Villa Foch in Luxembourg City, head office of East-West United Bank since 1977

East-West United Bank (French: Banque Unie Est-Ouest) is a bank based in Luxembourg, established on 12 June 1974 by the Gosbank, the Soviet Union's central bank.[1] It has been fully owned by Russia-based Sistema since 2018.[2] The bank offered private banking[3] and corporate financing.[4] Since the Russian invasion of Ukraine in February 2022 the bank has had to surmount many problems. Unable to sell the business, Sistema took the decision in late 2023 to close the bank.

History

The East-West United Bank was founded on 12 June 1974 by the Gosbank and Vneshtorgbank, with the support of Luxembourg Prime Minister Pierre Werner.[lower-alpha 1] The shareholding structure associating Gosbank and VTB lasted until 1992.[6][7][8]

From 1992 to 2000, Imperial Bank had a major stake in EWUB of 49%[6][7][8] and Tokobank,[lower-alpha 2] which collapsed after the 1998 Russian financial crisis began on 17 August 1998, held a 28% stake in EWUB in 1998,[11][12] but, on 17 April 2000, Imperial Bank was dissolved.[13] Imperial Bank focused on oil and natural gas supplies to East Germany and later to Germany including the oil-for-pipes program.[14][15][lower-alpha 3]

When VTB had a major stake in EWUB from 2000 to 2007, EWUB was one of the five foreign banks of Russia's VTB banking network.[6][7][8][16][17][lower-alpha 4]

Beginning in 2001, the Vladimir Yevtushenkov led Sistema gained a stake in EWUB.[16] Through Sistema's subsidiary Moscow Bank for Reconstruction and Development (MDRB) (Russian: Московский банк реконструкции и развития «МБРР»), which was established in 1993 with Sistema as a shareholder since 1994, Sistema controlled a 49% stake in East-West United Bank (EWUB) in February 2005 and, since 2007 Sistema has had the majority stake in EWUB.[6][7][8][17]

In 2018, Sistema became 100% owner of EWUB with Sergei Pchelintsev (Russian: Сергей Алексеевич Пчелинцев) as the CEO.[22][23][24][25][26]

According to a declaration given on 18 October 2018 in Spanish court by Sergey Dozhdev (Russian: Сергей Дождев), Igor Sechin uses his offshore companies to control Sistema through MTS and Bashneft.[27][28][29][lower-alpha 5]

In 2020, EWUB had €677 million in assets.[1]

On 27 June 2020, Etienne Schneider became an independent director of Sistema and his close political friend Jeannot Krecké was a director at Sistema beginning in May 2012.[30][16] In March 2022, Krecké at Sistema and Schneider at EWUB resigned from their positions on their respective boards after public pressure resulting from the 2022 Russian invasion of Ukraine.[31][32]

The Luxembourg bank was put up for sale once Sistema made the decision in October 2022, considered solvent with 10.7 billion rubles of assets and 4.8 billion rubles of liabilities. Bank assets were sold through 2023 creating liquidity however by the end of the year, it was decided to close the bank, with professional parties being given an exemption from sanctions to undertake a swift close down.[33]

Sanctions

Following the February and March 2022 sanctions issued against VTB and its subsidiaries which include the former daughter banks of the Soviet Union's State Bank Gosbank and later the Central Bank of Russia, EWUB in Luxembourg has become the principal Russian overseas bank in Europe after Gazprombank's liquidation.[34] As of early April 2022, Yevtushenkov, Sistema, and its subsidiary East-West United Bank (EWUB) in Luxembourg have not been sanctioned due to Russian interference in Ukraine,[34][35] even though some of the bank's directors resigned in early March 2022.[36] As of 2022, Russian billionaires are known to be beneficiaries of the bank.[37]

In November 2023 the bank was sanctioned by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) under E.O. 14024 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Sistema.[38] Authority was given by the US Department of Treasury to undertake bank wind down procedures until 31 January 2024, provided any funds recovered are placed in a blocked account.[39]

Head office

The EWUB is headquartered at Villa Foch, a historic property on 10, Boulevard Joseph II in Luxembourg. The villa was erected in 1891 for Alsatian businessman Jean-Henri Thierry and his wife Catherine Rückert on a design by architect Charles Mullendorff. In the final stages of World War I, it was used by Supreme Allied Commander Ferdinand Foch for his headquarters, from which it retains its name. The EWUB acquired it in 1976 and moved in the next year after renovation.[40] It was renovated again in 2010-2012.[6] The EWUB also maintains an office in a nearby building at 26, avenue Monterey.

