Photo: Kai Pfaffenbach / Reuters / Scanpix / LETA

Your payment is very important to us

Transferring money abroad and receiving it from there became a real quest. Why does this happen and what to do about it

“There was money, there will be money, now there is no money.” They say that this phrase was often heard by those who came to the Russian oligarch Boris Berezovsky for money - and left without money. In the case of bank payments, the situation is somewhat similar: funds are debited from the account in order to reach the recipient, but somewhere along the way they get stuck. Finding and unlocking them can take weeks or months.

“I feel like I was robbed”

“Tinkoff says that it sent everything, but the Emirates say that they have not received anything. I don’t know where the payment was lost,” a man who three weeks ago sent money to a Russian citizen to a bank account in the UAE tells Important Stories. The payment hasn't arrived yet. A typical story for today's times.

Since the beginning of the war, the Russian authorities have introduced a number of bans on the withdrawal of money. At first, Russians were prohibited from crediting currency to their foreign accounts, and transfers abroad were limited to $5,000 per month, and money could only be transferred to other Russian citizens. There was no financial catastrophe in the country, and restrictions began to be eased: the limit was raised first to $10,000, then to $50,000, and they were allowed to make transfers to their accounts in foreign banks.

But Western banks, on the contrary, are tightening the screws.

Subscribe to the “Important Stories” newsletter The newsletter is difficult to block, but reading is not prohibited

“I feel like I was robbed,” says Daria Nevskaya, partner at the law firm FTL Advisers. On March 28, she sent 4,950 euros from her Alfa Bank account to ADCB Bank in the UAE for legal services to obtain a residence permit in the UAE, where her company opened an office. “When I sent, Alfa Bank was not yet under sanctions. My payment has been hanging on the correspondent bank - Deutsche Bank - for a month and a half, as shown [by the order of Alfa] search for payments. The correspondent bank does not respond to requests and does not return money,” says Nevskaya. She had to pay the lawyers in cash.

Foreign banks also limit transactions on Russians’ accounts abroad. Now many Russians are faced with this, says Elena Shigidina, head of corporate practice at FBK.Pravo: “Switzerland, for example, makes rolling blocks, and Russian citizens, in order to unblock their accounts, must prove the origin of the funds: that, conditionally, they did not sell weapons , did not work with sanctioned persons and received money legally, although the latter was already checked when opening a bank account.”

Having a second citizenship does not eliminate problems. A former Russian banker, who received a Cypriot passport before the war and went to live in Europe, tells Important Stories that one of the Swiss banks prohibited the transfer of funds to his account: “I could withdraw money, but could not deposit it. I had to hire lawyers who drafted a letter confirming my status. It was the tax status that was very important; I did not prove the origin of the money, because I had been a client of the bank for nine years at the time of the start of the war.” The ex-banker spent 650 euros on lawyers.

“My bank called me and asked me to close the account, they said that they didn’t want problems, that they would have to spend a lot of time checking my transactions. I began to be indignant - how is that possible?”

An employee of a Russian company, a holder of an Israeli passport, had difficulties transferring money from Tinkoff Bank to the Israeli Discount bank: “At first I transferred $10,000 - that was the limit. When the Central Bank raised it to 50,000, I made a payment for 40,000 - and it still hasn’t arrived. They called me from an Israeli bank and asked me to provide a document filled out in a special form in English stating that all my assets are not of criminal origin. This is in addition to the fact that I have already provided them with a contract for the sale of real estate in Russia. The most interesting thing is that this document must be certified by both Israeli and Russian lawyers, but how do they know about my money? This is probably a well-established scheme in which you turn to special lawyers. It looks like taking money from poor olim (repatriates - editor's note)."

Discount bank, however, warns of a “disruption of the normal order” of transactions with Russia due to sanctions: “It cannot be ruled out that money transfers to and/or from these countries will not be carried out. It is necessary to take into account and be prepared for the fact that orders to carry out these operations will not be accepted, or will be suspended by the bank or other banks providing services to it, or that there will be a delay in carrying out these operations.”

