Sanctions

Visa, Mastercard resume services with 2 Russian banks blocked after US sanctions

International payment systems Visa and MasterCard have resumed services for transactions for clients at Russia's SMP Bank and Investcapitalbank, blocked after the US imposed sanctions against top Russian officials following Crimea’s move to join Russia

RT

23 March, 2014

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On Thursday, Washington imposed sanctions singling out 20 top Russian political figures and businessman, as well Rossiya bank. Boris and Arkady Rotenberg who control the SMP Bank and Investcapitalbank were included in the sanctions list.

Following Obama’s executive order to impose sanctions, on Friday Visa Inc and MasterCard Inc stopped serving clients of seven Russian lenders, according to Timur Batyrev, the head of the national payment system department at the Central Bank of Russia. The lenders included SMP Bank and Investcapitalbank.

Visa blocked four Russian banks including Rossiya bank and Sobinbank, belonging to Yury Kovalchuk, SMP and Investcapitalbank in control of the Rotenbergs, while MasterCard blocked the first three of them.

There was no official warning, according to Rossiya bank’s statement.

SMP Bank said the decision to stop providing services by the two international payment systems was unlawful because the sanctions were imposed on shareholders, not the bank, which said it has no assets in the United States.

"We are glad that the two biggest international payment systems have heard our arguments and reversed their decision to block (SMP bank transactions on Sunday)," SMP bank CEO Dmitry Kalantyrsky said in a statement.

"The decision was taken by MasterCard last night and Visa - in the morning. Currently MasterCard’s service is completely restored, Visa transactions will be restored in a few hours as communication channels are being debugged and equipment settings updated,” SMP Bank said in a statement. Investcapitalbank has also said in a statement that the payment systems have resumed their services.

According to Itar-tass, Visa has confirmed the system has lifted the embargo on the transactions with SMP Bank and Investcapitalbank.

"The US government has informed the company Visa Inc to lift economic sanctions on SMP Bank, and Investcapitalbank due to the fact that these organizations do not meet the criteria on which sanctions are imposed,” said a spokesman for Visa.

Visa officials could not clarify the future of the transactions with Rossiya bank and Sorbinbank. The officials of both banks told Itar-Tass that they do not know when Visa and Mastercard will return to a standard mode of operation with them.

Russia Returns Favor, Sees Chinese Yuan As World Reserve Currency

Zero Hedge

23 March, 2014

Following China's unwillingness to vote against Russia at the UN and yesterday's news that China will sue Ukraine for $3bn loan repayment, it seems Russia is returning the favor. Speaking at the Chinese Economic Development Forum, ITAR-TASS reports, the Chief Economist of Russia's largest bank stated that "China's Yuan may become the third reserve currency in the in the future."

Managing Director and Chief Economist of investment company Sberbank Yevgeny Gavrilenkov said at the 15th governmental Chinese economic development forum in the Chinese capital on Sunday (via ITAR-TASS):

"China’s yuan (renminbi) may become a third reserve currency in the world in the future"

 

"This forecast can be made on figures of domestic economic growth. Probably the country will keep high GDP growth rate and the GDP volume will increase to around 14-16 trillion U.S. dollars for a brief period of time, the indicators comparable to the European Union and the United States.

 

Meanwhile, Chinese securities are more attractive for the countries that have a surplus in economy, particularly the Middle East states; and China will obviously follow the path of securing the country’s assets,"

The forum which opened in the Chinese capital on March 22 discusses a broad range of issues of economic reforms and China’s stronger role as the second largest world economy. First Deputy Prime Minister of the Chinese State Council Zhang Gaoli, Managing Director of the International Monetary Fund Christine Lagarde and top managers of major world corporations participate in the forum as honorary guests.

Of course, as we noted previously, nothing lasts forever...

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and with Friday's "Petrodollar Alert" perhaps things are moving faster than many assumed.