Leadership

Notes

  1. ↑ In additional to Gosbank and Vneshtorgbank, other shareholders included the Sovzagranbanks: Moscow Narodny Bank Limited (MNB), Banque Commerciale pour l'Europe du Nord – Eurobank, Wozchod Handels Bank of Zurich, Ost-West Handelsbank, and the Russo-Iranian Bank (RIB) also known as Rusiranbank (Russian: Русиранбанк)[5]
  2. ↑ The Interindustry Commercial Bank for the Development of Wholesale Trade which is also transliterated as Intersectoral Commercial Bank for the Development of Wholesale Trade (Russian: Межотраслевой коммерческий банк развития оптовой торговли) or TOKOBANK (Russian: ТОКОБАНК) was founded in 1989 by the all-powerful State Supply of the USSR (Gossnab) with its territorial branches, the State Insurance of the USSR (Gosstrakh), the Administration of the Affairs of the Central Committee of the Komsomol, the Ministry of Marine of the USSR (Minmorflot), MGA of the USSR, Ministry of Montazhspetsstroy of the USSR, Agrobank of the USSR, the 1987 established Sberbank of the USSR, commercial banks, many large enterprises and cooperatives (Russian: Госснаб СССР с его территориальными отделениями, Госстрах СССР, Управление делами ЦК ВЛКСМ, Минморфлот СССР, МГА СССР, Минмонтажспецстрой СССР, Агробанк СССР, Сбербанк СССР, коммерческие банки, множество крупных предприятий и кооперативов.) In 1995, TOKOBANK was headed by Viktor Yakunin (Russian: Виктор Якунин).[9][10]
  3. ↑ With Vnesheconombank managing Soviet debt, Imperial Bank speculated in GKOs but collapsed with the demise of the GKO market following the 1998 financial collapse in Russia.[14]
  4. ↑ VTB has the western subsidiaries of the Central Bank of Russia and, before the dissolution of the Soviet Union, the daughters of the Soviet Union's Gosbank which were the 1921 established and Leonid Krasin associated Banque commerciale pour l'Europe du Nord or BCEN-Eurobank in Paris, Moscow Narodny Bank in London, the 1971 established Ost-West Handelsbank (OWH) in Frankfurt, the 1974 established Donau Bank in Vienna, and East-West United Bank in Luxembourg.[18] In order to financially assist Communist Parties, anti-imperialism, and pro national liberation movements worldwide, these banks acted as subsidiaries or daughters to their "mother" Gosbank, which was the central bank of Russian Soviet Federative Socialist Republic (Russia) from 1921-1922 and the Soviet Union from 1923-1991. These banks only support the Kremlin's objectives.[19][20][21]
  5. ↑ Sergey Dozhdev (Russian: Сергей Дождев) stated "The real Russian mafia is those who rule the world. In particular, it includes Igor Sechin, a man who took over Sistema through Bashneft and MTS using his offshore companies. The Rotenberg brothers, who control the Platon Company, are in the mafia too. 75 percent of Platon belongs to offshore companies, which the Rotenbergs use to siphon off money to Europe. Arnold Tamm used to co-own Sistema. However, he had a disagreement with the Rotenberg brothers, and Herman Gref ceased the refinancing of loans through his son Arkady. The company incurred artificial liabilities, and Sechin bought it at a low price through offshore companies."[27]
  6. ↑ Vladimir Georgievich Malinin (Russian: Владимир Георгиевич Малинин; 29 June 1940 Moscow, Soviet Union - 4 February 2021 Vienna, Austria) graduated from the Financial University in 1963 with a degree in economics. From 1964 to 1968, he was at Vneshtorgbank of the USSR as an inspector, senior economist, senior consultant, head of the foreign exchange and cash operations department, and from 1968 to 1969 he was the Deputy Chief Accountant. From 1969 to 1970, he was at Moscow Narodny Bank Limited in London and then transferred to its Beirut branch and from 1970 to 1971, he was the chief accountant under Viktor Gerashchenko and from 1971 to 1974, the deputy general manager under Tomas Alibegov. After EWUB, Malinin returned to Vneshtorgbank of the USSR and from 1984 to 1985 was the head of the foreign bank loans department then in 1985 was the head of the department for monitoring the operational activities of overseas Soviet banks until February 1988 when he became the Deputy Chairman of the Board of the Vnesheconombank of the USSR until December 1990. He moved to Vienna and from December 1990 to April 1996, he was Chairman of the Board of Donau Bank. In 2012, he became an independent director at Vozrozhdenie Bank and served on its board of directors until his death in 2021.[41][42]
  7. ↑ In September 2002, Yury Ponomaryov became a co-chairman of the board of directors, managing director of the Russian-owned East-West United bank (EWUB) in Luxembourg, where he worked in charge of accounting until 1 June 2005. Sergey Valentinovich Pavlov was a co-chairman at EWUB and was in charge of lending at EWUB. Beginning in 1990, Sergey Pavlov was an intern at EWUB.[47]

