EU warns banks against Russian sovereign bonds

EU officials have warned EU banks about Russia’s first issuance of sovereign bonds since sanctions were imposed in 2014 in response to its actions in Ukraine. The US is said to have given similar warnings. EU sanctions do not prohibit the purchase of Russian sovereign debt, but EU officials have cautioned banks to consider the possibility that the bonds are used to circumvent sanctions and have suggested that they put in place safeguards, such as clauses that prevent funds generated by the sale being transferred to sanctioned entities. EU sanctions on Russia significantly restrict the access of the country’s state banks to financial markets and liquidity.