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Russian court orders asset seizures for 2 major German banks

May 18, 2024

Germany's Deutsche Bank and Commerzbank had been expected to provide guarantees for the construction of a gas-processing plant that was to be operated by Gazprom.

Deutsche Bank headquarters in Frankfurt, Germany
The Frankfurt-based Deutsche Bank was sued by a Russian gas companyImage: Arne Dedert/dpa/picture alliance

A St. Petersburg court has ordered that assets and accounts of Germany's Deutsche Bank and Commerzbank in Russia be seized as part of a lawsuit filed by a Russian energy firm.

The German banks previously withdrew their guarantees for the construction of a gas-processing plant in the wake of Western sanctions over Russia's full-scale invasion of Ukraine.

What do we know about the gas processing plant project?

Deutsche Bank and Commerzbank were among the guarantor lenders for the construction under the contract with the industrial firm Linde and Turkish construction company Renaissance Heavy Industries.

But after the US and the EU imposed sanctions on Russia , Deutsche Bank and others withdrew their guarantees. This prompted Linde to inform RusChemAlliance that it would halt the project.

The RusChemAlliance firm, which is 50% owned by Russian gas giant Gazprom, sued the German bank.

RusChemAlliance said it had paid advances to Linde for the plant to be built.

What did the court order?

The St. Petersburg arbitration court has ordered the seizure of up to €238.6 million ($259 million) in securities, real estate and bank accounts of Deutsche Bank, its Russian subsidiary and its technology hub.

The sum represents only part of the bank's assets in Russia.

"We will need to see how this claim is implemented by the Russian courts and assess the immediate operational impact in Russia," the bank said in response to the ruling.

Deutsche Bank said that it considers itself fully protected under an existing compensation agreement.

The court also seized Commerzbank assets worth €93.7 million ($101.85 million) as well as securities and the bank's building in central Moscow.

In a separate lawsuit, the St. Petersburg court ordered the seizure of assets, accounts and property belonging to Italy's UniCredit bank. It also ordered that the bank's shares in two of its subsidiaries be seized.

UniCredit is the second largest foreign bank operating in Russia, after Austria's Raiffeisen Bank.

sdi,dh/msh (Reuters, dpa, Interfax)

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