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U.S. Sanctions Spread Through Billionaires' Business Empires

Published: March 25, 2014 (Issue # 1802)



  • Visa and Mastercard suspended service for SMP Bank last week when its billionaire co-owners, Arkady and Boris Rotenberg, were blacklisted by the U.S.
    Photo: Maxim Stulov / Vedomosti

The latest U.S. sanctions against Russia have even hurt companies that Washington did not formally blacklist.

Although the sanctions officially target only Bank Rossia, a number of other banks also saw disruptions to their services by international payment systems Visa and MasterCard.

And there is a reason why: These lenders, such as SMP Bank, list among their co-owners the brothers Boris and Arkady Rotenberg — two of the individuals that the U.S. hit with fresh punitive measures Thursday.

Visa and MasterCard resumed services for the customers of SMP Bank and other banks that were initially suspended, saying they had received assurances from the U.S. government that they could carry on, Vedomosti reported Sunday. But the confusion throws into the spotlight the question of how U.S. businesses should interpret the sanctions in dealing with their Russian counterparts.

U.S. law prescribes that any businesses where sanctioned individuals own at least 50 percent come under the restrictions as well, a spokesperson for the the Office of Foreign Assets Control of the U.S. Department of the Treasury. The U.S. government also advises caution in dealing with companies in which sanctioned individuals own smaller stakes.

Yury Botiuk, an international trade lawyer at London-based Pinsent Masons, said that many U.S. and European Union companies and financial institutions would try to limit any exposure to counterparts affected by the sanctions.

"Whether this could lead to contractual breaches depends on individual circumstances," he said. "This is when the financial bite of the sanctions regime can start to get very real very fast."

The Rotenbergs own 38 percent each in SMP Bank.

Visa said in a statement Friday that it cut service to two more lenders, Sobinbank, a subsidiary of Bank Rossia; and Investkapitalbank, co-owned by the Rotenbergs.

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Saturday, Aug. 23


Uppsala Park plays host to Fairy Noon today, a performance of five separate fairy tales ranging from folk classics to more haunting selections. There will be three different renditions of the tales throughout the day and tickets start at 500 rubles ($13.80) for adults and 300 rubles ($8.30) for children.


Classic Finnish cartoon characters the Moomins expect to receive a warm welcome from Russian fans during today’s Moomin Festival at the Pearl Plaza Shopping Center at 51 Petergofskoye Shosse. Become a kid again or introduce a new generation to the beloved creation of Finnish writer Tove Jansson.



Sunday, Aug. 24


The tortured genius of Dutch master Vincent van Gogh gets his day in the center’s Konnushnaya Ploschad during Make Art Like Van Gogh, a daylong celebration of the artist that will allow amateur artists to try and replicate the work that made the famed painter world-renowned.


Experience a variety of dances highlighting the diversity of the world around as at the final day of the Ethno-Dance International Dance Festival that has been at the St. Petersburg Humanitarian University of Trade Unions this past week. Tonight’s performance will feature Egyptian dancers accompanied by local orchestras.



Monday, Aug. 25


Today kicks off the Elena Obraztsovoy International Competition for Young Vocalists in the large hall of the Shostakovich Philharmonic. Talented youngsters will showcase their range over the next six days before a winner is chosen on Aug. 30.



Tuesday, Aug. 26


Love movies but hate all those words? Then check out Rodina Cinema Center’s Factor of Consensus film forum this evening. Silent movie classics from the beginning of the 20th century will be screened and accompanied by a pianist, who will provide the soundtrack for the ongoing action. The screenings begin at 7 p.m. Check Rodina’s website for more details.



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