Moscow seizes €2 billion from Raiffeisen Bank amid continued operations in Russia

The case is one of the most significant rulings against a Western company still operating in Russia and involves one of the largest damages awards.

Raiffeisen stated it will appeal the court's decision against its Russian subsidiary and will seek to recover part of the funds through legal proceedings.

The bank also noted that it will need to allocate a reserve in its financial reports for the past year to help cover the €2 billion loss.

Remaining in Russia

According to Reuters, nearly three years after Russia's full-scale invasion of Ukraine, Raiffeisen Bank International's ongoing presence in Russia underscores the enduring ties between Moscow and Austria, with Vienna serving as a transit hub for funds flowing from Russia.

As a result, Raiffeisen and Austria have found themselves at the center of a global US-led campaign to isolate Russia by strengthening sanctions against its banking sector and restricting access to Western goods following the invasion of Ukraine.

The ruling demonstrated Russia's ability to exert legal pressure on the Austrian bank.

"This lawsuit, with a huge number of gross violations, is an attempt to force the sale of blocked assets through a Russian court," Andrei Timchuk, partner at Delcredere, representing Raiffeisen Bank, said in a statement.

Legal dispute

The conflict arose after a prior agreement failed, which Raiffeisen had hoped would allow it to unlock part of its frozen billions in Russia.

The case centers on a Russian investment firm Rasperia lawsuit against the construction company Strabag, its Austrian shareholders, and Raiffeisen's Russian subsidiary.

RBI had attempted to acquire a stake in the Vienna-based Strabag from Rasperia, a company linked to Russian tycoon Oleg Deripaska.

Washington identified Rasperia as part of a group of Russian companies still controlled by Deripaska when sanctions were imposed on some of the entities connected to him.

A source familiar with the situation told Reuters that Raiffeisen holds approximately €6 billion ($6.29 billion) in Russia, derived from international transactions and billions of euros in Russian deposits.

Raiffeisen, with extensive holdings, over 18 million customers from Vienna to Moscow, and 44,000 employees, has been a financial anchor for Austria and much of Eastern Europe.

Raiffeisen Bank International has repeatedly stated its intention to separate from its Russian business. However, nearly three years into the war between Russia and Ukraine, little has changed.

While many Western governments distance themselves from Russia, some Austrian politicians remain reluctant to sever ties with a country they still credit for helping rebuild Austria in 1955 after World War II.

As reported earlier, Raiffeisen Bank is among the leading Western companies paying corporate taxes to the Russian budget, contributing $491 million in 2023.