References

  1. 1 2 "East-West United Bank is in the clear for now". delano.lu. Archived from the original on 2022-03-27. Retrieved 2022-03-31.
  2. ↑ "Luxembourg cuts ties with honorary consul Valery Gergiev". delano.lu. Archived from the original on 2022-03-31. Retrieved 2022-03-31.
  3. ↑ "East-West United Bank (EWUB) | GSL". GSL Law & Consulting. Archived from the original on 2022-03-31. Retrieved 2022-03-31.
  4. ↑ "East-West United Bank appoints David Hagen to board of directors". Luxembourg Times. 2021-07-22. Archived from the original on 2022-03-31. Retrieved 2022-03-31.
  5. ↑ "Soviet and East European-owned banks in the West" (PDF). CIA. December 1975. Archived from the original (PDF) on 16 October 2023. Retrieved 13 October 2023. See page B-9.
  6. 1 2 3 4 5 "East-West United Bank (EWUB). Our History: Ownership History". East-West United Bank S.A. April 2022. Archived from the original on 6 April 2022. Retrieved 5 April 2022.
  7. 1 2 3 4 "East-West United Bank (EWUB). Our History: Ownership History". East-West United Bank S.A. April 2022. Archived from the original on 6 April 2022. Retrieved 5 April 2022.
  8. 1 2 3 4 SABIR, USMAN (14 May 2021). "SUBSIDIARY BANK OF SISTEMA PJSFC: EAST-WEST UNITED BANK IN LUXEMBOURG". International Press Service News Agency (IPS) (ipsnews.net). Archived from the original on 6 April 2022. Retrieved 5 April 2022.
  9. ↑ Вачнадзе, Георгий Николаевич (Vachnadze, Georgy Nikolaevich) [in Russian] (1992). "Журналы «Москоу мэгэзин» и «Бурда»" [Magazines "Moscow Magazine" and "Burda"]. Секреты прессы при Гобачеве и Ельцине [Secrets of the press under Gobachev and Yeltsin] (PDF) (in Russian). Moscow: АО «Книга и бизнес» (K448). ISBN 5-212-00772-0. Archived from the original on 27 October 2023. Retrieved 27 October 2023.{{cite book}}: CS1 maint: multiple names: authors list (link) See page 186-187 in book in CHAPTER VI: PRESS FOR BUSINESS PEOPLE (ГЛАВА VI: ПРЕССА ДЛЯ ДЕЛОВЫХ ЛЮДЕЙ). The section Magazines "Moscow Magazine" and "Burda" is pages 186-192 and is in CHAPTER VI. book archive
  10. ↑ "Гусинский Владимир Александрович. Общие сведения" [Gusinskiy Vladimir Aleksandrovich. Overview]. Агентство политических новостей (www.apn.ru) (in Russian). 8 July 1999. Retrieved 27 October 2023.
  11. ↑ ""Дочерние" российские зарубежные банки и сеть ВТБ: доли ЦБ, ВТБ и др" [Russian Foreign "Daughter" Banks and the VTB Network: stakes held by Central Bank, VTB, others]. compromat.ru. February 2005. Archived from the original on 27 March 2022. Retrieved 5 April 2022.
  12. ↑ Бирман, Александр (Birman, Alexander) (21 February 2005). "В советских сетях: Нефтедоллары пойдут по проверенным каналам загранбанков" [In Soviet networks: Oil dollars will go through proven channels of foreign banks]. ООО Журнал «КО» (ko.ru). Archived from the original on 13 March 2005. Retrieved 5 April 2022.{{cite news}}: CS1 maint: multiple names: authors list (link)
