NSDC decision on application of sectoral sanctions against Russia's financial institutions to make it impossible for them to cooperate with Ukrainian financial institutions – NBU

KYIV. Feb 23 (Interfax-Ukraine) – The decision of the National Security and Defense Council (NSDC) to apply sectoral sanctions against financial institutions of the Russian Federation will make it impossible for them to cooperate with Ukrainian financial institutions, the press service of the National Bank of Ukraine (NBU) has reported.

“Sectoral sanctions make it impossible for any cooperation between representatives of Ukrainian business and the financial sector, including subsidiary banks of international financial groups operating in Ukraine, with the Russian financial sector,” the bank’s press service told Interfax-Ukraine.

According to the NBU, the sanctions will apply to the entire financial sector of Russia, in particular to banks, credit institutions, payment system operators, professional stock market participants, insurance companies, investment funds and other money service providers registered/located in the Russian Federation.

The National Bank proposed to apply sectoral sanctions to the financial sector of Russia, given its strategic importance for the aggressor state.

“The financial sector of Russia supports its economic and institutional capacity to wage a war of conquest against Ukraine, in particular, it helps the Russian financial system perform its functions despite the impact of international sanctions, provides guarantees to arms manufacturers under the Russian state defense procurement order, and implements salary and mortgage projects for military personnel,” the central bank added.

According to NBU governor Andriy Pyshnyy, such sanctions will serve as an example for the countries of the sanctions coalition.

“It is exactly the model of the sanctions approach that we expect from them. Currently, the United States, the EU, the UK, Canada, and other partners have applied full blocking sanctions, a ban on transactions… Our position is that a full blocking should apply to all banks and key market institutions of the Russian Federation, that is, the entire financial sector of Russia, except for one bank with a special license for a limited range of operations on non-sanctioned goods,” he wrote on Facebook.

According to him, it is the only way to ensure effective control over transactions with Russian residents and minimize the risks of circumventing sanctions restrictions.

“Raiffeisen Bank in Ukraine complies with all the established requirements of martial law, sanctions for other restrictions against the aggressor country. The regime of sectoral sanctions against Russian banks provides for the termination of all relations with them, including payments. The Ukrainian Raiffeisen Bank has actually ceased relations with Russian banks a year ago and will continue strictly complying with the sanctions regime,” the bank’s press service told Interfax-Ukraine.