Russia’s Sberbank’s successor bank, TradeXBank, can resume operations in US dollars.
The US Treasury Department’s Office of Foreign Assets Control (Ofac) announced on Monday that it had removed TradeXBank’s predecessor bank, Sberbank (Schweiz) AG, from its sanctions list for Russia.
The US authority enforces the sanctions that the United States imposes on states, companies and individuals worldwide. After the Russian attack on Ukraine in February 2022, she also put the largest Russian state bank, Sberbank, on this list. In Switzerland, its subsidiary bank was also affected.
This specialized in trading raw materials in the areas of energy, agricultural products, fertilizers and metals. Under the supervision of the Swiss Financial Market Supervisory Authority (Finma), the Swiss bank was sold by its Russian parent to the Geneva-based investment company m3 Groupe Holding SA. This was possible because Finma lifted the ban on transactions and withdrawals imposed by the USA between September 2nd and 5th, 2022.
Since then, the resized bank has continued to operate under its new name TradeXBank. Around 50 employees do business in the Europe, Middle East and Africa regions. Primarily medium-sized companies are offered all banking services relating to raw materials trading worldwide.
Cut off from the US dollar
However, some of the US sanctions remained in place even after the sale. The biggest disadvantage for the bank was that it could no longer make transactions for its customers in US dollars. The institute had to remain completely cut off from the US financial system. In raw materials trading in particular, an estimated 90 percent of transactions are carried out in US dollars.
“For the last year and a half, we were only allowed to make transactions in euros and Swiss francs. That was quite demanding for us and our customers,” explains Camille Sednaoui, who took over operational management of the bank in January. Customers had to make a currency exchange back and forth to the US dollar, which was always secured by the Swiss franc.
For “our loyal customers,” says Sednaoui, the transactions have become a little more expensive, but they still remain on board. According to the bank boss, only half a dozen banks in Switzerland offer such services that specialize in commodity transactions. Despite the sanctions, the bank made a profit of 2 million francs last year, a good result given the circumstances, says the CEO happily.
Different perceptions of time
“The process of getting off the sanctions list took much longer than we had thought,” explains bank president Christian Lüscher. Lüscher, a Geneva lawyer and politician who sat for the FDP in the National Council until last year and ran to succeed Federal Councilor Pascal Couchepin in 2009, took over the presidency of TradeXBank in September 2022.
Ofac had to be convinced that the successor bank no longer had any connections to the Russian parent bank; The latter is still subject to sanctions by the USA. To achieve this, the bank worked with several law firms in Washington. The most difficult thing was to convince Ofac of the urgency: “For Ofac, a month is not a long time, but for us every additional month on the list was difficult,” says Lüscher.
Simple things took a lot of time, like changing all the phone numbers that popped up every time “Sberbank” was dialed. The most complex step, however, is the planned change of the Swift number, the code that is unique for every financial institution worldwide and by which a bank can be identified by other banks. The bank bosses say the switch to a new Swift number can now finally be started.
Below the management level, the majority of the staff from the former Sberbank (Switzerland) remained on board. Russian and Ukrainian specialists are also employed. However, the bank has no longer done business with Russian customers since the change of ownership.
The bank is now resuming active business operations in US dollars, which the bank says will be implemented in the coming half-year. The bank bosses are convinced that this will result in a growth spurt.