Asia Alliance Bank initially announced the suspension of all foreign exchange transactions with Russian residents due to the extension of the US sanctions package. However, the bank later clarified and apologized for the error, stating that it continues to serve clients and comply with relevant legislation:
Background on US sanctions
In December, President Joe Biden authorized the US Treasury Department to impose secondary sanctions on foreign banks involved in transactions with approximately 1,200 entities connected to Russia's military industry. The recent extension of these sanctions will increase the number to over 4,500, covering nearly all previously sanctioned Russian organizations, regardless of their connection to the Ukraine conflict. This expansion will impact major Russian banks such as Sberbank and VTB.
The application of secondary sanctions resulted in a decrease in military imports to Russia, as banks from third countries became increasingly reluctant to engage with Russian clients due to the heightened risk. This deterrent effect even extends to financial institutions without direct ties to the US.
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