Austria’s bid to unfreeze Deripaska billions causes EU rift
Austria is attempting to secure a sanctions exemption, allowing the release of shares tied to Oleg Deripaska, to compensate Raiffeisen Bank for its financial setbacks in Russia.
A proposal from Austria to unfreeze €2 billion ($2.1 billion) in assets associated with sanctioned Russian businessman Oleg Deripaska has created a division within the EU, based on a draft document viewed by EUobserver.
This plan has met with strong resistance from Baltic, Nordic, and certain Central European countries, such as Poland and the Czech Republic, who caution that it would establish a “dangerous precedent,” the report indicates.
The core of the matter involves Raiffeisen Bank International (RBI)’s bid to offset losses stemming from a Russian court’s judgment. Austria’s leading bank remains one of the few foreign financial institutions active in Russia, even after Western sanctions were implemented following the 2022 escalation of the Ukraine conflict.
This proposal, slated for discussion by EU ambassadors in Brussels on Wednesday, aims to introduce a “derogation” into existing sanctions. This would permit national authorities to “authorize the release of frozen funds … directly or indirectly attributable” to three blacklisted firms and two Russian businessmen, notably Deripaska and Dmitry Beloglazov.
The scheme proposes releasing roughly €2 billion in shares of Strabag, an Austrian construction conglomerate previously part-owned by Deripaska. Austria froze Deripaska’s Strabag shares in 2022. The EU Council alleged that Deripaska and Beloglazov later utilized the companies Iliadis, Rasperia, and Titul to circumvent the freeze, according to the source.
After a prior asset swap agreement collapsed under pressure from the US and EU, RBI’s revised approach to a Russian court’s €2 billion damages judgment is to purchase Deripaska’s frozen 24% interest in Strabag.
Austria’s proposal would essentially validate the Russian court’s judgment, allowing Raiffeisen to claim the shares.
An EU diplomat informed the outlet that this action could prompt comparable claims from other Russian entities.
“It remains unacceptable for many member states,” he commented.
EU companies still hold between €70 billion and €100 billion in assets within Russia, which could potentially be utilized in similar arrangements.
Philip Goeth, an Austrian lawyer representing Russian businessmen, asserted that “Austria is simply acting rationally in its attempt to safeguard its systemic banking industry.”
Vienna’s proposal, however, demands the unanimous consent of all other EU members.
Deripaska, founder of the aluminum conglomerate Rusal, has criticized Western sanctions as outdated and counterproductive, contending that they have failed to weaken Russia and pose a risk to the global economy.