Raiffeisen bank under fire for Russian war industry ties
Bloomberg reported, citing official documents, that the Austrian Raiffeisen Bank International AG (RBI) allegedly benefited from business dealings that supported the Russian war industry, which is crucial for conducting military activities in Ukraine.
After reviewing bank account statements, Bloomberg found that the Russian branch of this Austrian bank earned 62 million rubles (620,000 dollars) in income from services provided to a Russian chemical company that produces products for the Russian military industry.
The Austrian bank allegedly profited from the war
"RBI has implemented monitoring and checking systems to ensure that all transactions and business activities comply with applicable sanctions," a bank spokesman responded to the agency’s inquiry.
Officials from one European country who reviewed the bank documents admitted that it is almost certain that Raiffeisen has more clients supplying components needed to produce military equipment used by Russians in Ukraine.
Last year, Bloomberg noted that the Russian branch of Raiffeisen generated over a billion dollars in profits in the first three quarters. The report emphasized that this amount 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 277 million euros (about 292 million dollars) in taxes to the Russian state treasury.
Despite the strong financial performance of the Russian branch of the Austrian bank, the bank's headquarters in Vienna does not have access to these funds, because they cannot leave Russian accounts. Under Russian law, the branch in Russia is considered a company of that country and is therefore subject to control by the Central Bank of Russia. Raiffeisen has attempted to transfer 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 chose to remain.
The Russian branch of RBI is considered by Moscow to be a key financial institution, providing 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 exit Russia must be granted by a special commission, and the final decision is made by Vladimir Putin.
One of the companies mentioned by Bloomberg is Unichim, which supplies chemicals to the military firm Rawienstwo, a company subject to western sanctions that produces, among other things, gliding bombs used by Russians in Ukraine largely to terrorize the civilian population. Furthermore, documents obtained by Bloomberg show that Unichim also conducted trade with Proletarskij Zawod, which belongs to United Shipbuilding Corp., a state holding company building ships for the Russian navy.
In the first half of 2024, Raiffeisen provided 17.8 million Chinese yuan (about 2.5 million dollars) to Unichim. The bank also handled 17 other international transactions, the agency reported, citing the official documents of the Austrian bank.
