The Russian government has decided to take over VTB Bank’s shares in Evrofinance Mosnarbank, which has come under sanctions for servicing payments by the Nicolas Maduro regime in Venezuela.
VTB’s share in the bank of 25% plus one share, which is held through VTB’s foreign offices and ITC Consultants, will most likely be transferred to the Federal Agency for State Property Management at no cost, VTB head Andrey Kostin announced on Thursday.
“The decision has been made, and it has been approved by Russian First Deputy Prime Minister Anton Siluanov,” the Russian news agency TASS cites Kostin as saying. The deal will be processed soon after it has been approved by the Federal Antimonopoly Service and the Bank of Russia.
Kostin noted that VTB had tried to sell its share in the bank on a commercial basis. There had been an agreement that the government would buy the shares and the bank would become state-owned, but this decision “was not implemented”.
Evrofinance Mosnarbank was recently cut off from international payments. Visa and Mastercard suspended the bank’s membership, which led to its cards being blocked internationally, even in Russia. The cards cannot be used even in the bank’s own ATMs, despite the fact that such a mechanism was meant to have been guaranteed since 2015 by the Bank of Russia’s national payment cards system.
According to the US Treasury Department, Evrofinance had become the primary bank through which emissions of the failed Venezuelan cryptocurrency “El Petro” were financed: anyone who bought the cryptocurrency was encouraged to transfer the money to the Venezuelan government’s accounts at the Russian bank.
Bloomberg reported that the Maduro government has been using the bank since October to pay its suppliers. Officials in Caracas reportedly urged local banks and companies to make their international transactions through Evrofinance.
The Central Bank of Venezuela advised local banks to open accounts with Evrofinance in order to participate in currency auctions where bolivars were exchanged for dollars, euros and yuans.
After the US imposed sanctions on the Venezuelan state-owned oil company PDVSA, Evrofinance Mosnarbank has been used to process the company’s payments to contractors abroad.