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Visa, MasterCard shrug off fresh US sanctions on Russian banks

July 30, 2014, 11:06 UTC+3 ENT: MasterCard not going to block VTB
The international payment systems did not restrict access to their services for Russia’s state development corporation Vnesheconombank and Gazprombank
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© ITAR-TASS/Dmitry Rogulin

MOSCOW, July 30./ITAR-TASS/. Visa and MasterCard will not block card operations by Russian banks hit by fresh US sanctions, the international payment operators’ Moscow offices said on Wednesday.

The US administration announced sanctions on Tuesday night against VTB Bank, Russian Agricultural Bank and Bank of Moscow.

“The new package of US economic sanctions is not affecting Visa operations in Russia and is not obliging Visa to suspend or block operations by financial institutions hit by sanctions or banks that service payment cards under their sponsorship,” a spokesman for the Visa Moscow office said.

“We continue clearing transactions in a normal mode,” the spokesman said.

The MasterCard press office said the sanctions imposed by the United States barred access for these Russian banks to the US capital market and were not affecting MasterCard operations.

The international payment systems did not restrict access to their services for Russia’s state development corporation Vnesheconombank and Gazprombank when they were hit by a third round of US sanctions on July 17.

During the first two rounds of US sanctions against Russia over its stance on Ukraine, Visa and MasterCard blocked card operations by Russia’s SMP-Bank, Rossiya Bank, Sobinbank and InvestCapitalBank blacklisted by the US administration.

The refusal by Visa and MasterCard to service these banks prompted Russia to take measures to develop a national payment card system.

The United States imposed a fourth package of sanctions against Russia on Tuesday over its Ukraine policy. The US Treasury Department said the sanctions would apply to Russia’s United Ship-Building Corporation, VTB Bank, Russian Agricultural Bank and Bank of Moscow.

Like the third package of sanctions against Vnesheconombank and Gazprombank, the fresh sanctions bar VTB Bank, Russian Agricultural Bank and Bank of Moscow from raising medium-term and long-term funds in the United States.

A US administration spokesman who commented on the imposition of fresh sanctions against the Russian banks said that VTB Bank had 80% of its liabilities denominated in the US currency while this ratio was 90% for Russian Agricultural Bank and 100% for Bank of Moscow. The spokesman said these figures showed the banks’ vulnerability to sanctions, especially when the United States and the European Union acted jointly.

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