Moscow seizes €2 billion from Raiffeisen Bank, which continues to operate in Russia.

A Russian court has ruled that over 2 billion euros in compensation must be paid to the largest Western bank in Russia, Austria's Raiffeisen Bank International. This landmark decision highlights the risks associated with doing business in Russia.

This information was reported by RBK-Ukraine citing Reuters.

The case represents one of the most significant rulings against a Western company still operating in Russia and involves one of the largest payouts to date.

Raiffeisen stated that it will contest the court's decision against its Russian subsidiary and seek to recover part of the funds through legal means.

The bank also announced that it would need to reserve funds in its financial reports from the previous year to help cover the 2 billion euro loss.

Remaining in Russia

As noted by Reuters, nearly three years after Russia's full-scale invasion of Ukraine, Raiffeisen Bank International's ongoing presence in Russia underscores the persistent ties between Moscow and Austria, as Vienna has served as a transit point for funds from Russia.

This situation has placed Raiffeisen and Austria at the center of a global U.S. campaign to isolate Russia by tightening sanctions against the banking sector and restricting access to Western goods following the invasion of Ukraine.

The ruling demonstrated Russia's ability to exert its own legal pressure on the Austrian bank.

"This lawsuit, containing a vast number of serious violations, is an attempt to enforce the sale of blocked assets through a Russian court," stated Andrey Timchuk, a partner at Delcredere, which represents Raiffeisen's interests.

Legal Case

The dispute arose after a previous deal failed, which Raiffeisen had hoped would allow it to unlock a portion of the frozen billions in Russia.

The case was based on a lawsuit filed by the Russian investment company Rasperia against the construction company Strabag, its Austrian shareholders, and Raiffeisen's Russian subsidiary.

RBI attempted to purchase a stake in the Vienna-based company Strabag from Rasperia, which Strabag linked to Russian oligarch Oleg Deripaska.

Washington identified Rasperia as part of a group of Russian companies still controlled by Deripaska when it imposed sanctions on some of the companies involved.

A source familiar with the situation told Reuters that Raiffeisen has about 6 billion euros in Russia, derived from international payments and billions in Russian deposits.

Raiffeisen, which has numerous holdings, more than 18 million customers from Vienna to Moscow, and 44 thousand employees, has become a financial anchor for Austria and much of Eastern Europe.

RBI has repeatedly stated its desire to separate its Russian business. However, nearly three years into the war between Russia and Ukraine, little has changed.

While many Western governments are distancing themselves from Russia, some Austrian politicians are reluctant to sever ties with a country that is still thanked for helping to restore Austria in 1955 after World War II.

Raiffeisen Bank leads among Western companies paying corporate income tax to the Russian budget. In 2023, it paid 491 million dollars.