A Russian court has taken drastic measures to protect the country’s financial interests, freezing a staggering $372 million in assets belonging to two major US banks. The Moscow Region Arbitration Court’s ruling targets funds held by Citibank’s Russian branch on behalf of the Bank of New York Mellon, as well as those held by Morgan Chase Bank, a Russian affiliate of JP Morgan Chase. The move is seen as a response to the Ukrainian central bank’s decision to revoke the license of MR Bank, a Ukrainian subsidiary of Russia’s largest bank, Sberbank, with plans to liquidate it by 2025. Russian prosecutors argue that the Ukrainian regulators’ actions constitute “expropriation” of MR Bank’s assets, infringing on the state’s legitimate interests. The prosecutors are seeking recognition of $121 million in JP Morgan Chase accounts and $251 million in Bank of New York Mellon accounts as rightful property of Sberbank, totaling $372 million in damages. The court’s decision effectively blocks Sberbank’s control over its subsidiary and its ability to manage its income, resulting in the Russian state losing potential revenue from MR Bank’s foreign operations. Both Sberbank and JP Morgan have declined to comment on the court’s ruling.
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