ST. PETERSBURG, May 22 /ITAR-TASS/. Russian Central Bank head Elvira Nabiullina has held meetings with representatives of international payment systems Visa and MasterCard at the currently ongoing St. Petersburg International Economic Forum 2014, the Central Bank reported Thursday.
The terms and prospects of running and developing the business of international payments systems in Russia were discussed at the meetings, the bank said. No details of the talks were immediately available.
Earlier, Russian Finance Minister Anton Siluanov said he will hold talks with Visa and MasterCard to discuss issues of changing the terms of their operation in Russia.
Siluanov said the Russian side will try to protect ordinary users of cards.
“We are for Visa and MasterCard to work in our country. I think the payment systems have a similar wish. We want to meet now and discuss how we can move further in these conditions. I am convinced that we will find a reasonable solution, a compromise and the work of international payment systems will continue,” he said.
Earlier it was reported that the Russian Central Bank on Wednesday received amendments to the law on the National Payment System. The amendments are designed to exclude from the law’s text the formulas of security deposits, as well as fines for the payment systems’ refusal to work with any Russian credit organizations, a source reported.
On Tuesday, Visa CEO Charles Scharf said in Boston that the international payment system may quit operations in Russia if payment systems are obliged to make security deposits worth hundreds of millions of dollars.
MasterCard CEO Ajay Banga said his company was involved in talks with the Russian authorities on changes into the law on the National Payment System (NPS) introduced after US sanctions were imposed on Russia for its position on events in Ukraine.
The NPS bill drafted by the financial markets committee of the State Duma, the lower house of Russia’s parliament, was the reaction to actions by Visa and MasterCard, which in late March blocked cards of the Rossiya Bank and SMP Bank.
NATIONAL PAYMENT SYSTEM LAW
The necessity to create a Russian national payment system emerged when the United States imposed sanctions against the Rossiya Bank and SMP Bank. As part of these sanctions, the Visa and MasterCard payment systems stopped servicing cards issued by the Rossiya and SMP banks. It happened because both plastic card payment systems are American and obey orders from the US authorities.
The NPS law introduces the notions “nationally significant payment system” and “foreign payment system”. The payment system of the Central Bank of Russia and the payment system used for money transfers on transactions made at organized bids are ranked as ones of national significance.
In line with the law, from July 1, 2014, the operator of a payment system which is not nationally significant has to make a security deposit in the amount of the money transfers carried out in Russia with the use of the payment system over two calendar days.
The deposit is formed by quarterly deductions to the tune of 25% from the average value of amounts of money transfers carried out over one calendar day on Russian territory for the previous quarter. The deposit is to be made by international payment systems whose clearing and processing are located outside of the Russian Federation.
WESTERN SANCTIONS AGAINST RUSSIA OVER UKRAINE EVENTS
The United States and the European Union have suspended cooperation with Russia in some spheres over Moscow’s position on Ukrainian developments. Some Russian and Crimean officials and companies have been subjected to sanctions by Western nations, including visa bans and asset freezes.
Russia has dismissed the threats of further penalties, including economic ones, against it, saying the language of punitive measures is counterproductive and will have a boomerang effect on Western nations.
Instability embraced Ukraine after a coup occurred in the country in February. New people came to power amid riots as security concerns caused President Viktor Yanukovich to leave the country the same month. The new leaders set early presidential elections for May 25.
Russia's position is that the Ukrainian authorities in Kiev, brought to power by the coup, are illegitimate.
The Republic of Crimea and Sevastopol, a city with a special status on the Crimean Peninsula, where most residents are Russians, refused to recognize the legitimacy of the coup-imposed Ukrainian authorities.
Crimea and Sevastopol adopted declarations of independence on March 11. They held a referendum on March 16, in which 96.77% of Crimean and 95.6% of Sevastopol voters chose to secede from Ukraine and join the Russian Federation. Russian President Vladimir Putin signed the reunification deals March 18.
In the Soviet Union, Crimea used to be part of Russia until 1954, when Nikita Khrushchev, the first secretary of the USSR’s Communist Party, transferred it to Ukraine's jurisdiction as a gift.
The West and the de facto Kiev authorities refuse to recognize the legality of Crimea’s reunification with Russia despite Moscow’s repeated statements that the Crimean referendum on secession was in line with the international law and the UN Charter and in conformity with the precedent set by Kosovo’s secession from Serbia in 2008.
After Crimea’s accession to Russia, massive protests against the coup-imposed Ukrainian authorities erupted in Ukraine’s Russian-speaking southeastern territories. Demonstrators in southeastern regions, demanding federalization, seized some government buildings. Kiev has been conducting a punitive operation against pro-federalization activists.
Turmoil in Ukraine has claimed dozens of lives since early May. At least 48 people died and 247 were injured on May 2 in clashes and a fire in Odessa after radicals set ablaze the Trade Unions House, where pro-federalization activists hid, and a tent camp where activists were collecting signatures for a referendum on federalization and for the status of a state language for Russian.
The eastern Ukrainian Donetsk and Lugansk regions held referendums on May 11, in which most voters supported independence from Ukraine.
In late April, Putin dismissed Western claims that Russia could be involved in pro-federalization protests in southeastern Ukraine.
“People say our special forces are present there [in Ukraine], say we have sent instructors there. Let me say in all responsibility that there are no Russian instructors, special forces or troops of any kind there. We have no one there,” Putin said.