Russia’s top banker warns sanctions retaliation could backfire

MOSCOW: German Gref, the head of Russia’s biggest bank Sberbank, said a proposed law that could result in people being jailed for helping enforce US sanctions would backfire on the Russian economy if implemented.

The draft legislation has exposed divisions within Russia’s ruling elite over how to react to Washington’s latest round of sanctions. Pro-Kremlin hawks want a tough response, while economic liberals, also allied to the Kremlin, say that could hurt the fragile economy.

In an interview with Reuters, Gref said criminalising compliance with US sanctions could force international firms to pull out of Russia.

“This law ... will hit all public companies very hard, not to mention the banking sector,” said Gref.

“It will be a problem for all foreign investors. I fear that, in a choice between coming under American sanctions or writing off their Russian investments, they will chose the second option.”

Gref is a former economy minister and one of the leading advocates of liberal economic policies in Russia’s ruling establishment.

The draft law, backed by Kremlin loyalists, has been approved at first reading in the State Duma, the lower house of parliament.

A second reading has been put on hold pending consultation with business leaders.

President Vladimir Putin said last week lawmakers backing the legislation were guided by “emotional considerations” and that the response to US sanctions should be balanced. — Reuters