Austrian bank under fire for Russian military ties
Bloomberg revealed, citing official bank documents, that the Austrian Raiffeisen Bank International AG (RBI) benefited from enterprises that supported the Russian military industry, which was pivotal in conducting military operations in Ukraine.
The Russian branch of this Austrian bank earned 62 million roubles (£620,000) in revenue from its services, utilised by, among others, a Russian chemical company producing products for the Russian defence industry, Bloomberg reported after reviewing account statements.
The Austrian bank was profiting from the war
"RBI has implemented monitoring and checking systems to ensure that all transactions and business activities comply with the applicable sanctions," the bank's spokesperson responded to the agency's inquiry.
Officials from one European country who reviewed the bank's documents admitted that it is almost certain that Raiffeisen has more clients supplying components necessary for the production of military equipment used by Russians in Ukraine.
Last year, the Russian branch of Raiffeisen generated over a billion dollars in profits in the first three quarters, Bloomberg noted. It highlighted that this is almost half of Raiffeisen's total profits and twice as much as it managed to earn in the two years preceding the invasion. In the first nine months of 2024, RBI paid a total of €277 million in taxes to the Russian state treasury.
Despite the good performance of the Russian branch of the Austrian bank, the bank's headquarters in Vienna do not have access to this money, as it cannot leave the Russian accounts. According to Russian law, the branch in Russia is an enterprise of that country and is therefore subject to control by the Central Bank of Russia. Raiffeisen has already attempted to move part of the profits out of Russia, but the European Central Bank did not agree to such a move.
Raiffeisen remained in Russia
Many Western financial institutions withdrew from Russia when Moscow launched a full-scale invasion of Ukraine in 2022, but Raiffeisen decided to stay.
The Russian branch of RBI is regarded by Moscow as a key financial institution that provides Russia with access to foreign currencies. Therefore, according to Bloomberg, the Kremlin will not allow Raiffeisen to exit the Russian market, as it is one of the last Western banks still operating in Russia. Approval to leave Russia must be granted by a special commission, and the final decision belongs to Vladimir Putin.
One of the enterprises mentioned by Bloomberg is Unichim, which supplies chemicals to the defence company Rawenstvo, subject to Western sanctions, producing, among others, gliding bombs used by Russians in Ukraine largely to terrorise civilian populations. Additionally, documents obtained by Bloomberg indicate that Unichim also traded with the Proletarsky Zavod plant, part of United Shipbuilding Corp., a state holding building ships for the Russian navy.
In the first half of 2024, Raiffeisen provided 17.8 million Chinese yuan (£2 million) to Unichim. The bank also handled 17 other international transactions, the agency reported, citing official documents from the Austrian bank.