  13. ↑ Юрьев, Виктор (Yuryev, Viktor) (26 May 2000). "ВСЕМИРНАЯ ИСТОРИЯ БАНКРОТСТВ-3: Новое руководство "Империала" возвращается на рынок банковских операций" [WORLD HISTORY OF BANKRUPTCY-3: The new management of "Imperial" returns to the banking market]. Nezavisimaya Gazeta (ng.ru) (in Russian). Archived from the original on 20 June 2000. Retrieved 5 April 2022.{{cite news}}: CS1 maint: multiple names: authors list (link)
  14. 1 2 Седунов, Александр (Sedunov, Alexander) (17 August 2015). "25 лет Всемирной Истории с Банком Империал" [25 years of World History with Imperial Bank]. Information Agency InterRight (in Russian). Archived from the original on 23 March 2022. Retrieved 5 April 2022.{{cite news}}: CS1 maint: multiple names: authors list (link)
  15. ↑ leptosis.org staff (February 2020). "Столяренко, Владимир Михайлович" [Stolyarenko, Vladimir Mikhailovich]. АНО «Экономическая летопись» (leptosis.org) (in Russian). Archived from the original on 11 February 2020. Retrieved 5 April 2022.
  16. 1 2 3 "Étienne Schneider élu administrateur chez Sistema" [Étienne Schneider elected director at Sistema]. paperJam (paperjam.lu) (in French). 3 July 2020. Archived from the original on 3 August 2021. Retrieved 3 August 2021.
  17. 1 2 "Les 45 ans d'East-West United Bank célébrés" [Celebrating 45 Years of East-West United Bank]. paperjam.lu (in French). 19 September 2019. Archived from the original on 3 August 2021. Retrieved 3 August 2021.
  18. ↑ Stern, Babette; Duparc, Agathe (10 October 1999). "La Cour des comptes russe dénonce l'opacité des filiales étrangères de la Banque centrale: Un rapport de la Cour des comptes de Moscou, commandé par la Douma, critique sévèrement la gestion des filiales étrangères de la Banque centrale de Russie. Cinq filiales sont épinglées, dont la Banque commerciale pour l'Europe du Nord, à Paris, maison-mère de Fimaco et chargée d'investir les réserves de la BCR à l'étranger" [The Russian Court of Auditors denounces the opacity of the foreign subsidiaries of the Central Bank: A report by the Moscow Court of Auditors, commissioned by the Duma, severely criticizes the management of the foreign subsidiaries of the Central Bank of Russia. Five subsidiaries are pinned, including the Commercial Bank for Northern Europe, in Paris, parent company of Fimaco and responsible for investing the reserves of the BCR abroad]. Le Monde (in French). Archived from the original on 27 March 2022. Retrieved 7 April 2022.
  19. ↑ Сухотина, Инна (Sukhotina, Inna) (10 November 2003). "Сколько стоит приданое "дочек" Банка России?" [How much is the dowry of the "daughters" of the Bank of Russia?]. «Российская газета» (Rossiyskaya Gazeta) (in Russian). Archived from the original on 29 November 2003. Retrieved 7 April 2022.{{cite news}}: CS1 maint: multiple names: authors list (link)
  20. ↑ "Виктор Константинович Якунин: Нашим возможностям соответствовал, Ost-West Handelsbank" [Victor Konstantinovich Yakunin: Our capabilities matched, Ost-West Handelsbank] (PDF). letopis.ru (in Russian). Archived from the original (PDF) on 13 August 2021. Retrieved 7 April 2022.
