Russia to create a special bank to allow financing of Russian military companies in circumvention of western sanctions
In response to new US sanctions, Russia created a special bank to service defense industry companies, reported the newspaper Kommersant, citing sources close to the government and the presidential administration.
According to the newspaper, the Russian Financial Corporation (RFK), which is 100% owned by Rosoboronexport, a subsidiary of Russian concern Rostec, has become the main candidate for the role of a specialized bank for servicing the military industry.
It is reported that the creation of a special "bank for the defense industry" is necessary due to the high risk of tougher sanctions from the US, which could cut off state-owned banks from working with Russian defense enterprises. According to sources, the scheme of work of the specialized bank should be determined before the end of the year.
Russia’s new financial tactic comes on the heels of US President Donald Trump signing the bill "On Countering America's Adversaries through Sanctions Act" in early August. One of the provisions of this bill states that sanctions can be imposed on any person carrying out "significant transactions" with the Russian military.
The new sanctions took effect in early August 2017, when US President Donald Trump signed a bill on sanctions against Russia, North Korea and Iran.
Both houses of the US Congress supported the bill. It places great emphasis on the support of the sovereignty and territorial integrity of Ukraine, as well as the strengthening of sanctions against the Russian Federation.