“Daughters” foreign banks began to assess clients from the DNI and LC

“Daughters” foreign banks began to assess clients from the DNI and LC

surveyed the largest “daughters” of foreign banks operating in the Russian market, whether they accept for services for persons with passports of the breakaway republics LNR and DNR and on what terms. Official requests were sent to the top 10 banks controlled by non-residents from countries that joined sanctions against Russia, in particular, UniCredit Bank, ROSBANK, Rusfinance Bank, Raiffeisen Bank KB Citibank, Nordea Bank, HKF Bank, OTP Bank, Credit Europe Bank and the Bank “Intesa”, and their headquarters to foreign entities.

On 18 February the President of Russia Vladimir Putin signed a decree on the recognition in Russia of the documents issued to citizens of Ukraine and stateless persons residing in the territories of separate districts of Donetsk and Lugansk regions of Ukraine. However, a month later, on March 7, the readiness to take on customer service with such passports officially announced only the savings Bank and Gazprombank.

Difficult question

The actions of the Russian “daughters” banks-non-residents in respect of persons with these passports represent a double interest. They are in a more difficult situation. On the one hand, as a legal entity incorporated and operating under Russian law (the existence of branches of foreign banks in Russia is prohibited. — ) they must comply with all Russian standards and receive the services for persons with passports of the LC and the DNI, with the other being subsidiaries of non-residents should listen to the parent companies that operate in accordance with the foreign, including sanctions legislation.

From official comments the majority of banks, where requests were sent, chose to abstain. UniCredit Bank and Bank “Inteza” in response to an official request declined to comment. In a press-service of the Bank reported that “fulfill the Russian legislation and the decrees of the President, and if theoretically there is a client who wants to get a Bank card (or other savings products for individuals in Nordea Bank no. — ) their application will be considered.” A source familiar with the situation in Nordea Bank, said that those who are unlikely to be: visa processing time — 90 days, the fee for opening the account 5 thousand. According to him, such conditions, the Bank introduced for all customers “from the street” to reduce retail out-of salary projects in the framework of its strategy.

The other “daughter” of foreign banks-nonresidents of the request is not answered. Their head structure did the same, or redirected the reporter to their Russian units. Attempt to ask the same questions of Ukrainian “daughters” of foreign listed banks who have failed. The answer has not received one official request to Ukraine.

The police are preparing to issue passports for the citizens of the DPR in Donetsk

Photo: Igor Maslov / RIA Novosti

Telephone conversation

Much more to clarify the situation in Russia appeal of the correspondent the same question in a call-centers of Russian “daughters” of Western banks.

Employees of call centers of five of them (UniCredit Bank, ROSBANK, Citibank, CB, HCF Bank and the Bank “Intesa”) announced that citizens with passports of the LC and the DNI can open an account with the necessary package of documents, which includes passport breakaway republics, migration card and the document confirming the right to stay in the territory of the Russian Federation.

However, the possibility of applying for opening an account or Deposit does not mean it is automatically open. As explained in the call centres, everything will depend on the outcome of the review. While in a number of call centers was given to understand that the order of consideration of such applications could be special, and the services to the client may be denied.

Only Citibank noted that there is already a practice of care for persons with passports issued by the self-proclaimed Luhansk and Donetsk republics, therefore, such customers when contacting the financial institution difficulties will not arise. However in a press-service of Citibank, said: “at the moment serviced by Citi in Russia do not have clients with the aforementioned areas”. The operator of the call center of Raiffeisenbank announced that in the next two to three months, the Bank will not serve citizens with passports of the LC and the DNI. According to him, the restriction on the service of such persons will be valid as long as the relevant amendments would be made to the legislation, which the operator did not elaborate.

In a call-center Rusfinance Bank reported that the service only citizens of the Russian Federation. This Bank is included into one group with a Bank and controlled by the French Societe Generale, thus, in this group the various Russian “daughters” and it appeared to be different approaches.

At the hotline numbers listed on the websites of OTP Bank and Credit Europe Bank did not respond to calls for two days.

Justified caution

Interviewed lawyers believe this cautious approach adopted by largest Russian subsidiaries of banks with Western capital, is understandable.

They unanimously say that the fact of recognition by Russia of passports of the LC and the DNI does not mean recognition of our state sovereignty of the breakaway republics. In the opinion of the partner of the legal company “Iontsev, Lyakhovsky and partners” Igor Dubova, in the framework of international public law of such States as the LC and the DNI, there is some education that cannot issue passports. “In this regard, banks are going extremely ambiguous situation when face authentication in [accordance with anti-money laundering legislation], that they are going to open an account or Deposit”, — adds Igor Dubov. In such a situation, according to lawyers, banks can respond and failure.

According to estimates of head of the legal Department SDM-Bank Alexander Golubev, the fact that the contract of Bank Deposit of a public offer, does not mean that absolutely any person can request such an agreement. Requires full compliance with the conditions of the public offer, and the citizens of the breakaway republics are no exception. “Recognition of passports DND and LNR only says that the citizen can be identified in accordance with this document, as a citizen of any other state”, — said Alexander Golubev. The expert drew attention to the fact that persons without Russian citizenship should be a legal basis to stay in Russia. As between Russia and the breakaway republics there was no formal agreement that would allow us to freely reside on the territory of Russia, in this regard, when contacting the financial institution must provide a migration card.

Considering how much paperwork and time is required for account opening for that category of customers in Russian “daughters” of Western banks, and the resulting high risks of failure, such customers easier to find another credit institution for their funds, especially as “aliens” with cheap funding from abroad, have not traditionally give a high return on savings in Russia, indicate the bankers and lawyers.

“To refuse opening of the account based on the dubiousness of the transaction or the client, the Bank may use a risk-based approach and professional judgment that gives some space for maneuver, — says the partner Tertychny Agabalyan Ivan tertychnyy. But if the client is new to the Bank and no operations earlier in the Russian banks are not held to justify the refusal in court if it comes to that, will be difficult.” “I think that people with passports of the LC and the DNI, which will go to the principle, will be one and in such cases the Bank will be easier to open an account in order not to lead to scandal, he continues. — Head of the organization when it can be explained that the action was done solely for the purpose not to violate the law and the sanctions regime is not directly violated”.

Most of the customers are probably the banks will gently hint at what statement best time to take, setting long-term consideration and prohibitive tariffs, so the person will be easier to apply in a Russian Bank, concluded Tertychnyi.