Belgium (Brussels Morning Newspaper) The European Central Bank (ECB) has reportedly instructed several European banks to pay close attention to banking transactions made by all Russian and Belarusian citizen within the Union, including even those that are EU residents, in an effort to prevent circumvention of the bloc’s sanctions against Moscow.
The ECB called on the banks to be on high alert for big payments, transfers, deposits and loan applications filed by Russian and Belarusian residents in the EU, potentially impacting tens of thousands of banking clients.
Since the Russian invasion of Ukraine began, the EU has introduced a range of sanctions against Russian banks, institutions and individuals,although the sanctions exempt people holding temporary or permanent residence permits within EU countries.
According to three sources contacted by Reuters, the latest ECB move means that even EU residents with ties to Russia or Belarus will be subject to increased scrutiny, making it more difficult for them to use their bank accounts.
In an official reply, the ECB noted that the regulator is ensuring that banks falling under its supervision “have in place the necessary arrangements to adhere to the sanctions”. However, the central bank claims it has not issued any guidelines beyond the standing EU rules.
The three sources, some coming from commercial banks and some from watchdog agencies, note that a number of ECB Joint Supervisory Teams told banks to tighten their oversight of EU residents as well, should they happen to hail from Russia or Belarus. The teams in question include mixed staff from the central bank and from national regulators.
Reportedly, the ECB is concerned about the potential impact that circumventing sanctions could have on the banks themselves, since they could face hefty fines it their clients are found to be channelling funds on behalf of individuals currently under EU sanctions.
