VTBE obtains important US license

The Frankfurt-based VTB Bank (Europe) SE has received a license from the US Office of Foreign Assets Control (OFAC).


With effect from September 19, 2022, the Frankfurt-based VTB Bank (Europe) SE (VTBE) has received a license from the US Office of Foreign Assets Control (OFAC). OFAC is a division of the US Department of the Treasury and is responsible, among other things, for the control and implementation of US sanctions against Russia.

VTBE, which is based in Germany and has a German banking license, is a subsidiary of the second largest Russian bank. VTBE has been completely shielded from Russian influence by the German supervisory authority already at the beginning of the year, which means that VTBE is not subject to EU sanctions against Russia.

“Despite this protective shield, many of our business partners were unwilling and unable to fulfil existing obligations towards VTBE in recent months,” says Special Representative and CEO Frank Hellwig, who was appointed by the Federal Financial Supervisory Authority (BaFin). “So interest payments were sometimes not made, redemptions were not met, amounts due were not always repaid to us or were repaid late, often for fear of indirect sanctions by the USA.” In addition, numerous service providers refused to cooperate further with VTBE and software licenses and agreements were terminated on the grounds of the sanctions and had to be substituted.

VTBE sees the granting of the OFAC license by the US Treasury Department as key evidence that such fears are generally unfounded. In individual cases the legal situation still needs to be reviewed to determine whether certain transactions may be in violation of the US sanctions regime. However, in such cases, case-by-case approval may be requested and granted.  “This clearly indicates that business transactions with VTBE are possible and do not in principle violate US sanctions,” says CEO Hellwig. “No one can fall back on the point of view that it is generally not permitted to cooperate with VTBE.”

Only a few days earlier, VTBE had received a license from the British sanctions authority, the Office of Financial Sanctions Implementation (OFSI), for so-called “basic needs”. These include among other things payments for employees’ wages, taxes, rents and legal advice. The VTBE board hopes that after the OFAC license has been granted from the USA, an extended OFSI license will also be issued soon. ” With the extension of the OFSI license and the OFAC license already obtained, two of the biggest obstacles at VTBE would be removed,” says CEO Hellwig, “because in fact we currently find ourselves in scenario of portfolio management and orderly wind-down which is a consequence of the ban on new business imposed by BaFin.” In the first half of 2022, due to the current situation, the overall balance sheet total of VTBE has already decreased significantly.