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Switzerland restricts bond issues of 5 Russian state-run banks

August 27, 2014, 17:52 UTC+3 GENEVA
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GENEVA, August 27. /ITAR-TASS/. The Swiss government decided on Wednesday to impose restrictions on long-term bond placements by five Russian state-run banks hit by EU sanctions.

The EU imposed sanctions on August 1 against Russia’s state-owned Sberbank, VTB, Gazprombank, VEB and Russian Agricultural Bank.

In accordance with the Swiss government’s decision, these banks will be required to obtain permission from the Swiss authorities for bond sale in Switzerland to prevent them from selling bonds in the country in circumvention of sanctions imposed by the European Union over Russia’s stance on developments in neighboring Ukraine.

Permissions for new bond issues will be granted in the future only if these issues match the banks’ average financial obligations for the past three years, the Swiss government said in a statement.

At the same, the Russian banks’ subsidiaries in Switzerland will not be required to obtain such permissions as long as they do not act on behalf of their parent companies or under their instructions.

Switzerland also added 11 new names to its sanctions list of individuals and companies, barring Swiss intermediaries from entering into new business relations with them. Swiss intermediaries will also be required to notify of exiting business relations with the sanctioned persons and entities.

Switzerland has also banned the imports of military products from Russia and the exports of equipment for the Russian oil industry.

The EU imposed sectoral sanctions on August 1 against the Russian financial sector, banning state-owned Sberbank, VTB, Gazprombank, VEB and Russian Agricultural Bank and their special purpose vehicles from raising loans with maturities of over three months on European financial markets. The sanctions will be effective for one year and may be extended every three months. The EU also banned these banks to place new debt issues for a term of over 90 days. The sanctions apply only to new transactions.

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