Major Irish banks have stepped up screening on transfers and transactions with Russian accounts on foot of international sanctions against the Putin regime’s interference in Ukraine.
The development comes amid economic turmoil in Russia, whose central bank moved yesterday in the face of a precipitous decline in the rouble’s value to let the currency float.
Irish institutions are now scrutinising all flows of money from Russian sources as “high risk”.
Some examinations are said to be on a par with the scrutiny of any transfers involving or suspected to involve North Korea, Iran or Cuba, against whom blanket western sanctions apply.
As European and US sanctions against individuals and companies in Russia bite, the aim of the screening is to ensure there is no violation.
Sanctions avoidance
Transfers between Russia and Ireland are relatively small but one concern is to prevent transfers involving people and corporate entities not covered by sanctions being used as a front by sanctioned parties.
This is not held at the moment to be a major concern in the Irish context, although special procedures have still been introduced by banks in Dublin.
The western sanctions mainly target big Russian banks and companies over the annexation of Crimea and support for pro-Russian separatists in eastern Ukraine. These have already prompted a virtual freeze on investment inflows, contributing to the rouble’s decline amid growing demand in the country for foreign currency.
Russia introduced retaliatory sanctions to ban food imports from EU member states and other western countries, prompting anxiety in agricultural circles about a knock-on impact on Irish food exports.
The rouble’s value is down 25 per cent this year but it gained some 2 per cent against the dollar to close yesterday at 45.6 roubles to the dollar, after the central bank declared it would no longer carry out daily market interventions to support the currency. The central bank also scrapped a floating corridor against a euro-dollar basket.
Oil prices
The rouble has been laid low by plunging oil prices and western sanctions over Ukraine, although President Vladimir Putin has blamed speculators and said they risked losing their money. As the central bank said it could intervene to punish speculators, he insisted there was no plan for capital controls.
Saying western sanctions would continue at least until the end of 2017, the central bank warned of prolonged stagnation as it brought its forecast for economic growth in 2014-2016 close to zero.
