You're reading: Sanctions against Russian banks’ subsidiaries in Ukraine to come into effect from March 23

The National Bank of Ukraine (NBU) has amended legal acts to ensure a decision by the National Security and Defense Council of Ukraine to sanction Ukrainian-based banks with Russian state capital, respective NBU resolution No. 25 dated March 21 is to become effective from March 23.

“The sanctions bar these banks from any financial operations in favor of affiliated entities, in particular, parent structures,” the NBU said on its website on March 22 .

The NBU says that the new resolution expands its original No. 654 resolution on sanctions dated October 1, 2015.

What is more, the regulator banned the Ukrainian subsidiaries from effecting operations that are aimed, conducive or may let avoid such sanctions, as well as violate, contribute or could facilitate infringements on such sanctions.

As was reported, Ukrainian President Petro Poroshenko on March 16 enacted a decision taken by the National Security and Defense Council (NSDC) of Ukraine to impose sanctions on five Ukrainian-based banks with Russian capital. Twelve-month sanctions will be imposed on PJSC Sberbank, PJSC VS Bank, PJSC Prominvestbank, PJSC VTB Bank, PJSC BM Bank. The banks are not allowed to withdraw capital outside Ukraine in favor of entities that are affiliated with them.

The imposition of such sanctions means prohibiting the carrying out of any financial operations in favor of the parent bank, i.e. granting interbank loans, deposits, subordinated debts, purchase of securities, placement of funds at correspondent accounts and other such operations.

This also involves banning payment of dividends, interest, return of interbank loans, funds from correspondent accounts and a subordinated debt.