Gazprombank, the last of Russia’s major state-owned banks, which maintains access to SWIFT and settlements in major world currencies, will be subject to new US sanctions.
US President Joe Biden’s administration is considering the possibility of designating Gazprombank (GPB), Russia’s third largest bank by assets, which serves as a centre for gas deals with Europe.
According to sources, Gazprom would be banned from any transactions with American banks.
Gazprombank, which is one-third owned directly by Gazprom and 40 per cent by the pension fund, has not yet been subjected to strict Western restrictions, the Moscow Times reported: In the US it is only prohibited from raising capital on the debt market, but its senior executives and subsidiary IT company are subject to blocking sanctions. In the European Union, too, GPB has avoided ‘blacklists’ and only the UK has imposed blocking sanctions against the bank.
As a result, the bank has been able to become one of the main ‘custodians’ of the huge foreign exchange reserves that the Kremlin has amassed abroad following the freezing of the Central Bank’s assets in the West. According to Janis Kluge, a researcher at the German Institute for International Security Issues, by mid-2024 these shadow reserves had reached $180 billion. According to Kluge, this money could be used to pay for critical imports or to support the ruble exchange rate in the event of a radical deterioration of the situation in the Russian economy.
The GPB has been experiencing problems with dollar transactions since early 2023 after the American JPMorgan Chase Bank and Bank of New York Mellon (BoNY) closed their correspondent accounts. The bank’s website states that it currently offers transfers in euros, Chinese yuan and Kazakhstan tenge.
