Russia increasing troops, moving towards Ukraine border

Russian bank subsidiaries will be exempt from EU economic sanctions

 

The number of Russian troops and weaponry along the border with Ukraine is increasing and is “well over 12,000”, Nato military commander General Philip Breedlove said today.

“We watch the materials move from inside the central military district in Russia to the area of Rostov, where they are assembled, then meet, train, and move towards the border and we see them across the border,” he told reporters at Pristina airport after visiting Nato troops in Kosovo.

Meanwhile, Russian bank subsidiaries based in the European Union will be exempt from EU economic sanctions designed to choke off finance for big state-owned Russian lenders, according to sources today.

These sources said the exemption, which EU officials said they would monitor closely to avoid abuse, meant Sberbank and VTB subsidiaries could operate normally within EU member states.

The step will come as a relief to Austria, where the two big state-controlled Russian lenders have the headquarters of their European operations, the sources said.

Hungary and Slovakia had also said the latest sanctions - aimed at punishing Moscow for fomenting Ukraine’s political crisis - should not apply to Russian banks operating in the EU to prevent disruptions on their retail operations.

Details of the EU sanctions - which include banning state-controlled Russian banks from raising long-term financing by selling stock or bonds on EU markets - are due to be published tomorrow and enter into force on Friday.

The European Commission has not yet published a list of the Russian banks that will be affected but has said it will apply only to Russian banks that are more that 50 percent owned by the state or other public authorities.

Sberbank is majority-owned by the Russian central bank, and VTB is majority-owned by the government.

“We limited the geographical scope to Russia. We did not want to include EU subsidiaries registered and established in the EU,” one EU source said, seeing as the risk as “manageable” that these local lenders could transfer cash to their parents.

“These subsidiaries never issued corporate bonds or equities in the past three or four years, so it will be extremely visible if they start doing it now,” the official said.

Reuters