Banks in the eye of the storm: Financing Putin's war chest through taxes

Twenty-one major international banks continue to operate in Russia, with one even featured on the Central Bank of Russia's "systemically important enterprises" list, reported the French newspaper "Le Monde" on Friday. Last year, these banks contributed nearly a billion euros in taxes to Vladimir Putin's Russia.

According to data from a report by the Kyiv School of Economics cited by "Le Monde," despite the onset of the Russian invasion of Ukraine, these 21 international banks have maintained their operations in Russia. They still earn substantial profits there - $3.5 billion in 2023 alone - thereby facilitating Vladimir Putin's regime in financing the war in Ukraine through their tax contributions. Last year, their tax payments totalled 970 million euros.

The Russian market continues to be home to banking giants such as the American Citibank and the Italian UniCredit, as well as smaller institutions like the Austrian Raiffeisen and the Hungarian OTP, according to "Le Monde." The significance of Raiffeisen in the Russian market is underscored by its inclusion on the Central Bank of Russia's list of "systemically important enterprises," the newspaper noted. In 2023, the bank’s revenue in Russia was 2.6 billion euros, accounting for 52 percent of its total profits.

Raiffeisen's management has indicated its intention to exit the Russian market, but - as "Le Monde" interprets - seems hesitant to face the potential financial losses. The French bank Societe Generale's departure from Russia, for instance, resulted in a loss of 3.1 billion euros.

In December 2023, upon Raiffeisen's removal from Ukraine's "war sponsors" list, Austria lifted its veto on the European Union's 12th package of sanctions against Russia.

The "war sponsors" list is managed by the National Agency for Prevention of Corruption, a Ukrainian central authority body with a special status established in 2015. Its primary role is to develop and implement national anti-corruption policy. The list identifies foreign enterprises that continue their operations in Russia amidst its aggression towards Ukraine.