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JP Morgan unfreezes Russian embassy payment

Published time: April 03, 2014 14:40
Reuters / Mike Segar

Reuters / Mike Segar

America’s JPMorgan Chase said it has resumed processing a payment from the Russian Embassy in Kazakhstan, after the Russian Foreign Ministry said it had been blocked under "anti-Russian sanctions".

"Following consultation with our regulators, we are processing this transaction," JPMorgan said in a statement Thursday.

The payment is for Sogaz, an insurance company partly owned by Bank Rossiya, Russia's fifteenth largest lender, targeted by the US because it is believed to be the bank of many senior Russian officials. Last week the bank said it would limit its operations to the domestic market and stick to the ruble, after it was temporarily blocked by Visa and MasterCard.

Reports that the American bank had illegally frozen the transaction led to the foreign ministry to respond and threaten repercussions for the US Embassy in Russia.

Russia and the US have been entangled in a web of sanctions over Ukraine and the Crimea referendum on March 16 that returned the peninsula to the Russian Federation.

The US reacted with asset freezes and visa bans against government officials and individuals thought to be close to Russian President Vladimir Putin. Many sanctioned government officials reacted nonchalantly to the ban, saying they have no assets abroad or desire to travel to the US.

Sogaz insurance agency is 48.5 percent owned by Abros, a wholly-owned subsidiary of Bank Rossiya.
Many American banks have headquarters in Moscow and branches throughout Russia including Bank of America, Goldman Sachs, and Morgan Stanley.

Many American banks have headquarters in Moscow and branches throughout Russia including Bank of America, Goldman Sachs, and Morgan Stanley.

Russian banks with foreign investment arms, such as VTB, are considering switching to ruble-based accounts, to hedge against Western-controlled dollar payments.

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