That ugly mess of sanctions against Russia and asset freezes.

World War III on the doorstep of Europe?

by Editorial Staff

SOURCE

April 28, 2024

   Dick Cheney, who was vice president of the United States from 2001 to 2009, under the presidency of George Bush, declared many years ago: "the alliance between German technology and Russian raw materials and low-cost labor are a danger for United States which must be absolutely avoided." Moreover, for the American neo-cons the preservation of American hegemony in the world, according to the Wolfwitz ​​doctrine, is worth a dogma. However, the war drums with Russia, according to many geopolitical analysts, actually began to beat on March 24, 1999, when the NATO "Allied Force" operation was launched and Serbia was bombed. According to these researchers, behind this conflict there was the so-called "green belt" strategy to contain Russia's strategic growth, exactly as it was theorized in the book "The Great Chessboard" by Brezinsky, who was a widely listened to advisor to 6 American presidents. It was essentially a containment of the former communist-Slavic-Orthodox bloc. 

   Already in 2014, following the annexation of Crimea by Russia, sanctions were imposed against Russia, including individual targeted sanctions, economic sanctions and diplomatic measures. To date, 13 sanctions packages have been launched against Russia and they are working on a 14th, which could include a ban on the import of Russian liquid natural gas. In 2016 the Grimaldi Law Firm of Milan, together with the Romanoff & Partners Foundation and the Centro Studi Libere Identità Europeane, organized a conference against the sanctions against Russia, entitled "Russia: time of opportunities", predicting that there would be a notable boomerang on the European economy, as in fact happened. 

   It was Mario Draghi who suggested to the West the confiscation of the monetary assets held abroad by the Russian Central Bank. The colossal figure is close to 300 billion dollars. In February 2023, however, Bloomberg broke the news that the European Union's legal service had confirmed that it had no idea where 86% of the Russian Central Bank's frozen assets were located. It is therefore the European banks that should provide the European Commission with data on frozen Russian assets. The problems, however, also concern individual Western investors who have invested in bonds issued in rubles by prestigious issuers such as IFC, International Finance Corporation, EBRD, the European Bank for Reconstruction and Development, and the Russian Federative Republic itself. Even in this case there was no shortage of anomalies and Italian banks behaved in a totally different way. Among the large institutions, Unicredit seems to have tried to protect investors. Many small banks quickly took action to defend the interests of their customers,advising to promptly sell bonds in rubles, in consideration of the worsening of relations with Russia, or, having investors open accounts in rubles so that, despite the impossibility of exchanging the Russian currency, the money was already in Italy, ready to be cashed, following a possible improvement in the situation, or by triangulating ruble bonds with state banks, which had been slow to join the sanctions against Russia. 

   From the direct testimony of a customer of an important Italian private bank we instead gather evidence of the disinterest shown by this institution in protecting customers in this delicate situation. Although the investor interviewed had around 25% of his capital invested in ruble bonds, no support appears to have been offered. The client underlined the months-long time required to obtain a copy of the Issue Regulations for bonds in rubles, from which it could be deduced whether or not the issuer had foreseen a possible payment in an alternative currency to the ruble, which is normally the American dollar. Information was provided to the investor "drip-and-drip" and often contradictory, according to the bank offices consulted. The bank in question tried to put obstacles in the way of transferring some bonds abroad, despite the fact that the legislation only prevented the exchange of currency. 

   Among the various complaints, the failure to pay the coupon 20/3/2022 of the IFC 5.% bond (code isin XS1793259265) stands out in particular. The surprise arises from the fact that this coupon was regularly paid by other Italian banks, which in any case always had BPN Paribas as a sub-custodian. Furthermore, the institution paid, with a year's delay, and without recognition of interest, the IFC coupon 03/20/2023 of the same bond in rubles, after IFC had made the payment in an alternative currency, and only after the warning from complaint by the client's criminal lawyer. 

   It should also be noted that, following the sanctions against the Russian National Settlement Depositary, many intermediaries and custodians have taken action, sending requests for authorization and exemption to the competent authorities, according to the offices of the clearing circuits, or to the "Belgian Treasury ", in relation to Euroclear, and to the Ministry of Finance of Luxembourg, in relation to Clearstream. However, it cannot be forgotten that the problems for some investors began before June 3, 2022, when the Russian National Settlement Depositary was designated as an EU-sanctioned entity. On March 17, 2022, the Russian National Settlement Depositary informed that Euroclear had stopped executing instructions received from NSD itself and a week later it became known that Clearstream had blocked NSD's account; he later exchanged the codes with Raffaisen Bank Moscow. 

   In all of this, the assets of Western investors have ended up in limbo, officially in "third party accounts", registered to the clearing circuits. This situation concerns many investors, who to date, being fragmented, have not received answers regarding the future of their investments. However, there are defrosting procedures which the bank customer we interviewed promptly requested to be activated. Also in this case there was absolute silence and no response. However, the law firms Withers and Saveliev & Partners believe that, according to the order of the President of the Russian Federation n. 95 of 5/3//2022 "payments of coupons and dividends and/or operations with financial instruments, including securities, which exceed 10 million rubles per month, are permitted to "non-residents" of the so-called "hostile countries" " only if such payments are made to a designated "C" type account in a Russian bank and if the payments are made in rubles; payments in rubles and in foreign currency to a normal, non-type "C" account are permitted only with the prior authorization of the Russian Central Bank or the Ministry of Finance of the Russian Federation; funds from "C" type accounts can only be spent on the territory of the Russian Federation, according to certain methods". 

   Recently the American Congress passed a law called the REPO ACT, which is a clever play on words. The acronym stands for "Rebuilding Economic Prosperity and Opportunity (for Ukrainians), but the term "REPO" is the slang used for "repossession" and is used when, for example, the bank takes away the house because the installments have not been paid of the mortgage. With this law the US government can appropriate the over 6 billion dollars, owned by Russia, which are frozen in American banks to give them to the Ukrainians. The law passed with an overwhelming majority. Among the few opposing voices was that of Rand Paul who called it "an act of economic warfare that could have devastating consequences for the United States". Rand Paul is the son of Ron Paul, the famous American presidential candidate, who based part of his election campaign on the abolition proposal. of the Federal Reserve System. The Kremlin spokesman, Dimitri Peskov, declared that this move risks becoming the destruction of the very foundations of the global economic system, against its real interests, against the interests of its companies ,see for example the case of the Russian branches of Ariston and Bosch, which were temporarily transferred to the Gazprom Group, risks having a world war on its doorstep within a century, for the third time, after the second made as many as 55 million victims.