A Russian court has just ruled to confiscate $439.5 million from US bank JPMorgan Chase. This is a ruling on the side of Russian state-owned bank VTB, after the bank had its accounts frozen in the US by JPMorgan to enforce the US Government’s sanctions against Moscow after the Russia-Ukraine conflict broke out. 2022.
According to the Financial Times newspaper, citing a ruling from a Russian court on April 24, the court ordered the confiscation of the above amount from JPMorgan’s account as well as “fixed and non-fixed assets” in Russia, including shares. section at Russian branch.
Last week, VTB filed a lawsuit with the arbitration court in St. Petersburg to get back all the money frozen in accounts in the US. This move took place after JPMorgan announced plans to withdraw from the Russian market.
The next appeal hearing in this case is scheduled to take place on July 17.
The ruling is the latest case of US banks being caught between their overseas business interests and Western sanctions on Russia. JPMorgan is the largest bank in the US by asset value.
Within two years after Russia launched a “special military campaign” in Ukraine, US President Joe Biden’s administration introduced a series of unprecedented sanctions against Russia, including the same sanctions. The ally imposed a ceiling on Russian oil prices as well as trade restrictions to reduce Moscow’s military revenue.
On April 24, Mr. Biden signed a large-scale foreign assistance law, which empowers US officials to identify and confiscate assets of Russian individuals and organizations in the US. The legislation also helps strengthen US efforts to persuade European allies to use confiscated Russian assets to support Ukraine.
Returning to the above incident, last week JPMorgan also sued VTB in a New York court to stop the Russian bank’s litigation efforts and said that US law did not allow them to release the $439.5 million amount. frozen of VTB. JPMorgan emphasized that it is facing “irreparable harm” due to VTB’s actions.
Previously, when JPMorgan and another US bank, Goldman Sachs, announced their intention to close their operations in Russia, many experts warned that this could take more than a year. Several other Western banks, including America’s Citigroup, Italy’s UniCredit and Austria’s Raiffeisen, still operate in Russia.
In 2022, Russian President Vladimir Putin signed a decree according to which international businesses that want to leave Russia need to receive approval from the President. To date, 7 international banks, out of 45 banks operating in Russia, have been approved by Mr. Putin to withdraw from the country, including Mercedes-Benz Bank, Ikano, J&T and Intesa. Also in 2022, Moscow banned corporate shareholders from “unfriendly countries,” including the United States, from withdrawing shares they hold in Russia.
Before the JPMorgan case, the Russian side also made similar decisions many times. Last summer, a Russian court ruled to freeze $36 million in assets of Goldman Sachs bank in a lawsuit in which Russian state-owned bank Otkritie was the plaintiff. A few months later, the court ordered the US bank to pay the above amount to Otkritie.
In March 2023, another Russian court ruled to confiscate assets worth 204 million USD of German car manufacturer Volkswagen in Russia in a lawsuit initiated by Gaz Group – a former partner of Volkswagen – to sue. Gaz Group is a company owned by Russian businessman Oleg Deripaska, who is on the list of Western sanctions. These assets were later unfrozen when Volkswagen was allowed by Russian authorities to sell its Russian branch to Avilon – one of the largest automobile companies in Russia.
