U.S. sanctions on Russian businesses and individuals are widely disliked, the president and chairman of Russia’s VTB Bank told CNBC Tuesday.
“Nobody likes American sanctions, and Europeans (don’t like them) as well,” VTB Bank’s Andrey Kostin told CNBC at the World Economic Forum in Davos.
The U.S. and EU, along with other western nations, placed sanctions on Russia for its annexation of Crimea from Ukraine in 2014, and its role in a subsequent pro-Russian uprising in the east of the country. The sanctions affected certain Russian sectors, including the financial industry, entities and individuals.
Majority state-owned VTB bank was placed on a U.S. Ukraine-related sanctions list in 2014. Andrey Kostin was added to a 2018 list of sanctioned individuals as he was deemed to be a government official. He told CNBC last May that the decision to put him on the list was “unfair.”
European companies doing business with Russia, specifically on the construction of the ‘Nord Stream 2’ gas pipeline project, have also been threatened with secondary sanctions by the U.S.
Kostin said that threat was a negative development but said there were better chances to a rapprochement with Europe if relations surrounding Ukraine improved.
“I don’t think European companies like (the secondary) sanctions that they’re facing either on (doing business with) Iran or Russia. And it creates certain restrictions for the development of relations between Russia and Europe as well, particularly on the Nord Stream 2 (gas pipeline project) although the project will still go ahead, as far as I understand. Of course, it’s future is not quite clear though.”
Commenting on the wider global outlook as world leaders and business heads meet in Switzerland at the annual economic forum, Kostin said he had little expectation of the U.S.’ trade war with China and its fraught relations with Russia being resolved any time soon.
“From the meetings I’ve had in Davos over the last couple of days, I’ve heard the opinion from American counterparts that we shouldn’t expect for the next two years any change of heart on the part of the U.S. administration regarding Russia or China. So I’m afraid we have a couple of years ahead where we’ll not be in a position to change this trend very much,” he said.
Kostin suggested it was becoming harder for Russia to forge alliances, saying “the problem is that I think it’s more and more difficult for Russia to find a counterpart with whom we should agree on certain things.”
He added that global economic growth could be at risk as a result of fractious global relations.
“Davos was always about globalization and freedom of trade and the development of cooperation and what we’re seeing now is a lot of conflicts between different countries in the area of trade, the economy and conflicts inside countries like growing division in the U.S. … so it all raises concerns about future economic growth.”