  21. ↑ Симонов, Дмитрий (4 May 1992). "Выкуплен первый совзагранбанк: Чьи деньги, Зин?" [The first sovzagranbank was redeemed: Whose money, Zin?]. Коммерсантъ (in Russian). Archived from the original on 8 April 2022. Retrieved 7 April 2022.
  22. ↑ "EWUB – Наша история" [EWUB - Our history]. ewub.lu website (in Russian). 27 April 2021. Archived from the original on 27 April 2021. Retrieved 3 August 2021.
  23. ↑ "EWUB – Управляющие директора" [EWUB – Managing directors]. ewub.lu website (in Russian). 28 April 2021. Archived from the original on 28 April 2021. Retrieved 3 August 2021.
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  27. 1 2 Кириленко, Анастасия (2 April 2019). "On the death of Tamm: Solntsevskaya gang's ties to FSB and United Russia". The Insider. Retrieved 5 April 2022.
  28. ↑ "Sergey Dozhdev's statement on Gref and Sechin – Spain". Transborder Corruption Archives (tbarchives.org). 17 October 2018. Archived from the original on 30 March 2022. Retrieved 5 April 2022.
  29. ↑ "Report on the SOLNTSEVSKAYA criminal organization". Transborder Corruption Archives (tbarchives.org) (in Russian). 5 November 2018. Archived from the original on 30 March 2022. Retrieved 5 April 2022.
  30. ↑ "Sistema Board Recommends to the AGM to elect three new Independent Directors". AFK Sistema. 31 May 2012. Archived from the original on 3 September 2017. Retrieved 3 August 2021.
  31. ↑ "Former LSAP Ministers: Jeannot Krecké and Etienne Schneider step down from controversial board positions". today.rtl.lu. Archived from the original on 2022-03-31. Retrieved 2022-03-31.
  32. ↑ "Sodrugestvo: More people of influence linked to firms with Russian ties". today.rtl.lu. Archived from the original on 2022-04-24. Retrieved 2022-03-31.
  33. ↑ "Sistema preparing to sell Luxembourg-based East-West United Bank". 11 April 2023.
  34. 1 2 Fassone, Marc (28 February 2022). "SANCTIONS AGAINST RUSSIAN INTERESTS: East-West United Bank is in the clear for now". Delano (delano.lu). Archived from the original on 27 March 2022. Retrieved 5 April 2022.
  35. ↑ Strohecker, Karin (25 February 2022). "Explainer: How Western sanctions target Russia". Reuters. Archived from the original on 27 March 2022. Retrieved 5 April 2022.
  36. ↑ "Patrick Santer leaves Sodrugestvo". delano.lu. Archived from the original on 2022-03-31. Retrieved 2022-03-31.
  37. ↑ "One-third of Forbes' top 40 Russian oligarchs own Luxembourg companies". Delano (delano.lu). Archived from the original on 2022-03-31. Retrieved 2022-03-31.
  38. ↑ "Treasury Hardens Sanctions With 130 New Russian Evasion and Military-Industrial Targets". 2 November 2023.
  39. ↑ "OFFICE OF FOREIGN ASSETS CONTROL Russian Harmful Foreign Activities Sanctions Regulations 31 CFR part 587 GENERAL LICENSE NO. 74". 3 November 2023.
  40. 1 2 Natalie A. Gerhardstein (8 July 2021). "EWUB headquarters at Villa Foch". Delano (delano.lu).
