The European Union has adopted certain financial sanctions against the Russian Federation and its allied Belarus, aimed at affecting and/or hindering financial transactions with both enterprises and simple Russian and Belarusian citizens. However, such sanctions can also affect foreign (but not if European citizens) individuals who are currently residing in Russia or Belarus.
We can summarize such financial restrictions as follows:
Russian and Belarusian citizens, as well as all other foreign individuals residing in those two countries – unless such foreign individuals are citizens of an EU member-State, or of a member-State of the European Economic Space or Switzerland – are prevented from holding more than Euro 100,000.00 globally in bank accounts at European banks, unless such individuals can submit evidence of a temporary or permanent residence permit currently in force and validly issued by an EU member-State, a member-State of the European Economic Space or Switzerland;
if such individuals cannot submit such documentation, they cannot receive remittances in those European bank accounts, nor can they carry out any transaction involving Euro-denominated financial instruments (this shall only apply to instruments issued after 12 April 2022, though);
any negotiation to buy or sell Rubles-denominated financial instruments, or any such instruments if issued by any Russian entities, can be subject in any case to block or restrictions pursuant to the relevant financial market regulations just issued to such regard by U.S. and European authorities;
finally, also the settlement of investment funds transactions involving Russia and Belarus is affected by strict restrictions, which currently hinder the possibility to compute the relevant NAV-net asset value of such funds.
We can also note that EU Regulation no. 2022/345 of 1st March 2022 has prohibited – as from 12 March 2022 – the rendering of any specialized service of financial messaging, necessary to exchange financial data, to certain Russian bank and financial institutions, as well as to their Russian subsidiaries – which can no longer have access to the SWIFT electronic payment system - namely in particular the following:
VTB Bank
Bank Otkritie
Bank Rossiya
BM-Bank
Novikombank
Orient Express Bank
Post Bank JSC
Promsvyazbank
Russ Bank - Russian Interregional
Sovcombank
State Specialized Russian Export
Vnesheconombank (VEB)
As from 20 March 2022, same restrictions apply to the following Belarus banks and financial institutions, as well as to their subsidiaries:
Belagroprombank Bank
Dabrabyt Development
Bank of the Republic of Belarus
In summary, all above mentioned financial institutions can no longer interact with any European financial entities, enterprises and individuals, since any kind of financial transactions as between them is prohibited, inclusive of the receipt of any bank remittances or the payment of any receivables relating to goods and services.
Prof. Avv. Salvatore Vitale
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