Russia Considers Penalizing Companies For Complying With Western Sanctions

                         

Vladislav Reznik, a member of the United Russia party, has proposed amendments to legislation that would effectively force out of the Russian market all of the companies and organizations that comply with western sanctions against the Russian banking system, Vedomosti reports, citing Reznik himself.

The Russian MP proposed new rules which stipulate that, if a company is found to be in breach of a contract due to compliance with external sanctions, then the Bank of Russia will put it and its beneficiaries and shareholders on a registry of “unreliable service providers”.

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Reznik’s amendments will also affect existing legal relations. An affected Russian bank or any of its cardholders will be entitled to file lawsuits against offending companies. The Prosecutor General Office will also be able to initiate cases.

The new rules are a response prompted by sanctions that the US Treasury Department imposed on the Russian bank Evrofinance Mosnarbank. Visa and Mastercard suspended the bank’s membership, which led to its cards being blocked internationally, even in Russia. The cards cannot even be used in the bank’s own ATMs, despite the fact that the Bank of Russia’s National Payment Cards System was meant to prevent such a scenario.

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The reason the cards do not work at all is that they are supported by the Russian processing center Kartstandart. When Visa and Mastercard stopped working with Evrofinance, Kartstandart stopped servicing its cards, retaining support for only the domestic “Mir” cards.

Kartstandart facilitates the operations of roughly 100 Russian banks.

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