The Treasury Department’s Office of Foreign Assets Control, which enforces US sanctions, on July 22, 2022, opened a three-month deadline for banks to help investors who left with now-unsound Russian bonds get rid of them.
Source: US Treasury Department’s Office of Foreign Assets Control (OFAC)
European banks will resume trading in Russian bonds after Wall Street banks did it.
The global market for Russian sovereign and corporate bonds froze in June after US investors were barred from buying Russian securities on the secondary market as part of Western sanctions against Moscow following its invasion of Ukraine.
But European banks UBS, Barclays and Deutsche Bank have renewed the permission for clients to sell their Russian debt obligations, following similar steps by the US JPMorgan, Bank of America, Jefferies and Citigroup since July 22.
“It’s mainly for clients who want to get rid of Russian assets. The volumes are not that significant,” said one employee of a bank that has resumed trading in Russian debt.
When Moscow launched its invasion of Ukraine in February, nearly $40 billion of Russian public debt remained outstanding, with about half held by foreign investors.
A license from the US Office of Foreign Assets Control (OFAC) allows banks to facilitate, clear and settle transactions carried out by US citizens to reduce their exposure to Russia, even if this involves the purchase of additional securities.
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