In Luxembourg, after more than ten years of litigation, a sanctioned Russian bank will have to return 15 million euros withdrawn from the liquidated JSC Latvijas krājbanka, reports the TV3 program. However, it is not that simple.
Latvia's money is owed by East-West United Bank (EWUB) — a bank located in Luxembourg, founded in June 1974 by the State Bank of the USSR — the central bank of the Soviet Union.
Since 2018, the bank has been wholly owned by the Russian company Sistema, with total assets amounting to 724 million euros as of 2021.
In November 2023, the bank was added to the sanctions list of the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury under Executive Order No. 14024 for being owned, controlled, or acting on behalf of the Russian AFK Sistema.
Among other things, it was EWUB that, in October 2011, transferred 15 million euros from Latvijas krājbanka. These funds were used as collateral to issue the same amount as a loan to a Swiss company linked to Latvijas krājbanka shareholder Vladimir Antonov. The money was then transferred from the Swiss firm's accounts to other companies owned by Antonov.
Now, after 15 years, there are chances to recover these 15 million euros. In November of last year, a Luxembourg court rejected EWUB's attempts to evade claims and ordered the return of the funds. The deadline for cassation appeal expired in March, yet the 15 million euros have still not been credited to the account of the administrator of Latvijas krājbanka.
There are two reasons for this: firstly, EWUB is under sanctions, making it problematic to transfer money to it. Secondly, the bank has significantly suffered losses — due to international sanctions and other issues, Sistema decided to sell the bank at the end of 2023. As a result, the bank ceased operations due to asset devaluation.
Thus, justice seems to have prevailed — the court made the appropriate decision, yet depositors of Latvijas krājbanka are unlikely to see their money.
