Russian Court Supports VTB’s Sanctions Retaliation Against JPMorgan Chase for Ukraine Freeze

In an ongoing dispute, a Russian court has supported the attempts of state-owned bank VTB to retrieve $439.5 million frozen in US accounts by JPMorgan Chase following Russia’s invasion of Ukraine. The decision sees funds from JPMorgan’s Russian holdings and property being seized as part of this ruling issued on Wednesday, with further court action set for 17 July.
This development represents a scenario faced frequently now between the demands of Western sanctions regimes and foreign interests by American banks. As the largest US bank based upon asset size and helmed by seasoned CEO Jamie Dimon, JPMorgan Chase declined to comment on this situation whilst VTB failed to respond when CNBC contacted them regarding the matter in question.
Over two years after Russian military forces occupied Ukraine’s Crimea peninsula, Joe Biden has overseen a series of unprecedented sanctions and trade restrictions aimed at weakening Moscow’s war machine. This week saw President Biden sign into law an extensive foreign aid bill which offers fresh powers to US officials seeking out and confiscating Russian assets within the United States. It additionally serves to step up attempts already ongoing with America’s European partners regarding Russian state possessions used in assisting Ukraine.
In a separate lawsuit filed last week by JPMorgan Chase against VTB in New York, they endeavoured unsuccessfully to halt VTB’s pursuit of compensation through American courts on the basis that US legislation prohibits their release of VTB’s $439.5 million funds. This leaves JPMorgan exposed for a potential loss worth almost half-a-billion dollars as it adheres to US sanctions, with Russian courts having enabled similar actions by other Russian lenders against American or European banks on at least six prior occasions according to the bank’s own statements in this matter.
JPMorgan Chase has argued that VTB broke its contractual pledge to seek relief through American legal channels instead opting for a more favourable venue within Russia, resulting in “certain and irreparable harm” facing their position at present due to these recent actions from VTB Bank Ltd., an allegation disputed by the Russian bank.