Accounts blocked, credit card gone
Many Russians caught off guard by sanctions
4/1/2022, 8:52 p.m
The international community wants to force Putin to end the Ukraine war with tough sanctions. But they don’t just affect Moscow’s circle of power. Russians living abroad suddenly can no longer open accounts and credit cards no longer work. There is a climate of distrust.
Russians living abroad are increasingly caught up in the grindstones of Western sanctions against their country in their everyday lives. Even if they are not the target of sanctions, many Russians now have problems with money transactions. Reuters news agency interviewed nine Russian citizens living abroad, as well as wealth managers, lawyers, accountants, brokers and art dealers. The answers suggest that the financial sanctions, which were intended to hit the inner circle of power around President Vladimir Putin, are now affecting a much larger circle of people with Russian passports.
“I deal with Russians who can’t leave their hotels, students who have no money because their credit cards are worthless,” said Bob Amsterdam, founding partner of Washington and London-based law firm Amsterdam & Partners. “Banks deny Russians bank accounts. They close their doors to Russians because of their nationality.” Leading law firms in the City of London did the same.
Evgeny Chichvarkin, a telecoms tycoon who fled Russia in 2008 and then settled in London, has long been a vocal supporter of Ukraine. Along with his partner Tatyana Fokina, the multimillionaire says he sent four truckloads of medical and protective gear to Poland to help Ukrainians after the Russian invasion on February 24. He even drove the first load himself, said Chichvarkin. But the 48-year-old, who is a longtime critic of Putin, also said one of his Swiss bank accounts was unexpectedly frozen. He did not name the bank.
Entire accounts of Russians frozen
Russian writer Grigory Chkhartishvili, who lives in London and whose name is Georgian, reported that he had successfully transferred a sum of money through the British bank Barclays to support his Ukrainian refugee aid organization True Russia. However, his wife, who has a Russian name, was initially unsuccessful at Barclays when she tried to send money to the same aid organization. The bank asked for a face-to-face interview.
“My sum was ten times that, but it wasn’t a problem,” said Chkhartishvili. “That clarifies the atmosphere.” After a call to the bank, his wife was finally able to transfer the money. No comment was immediately available from Barclays.
Others can also report on experiences like Chichvarkin and Tschkhartishvili. Four Russians living abroad with dual citizenship said banks in London, Zurich and Paris had frozen accounts or payments. A wealthy émigré in London said he had switched to cash to shop and otherwise tried to keep a low profile.
Two financial advisors and a lawyer named cases in which banks had rejected applications from Russian customers for bank accounts. Money houses would take extra precautions with Russian money. Several brokers pointed to cases of stalled real estate and art deals.
“Everything Russian is toxic”
Several lawyers representing wealthy Russians in Europe spoke of a pervasive climate of distrust. One tax and wealth planning expert who asked not to be named said Russians are under particular scrutiny, regardless of where they live or their wealth. “Right now, anything Russian is toxic. That means everyone is trying to be extremely, extremely careful when it comes to Russian clients,” said the lawyer, who has both Russian and British citizenship.
Journalist Elena Servettaz, who has lived in France since 2005, reported that the French bank Crédit Mutuel refused a transfer of less than 1,000 euros to her account. It was money sent to her from London to support Ukrainian refugee aid. When Servettaz called the bank, she was told that the transaction had been flagged as suspicious because of her Russian nationality. She then received the money more than a week later.
“It’s so unfair when you’re part of the Russian opposition and you’re helping Ukrainian refugees and then you’re told you’re Russian, so you can’t get your money,” she lamented. Crédit Mutuel said European banks have an obligation to exercise caution when reviewing transactions that could be affected by EU sanctions. Additional checks could therefore lead to delays. However, the bank is doing everything possible to limit the consequences for customers.
The Reuters news agency had already reported in mid-March that bank supervisors had instructed institutes to scrutinize transactions of all Russian and Belarusian customers. The precautionary measure applies to people who are not on the sanctions list and with regard to Russian and Belarusian EU residents, said people with knowledge of the matter.