Bank ceases accepting Russian funds (money inflow)
Former German Chancellor Gerhard Schroeder is experiencing financial strain due to the recent cessation of payments from Russia to his account by Sparkasse Hannover. The payments, believed to be originating from Russia, have reportedly been denied since mid-2024.
According to a report by German news outlet Bild, Schroeder has missed out on approximately half a million euros since the bank halted these payments. The bank allegedly returned the funds to Gazprombank in Luxembourg, fearing potential exposure to US sanctions if it continued to credit Schroeder's account.
Schroeder, who served as Germany's chancellor from 1998 to 2005, maintains significant ties with Russian state-owned companies despite Russia's invasion of Ukraine. He continues to serve as the chairman of the supervisory board of Nord Stream 2 AG, a company owned by the Russian state-owned Gazprom, which remains subject to EU and US sanctions due to the conflict in Ukraine.
The ongoing payments from Nord Stream 2 AG to Schroeder, estimated to be around 200,000 euros every six months, have reportedly been affected. The bank's decision to stop processing these payments may have been influenced by the change in leadership on the Sparkasse Hannover's supervisory board. Belit Onay, an outspoken critic of Schroeder's Russian ties, was appointed as chairman in June. Neither Onay's spokesperson nor the bank responded to Bild's request for comment.
In the past, Onay attempted to strip Schroeder of his honorary citizenship of Hannover at the start of Russia's large-scale invasion. However, Schroeder relinquished the title voluntarily. Onay stated at the time that given Schroeder's refusal to take personal consequences from the war in Ukraine, revoking his honorary citizenship was a logical step, as Schroeder's ongoing business ties with Putin were incompatible with the city's values.
[1] The payments are linked to Schroeder's position on the board of Nord Stream 2, a Russian energy project subject to various EU and US sanctions due to the conflict in Ukraine.[2] The bank cited concerns about violating international financial restrictions, particularly US sanctions targeting Russian energy entities, as the reason for freezing and returning the funds.[3] The account freeze coincided with the change in the bank's supervisory board leadership, with Belit Onay, a critic of Schroeder's Russian ties, becoming chairman, possibly influencing the bank's stance.[4] The situation highlights the complexities banks face in navigating sanctions compliance, especially when dealing with politically exposed persons connected to sanctioned entities.
- The ongoing payments to Schroeder, a former German Chancellor, are linked to his position on the board of Nord Stream 2, a Russian energy project, which is subject to various EU and US sanctions due to the conflict in Ukraine.
- The bank's decision to freeze and return the funds to Gazprombank in Luxembourg, allegedly originating from Russia, may have been influenced by the change in leadership on the Sparkasse Hannover's supervisory board, with Belit Onay, a critic of Schroeder's Russian ties, becoming chairman.
- The situation raises questions about the complexities banks face in navigating sanctions compliance, especially when dealing with politically exposed persons connected to sanctioned entities, such as Schroeder and Nord Stream 2 AG.
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