UN opened Russian bank account to enable climate payments amid sanctions

UN opened Russian bank account to enable climate payments amid sanctions

The United Nations said it opened a Russian bank account in 2022 as Western sanctions complicated the use of normal payment channels and has received membership fees from three Russian banks to a U.N. climate funding programme since then.

Sovcombank, one of Russia's 13 most important credit institutions according to the central bank, on Monday said the U.N. had opened an account with an undisclosed, non-sanctioned Russian lender, to allow for transactions in roubles.

"There has been a Russian bank account opened by the U.N. Secretariat, consistent with our policy to assist all member states to pay their assessed contributions, failing which they lose their right to vote," a U.N. spokesperson said.

"Opening the account was necessary, as other normal channels of payment were having challenges arising from the sanctions," the spokesperson said, with the bank account used to receive assessed and voluntary contributions to the U.N.

Western countries imposed sweeping sanctions on Russia's financial system after it started what Moscow calls a "special military operation" in Ukraine in February 2022.

In 2022, the U.S. Treasury's Office of Foreign Assets Control (OFAC) placed Sovcombank on its Specially Designated Nationals (SDN) list, effectively kicking it out of the U.S. financial system, banning trade with Americans and freezing its U.S. assets.

The bank is now seeking a U.S. Treasury licence to pay membership fees for the United Nations Environment Programme Finance Initiative (UNEP FI), testing the waters in Washington for special exemptions for certain transactions by Russian banks.

A UNEP spokesperson said $114,000 in membership fees from three Russian banks that are part of the UNEP FI has been received.

Sovcombank's OFAC licence application is still pending.