Raiffeisen Bank International (RBI) will not be receiving compensation from the EU for its subsidiaries’ losses in Russia as part of the upcoming 19th sanctions package, the Austrian Foreign Ministry has indicated in a public statement. After reportedly holding up negotiations over the 19th package for several weeks in an attempt to push through its unpopular proposal to award RBI €2 billion in frozen Russian assets, the Foreign Ministry’s announcement that it will agree to the package all but signals the proposal’s failure.

Austria had previously proposed unfreezing EUR 2 billion in assets owned by Rasperia Trading, a Russian investment company with links to sanctioned Russian oligarch Oleg Deripaska, and awarding them to RBI to compensate the bank for a EUR 2.1 billion sum seized from its subsidiary by a Russian court in January during a legal dispute with Rasperia.

Austria’s proposal had previously attracted widespread controversy and opposition from other EU member states. Diplomats privately voiced concerns that the proposal would de facto see the EU legitimise Russia’s court ruling against Raiffeisen by greenlighting a transfer of seized Russian assets for seized European ones. Regulators had also voiced concerns that the proposal would reward RBI, the international bank with the largest remaining presence in Russia, for its continued failure to exit the Russian market and manage the risks of its Russia operations.

In response to the proposal, BankTrack and our partners at B4Ukraine mobilised an open letter signed by 17 civil society organisations from Ukraine, the EU, and across the world, warning the European Commission that Austria’s plan would “reward the bank for its longstanding and well-documented role in financially enabling Russia’s war of aggression against Ukraine”. The letter noted that RBI had ignored calls to exit the Russian market for more than three and a half years and continued to play an outsized role in facilitating the financial activities of Russian state and state-linked entities.

The letter further warned that Austria’s proposal risked legitimising and greenlighting an “asset swap” of RBI’s Russian assets for Rasperia’s European assets, in effect resurrecting a deal which RBI had pursued in early 2024 but abandoned after US authorities voiced sanctions concerns. In January, BankTrack and B4Ukraine had warned that attempts to compensate RBI in Europe for losses incurred in Russia risked “playing the Kremlin’s game for it”.

After launching the open letter, BankTrack and B4Ukraine advocated for the Commission to abandon the plan, building on the existing opposition that EU member states had reportedly voiced in response to Austria’s proposal. This opposition ultimately proved insurmountable for the Austrian Foreign Ministry, with all other EU member states ultimately rejecting the proposal.

Max Hammer, Human Rights Campaigner at BankTrack, said:

“The failure of Austria’s RBI proposal is a huge relief for efforts to hold businesses accountable for their activities in Russia. Had the EU compensated RBI for the losses it incurred in Russia after three and a half years of failing to exit, it would have signalled to all companies still operating in Russia that the EU is willing to cushion their risks. By rejecting this proposal, the EU is sending a clear signal: businesses must exit the Russian market or face the financial consequences.”

BankTrack has been campaigning for Raiffeisen Bank International to leave Russia since Russia launched its illegal invasion of Ukraine in early 2022 and has regularly reported on RBI’s links to the Russian war economy.