- The ruling freed assets totaling 204.7 billion rubles.
- The dispute arose from VTB’s claim that JPMorgan obstructed $439.5 million in its correspondent account in New York.
A Russian court has reversed the seizure of JPMorgan’s funds in Russia in an ongoing dispute between the US bank and Russian state lender VTB, Reuters reported. The ruling affects a portion of JPMorgan’s assets, specifically those held in type C accounts and used for internal operations such as staff wages and tax payments.
Despite VTB’s claim of $439.5 million being blocked by JPMorgan in a New York correspondent account due to US sanctions, the court has opted to release the frozen funds within Russia. This decision followed JPMorgan’s filing, which indicated that the value of claims against it and orders to freeze assets exceeded its available assets in Russia.
The legal tussle between VTB and JPMorgan resulted from claims by the former that the US bank obstructed $439.5 million in its correspondent account in New York during the time VTB faced US sanctions. Consequently, the Russian court initially ordered the seizure of funds in JPMorgan’s accounts in Russia. However, with the recent ruling, JPMorgan’s assets held in type C accounts, amounting to 204.7 billion rubles, have been freed from seizure.
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Impact on JPMorgan’s Russian Operations
JPMorgan’s total assets in Russia stand at 243.3 billion rubles, with a significant portion locked in type C accounts. These accounts, predominantly held by foreigners, restrict money movement abroad but also safeguard against seizure, as per presidential decrees. The court’s decision not only releases the frozen funds but also enables JPMorgan’s Russian subsidiary to resume its operations, including the disbursement of staff wages and tax payments from a separate current account.
In a recent filing, JPMorgan Chase alerted investors that its assets in Russia could face seizure following legal actions in both Russian and US courts. The embattled bank finds itself entangled in various legal challenges concerning its Russian operations, triggered by the imposition of economic sanctions on Russia by the US and European nations in response to the Ukraine conflict.
JPMorgan’s predicament stems from a series of lawsuits surrounding its dealings in Russia. A Russian court’s recent decision to seize funds in JPMorgan accounts followed a lawsuit by state-owned bank VTB, aiming to reclaim funds blocked abroad. In a tit-for-tat move, JPMorgan retaliated by suing VTB Bank in the US, seeking to block its efforts to recover $439.5 million.
