Russia’s sanctioned Sovcombank requests US licence to make UN climate payments

By Elena Fabrichnaya

MOSCOW (Reuters) – Russian private lender Sovcombank has applied to the U.S. Treasury for a licence to make membership payments to a United Nations climate funding programme while its activities are blocked by U.S. sanctions, a senior bank executive told Reuters.

Sovcombank, one of Russia’s 13 official “systemically important” credit institutions, was placed under U.S., UK and European Union sanctions soon after Russia launched what it calls a “special military operation” in Ukraine in February 2022.

The Treasury’s Office of Foreign Assets Control (OFAC) placed Sovcombank on its Specially Designated Nationals (SDN) list, effectively kicking it out of the U.S. financial system, banning trade with Americans and freezing its U.S. assets.

But the bank is now seeking a licence to pay membership fees for the United Nations Environment Programme Finance Initiative, testing the waters in Washington for special exemptions for certain transactions by Russian banks.

“We have applied to OFAC with a request to issue a licence so that our payments are accepted,” Mikhail Avtukhov, head of Sovcombank’s corporate and investment banking division, said on the sidelines of a financial forum in Moscow.

“We have funds in foreign currency for these payments, but we have not received any response from them yet, unfortunately.”

The U.S. Treasury declined to comment.

Avtukhov said Sovcombank was in dialogue with the UN on the matter. The UN did not immediately respond to a request for comment.

“We have not suspended our membership in international organisations,” Avtukhov, who also sits on Sovcombank’s board, said. “We continue working with them, despite all the difficulties that arose last year.”

“The bank has not suspended any initiatives within the UN framework. There are certain difficulties with making payments in general for Russian participants of this programme,” Avtukhov said. “But the UN treats this with understanding.”

Asked whether the bank might try to pay in currencies other than dollars or euros, Avtukhov said the bank did not want to be accused of trying to circumvent sanctions and wanted to pay in “the usual way”.

(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Kirsten Donovan)