JPMorgan Chase CEO and Chairman Jamie speaks while gesturing during a U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street companies at the Capitol in Washington, U.S., December 6, 2023. Daimon.
Evelyn HochsteinReuter
A Russian court sided with state-run financial institution VTB Bank, which sought to recover $439.5 million. JP Morgan Chase After the invasion of Ukraine, American financiers froze American accounts.
According to a court order released Wednesday, the court ordered the seizure of “movable and immovable property,” including funds in JPMorgan’s Russian accounts and shares in the bank’s Russian subsidiary.
The order comes after VTB filed a lawsuit in the St. Petersburg Arbitration Court last week seeking full return of funds frozen in the U.S. and relief from JPMorgan’s announcement of plans to withdraw from Russia. It was issued in response to this.
The next hearing in the Russia case is July 17th.
JPMorgan declined to comment. VTB did not respond to requests for comment.
The order was the latest example of U.S. banks caught between the demands of the Western sanctions regime and foreign interests. JPMorgan is the largest bank in the United States by assets and is run by veteran CEO Jamie Dimon.
Two years after Russia invaded Ukraine, the Biden administration has imposed an unprecedented set of sanctions, oil price caps and trade restrictions aimed at weakening Russia’s military establishment.
On Wednesday, President Joe Biden signed a comprehensive foreign aid bill that includes new powers for U.S. authorities to locate and seize Russian assets in the United States. It also boosted the United States’ continued efforts to persuade European allies to release Russian state-owned assets to support Ukraine.
In a lawsuit filed last week against VTB in the Southern District of New York, JPMorgan sought to block VTB’s efforts, noting that U.S. law prohibits the bank from parting with VTB’s $439.5 million.
This would expose JPMorgan to nearly $500 million in losses from complying with U.S. sanctions.
American banks seeking to thwart VTB’s efforts said the Russian company had broken its contractual promise to seek relief in American courts and instead found a more friendly venue in Russia.
JPMorgan said Russian courts have recognized at least six other similar efforts by Russian lenders against banks in the United States and Europe.
JPMorgan said it faces “certain and irreparable harm” from VTB’s efforts.
