Russian banks strengthen ties with blacklisted Syrian lenders

(Reuters) – Intent on supplying his government with arms, oil and food, Syrian President Bashar al-Assad has turned to Russian banks to access worldmarkets, and the lenders could open more doors to him, despite a risk of isolation from the U.S. banking system.

U.S. sanctions aimed at forcing Assad to end the violence in Syria’s two-and-a-half-year civil war forbid its own banks from dealing with Syria’s central bank and the Commercial Bank of Syria. They do not cut off other countries’ banks that deal with the two blacklisted institutions from the U.S. banking sector, though there are calls for tougher action.

U.S. senators asked Treasury Secretary Jack Lew last month to put Russian banks that deal with them on a list prohibiting U.S. banks from doing business with them, in an attempt to pressure them into ending their relationships with Assad.

But some Russian lenders have looked to strengthen those ties in recent months, underscoring the extent of relations between Damascus and Russia.

Russia, one of Assad’s biggest arms suppliers, has vetoed a number of U.N. Security Council resolutions condemning the Syrian leader.

While Assad has used second-tier Russian banks to pay for air defense systems and fighter jets, the Commercial Bank of Syria has also opened accounts in the small Moscow-based lender Tempbank and is in talks with the bank to expand ties.

A fax obtained by Reuters was sent from the Syrian bank on August 6 to Tempbank, proposing the opening of a barter account that would allow Damascus to trade goods or oil for foodstuffs that would be shipped from Ukraine.

“Further to the opening of various accounts in our bank’s name on your books, and our previous discussions for the establishment of a fruitful banking relationship between our two banks … an agreement between the commercial parties in Syria and Ukraine has been concluded for exporting & importing main foodstuff and agricultural products between both sides through barter deals as per the demand of the Syrian government,” the fax said.


Reuters has the full article

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