Page 11 - RusRPTJul22

As far as SWIFT is concerned, previously the EU has already disconnected from the financial messaging system the sanctioned VTB Bank, Russia's second-largest state-controlled bank, Otkritie (restructured by the central bank and primed for IPO prior to invasion), restructured state-controlled "military bank" Promsvyazbank, military-affiliated Novikombank, Bank Rossiya with links to Kremlin, the state development bank VEB.RF, and private Sovcombank.
Russia's largest lender Sber has previously been added to the US SDN list and sanctioned by the UK, and the latest EU move is unlikely cause the operational conditions for the bank to significantly deteriorate.
However, one significant change from the latest EU sanctions would be the addition of the Russian Agricultural Bank to SWIFT sanctions, as the bank is one of the main issuers of the UnionPay system credit cards in Russia. After Visa and MasterCard have pulled out of Russia, Chinese UnionPay remains the only option for Russian banks to issue payment cards accepted internationally both offline and online.
National Settlement Depository Another heavy sanction forming a component of the financial part of the sixth package is the sanctioning of the National Settlement Depository (NSD), a subsidiary of the Moscow Exchange and Russia’s central securities depository.
Most notably, the NSD is used by the Finance Ministry to service foreign debt and has been central in the ministry's manoeuvring out of sovereign default and the most recently proposed bonds-for-rubles scheme.
The NSD “plays an essential role in the functioning of Russia’s financial system and its connection to the international financial system, thus directly and indirectly enabling the Russian government in its activities, policies and resources,” the EU commented.
Now that the Finance Ministry is unable to service its debt in US dollars after the expired general licence of the US Treasury, it will also be hit on NSD’s restrictions to use euros. The NSD has already stopped euro operations, according to Kommersant daily.
Yandex CEO Volozh The EU has sanctioned Arcady Volozh, the CEO and the founder of Russia’s internet major Yandex and most valuable digital company in the country prior to the invasion of Ukraine.
Volozh has already announced resigning from all positions in Yandex and its board. Yandex previously saw a cascade of top-level resignations that followed the sanctioning of Yandex Deputy CEO Tigran Khudaverdyan.
Although Yandex has previously tried hard to maintain its independence from the Kremlin, the EU commented that state-owned banks such as Sberbank and VTB are shareholders and investors in Yandex.
EU also reminds that in 2019 Yandex backed down to Kremlin pressure and after dodging a takeover attempt from Sberbank agreed to a restructuring that
11 RUSSIA Country Report October 2020 www.intellinews.com