank for such violations, (DC World News, 7 July 2014).

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