Anyone can fall under the distribution - no matter how much money is in your account or what bank you have. A native of Belarus who has lived in Italy for 15 years says a small local bank tried to close her account: “My bank called me and asked me to close the account, they said they didn’t want any problems, that they would have to spend a lot of time checking my transactions . I began to be indignant - how can this be? I have been living in Italy for a long time, I have a family and business here. This account, by the way, is inactive - there were 100 euros in it, but I didn’t like the fact that I had to close it simply because I was born in Belarus. I asked the bank to send a document - on the basis of which they decided to close my account. After that, the issue was removed, I can use the account.”

No matter what happens

Why is this happening? Western banks are playing it safe: they are afraid of violating sanctions, so it’s easier to stop the operation. Often the payment gets stuck on the way, at the correspondent bank.

Here it is necessary to explain how money goes from the sender to the recipient. The sender's bank transfers money to the recipient's bank not directly, but through one or more intermediaries. Any bank has such intermediary partners - they are called correspondent banks, in which it has accounts in one currency or another. If the currency is euros, then it will be a European bank, if dollars are American, etc. Payment in euros will in any case go through a European bank, and in dollars - through an American bank (even if the sender and recipient are Russian banks).

A little more about correspondent banks

When interacting with a bank, we rarely think about what exactly happens to the money. For example, when you open a deposit or send a transfer, you give money to the bank. A liability to you appears on his balance sheet, but how is it secured? If you deposited cash, then with the money at the cash desk, and if by transfer, then with the funds received in the bank account. But what is this account, where is this money? This is where a correspondent bank comes into play: it is where the account is opened. This could be the country's central bank or a partner bank.

The correspondent bank has the same thing: the money received from your bank is backed by money in its account at another bank, and this chain will at some point lead to the bank of the country whose currency is being transacted, in most cases to the central bank.

This allows central banks to control the financial system and conduct monetary policy: they see payment flows, whether banks have enough money, and so on. This is why sanctions are so effective.

This is the problem today. If a bank, which has known its client for years, begins to doubt and, out of harm’s way, asks him to close the account or blocks transactions on it, then what can we say about the correspondent bank, which received an order for a transfer from an unknown person to an unknown person? The US Treasury warned foreign banks that it could impose sanctions against them if they help Russians circumvent US sanctions. And what bank would risk its business over a payment of several thousand or tens of thousands of dollars?

Under normal circumstances, banks in the chain can rely on the sender's bank to check everything. Under sanctions, risks have increased and each bank in the chain wants to know all the details of the transfer. He can request additional documents from the sending bank, and that, in turn, from the client. For example, if this is payment for some service, then demand an agreement for its provision. Or a certificate of non-criminal origin of the money received from the sale of an apartment, as in the case of a “poor olim.”

Foreign banks now check payments manually, says Anatoly Perfilyev, junior director for banking ratings at Expert RA: “They are sometimes ready to once again refuse a client, rather than deeply understand the current restrictions or simply carry out a transaction with a potential sanction risk, threatening a million-dollar fine.” .

“Banks may not like the fact that the client’s company is located at Sevastopol Avenue or the name has some similarity with the name of the sanctioned entity. They include powerful semantic analysis."

Correspondent banks carefully check who sent the payment and why, and threaten to close accounts, a top manager of a Moscow bank complains: “They may not like the fact that the client’s company is located at Sevastopol Avenue or the name has some similarity with the name of the sanctioned entity. They include powerful semantic analysis,” the banker sneers.

Moreover, this does not depend on the direction of payment. Shigidina from FBK.Pravo says that her company is faced with the problem of receiving money from foreign customers: “Some payments take 30 days, others are returned back to the sending bank. Consulting services, that is, ours, are not prohibited from being purchased, but the banks on the other side are short-circuited by the abundance of restrictions. The bank thinks: “I’d better prohibit the transfer just in case.”

European, British, and Singaporean banks may refuse to process payments, agrees managing partner of TA Legal Consulting Marat Aghabalyan: “We had questions from foreigners who are serviced by small banks abroad. At first their banks refused to make payments to Russia at all; now payments arrive with a delay. Payment can take a week, or sometimes even two.”

Some foreign banks are generally closing correspondent accounts of Russian banks, even those that are not subject to sanctions. This was done , for example, by Deutsche Bank and the Austrian group Raiffeisen Bank International, which served many Russian banks as an important hub for payments in euros. In the latest case, Tinkoff was among the victims: became unavailable to its clients. transfers in euros

Dance on the bones

Since the beginning of the war, more than 20 Russian banks have been sanctioned. These are the largest banks in the country - both public and private. Because of this, the load on the remaining banks has increased significantly, and traffic jams are forming: the remaining banks simply cannot cope with the multiple increase in the number of payments.

