Austria backed new EU sanctions package against Russia after it got a concession from Ukraine

Austria backed the EU’s 12th sanctions package against Russia after Ukraine suspended the listing of Raiffeisen Bank on the list of war sponsors. Reuters reported this, quoting an unnamed EU diplomat.

The EU will vote on the 12th package of sanctions against Russia

The European Union will vote on the 12th package of sanctions against Russia next week, the media reported. Media reports indicate that the European Union is expected to approve the 12th EU sanctions package before Christmas.

According to media sources ahead of the European Council session on December 14–15, Vienna has delayed the latest package approval.

Austria had been fighting to have the Austrian Raiffeisen Bank International removed from a Ukrainian list branded “international sponsors of war.” This list seeks to shame corporations doing business in Russia and supporting the war effort by paying taxes, for example.

Austria achieved the removal of Raiffeisen Bank from Ukraine’s blacklist

This blacklist has no legal standing, but it is symbolic in that it increases public pressure on Raiffeisen to leave Russia, something the Austrian bank has stated it is willing to do but has yet to do.

Despite the fact that EU members publicly announced the 12th package during the summit on December 14, Austria was still blocking it due to the RBI issue.

“It makes me sad to see Ukrainian lives put on one side of the scale and the commercial interests of an Austrian bank in Russia on the other side,” the EUObserver quoted a Ukrainian contact as saying. It concluded that Austria was “blackmailing” Ukraine using EU sanctions, the same way Hungary did.

The website of Ukraine’s National Agency for Corruption Prevention stated that the RBI’s placement on the list of international sponsors of war has been suspended during bilateral consultations with representatives of the European Commission.

Raiffeisen Bank International and its operations in Russia

Despite the full-fledged invasion of Ukraine in February 2022, Austria’s second-largest bank lender, the RBI, has continued to operate in Russia.

The bank has a lengthy history in Russia and is one of only two foreign banks designated as “systemically important” by the Russian central bank.

The Czech Republic opened an investigation into the Austrian bank’s ongoing business activities in Russia in August after the Czech Association for the Rights of Citizens and Entrepreneurs pointed out that Raiffeisen’s Russia-based companies had paid up to $720 million in taxes to the Russian state budget.

On March 24, the European Central Bank ordered Raiffeisen to develop an exit strategy for selling or closing down the group’s Russia operations.

Raiffeisen Bank’s profits in Russia tripled since the start of Russia’s war

The bank responded to the criticism by announcing a decrease in its business activities in the nation, a reduction in “the RBI Group’s cross-border exposure to Russia,” and an evaluation of options for selling or spinning off its Russian branch. However, no additional updates have been released.

Raiffeisen, an Austrian banking corporation, threatened to abandon the Russian market at the start of Russia’s full-scale invasion of Ukraine. However, as of May 5, 2023, Raiffeisen Bank’s profits in Russia had tripled since the beginning of the year.

Raiffeisen Bank International postponed its withdrawal from the Russian market once more in early November.

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