Two U.S. banks operating in Russia had funds totaling about $372 million frozen by a Moscow court on Oct. 2.
The funds of the Bank of New York Mellon Corp. and JP Morgan Chase were allegedly frozen by the Moscow Region Arbitration Court in response to a Russian bank having its license withdrawn in Ukraine.
The funds were held in accounts at the Russian affiliate branches of Citibank and Morgan Chase Bank, Reuters reported.
The decision was supposedly “in defense of the interests of the Russian Federation” in connection with the Central Bank of Ukraine’s withdrawal of the license of MR Bank, a subsidiary of Russia’s Sberbank, which is the largest bank in Russia.
According to Reuters, the Russian prosecutor’s office sought recognition of $121 million placed by MR bank in an account of JP Morgan Chase as the rightful property of SberBank and $251 million put in an account of the Bank of New York Mellon.
Prosecutors alleged that Ukraine’s withdrawal of MR Bank’s license was “expropriation” and infringed upon Sberbank’s lawful interests in controlling its subsidiary and their associated income, harming Russia’s financial interests, according to court documents.
Reuters reported in May that a Moscow court had authorized the seizure of about $13.34 million of assets held in Russia by a European subsidiary of JPMorgan, in a case lodged by another Russian bank that came under Western sanctions following the 2022 Russian invasion of Ukraine.
Last year, a Russian court served a notice to Goldman Sachs that $36 million of the bank’s shares in Russian companies were frozen, stemming from a lawsuit from another Russian bank related to sanctions.
Russian President Vladimir Putin in May signed a decree allowing American property in the country to be seized as compensation for damages related to Russian assets seized in the United States, TASS reported at the time.
The decree allowed the seizure of movable and immovable property of the United States, American companies, and citizens on the territory of Russia, as well as securities owned by them.
“The decision [of the court] on establishing the fact of an unjustified deprivation of the Russian copyright holder of rights to property and on compensation for damages provides for the termination of rights of the United States or a US citizen to property included in the list, and the subsequent transfer of these rights to the Russian copyright holder to compensate for the damage,” the decree said, according to the Russian state news agency.
The Epoch Times requested comment from representatives for both the Bank of New York Mellon and JP Morgan Chase but did not receive a response by publication time.
