For over four months, U.S. representatives issued stern warnings to Austria’s Raiffeisen Bank International (RBIV.VI) regarding a business deal linked to a prominent Russian oligarch. In May, the U.S. government’s patience reached its limit.
On May 8, the U.S. issued a written ultimatum to Raiffeisen Bank, the European Central Bank, and the Austrian government. The ultimatum threatened to restrict Raiffeisen’s access to the U.S. dollar—a critical move given Raiffeisen’s substantial operations in Russia.
Responding swiftly, Raiffeisen canceled the deal that was initially publicized in December. Nevertheless, the ordeal had already strained U.S. relations and seeded distrust, according to an individual familiar with the U.S. perspective.
Two months later, the pressure for Raiffeisen to reduce its Russian connections has intensified, with both Washington and the European Central Bank applying pressure, per three informed sources.
Raiffeisen and Austria are now at the forefront of a concerted effort by the U.S. to isolate Russia economically by tightening sanctions and cutting off access to Western commodities, more than two years after Russia’s invasion of Ukraine.
Reuters communicated with over a dozen individuals, including top officials from the U.S., Austria, and European regulatory bodies, and others directly aware of Raiffeisen’s strategy.
The narrative detailed how, despite terminating its plans to acquire a stake in the Austrian firm Strabag—which the U.S. Treasury in May linked to sanctioned Russian businessman Oleg Deripaska—Raiffeisen is still under significant international pressure to pull back from Russia.
Deripaska dismissed the U.S. response as nonsensical, and his spokesperson confirmed that he currently holds no interest in Strabag.
The discussions revealed that Raiffeisen had ignored previous cautions from European regulators about its risky dealings with Russia. The U.S. continues to monitor Raiffeisen closely for any potential sanction breaches.
Raiffeisen’s spokesperson remarked that discussions with the U.S. Treasury were generally amicable and the bank was actively reducing its exposure in Russia.
The U.S. Treasury, with the authority to impose sanctions and cut off dollar access, previously fined BNP Paribas $9 billion in 2014 for violating U.S. sanctions.
Austrian lawmaker Nina Tomaselli commented on the precarious situation, noting the decisive influence of the U.S.
While some Austrian politicians are hesitant to sever ties with Russia—a key historical ally—Raiffeisen’s European regulators are pressing for immediate disengagement.
In June, ECB officials insisted on prompt action during a Raiffeisen supervisory board meeting, demanding a comprehensive plan for reducing its Russian involvement.
A senior international regulator commented on the strained relations with Raiffeisen’s supervisors, who view the bank as untrustworthy and lament their lack of insight into its Russian operations.
Raiffeisen confirmed it was reducing its Russian loan and payment volume and working to decrease its deposits in the region, which total 14 billion euros.
The ECB declined to comment on the situation.
As a major financial player from Vienna to Moscow, Raiffeisen’s profitability in Russia has surged, particularly since the Ukraine conflict began in 2022.
The continuing threat from the U.S. Treasury looms large over Raiffeisen, with significant potential implications for its operations and the broader financial system, prompting cautious steps from U.S. authorities.
Washington prefers European regulators to compel Raiffeisen to detach from Russia, reflecting the ongoing complex dynamics in enforcing economic sanctions against Moscow.
