HSBC Steps Up Scrutiny Of Russian Clients As Sanctions Heighten

HSBC is shunning prospective Russian clients and declining credit to some existing ones, two sources with knowledge of the matter told Reuters, as the bank seeks to shield itself from Western sanctions against Moscow, Sumeet Chatterjee and Lawrence White reported for Reuters.

Photo Insert: HSBC had said on March 14 it is "not accepting any new business in Russia."

The measures affect HSBC's individual and business customers globally and go further than the bank's previously stated intentions to wind down its relations with lenders such as VTB, which were placed under Western restrictions after Russia invaded Ukraine on Feb. 24.

The moves by Europe's second-biggest bank show how sanctions aimed at Russia's financial system and its political and business elite are also ensnaring Russian nationals outside the country as lenders seek to avoid falling foul of the restrictions and potentially hefty fines.

HSBC had said on March 14 it is "not accepting any new business in Russia," without spelling out what that means for existing or prospective Russian customers in other markets.

The sources said the bank's risk and compliance staff have told business managers to apply extra scrutiny to all prospective clients bearing Russian passports or furnishing Russian addresses, with the result that many more are turned away than would have been in the past.

The checks also extend to dual passport-holders as well as those with links to Belarus, seen as an ally of Moscow, as the bank's staff scramble to ensure they do not inadvertently offer services to sanctioned individuals or businesses.

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