Singapore imposes sanctions on 4 Russian banks; export of certain goods also banned

SINGAPORE - Banks and other financial institutions here will be banned from doing business with four Russian banks, as part of sanctions the Republic is imposing to hit the Russian economy for the invasion of Ukraine.

The sanctions will also involve a ban on the export of certain goods to Russia, including electronics, computers and military goods, said the Ministry of Foreign Affairs (MFA), which gave more details on these sanctions on Saturday (March 5) for the first time since they were announced on Monday.

"These sanctions and restrictions aim to constrain Russia's capacity to conduct war against Ukraine and undermine its sovereignty," said MFA.

Russia invaded neighbouring Ukraine on Feb 24 after months of tension at the border, with Russian troops massing and conducting military exercises. Its actions have been widely condemned by countries around the world, including Singapore.

MFA said that financial institutions will be prohibited from entering into transactions or establishing business relationships with these banks:

• VTB Bank Public Joint Stock Company
• The Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank
• Promsvyazbank Public Joint Stock Company
• Bank Rossiya

"Where there are existing business relationships, financial institutions must freeze any assets and funds of these four banks," said MFA.

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The ministry added that digital payment token service providers are specifically prohibited from facilitating transactions that could help to circumvent these financial measures.

Transactions and providing financial services that facilitate fund raising to the Russian government and the Central Bank of the Russian Federation, as well as any entity owned or controlled by them or acting on their direction or behalf, will be prohibited.

MFA said that these prohibitions apply to buying and selling new securities, providing financial services that facilitate new fund raising by, and making or participating in the making of any new loan to the above entities.

"The Singapore Government and Monetary Authority of Singapore will also cease investing in newly issued securities of the above entities," MFA said.

Banks, insurers and other financial institutions here will additionally not be allowed to do business with certain sectors in the breakaway regions of Donetsk and Luhansk of Ukraine. The sectors are transport, telecommunications, energy and prospecting, and the exploration and production of oil, gas and mineral resources.

The banned transactions involving Russia will also apply to cryptocurrencies, and MFA said that Singapore's sanctions cover all transactions that involve cryptocurrencies and extend to the payment and settlement of transactions that relate to digital assets, such as non-fungible tokens.

Separately, the ban on the transfer of goods to Russia will involve all items in Singapore's Military Goods List and all items in the "Electronics", "Computers", and "Telecommunications and Information Security" categories of the Dual-Use Goods List of the Strategic Goods (Control) Order 2021.

These items will not be allowed to be exported to Russia because they can be used as weapons to inflict harm on or to subjugate the Ukrainians, or contribute to offensive cyber operations.

Last year, Singapore’s trade in goods with Russia was $5 billion, said the Ministry of Trade and Industry. Its top exports to Russia are in electronics and apparatus.

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Russia's invasion of Ukraine contravenes the United Nations Charter and is a clear and gross violation of international law, said MFA.

It highlighted how the sovereignty, political independence and territorial integrity of all countries must be respected, and that Singapore takes any violation of these core principles seriously, as they are fundamental to the survival of the country, which is a small state.

"While we continue to value good relations with Russia and the Russian people, we cannot accept the Russian government's violation of the sovereignty and territorial integrity of another sovereign state.

For a small state like Singapore, this is not a theoretical principle, but a dangerous precedent. This is why Singapore has strongly condemned Russia's unprovoked attack on Ukraine."

Financial institutions in Singapore will be prohibited from the following:

(a) Entering into transactions or establishing business relationships with the following Russian banks:

• VTB Bank Public Joint Stock Company;
• The Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;
• Promsvyazbank Public Joint Stock Company; and
• Bank Rossiya

Where there are existing business relationships, financial institutions must freeze any assets and funds of these four banks.

(b) Providing financing or financial services in relation to the export from Singapore or any other jurisdiction of goods subject to Singapore’s export controls on Russia.

These goods comprise all items in the Military Goods List and specified categories in the Dual-Use Goods List of the Strategic Goods (Control) Order 2021.

(c) Providing financial services in relation to designated Russian non-bank entities which are involved in activities in (b). Where there are existing business relationships, financial institutions must freeze any assets and funds of these designated entities. Details on the designation of non-bank entities will be provided subsequently.

(d) Entering into transactions or arrangements, or providing financial services that facilitate fund raising by:

The prohibitions apply to buying and selling new securities, providing financial services that facilitate new fund raising by, and making or participate in the making of any new loan to the above entities.

The Singapore Government and Monetary Authority of Singapore will also cease investing in newly issued securities of the above entities.

(e) Entering into transactions or providing financial services in relation to the following sectors, in the breakaway regions of Donetsk and Luhansk:

• transport;
• telecommunications;
• energy; and
• prospecting, exploration and production of oil, gas and mineral resources.

(f) Entering into or facilitating any transactions involving cryptocurrencies, to circumvent any of the above prohibitions in (a) to (e). The prohibited cryptocurrency transactions cover all transactions that involve cryptocurrencies and extend to the payment and settlement of transactions that relate to digital assets (such as non-fungible tokens).

This article was first published in The Straits Times. Permission required for reproduction.