Austrian bank faces scrutiny for Russian ties amid war
Bloomberg revealed, citing official documents, that the Austrian Raiffeisen Bank International AG (RBI) benefited from businesses supporting the Russian war industry, which was crucial for conducting military activities in Ukraine.
The Russian branch of this Austrian bank earned 62 million rubles (approximately 830,000 CAD) in income in exchange for its services, which were used by, among others, a Russian chemical company producing products for the Russian military industry, Bloomberg reported after reviewing bank account statements.
The Austrian bank allegedly profited from the war
"RBI has implemented monitoring and checking systems to ensure that all transactions and business activities comply with applicable sanctions," a bank spokesperson responded to the agency's inquiry.
Officials from one European country, who reviewed the bank documents, admitted that it is almost certain that Raiffeisen has more clients supplying components needed to produce military equipment used by Russians in Ukraine.
Last year, the Russian branch of Raiffeisen generated over a billion CAD in profits in the first three quarters, Bloomberg noted. It emphasized that this is almost half of Raiffeisen's total profits and twice as much as it managed to earn in the two years preceding the invasion. In the first nine months of 2024, RBI paid a total of 277 million euros (about 400 million CAD) in taxes to the Russian state treasury.
Despite the good results of the Russian branch of the Austrian bank, the bank's headquarters in Vienna does not have access to this money, because it cannot leave Russian accounts. Under Russian law, the branch in Russia is considered a company of that country and is therefore subject to control by the Central Bank of Russia. Raiffeisen has already tried to transfer part of the profits out of Russia, but the European Central Bank did not agree to such a move.
Raiffeisen remained in Russia
Many western financial institutions withdrew from Russia when Moscow launched a full-scale invasion of Ukraine in 2022, but Raiffeisen decided to stay.
The Russian branch of RBI is considered by Moscow to be a key financial institution, providing Russia with access to foreign currencies. Therefore, according to Bloomberg, the Kremlin will not allow Raiffeisen to leave the Russian market because it is one of the last western banks still operating in Russia. Approval to leave Russia must be granted by a special commission, and the final word belongs to Vladimir Putin.
One of the companies mentioned by Bloomberg is Unichim, which supplies chemicals to the military firm Rawienstwo, subject to western sanctions, producing, among other things, gliding bombs used by Russians in Ukraine largely to terrorize the civilian population. Furthermore, documents obtained by Bloomberg show that Unichim also traded with Proletarskij Zawod, belonging to United Shipbuilding Corp., a state holding company building ships for the Russian navy.
In the first half of 2024, Raiffeisen provided 17.8 million Chinese yuan (about 3.2 million CAD) to Unichim. The bank also handled 17 other international transactions, the agency reported, citing official documents of the Austrian bank.
