He may not take shirtless horseback rides across the steppes, or have a black belt in judo, but on Thursday, President Obama sent a message to Russian president Vladimir Putin about strength. Specifically, economic strength.
The message was this: Whenever I decide to, I can pick up a pen, and kill a significant financial institution in your country.
Related: Does Putin Want to Carve Up Ukraine and Take the Spoils?
Obama’s victim was the St. Petersburg-based Bank Rossiya.
In response to Russia’s takeover of the Ukraine’s Crimean peninsula, Obama yesterday authorized the Treasury Department to add 20 members of Putin’s inner circle, as well as Bank Rossiya, to the Office of Foreign Asset Control’s list of “specially designated nationals.”
The designation makes the individuals named ineligible to do business with U.S. financial institutions, which is likely a major personal inconvenience. But for Bank Rossiya, the designation is something like the kiss of death.
Bank Rossiya is not the largest bank in Russia by a long shot, but its significance lies in its clientele rather than its size. In announcing the sanctions, the Treasury Department noted that Bank Rossiya “is the personal bank for senior officials of the Russian Federation” including members of the Ozero Dacha Cooperative, an exclusive community where members of Putin’s inner circle live. In addition, it provides financial services to the single largest segment of the Russian economy – the oil, gas, and energy sector.
Essentially, this is a credit union for oligarchs, with a side business in financing the Russian energy industry. Its customers include many more high-profile Russians than just those named in the Treasury statement. As of Thursday it is, for all intents and purposes, out of business.
Related: How Vladimir Putin Is remaking a New World Order
If account holders want to do any kind of business at all short of paying their utility bills and using Russian ATMs, they are going to need to go elsewhere, said experts.
“They’ve got to go to another bank,” said Lester M. Joseph, former principal deputy chief of the Department of Justice’s Asset Forfeiture and Money Laundering section. “That bank is pretty much a pariah.”
Currently the international investigations manager at Wells Fargo Bank, Joseph said when heard about the sanctions on Bank Rossiya, the first thing he did was check to see if it was a customer of his institution. “It is not, thankfully,” he said.
The impact doesn’t stop there, Joseph explained. His next step, which is ongoing, is to see if any banks that Wells Fargo has relationships with are also doing business with Bank Rossiya, and to make sure that none of those banks are routing transactions from the Russian bank through Wells Fargo’s system. “If a transaction from that bank is coming from another bank, we would have to block it,” he said.