There are two types of sanctions: blocking and sectoral.

If a country imposes blocking sanctions, it freezes all assets and bank accounts, and its residents are prohibited from any transactions with the bank and its subsidiaries. This means that the bank can no longer deal with that country or that country's currency.

Sectoral sanctions are milder: they limit the bank from attracting financing, but correspondent accounts are not blocked, transfers are possible, although they do not always go smoothly.

“We have doubled the number of clients in foreign economic activity [foreign economic activity],” says the deputy chairman of the board of a regional bank. According to the top manager of a small Moscow bank, the business now opens about 300 new accounts with them per month, although previously there were no more than 50. “The workload on the tellers has increased greatly, clients are nervous, the level of aggression is growing, it’s hard for employees morally,” the banker complains .

Many clients from small and medium-sized businesses, just in case, opened accounts in banks not under strict sanctions, a source tells “Important Stories” in a bank that fell under sectoral (that is, soft) US sanctions: “We have a wave of new clients, our employees are very stressed , but so far they are coping. Of course, it’s a little awkward - it’s a dance on the bones.”

“To carry out settlements for foreign trade activities, companies are moving to banks that are not affected by sanctions. Given the generally smaller size of banks and limited production capacity, the processing time for cross-border payments increases,” explains Perfilyev from Expert RA.

But even if the tellers cope and the level of aggression remains under control, transactions on newly opened accounts are inherently more suspicious and attract more attention from the bank's compliance authorities. And if a small bank sharply increases activity, then it is even more necessary to take a closer look at it. “With the influx of new clients, Western correspondent banks are implementing stricter compliance, our clients’ payments are delayed, about 50 foreign currency transfers per week are stopped, or 10% of the total, and this is a lot,” says a top manager of a capital bank.

So what's now

To avoid problems, lawyers advise Russian companies to open a separate legal entity abroad and conduct all payments through it - contribute money to the company’s capital, and it will pay contractors. But here, too, everything is not easy: to work according to such a scheme in an “unfriendly” (that is, almost any developed) country, you need permission from the Central Bank. “As far as I know, the approval of this step with the Central Bank is quite long. But simply bringing money in cash to Cyprus and depositing it into your company’s account is risky - what sanctions could there be for this at home?” says Shigidina from FBK.Pravo.

And, for example, emigrants who sold an apartment in Russia can only hope that the transfers will still reach their foreign accounts. Here are some tips on how to reduce the likelihood of frozen payments and blocked accounts and what to do if this does happen.

Study the information background around the Russian bank through which you plan to make a payment. Is there a risk of sanctions being imposed against him? Is his work connected (even indirectly) with Russian authorities, individuals who are sanctioned or at risk of being sanctioned? If there are doubts, and the amount is large, then it is better to choose the Russian subsidiary of a foreign bank for the transfer. They are not subject to sanctions and, as a rule, use correspondent accounts in their parent structures, so the risk of them being blocked is minimal.

If you open an account abroad, especially in Europe, as a citizen of Russia, then make sure that you have your documents in order: residence permit, tax residency. The most problems with lifting account restrictions arise for Russian citizens with accounts abroad, but without the corresponding “registration”.

If the payment is still stuck, be sure to order a payment search from the sending bank. This will help you understand at what stage the problem arose. If the transfer is stuck in the correspondent bank, then you can find out what kind of bank it is and try to contact them with a request. Consult with the sending and receiving banks about what steps you should take to receive your money.

If a foreign bank wants to close your account, ask for a formal explanation of why it plans to do so. The bank does not have the right to close accounts unilaterally without compelling reasons. If you are confident in the purity of your money, do not agree to the offer or requirement to close the account.

The bankers that Important Stories spoke with believe that it is now safer to send a transfer from Russia from a dollar account, even if it goes to Europe. This way it goes through an American correspondent bank at the initial stage and there is less risk of blocking. Correspondent accounts for Russian banks are now more often blocked by European banks (Deutsche Bank, Raiffeisen Bank International). If the payment is received into an account denominated in euros, the money is automatically converted into European currency.