NASSAU, BAHAMAS — The Russian Federation has added The Bahamas to the list of jurisdictions, against which Russian entities have been authorized to settle obligations in roubles, for arrangements that were made in foreign currencies such as the United States dollar.
The Ministry of Foreign Affairs said the country was reportedly listed as a result of “unfriendly acts”.
“The initial reaction to this is that the impact is more symbolic than real. The Central Bank is being asked to comment. We have committed no unfriendly acts against Russia in the objective sense of that word.”
The Central Bank addressed The Bahamas’ banking sector exposure to financial measures taken by the Russian Federation in a statement yesterday.
The regulator explained this would impact credit and other claims due from Russia, to entities and individuals who are domiciled in The Bahamas.
However, it noted that the level of direct exposure to Russian entities
“Outcomes of this nature were expected,” the statement read.
“The Central Bank of The Bahamas does not anticipate any material impact of the measures on Bahamas-based banks and trust companies. The level of direct exposures to Russian entities remains below thresholds that would destabilize the operations of any affected Bahamian financial institution.
It added: “Based on the Central Bank’s recent survey, Russian exposures held in The Bahamas equated to around one percent of the system’s total deposits and about the same fraction of custodial assets.”
The bank also advised supervised financial institutions that the directives issued by the Bahamas Group of Financial Services Regulators on March 12, remain in force.
In March, The Bahamas joined the list of western countries that have imposed sanctions on the financial resources of Russian businesses and oligarchs.
It was the first time the country has introduced sanctions in the absence of a resolution from the United Nations Security Council (UNSC) and follows a formal request from the United States for the country to take direct action against Russia’s invasion of Ukraine.
According to the UN refugee agency, UNHCR, millions have fled Ukraine since the war began with Russia’s invasion on February 24.
The sanctions are essentially two measures: the Attorney General has directed local regulators to report on whether any of the entities flagged by the US have local dealings, and the second is a directive from local financial regulators for institutions to adopt the restrictions imposed by the US, UK, and the EU.
The Central Bank of The Bahamas previously indicated that the offshore sector holds US$420 million in deposits and US$2.5 billion in custody or trust assets with ultimate beneficial owners from or connected to Russia.
