The EU is considering unfreezing €2bn worth of Strabag construction company shares linked to Russian oligarch Oleg Deripaska to compensate Raiffeisen Bank International. Raiffeisen, which is the biggest Western bank still operating in Russia, was earlier forced by Moscow to pay compensations. The plan is part of the latest draft of next EU’s sanctions against Russia.
The provisions envisage unfreezing shares in the Austrian construction company Strabag which were previously partly owned by Mr Deripaska. These assets would become property of Raiffeisen Bank International and will compensate for a €2bn fine that the bank was forced to pay after a Russian court ruling in favor of a company linked to Deripaska, Financial Times informed.
Circumvention of sanctions?
The sanctions were originally imposed because Mr Deripaska was suspected of providing material support to Russia’s military-industrial complex after the full-scale Russian invasion to Ukraine had started in February 2022.
However, some European officials are concerned that this move could legitimize oligarchs’ attempts to circumvent EU sanctions against Russia. Russia has been routinely ordering the confiscation of Western assets in response to sanctions.
The scheme, currently being discussed in Brussels, would allow Raiffeisen to take ownership of the sanctioned shares. That would effectively mean recognizing the Russian court’s decision. Proponents of this measure believe that it would prevent the sanctioned entity from receiving money twice—first as compensation by court order, and then again when the sanctions are lifted one day.
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Valued channel for SWIFT
Raiffeisen is currently the Western bank with the largest presence in Russia. However, the bank is under constant pressure from regulators and governments in Western countries to exit the Russian market. Many other Western companies have already done so.
Raiffeisen is trying to wind down its operations in Russia. Russian regulators, however, are reportedly unwilling to allow the bank to leave. The reason is that Raiffeisen remains one of the few channels in Russia for accessing the international interbank payment system SWIFT.
The aluminium king
Oleg Deripaska, one of the Russia’s richest people, began his career as a metals trader after the breakup of the Soviet Union. He used accumulated funds from trading to acquire stakes in the Sayanogorsk aluminum smelter from a consortium of businessmen who privatized it. The Sayanogorsk plant served as the foundation of what later became the world’s largest aluminium company Rusal.
Deripaska is the founder of Basic Element, one of Russia’s largest industrial groups, and Volnoe Delo, Russia’s largest charitable foundation. He was the president of En+ Group, a Russian energy company. Mr Deripaska also headed United Company Rusal, the second-largest aluminum company in the world, until he quit both roles in 2018.
Mr Deripaska is one of a handful Russian businessmen to have openly denounced the Russian invasion to Ukraine in 2022.
