Today, a coalition of 17 civil society organisations from Ukraine, the European Union, and across the globe sent an open letter addressed to the Vice-President of the European Commission, Kaja Kallas, urging the Commission to abandon a plan to award €2 billion in frozen Russian assets to Raiffeisen Bank International (RBI).
This appeal follows news that the Commission has endorsed an Austrian proposal to unfreeze a €2 billion stake in Austrian company Strabag currently owned by Rasperia Trading, a Russian investment company with links to sanctioned Russian oligarch Oleg Deripaska. Austria proposes awarding these assets to RBI to compensate the bank for the €2.1 billion a Russian court seized from its subsidiary in January during a legal dispute with Rasperia.
The controversial plan has been opposed by the majority of European member states over concerns that it would legitimate the business activities of one of the largest international companies still operating in Russia. European diplomats have also noted that the proposal risks legitimising previous Russian attempts to seize the assets of European companies at a time when the Russian government is attempting to drastically ramp up its weaponisation of Western corporate exposure to the Russian market.
Despite widespread opposition to the plan, negotiations over the 19th package of EU sanctions on Russia have been deadlocked over Austria’s proposal, with Austria threatening to veto other measures if it is not approved. In response, civil society organisations are appealing to the European Commission to resist Austria’s blackmail and reject the proposal.
Since Russia’s invasion of Ukraine in early 2022, RBI has attracted repeated controversies for its operations in Russia. Reports suggest that the bank has maintained financial ties with Russian military suppliers and sanctioned state-operated entities and operates crucial payment infrastructure allowing Russian gas to continue flowing into Europe. Despite years of pressure from civil society organisations and regulators, including the European Central Bank, RBI has resisted calls to exit Russia, citing difficulties in finding a buyer for its Russian business while refusing to commit to a full wind-down of its Russian operations.
The signatories warn that compensating RBI for its losses in Russia would effectively reward the bank for its longstanding and well-documented role in financially enabling Russia’s war of aggression against Ukraine. They call on the Commission to uphold its commitment to freezing Russian assets and to avoid setting a dangerous precedent that signals to companies operating in conflict zones that the EU will cushion the risks of their business decisions.
Nezir Sinani, Executive Director of the B4Ukraine coalition, said: “For years, civil society and regulators have warned RBI that continuing to pursue profits in Russia carried severe risks. RBI’s losses in Russia are a consequence of failing to take that risk seriously. If the EU reimburses RBI for its risks, it will signal to all companies still operating in Russia that they have nothing to fear. The Commission must reject this proposal. Banks that undermine European security and Ukrainian human rights should be held accountable, not rewarded.”
The letter can be downloaded here and has so far been signed by BankTrack, B4Ukraine, Urgewald, StateWatch, PR ARMY, Business & Human Rights Resources Centre, The Dekleptocracy Project, Profundo, Money Justice Collaborative, CEE Bankwatch Network, WeMove Europe, Investor Alliance for Human Rights, Norwegian-Ukrainian Friendship Association, PAX, Investigations With Impact (INPACT), Lex Collective, and the International Partnership for Human Rights.