Can They Satisfy Foreign Judgments? Key Lessons from the Raiffeisen-Deripaska Case
A developing situation involving sanctioned Russian oligarch Oleg Deripaska, Raiffeisen Bank International (RBI), and the European Union has prompted critical questions about how far sanctions restrictions reach in cross-border enforcement scenarios. Specifically, can frozen assets linked to sanctioned individuals be transferred to satisfy a foreign judgment, even if the underlying claim arises from a politically complex jurisdiction like Russia?
This unfolding episode offers important insight for financial institutions, litigation funders, creditors, and others navigating the evolving interface between sanctions compliance, judgment enforcement, and geopolitical strategy.
The Situation: Raiffeisen, Deripaska, and the Strabag Shares
In 2022, the European Union imposed sanctions on Oleg Deripaska in response to Russia’s invasion of Ukraine, freezing assets linked to him across multiple jurisdictions. Among these were shares in the Austrian construction firm Strabag, allegedly controlled by Deripaska through intermediaries.
Separately, a Russian court entered a judgment for approximately €2 billion in favor of Rasperia Trading Ltd., a Deripaska-affiliated entity, against Raiffeisen Bank International. The judgment arose out of a shareholder dispute tied to RBI’s dealings in Russia. In the aftermath, Austrian officials reportedly floated the idea of unfreezing Deripaska-linked Strabag shares and transferring them to RBI as a form of compensation—a potential workaround that would satisfy the judgment using assets otherwise blocked under the EU sanctions.
This Raiffeisen-Deripaska workaround highlights the gray areas in cross-border judgment enforcement under sanctions—areas where proactive counsel can turn compliance hurdles into strategic opportunities.
Legal and Regulatory Questions Raised
This development raises significant legal and compliance issues:
- Can frozen assets under EU sanctions be used to satisfy private claims? OFAC and EU regimes generally prohibit transfers without authorization, but license applications offer narrow pathways for clients.
- Does transferring sanctioned property to a judgment creditor violate sanctions? Although the sanctioned individual may not derive a direct benefit, utilizing frozen assets to settle liabilities could violate restrictions governing asset transfers.
- What weight should be given to foreign judgments from jurisdictions like Russia? Recognition and enforcement of such judgments in Western courts are already controversial. Using sanctions-related mechanisms to enforce them may compound those concerns.
- How can firms future-proof against sanctions evolution? With U.S. and EU regulators tightening rules on geopolitical enforcement, early compliance audits are critical to avoid multimillion-dollar penalties.
- Could this embolden sanctioned individuals to seek similar outcomes elsewhere? If successful, the Raiffeisen workaround could invite copycat attempts to convert frozen assets into enforcement tools.
Implications for Financial Institutions, Creditors, and Counsel
The RBI–Deripaska case is a cautionary tale for any party operating in or adjacent to sanctioned jurisdictions. Key takeaways include:
- Litigation Risk Exposure: Institutions with Russia-facing exposure may face legal action in foreign courts, with limited ability to defend or recover without triggering sanctions compliance conflicts.
- Asset Recovery Strategy: Creditors seeking to recover judgments against sanctioned counterparties must tread carefully, especially when assets are blocked under sanctions regimes.
- Sanctions Compliance Safeguards: Navigating enforcement involving sanctioned persons demands coordination with expert sanctions counsel, including OFAC-specific license applications, EU derogations, and tailored compliance controls to protect against regulatory scrutiny.
- Regulatory Engagement: Early and transparent engagement with regulators can help mitigate penalties and identify permissible pathways to asset recovery.
Companies can leverage these strategies to recover blocked assets in high-stakes disputes and sanctions-related asset recovery.
Conclusion
The Raiffeisen–Deripaska episode underscores a broader trend: sanctions enforcement is no longer limited to passive asset freezes or list-checking. It now sits at the intersection of litigation, asset strategy, and geopolitical signaling. For stakeholders managing cross-border disputes, enforcement risks, or exposure to sanctioned jurisdictions like Russia, proactive legal strategy and compliance planning are essential.
