By Tommy Reggiori Wilkes and John O’Donnell

LONDON/VIENNA (Reuters) – A Russian court has frozen Raiffeisen Bank International’s local arm, eliminating any chance of selling the business for the time being and exacerbating the standoff between Moscow and the West.

Austrian bank RBI, active in Russia since the end of the Soviet Union, has increasingly frustrated U.S. and European officials by failing to reduce its business operations there, despite repeated warnings to withdraw following the 2022 invasion of Ukraine.

Below is a timeline outlining the dispute regarding Raiffeisen’s operations in Russia:

Timeline

• February 2022: Russia invades Ukraine, leading to unprecedented Western sanctions on Moscow. Many Western banks hurried to sever ties or shut down operations in Russia.
• 2022: Some banks remain, notably RBI and Italy’s UniCredit, as Russian companies seek payment routes to the West amid booming business. Washington monitors the situation.
• February 2023: The U.S. sanctions enforcement agency OFAC initiates an inquiry into RBI. U.S. officials question Raiffeisen about its operations in Russia, the partially occupied Donbas, Ukraine, and Syria, including transactions and specific clients.
• March 2023: The European Central Bank pressures RBI to exit Russia, according to sources.
• May 2023: RBI attempts to reassure critics by proclaiming increased efforts to leave Russia, although the search for a buyer is fruitless.
• July 2023: RBI postpones its planned exit from Russia beyond the previously set September deadline, with both the bank and Austria remaining firm.
• December 2023: To access stranded funds in Russia, RBI reveals a complex arrangement to acquire a stake in Austrian construction group Strabag linked to sanctioned Russian oligarch Oleg Deripaska.
• March 2024: Washington exerts pressure on RBI to withdraw from the Strabag deal over concerns that Deripaska would benefit, leading to stock market volatility and halting a bond sale.
• March-April 2024: The ECB escalates pressure, demanding RBI decrease loans to Russian clients and reduce international payment activities.
• May 2024: In a written ultimatum, Washington warns RBI about potential restrictions on its access to the dollar system.
• May 2024: RBI retracts the disputed Strabag deal.
• May 2024: RBI defends its actions, stating it has curtailed activities in Russia despite the complexities of a withdrawal.
• September 2024: RBI announces a Russian court has frozen shares in its local branch, making the long-sought sale impossible for now.