MOSCOW: A Russian court has ruled that Deutsche Bank and UniCredit’s assets in the country are to be seized, documents showed. European banks have largely exited Russia after Moscow launched its offensive on Ukraine in 2022.

Russia has a list of Western assets that would be seized if Group of Seven (G7) leaders decided to confiscate $300 billion in frozen Russian central-bank assets, the Kremlin had warned on Dec 29 last year.

Kremlin spokesman Dmitry Peskov said any such move by the West would violate international law and undermine the global financial system and the world economy. A court in Saint Petersburg ruled in favour of seizing 239 million euros ($260 million) from Deutsche Bank, documents dated May 16 showed.

The same day, it ordered the seizure of around 463 million euros of assets belonging to Italy’s UniCredit.

Kremlin had threatened fiscal retaliation if Russian assets are seized

The court also seized Commerz­bank’s assets worth 93.7 million euros ($101.85 million) as well as securities and the bank’s building in central Moscow. Commerzbank did not immediately respond to a request for comment.

The decisions were issued in answer to a request from RusKhimAlians, which was planning to build a major gas processing and liquefaction plant in cooperation with German company Linde, which pulled out of the project due to Russia’s military campaign.

RusKhimAlians sued UniCredit and Deutsche Bank — both guarantors of the project.

Deutsche Bank said it would “need to see how this claim is implemented by the Russian courts and assess the immediate operational impact in Russia”.

UniCredit said it “has been made aware” of the decision and was “reviewing” the situation in detail.

UniCredit was one of the Euro­pean banks most exposed to Russia when Moscow started its campaign in Ukraine, with a large local subsidiary operating in the country.

It began preliminary discussions on a sale last year, but the talks haven’t advanced.

Chief executive Andrea Orcel said UniCredit wants to leave Russia, but added that gifting an operation worth three billion euros was not a good way to respect the spirit of Western sanctions on Moscow over the conflict.

Nevertheless, UniCredit has gradually reduced its exposure to Russia and managed to increase the ratio of its capital to risk-weighted assets to 16 per cent from 15pc last year.

The lawsuits were filed by St Petersburg-based RusChemAlliance, a joint venture 50pc owned by Russian gas giant Gazprom which is the operator of the project.

Published in Dawn, May 19th, 2024