  41. 1 2 "Малинин, Владимир Георгиевич" [Malinin, Vladimir Georgievich]. «ФИНАНСОВЫЙ УНИВЕРСИТЕТ: ГОДЫ И ЛЮДИ» (fa100.ru) (in Russian). 2022. Archived from the original on 8 April 2022. Retrieved 7 April 2022.
  42. 1 2 "Малинин, Владимир Георгиевич: биография" [Malinin, Vladimir Georgievich: Biography]. «ФИНАНСОВЫЙ УНИВЕРСИТЕТ: ГОДЫ И ЛЮДИ» (fa100.ru) (in Russian). 2022. Archived from the original on 8 April 2022. Retrieved 7 April 2022.
  43. ↑ "Павлов, Сергей Валентинович" [Pavlov, Sergey Valentinovich]. fa100.ru (in Russian). Archived from the original on 25 October 2023. Retrieved 25 October 2023.
  44. ↑ "Павлов Сергей Валентинович" [Pavlov Sergey Valentinovich]. fa100.ru. Archived from the original on 25 October 2023. Retrieved 25 October 2023.
  45. 1 2 "East-West United Bank: eine Frau an der Spitze: Svetlana Fedotova ist neuer Managing Director und Verwaltungsratsmitglied der East-West United Bank S.A. in Luxemburg. Sie löst Sergey Pavlov ab" [East-West United Bank: a woman at the helm: Svetlana Fedotova is the new Managing Director and member of the Board of Directors of East-West United Bank S.A. in Luxembourg. She replaces Sergey Pavlov.]. wort.lu (in Luxembourgish). 6 April 2013. Archived from the original on 25 October 2023. Retrieved 25 October 2023.
  46. ↑ Избран новый совет директоров МБРР 27 April 2010
  47. ↑ Кротов, Николай Иванович (Krotov, Nikolay Ivanovich) [in Russian] (2007). ИСТОРИЯ советских и российских банков за границей: Воспоминания очевидцев Документы Том 1 (1917-2017) [HISTORY Soviet and Russian banks Abroad: Memories eyewitnesses Documentation Volume 1 (1917-2017)] (PDF) (in Russian). Moscow: АНО «Экономическая летопись» (ANO "Economic Chronicle") (letopis.ru). ISBN 978-5-903388-08-0. Archived from the original (PDF) on 29 August 2023. Retrieved 30 October 2023.{{cite book}}: CS1 maint: multiple names: authors list (link) See pages 74 and 294.
  48. ↑ "Новым управляющим Директором и членом Совета Директоров Ист-Вест Юнайтед Банка С.А. назначена Светлана Федотова.
  49. ↑ Nickels, Marina (7 September 2015). "East-West United Bank: Сергей Пчелинцев заменит Светлану Федотову" [East-West United Bank: Sergey Pchelintsev will replace Svetlana Fedotova]. ru.russki.lu (in Russian). Archived from the original on 25 October 2023. Retrieved 25 October 2023.
  50. ↑ "Sergey Pchelintsev". Delano (delano.lu). Archived from the original on 20 September 2019. Retrieved 25 October 2023.
  51. ↑ Менг, Марко (Meng, Marco) (20 June 2019). "«МЫ – УНИКАЛЬНАЯ КОМБИНАЦИЯ»" ["WE ARE A UNIQUE COMBINATION"]. Сноб (snob.ru) (in Russian). Archived from the original on 4 March 2021. Retrieved 25 October 2023.{{cite news}}: CS1 maint: multiple names: authors list (link)
  52. ↑ БАЙБАКОВ, АЛЕКСЕЙ (BAIBAKOV, ALEXEY) (18 June 2003). "Доллар сбрасывает вес: валютный рынок" [Dollar loses weight: currency market]. Kommersant (in Russian). Retrieved 25 October 2023.{{cite news}}: CS1 maint: multiple names: authors list (link)
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