S. Korea to End Transactions with Major Russian Banks under US Sanctions

SEOUL:
South Korea said Tuesday it plans to suspend financial transactions with seven major Russian banks and their affiliates in a bid to join global efforts to impose financial sanctions against Moscow over its attack on Ukraine.

The government said it will also “strongly” recommend local public and financial institutions halt their investment in Russian government bonds that will be issued starting Wednesday, Yonhap news agency reported.

The decision came as Seoul decided to join the multinational move to remove Russia from the SWIFT international settlement network over its invasion of Ukraine.

The banks include Russian top lender Sberbank and state-owned banks VEB and PSB.

But the government said it will also apply the same standards as the US when it comes to transactions that will be exceptionally allowed, such as in agriculture, Covid medical support, and energy supplies.

South Korea said it plans to immediately implement the SWIFT-related sanctions once the European Union unveils a detailed action plan.

The US and its allies have tightened sanctions against Russia over its invasion of Ukraine, as they agreed to exclude some Russian banks from SWIFT, an international settlement system where trillions of dollars change hands for cross-border payments.

But a list of selected Russian banks subject to the sanctions and the timing of the implementation of the punitive actions have yet to be announced.

Earlier, First Vice Finance Minister Lee Eog-weon met his US counterpart, Wally Adeyemo, in Washington and said South Korea is reviewing imposing additional sanctions against Russia.

“As a member of the international community with responsibility, the South Korean government actively supports major nations’ efforts to solve the crisis,” Lee said. “Starting with export ban of strategic materials to Russia, we are reviewing additional sanction measures.”

On Monday, the Foreign Ministry announced exports of strategic materials to Russia will be banned.

Seoul’s additional measures are expected to be related with export controls regarding advanced technologies and high-tech products.

The government has already said it plans to finalise a decision on possible steps it can take in connection with US standalone export curbs against Russia on dozens of items, such as semiconductors, computers, telecommunications, information security equipment, lasers, and sensors.