OFAC Delists Sberbank Subsidiary After Purchase by Kazakhstan Government

The U.S. this week removed sanctions on a former Kazakhstan-based subsidiary of Russia’s Sberbank after the subsidiary changed ownership and asked the Treasury Department to delete the bank from its Specially Designated Nationals List. The subsidiary, now owned by the Kazakhstan government, is "one of the largest banks in Kazakhstan" and "systemically important to the Kazakhstani financial industry," a Treasury spokesperson said March 8, adding that the agency worked "closely" with the Kazakhstan government to help it complete the purchase.

The Kazakhstan government-owned National Managing Holding Company Baiterek last year purchased the subsidiary, formerly known as Subsidiary Bank Sberbank of Russia Joint Stock Co., Treasury said. Soon after the purchase, the Kazakhstan government renamed the company the Bereke Bank Joint Stock Company and replaced its board of directors in a bid to remove itself from U.S. sanctions, the spokesperson said. The Baiterek CEO on Sept. 23 asked the Office of Foreign Assets Control to remove the rebranded company from the SDN List and the Sectoral Sanctions Identifications List. The change took effect March 8.

OFAC removed the sanctions because "the circumstances resulting in its addition to the SDN and SSI Lists no longer apply," the spokesperson said. Treasury said it worked with the State Department on the matter, and the two agencies received "reliable assurances" the bank won't "knowingly engage in activity subject to sanctions." The bank also agreed to release "proprietary information to the appropriate congressional leadership and committees as may be necessary," the spokesperson said.