Russia freezes assets of largest US bank

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A court ruling supported the lawsuit filed by state bank VTB, which seeks to recover funds blocked under Western sanctions

A St. Petersburg court ordered the freezing of funds owned by US banking giant JPMorgan Chase in Russia on Wednesday. The ruling was made in favor of the country’s second-largest lender VTB, which ha filed a lawsuit seeking to recover $439.5 million that is blocked abroad under US-led sanctions.

VTB sued JPMorgan and its subsidiaries in the Arbitration Court of St. Petersburg and Leningrad Region on April 17, court filings showed on Monday. The order targeted funds in JPMorgan’s Russian accounts and “movable and immovable property,” including the bank’s stake in a Russian subsidiary. 

The dispute centers on $439.5 million in funds that VTB held in a JPMorgan account in the US, which were blocked by Washington as part of Ukraine-related sanctions in 2022.

The court ordered the seizure of all funds in JPMorgan bank accounts in Russia, including correspondent accounts and those opened in the name of a subsidiary.

It also revealed that VTB had requested interim steps because the respondents were “taking measures to withdraw their assets” from Russia, while the Russian lender was seeking to recover money from the US bank.

In its own lawsuit against VTB last week in the Southern District of New York, JPMorgan sought to block the Russian bank’s efforts, noting that US law prohibited the bank from releasing the $439.5 million owned by VTB.

JPMorgan is concerned that VTB will try to seize its Russian assets, Reuters reported on Wednesday, citing the US lender.

The Wall Street bank admitted to the outlet that VTB’s prospects were good, since Russian courts had granted at least six other local lenders relief against US and EU banks that were required to comply with sanctions laws.

The next hearing in the JPMorgan case is scheduled for July 17.

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