The relationship between Credit Bank Moscow PJSC and Rosneft has become very close. Last year, Rosneft placed 22 billion rubles (~ $355 million US) in long-term deposits at the bank that do not come due until 2066, shoring up the bank’s capital at a time when it’s stability was in question. Rosneft is now one of the bank’s largest clients.

Credit Bank of Moscow has also been raising funds through an Irish special purpose vehicle, CBMO Finance Plc. The company has raised more than $2.3 billion since November 2016. The funds raised have gone to Credit Bank Moscow in order to help it meet stricter capital requirements after it was determined to be a systemically important bank in Russia. The shell company has sold more than $500 million in bonds to investors including Goldman Sachs Group Inc.

Analysis: While Credit Bank Moscow is not a sanctioned entity, Rosneft is. Funds raised through CBMO Finance Plc could also ostensibly be lent to Rosneft, breaking the spirit of the sanctions, if not the letter of them. The relationship between these two entities will certainly come under additional scrutiny as sanctioned are tightened against Russia.

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Compliance, illicit financing, sanctions evasion, Uncategorized

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