Life in the EU and an account in the Russian sanctions bank: lawyers' opinions on risks and action plan

Many Russians living in Europe still have accounts and cards in Russian sub-sanctioned banks. But EU countries are gradually introducing liability for circumventing anti-Russian sanctions, which raises the question of whether having an account in such a bank and using it is considered a criminal offense. Lawyers from the EU and Russia have presented two scenarios for the application of this norm - optimistic and pessimistic.

On Ma 20, 2025, EU Directive 2024/1226 came into force, a document through which European authorities are trying to establish a common approach for all members of the Union to comply with anti-Russian sanctions and punish circumvention of them.

At the moment, in 12 of the 27 EU countries there is only criminal liability for circumventing anti-Russian sanctions, in 13 of them administrative liability is also possible, and in two - exclusively administrative, explain Igor Klushin and Semyon Demchenko from Denuo, a law firm working in the CIS and UAE markets, in their article. Depending on the country, the term of imprisonment ranges from 2 to 12 years. As a result, violators settled in jurisdictions with lenient regulation. This is what the EU wants to fight against.

Not all countries managed to change their legislation by the May deadline: only Estonia, Latvia, Lithuania, Finland, Sweden, Denmark, Slovakia, Hungary and Cyprus had done so by November 2025. In the Czech Republic, the new rules will come into effect in 2026.

The Directive specifies which actions to circumvent sanctions are now considered a crime in the EU. These include concealing information about accounts and assets that are to be frozen, entering into transactions with sub-sanctioned persons and companies and their partners, and importing and exporting prohibited goods and services. It will also be an offense to directly or indirectly provide money or any economic resources to a person or company under European sanctions.

This directive may end up hitting law-abiding Russians who live in the EU - many of them still have accounts and cards in sub-sanctioned Russian banks. Not having an EU passport will not save them. In European law, any violation of sanctions committed on the territory of a member state falls under its criminal law, reminds Veronika Siverova, senior lawyer at the consulting company ITSWM. Thus, the norms will apply to holders of European residence permits and residence permits, national D visas, asylum seekers and other people living in the EU on humanitarian grounds.

The question of whether the mere presence of an account in such a bank is a crime is not clearly stated in the EU acts, says Nina Makhanova, a lawyer in the compliance and sanctions law practice of BGP Litigation.

This can ultimately lead to polar interpretations of the norm.

The norm itself is aimed at preventing those under EU sanctions from receiving funds using Russian banks and accounts, says Paris-based lawyer Yulia Koroleva.

But in practice, the logic of the law may look like this: if a Russian bank is included in the EU sanctions list, "providing funds and economic resources" to it is prohibited, warns Roman Khaminsky, head of the international compliance practice at Russian law firm Orion.

Nina Makhanova believes that EU law enforcement agencies may consider the extension of the contract with such a bank and the opening of a savings account or deposit in it as a violation of the sanctions regime.

Roman Khaminsky adds: if a sanctioned bank charges a fee from a client for services, it cannot be ruled out that its payment will lead to "provision of funds and economic resources" to the sanctioned organization.

A money transfer and payment from such an account within Russia may also be considered a violation if it is linked to a person or entity on the sanctions list, says Yulia Koroleva.

If we are talking about payment of utility bills, taxes and assistance to relatives, the risk of criminal or administrative prosecution is minimal, but a large transfer without an obvious purpose may be considered as a suspicious operation, believes Andrei Gusev, senior partner of the law firm Nordic Star.

There is now no exchange of financial information between the tax services of EU countries and Russia. The Russian Federal Tax Service officially excluded all EU countries from automatic exchange from December 31, 2024, and some of them themselves stopped supplying data to Russia two years before that. However, financial intelligence services and law enforcement agencies still have enough channels to collect information.

First, they can get information from the tax authorities. There is no uniform obligation in the EU for all residents to declare foreign accounts. But some European countries do require it.

For example, tax residents of France are obliged to report all bank accounts when filling in a tax return - the tax authorities need their number, the name of the bank and in which country it is registered. A statement of account may be requested - translated into French - as part of a taxpayer's audit, Koroleva gives an example.

Secondly, such information can be provided by banks and brokers. Many Russians themselves have disclosed to them information about the existence of accounts, agreements with counterparties and other documents confirming the transparency of capital when they underwent compliance or made real estate transactions, continues Khaminsky.

The tax authorities may start an audit on a signal from EU financial organizations that have ever received money from Russian accounts, Koroleva explains.

Lawyers interviewed by Oninvest have drawn two scenarios for Russians living in the EU with accounts in Russian banks under sanctions.

- Optimistic

He suggests that basic transactions - paying utilities, taxes, cell phone service and helping parents and relatives - will not be penalized.

Checking the accounts of tens of thousands of Russians and penalizing them will not be easy in terms of administration, but the most wealthy and "prominent" Russians should prepare themselves for the attention of the regulatory authorities, reminds Roman Khaminsky.

