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22 Apr, 2022 06:34

UK waives sanctions on key Russian bank

British authorities are allowing payments to a Russian financial institution to safeguard the European Union’s gas supply
UK waives sanctions on key Russian bank

The United Kingdom has granted a license for continued payments to Russia’s Gazprombank for more than a month, despite sanctions imposed on the firm and dozens of other Russian financial institutions last month.

London’s Office of Financial Sanctions Implementation (OFSI) issued the sanctions waiver on Thursday for “the purpose of making gas available for use in the European Union,” noting that the license expires on May 31.

It applies to contracts agreed prior to Thursday with Gazprombank and its subsidiaries, and it allows for “the opening and closing of bank accounts” so long as it helps to secure the flow of gas into the EU. 

Following a flurry of other financial penalties in the wake of Moscow’s attack on Ukraine, the UK government imposed sanctions on Gazprombank late last month, also targeting other major financial firms such as Alfa Bank. In announcing the latest waiver, however, the Treasury cited a 2019 law which allows exemptions for penalties on Russia under certain circumstances. 

Despite the push to penalize Russia, a number of European countries remain dependent on Moscow's energy supplies, creating some reluctance to support calls for outright embargoes on gas, oil and coal.

Gazprombank is among the largest banks in Russia by assets held, largely working in the corporate and investment sectors. The United States and a series of allies slapped penalties on the bank in February, imposing debt and equity restrictions after Russia attacked Ukraine, part of a coordinated effort to “isolate” and “cripple” Russia’s economy.