Monday's ruling by a Russian court, imposing over €2 billion in damages on Austria’s Raiffeisen Bank International, underscores the immense financial and compliance-related risks companies face by remaining inert and attempting to bide their time while continuing operations in Russia in pursuit of profits.

“This case highlights that companies are not engaging with an honest broker in the Russian government but are instead dealing with a rogue state that flouts the rule of law. It should be a clear warning to Raiffeisen’s investors and shareholders: the longer a financial institution stays in Russia, the higher the risks,” said Max Hammer, Human Rights Campaigner at BankTrack.

While future losses for Raiffeisen shareholders loom large, the bank also faces the growing risk of complicity in human rights abuses. The landmark ruling comes at the benefit of Rasperia Trading Limited — a company that has been linked to sanctioned oligarch Oleg Deripaska — and places Raiffeisen’s Russian profits at risk of being funnelled into the Kremlin’s network of Putin allies. CSOs such as BankTrack and B4Ukraine have previously alerted businesses to this risk after a series of similar decisions by Russian courts, which have repeatedly ordered international businesses to transfer massive sums to their Russian counterparts.

The bank’s statement that it plans to appeal the verdict is ironic and meaningless in the face of Russia’s lawlessness, compounded by the presence of armed, unidentified individuals in balaclavas at the court hearing. The bank also seeks legal recourse in Austria against Rasperia’s frozen 28.5 million shares in Austrian construction company Strabag. Raiffeisen had previously attempted to purchase these shares by swapping them for its assets in Russia, but the deal fell through in May 2024 following concerns that it would enable Deripaska to circumvent US sanctions.

“Raiffeisen’s attempt to manage this €2bn loss is both unrealistic and irresponsible. By seeking recourse via assets linked to sanctioned oligarch Oleg Deripaska, the bank is playing the Kremlin’s game for it. The only responsible course of action now is for Raiffeisen to exit Russia immediately, without paying off Kremlin-linked oligarchs, which could fuel Russia’s war against Ukraine. The bank should write off its Russian assets, record the loss, and seek international legal remedy,” said Nezir Sinani, B4Ukraine Executive Director.