The U.S. embassy and consulates in Russia should expect retaliation after JPMorgan Chase blocked a payment from the Russian embassy, the country’s Foreign Ministry said on Tuesday.
The Russian Foreign Ministry said JPMorgan blocked a payment from its embassy in Astana, Kazakhstan to Sogaz, an insurance company partially owned by Bank Rossiya, the sole Russian financial institution sanctioned by the U.S.
“We consider JPMorgan Chase’s decision to block a transfer from the Russian Embassy in Astana to the SOGAZ insurance company under the pretense of anti-Russian sanctions introduced by the U.S. in response to the reunification of Crimea with Russia to be absolutely unacceptable, illegal, and absurd,” the Foreign Ministry said in a statement.
The bank detected the payment and suspended it because of Sogaz’s connection to Bank Rossiya, a person familiar with the matter said. The payment was for less than $5,000, the person said.
When Bank Rossiya was placed on the U.S. sanctions list in March, a senior administration official described it to reporters as a “crony bank.”
The St. Petersburg-based bank is heavily invested in gas assets owned by the state and the Treasury said it was “the personal bank for senior officials of the Russian Federation.” Another senior administration official said when the sanctions were announced that the U.S. would “prevent it from operating to the greatest extent possible.”
The Foreign Ministry said that the U.S. “needs to understand that any hostile actions against a Russian diplomatic mission are not only a highly egregious violation of international law, but open the door to retaliation that will inevitably affect the work of the U.S. Embassy and consulates in Russia.”
Last week, Bank Rossiya announced that it was closing out its dollar-denominated deposits and only doing business in rubles.
On Friday, a Bank Rossiya subsidiary, Abros, sold a portion of its stake in Sogaz back to the company, taking its overall ownership down to 48.52% from 51.52%.
“As with all US financial institutions that operate globally, we are subject to specific regulatory requirements. We will continue to seek guidance from the U.S. government on implementing their recent sanctions,” JPMorgan said in a statement.
Additional reporting by Max Seddon.