- Pessimistic

For every action with an account or card in a sub-sanctioned bank, authorization will have to be obtained. But so far, the EU has no clear rules on how this can happen - all these procedures have yet to take shape.

For this to happen, the EU must first introduce a provision in the laws on the need for such authorization. Perhaps national sanctions regulators will issue general licenses under Article 5h of Regulation 833/2014, which will allow Russians living in Europe to use Russian bank accounts to pay for housing and utilities, taxes and other basic expenses, Nina Makhanova hopes.

Otherwise, she fears, transactions through a sanctioned bank may require an individual license from an authorized body of an EU country.

Russians whose foreign assets are frozen in Euroclear have already faced the need to obtain individual licenses for unblocking from the Belgian Treasury. As practice has shown, Russians have been waiting for them for months and even years due to the regulator's workload. Periodically, the Treasury revises the requirements to document packages and application forms, and changes the appeal procedure. For example, from the fall of 2025, it will not consider repeated applications, sending applicants to court.

Regulators and law enforcement agencies in Estonia will focus on compliance with the sanctions regime primarily by European legal entities, the national Anti-Money Laundering Data Bureau (RAB) told Estonian Business News. The RAB said that the use of accounts and cards in sub-sanctioned banks by Russians is considered a violation only in individual cases - for example, when the money actually becomes available to the sub-sanctioned bank itself.

In Latvia, if a Russian bank is not under EU sanctions, having an account in it is permissible. The position of the country's Financial Intelligence Service (FID) is as follows: sub-sanctioned banks should not have access to funds and economic resources, so any cooperation with them is prohibited, according to the service's response to the Latvian publication Delfi. Latvia has introduced liability for violating the sanctions regime - from community service to prison terms of up to 4 years, and in case of "causing substantial harm" - up to 5 years. There is no administrative punishment for such an offense.

The Financial Crimes Investigation Service of the Lithuanian Ministry of Internal Affairs believes that as long as an account in a sub-sanctioned bank is open, the resident violates the sanctions regime, learned "Novaya Gazeta. Baltia." For this in the country there is a fine from €200 to €6 thousand. The publication has learned about one case of a fine of €600 for having such an account. But any action with such an account, including its zeroing, without individual authorization from the Ministry of Finance, Central Bank or other competent authority of the EU country will be considered a willful violation. The procedure for obtaining such authorization in Lithuania has not yet been published.

Directive 2024/1226 states that the provision of funds to any sub-sanctioned persons, including banks, is a criminal offense only if the amount involved is €10,000 or more, Nina Makhanova reminds us. For smaller amounts, the logic of the directive suggests that administrative liability should still be imposed.

EU countries may establish that some of the listed violations will not be considered a crime if the amount involved is less than €10,000 and if it is not several transactions above €10,000, B1 lawyers wrote. However, the final decision on where the boundary of administrative and criminal liability lies will be made by the legislators of each country.

The easiest option for Russians living in the EU was named by all the lawyers interviewed by Oninvest as closing an account in a sub-sanctioned bank. This can now be done in person at the bank, in a mobile application or through a trustee. A power of attorney can also be executed with a European notary, provided that an apostille is affixed and a notarized translation into Russian is made in Russia, Yulia Koroleva reminds us.

For those for whom the presence of a Russian card and account is critical, it is worth opening a new account in a bank that is not under sanctions. But there is a problem here - the list of sub-sanctioned banks is constantly being added to. For example, Alfa Bank, MTS Bank and Absolut Bank were included in the 19th package of European sanctions, and 22 Russian banks were included in the 18th package . Now 57 Russian banks are already under EU sanctions, including the largest retail banks Sberbank (110 million retail customers), VTB (25 million) or T-Bank (52 million), as well as Ozon Bank and Yandex Bank, which are rapidly growing due to discounts on goods on marketplaces.

For settlements within the Russian Federation, it is worth keeping all documents confirming the legality of the purpose. Large transfers and opening new products and services for which the bank will charge a commission should be avoided.

The lawyers interviewed by Oninvest also advised Russians who decided to close an account in a Russian bank, either personally or through a trustee, not to explain to the bank's employees the reason for closing the account due to the implementation of anti-Russian sanctions.

B1 lawyers explain that in Russia the implementation of foreign anti-Russian sanctions is not in itself a crime. But public calls to impose, extend or expand such sanctions are already criminalized. Actions in personal interests can also be penalized if they have caused serious harm to Russian citizens or companies.

In addition, the State Duma has a bill No. 102053-8 under consideration, proposing to penalize the enforcement of foreign sanctions against Russia for up to 10 years, but it has not been passed since 2022.

The lawyers interviewed found it difficult to say what to do with Russians with the status of "foreign agents", who have been obliged by the Russian authorities to have a special ruble account in Sberbank without the possibility of closing it, and to whom they are entitled to open such an account without the consent and presence of the owner. Clearly, separate clarifications from the EU are required here.

Oninvest has sent a request to the European Commission.

This article was AI-translated and verified by a human editor