Italy's largest bank to restrict euro payments from Russia to EU

Italy's largest bank, Intesa Sanpaolo, has announced that it will stop accepting euro payments from all Russian banks, except its own subsidiary in Russia, Intesa, starting from January 15, 2025. The bank informed its clients and counterparties about this decision in December, reported from Russian media.

Furthermore, Intesa Sanpaolo will also modify the terms of service for its subsidiary bank's correspondent account from January 15, 2025. Euro payments will only be available for commercial purposes through accounts held within Intesa, its subsidiaries, and banks located in Italy.

The bank's message to its clients reads, "Please consider this information when planning payments and assess the risks of refusal in advance."

This decision is expected to primarily affect Russian corporate clients who have been using the bank's local subsidiary for euro settlements with counterparties outside Italy. 

Olga Sorokina, managing partner of the law firm O2 Consulting, notes that exporters, importers, and companies from the service and industrial production sectors will be most impacted.

However, it is worth noting that over the past few years, Intesa has significantly reduced the volume of operations on its correspondent accounts and has primarily focused on cooperating with companies doing business in Italy or working with Italian partners.

Approximately 15 domestic banks have corresponden accounts with the Russian Intesa, according to Andrey Gusev, managing partner of the Nordic Star law firm. He suggests that their clients, particularly small and medium-sized businesses connected with Italy, may face difficulties, especially those relying on long-term contracts with euro settlements. They will need to seek alternative payment routes.

Experts attribute Intesa's decision to pressure from the European Central Bank (ECB), sanctions restrictions, and reputational risks. The ECB requires eurozone financial institutions to strictly comply with sanctions and monitors transactions related to sanctioned jurisdictions.

As of December 16, Intesa has increased the commission for legal entities and individual entrepreneurs for currency control on operations performed under contracts for the purchase/sale of goods without importing them into Russia. For certain operations, the commission has increased tenfold.

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