Ukraine refuses to remove Raiffeisen from "Sponsors of War" blacklist: Report

In a move intensifying geopolitical tensions, Ukraine has stood firm on its decision not to remove Raiffeisen Bank International from its "sponsors of war" blacklist despite pressure from Austrian political leaders and the bank itself.

The decision challenges Raiffeisen, one of Austria's largest banks, to clarify its plans regarding its ties with Russia, as revealed in a letter obtained by Reuters.

Ukrainian officials expressed scepticism over the vague nature of Raiffeisen's exit strategy from Russia, citing concerns about the lack of a clear timeline and incomplete plans.

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"The sale timeline is missing... it remains unclear when, if at all, a spin-off scenario might come into action," Ukrainian officials emphasised in the letter.

Raiffeisen had previously aimed to spin off its Russian business, but concrete steps in that direction have yet to materialise, adding to the ambiguity surrounding its departure from the region.

Raiffeisen defended its position, citing the dependency on regulatory approvals as a key factor in determining the timeline for leaving Russia.

Despite facing mounting pressure, the bank refrained from committing to a specific timeframe, stating that such decisions hinge on regulatory consent.

The blacklist, although lacking legal implications, holds significant symbolic weight, serving as a point of contention between Ukraine and Austria.

While Austria has publicly supported Ukraine, it has also been cautious not to sever longstanding ties with Russia completely.

Austrian officials argue that Raiffeisen has been unfairly singled out, especially considering the presence of other international banks, like Italy's UniCredit, which continue to operate in Russia without facing similar repercussions.

In December, Austrian politicians secured a temporary suspension for Raiffeisen from the blacklist, reflecting Austria's efforts to balance its support for Ukraine with its economic interests in Russia.

However, the bank's name still appears on the list alongside other companies designated as "international sponsors of war" by Ukraine's National Agency of Corruption Prevention.

Responding to the pressure, Raiffeisen disclosed its advanced talks to sell its Belarusian subsidiary to a buyer from the United Arab Emirates.

This move suggests a shift in the bank's strategic focus away from Russia, potentially addressing some of the concerns raised by Ukrainian officials.

Despite the suspension from the blacklist, Ukrainian authorities have maintained their stance, emphasising that Raiffeisen's "suspended" status would persist until concrete progress is made toward disengagement from Russia.

The letter sent to the bank reiterated the possibility of removal from the blacklist contingent upon receiving "positive news," signalling Ukraine's willingness to reconsider its position based on tangible developments.

(With inputs from Reuters)