Western Banks Face Major Asset Seizure in Russia Amid Gazprom Subsidiary Dispute

In a significant move against western banks, a St Petersburg court has seized over $763 million of assets from Unicredit, Deutsche Bank, and Commerzbank, following a dispute with a subsidiary of Gazprom. This seizure, one of the largest since Moscow’s invasion of Ukraine, includes $504 million of Unicredit’s assets, equivalent to about 4.5% of its holdings in Russia, and $260 million of Deutsche Bank’s assets. The court has also prohibited the banks from selling their businesses in Russia. The dispute began when the company demanded the banks pay guarantees under a contract with German engineering company Linde, which the banks refused, citing potential violation of European sanctions. The seizures have prompted Italy’s foreign minister to call a meeting to discuss the impact on Unicredit. This development comes in the backdrop of western countries freezing the assets of Russian banks as part of their sanctions against Russia, further escalating the financial tug-of-war between Russia and the West.