UniCredit and Raiffeisenbank are the first banks to take a stand against European Central Bank sanctions on Russia by appealing to the European Court of Justice. Based in Milan, UniCredit argues that the ECB’s demands go beyond its authority and has asked to freeze these requirements. The sanctions put banks in a tough spot: they can either sell their assets for low prices or face hefty fines.

Below is the press release from UniCredit:

Request to the Court of the European Union for clarification

UniCredit SpA (“UniCredit” or “UCI”) informs that it has filed an application with the General Court of the European Union to obtain clarity on the obligations established by the European Central Bank (ECB) for the further reduction of risks associated with UniCredit’s activities in Russia, carried out by subsidiaries including UniCredit Bank Russia (“AO Bank”). 

Since the Russian invasion of Ukraine in February 2022, UniCredit has implemented a series of strategies to drastically limit its activity in the Russian Federation, resulting in a reduction of its cross-border exposure by 91% and its local exposure in the country by 65% ​​to date; further substantial reductions will be made in line with UniCredit’s action plan commitments.

This demonstrates that UniCredit shares with the ECB the importance of reducing its presence in Russia, but has concerns about the ways of implementing such reduction identified in the ECB decision, which go beyond the current regulatory framework. 

In this regard, UniCredit has engaged in a constructive dialogue with the ECB. However, the unprecedented circumstances and the complexity of the socio-economic and geo-political context, the lack of a single regulatory framework applicable to the current scenario, and the possible serious consequences arising from the implementation of the decision that impacts not only the activities in Russia but also UniCredit SpA, require that the Board of Directors of UniCredit obtain certainty and clarity on the obligations and actions to be taken. To this end, it has decided to lodge an appeal with the General Court of the European Union in order to resolve any doubts about the obligations to which UniCredit will have to comply. The ECB has been informed of this intention with full transparency and well in advance. 

The conclusion of the proceedings could take several months, but it represents an obligatory step to ensure legal certainty for both UniCredit and the ECB. Pending the judgment, UniCredit has requested the provisional suspension of the ECB’s decision. 

UniCredit remains committed to implementing its plan for a significant reduction of its presence in Russia, in compliance with the legal, regulatory and sanctions framework. UniCredit remains committed to maintaining an active and open dialogue in this regard with the ECB.

Milan, 1 July 2024

Meanwhile, Putin’s gold strategy, implemented in early 2022 by tying the value of the ruble to gold, has successfully countered sanctions, aided by Russia’s status as the world’s second-largest producer of gold.