Sovcombank Seeks US License for UN Climate Payments


Russian bank Sovcombank has applied for a US license to make UN climate funding program payments despite being under US sanctions due to the conflict in Ukraine.

Sovcombank’s Request for US License

Sovcombank, a Russian private lender, has submitted an application to the US Treasury for a license to facilitate payments to a United Nations climate funding program. This move comes as the bank is facing restrictions under US sanctions imposed after Russia’s military intervention in Ukraine.

Challenges Faced by Sovcombank

As one of Russia’s 13 official ‘systemically important’ credit institutions, Sovcombank was subject to sanctions by the US, UK, and the European Union following Russia’s military actions in Ukraine. This led to the bank’s placement on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list, resulting in exclusion from the US financial system, prohibition of trade with Americans, and freezing of its US assets.

Dialogue with US Treasury and UN

Sovcombank’s head of corporate and investment banking division, Mikhail Avtukhov, confirmed the bank’s application to OFAC for a license to ensure acceptance of their payments. Despite having the necessary funds in foreign currency, the bank is yet to receive a response from the US Treasury. The bank is also engaging in discussions with the United Nations regarding this matter, with a focus on sustaining its membership in international organizations and addressing the challenges faced by Russian participants in making payments for UN programs.

Adhering to Regulations and Seeking Understanding

Avtukhov emphasized that Sovcombank aims to avoid accusations of circumventing sanctions and remains committed to making payments in compliance with regulations. The bank is seeking to fulfill its financial obligations to the United Nations without resorting to alternative currencies or methods that could be perceived as evasive.