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23 Mar, 2014 15:35

Visa, Mastercard resume services with 2 Russian banks blocked after US sanctions

Visa, Mastercard resume services with 2 Russian banks blocked after US sanctions

International payment systems Visa and MasterCard have resumed services for transactions for clients at Russia's SMP Bank and Investcapitalbank, blocked after the US imposed sanctions against top Russian officials following Crimea’s move to join Russia.

On Thursday, Washington imposed sanctions singling out 20 top Russian political figures and businessman, as well Bank Rossiya. Boris and Arkady Rotenberg who control the SMP Bank and Investcapitalbank were included in the sanctions list.

Following Obama’s executive order to impose sanctions, on Friday Visa Inc and MasterCard Inc stopped serving clients of seven Russian lenders, according to Timur Batyrev, the head of the national payment system department at the Central Bank of Russia. The lenders included SMP Bank and Investcapitalbank.

Visa blocked four Russian banks including Bank Rossiya and Sobinbank, belonging to Yury Kovalchuk, SMP and Investcapitalbank in control of the Rotenbergs, while MasterCard blocked the first three of them.

There was no official warning, according to Bank Rossiya's statement.

SMP Bank said the decision to stop providing services by the two international payment systems was unlawful because the sanctions were imposed on shareholders, not the bank, which said it has no assets in the United States.

"We are glad that the two biggest international payment systems have heard our arguments and reversed their decision to block (SMP bank transactions on Sunday)," SMP bank CEO Dmitry Kalantyrsky said in a statement.

"The decision was taken by MasterCard last night and Visa - in the morning. Currently MasterCard’s service is completely restored, Visa transactions will be restored in a few hours as communication channels are being debugged and equipment settings updated,” SMP Bank said in a statement. Investcapitalbank has also said in a statement that the payment systems have resumed their services.

According to Itar-tass, Visa has confirmed the system has lifted the embargo on the transactions with SMP Bank and Investcapitalbank.

"The US government has informed the company Visa Inc to lift economic sanctions on SMP Bank, and Investcapitalbank due to the fact that these organizations do not meet the criteria on which sanctions are imposed,” said a spokesman for Visa.

Visa officials could not clarify the future of the transactions with Bank Rossiya and Sorbinbank. The officials of both banks told Itar-Tass that they do not know when Visa and Mastercard will return to a standard mode of operation with them.