The Putin Follies: U.S. Sanctions Over Ukraine Hit Two Russian Banks Hardest

Bank Rossiya, SMP Bank main targets; even Paypal accounts frozen

Banks controlled by three billionaire friends of Russian President Vladimir Putin have seen about $640 million of assets frozen in the U.S. as retaliation for the Kremlin’s actions in Ukraine, according to U.S. government records.

Russian President Vladimir Putin, left, and billionaire 
Arkady Rotenberg attend the funeral of a former judo 
trainer in St. Petersburg in 2013. Photo: Getty Images

The figures, not previously reported, show the surprising extent to which the economic sanctions imposed by the U.S. have pinched the pockets of some of Russia’s most politically connected firms.

Hit the hardest is Bank Rossiya, which had at least $572 million blocked in U.S. accounts, according to records released to The Wall Street Journal by the Treasury Department. That is equivalent to roughly 10% of its 2013 assets, at today’s exchange rate.

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The St. Petersburg bank, whose founder Yuri Kovalchuk is alleged by the U.S. to be one of Mr. Putin’s “cashiers,” was described by the Obama administration as a personal bank for senior Russian officials.

Also hit is SMP Bank, majority-owned by Arkady and Boris Rotenberg, two brothers who are childhood friends and former judo partners of Mr. Putin. They have amassed some of Russia’s biggest fortunes, built in part on lucrative contracts with the state and state-owned companies.

Their bank has had at least $65 million—equal to about 2% of 2013 assets—blocked across dozens of accounts in U.S. financial institutions, Treasury documents show.

Dozens of other Russian firms have been ensnared in U.S. sanctions, including a prominent weapons manufacturer. But none comes close to those amounts, reflecting the two banks’ exposure to Western money channels.

Read the rest of the story HERE and follow a link to a related story below:

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