The Supreme Court of the Russian Federation will review, for the first time, a dispute between the company IS TEKS and the legal successor of Promsvyazbank (PSB) regarding funds that were blocked during an international transfer. This development has attracted attention from business circles concerned about sanctions and their practical impact on cross‑border payments, and it has sparked discussion about how financial fault lines are navigated when sanctions are involved.
In March 2022, IS TEKS directed Moscow Industrial Bank to move 59.4 thousand dollars to Kazakhstan to settle a supply agreement. The plan hit a snag when, on May 6, Promsvyazbank fell under U.S. sanctions and the U.S. bank BNY Mellon blocked the transfer. The move effectively froze the payment in the pipeline between the intermediary financial institutions and the intended recipient, raising questions about liability and operational compliance under rapidly shifting sanctions regimes.
IS TEKS proceeded to the courts, arguing that Promsvyazbank violated the agreed transfer conditions by replacing the designated intermediary bank without the company’s consent. The case progressed through the judiciary, and the three lower courts ultimately ordered the bank to compensate IS TEKS the full amount of 59.4 thousand dollars, ruling in favor of the company on the merits of the blocked transaction.
Promsvyazbank, which has inherited MinBank as its legal successor, challenged the decisions in the Supreme Court. The bank contends that its actions adhered to existing settlement practices and that sanctions were not foreseeable at the time of the transaction, asserting that it did everything within the framework of standard banking procedures that govern sanctions compliance and correspondent banking relationships.
Observers note that the Supreme Court’s ruling in this case could have broad consequences for many companies and individuals whose funds were blocked due to sanctions on Russian financial institutions. The outcome may clarify questions about liability for intermediary banks, the interpretation of settlement agreements under sanctions, and the responsibilities banks bear when bypassed or altered payment routes are involved in international trade and finance.
Analysts point out that the decision could influence how firms structure cross‑border payments moving forward, including how they assess risk, select correspondent banks, and document compliance for international transactions. The debate also touches on risk management strategies for sanctions compliance, the legal exposure of successor financial institutions, and the potential need for clearer guidelines to prevent similar disputes in the future. The evolving landscape of sanctions continues to shape the behavior of banks and their corporate clients, prompting a reassessment of settlement practices and dispute resolution mechanisms in cross‑border commerce.
In related discussions, industry experts have recently highlighted possible consequences of restrictions on withdrawing rubles abroad and the broader implications for foreign exchange flows. The central bank’s policies on non‑resident funds and the evolving regulatory environment add further layers to the ongoing conversation about how sanctions intersect with everyday financial operations and the risks faced by companies engaged in international trade. The evolving scenario underscores the need for robust risk assessment and careful navigation of sanctions regimes by financial institutions and their customers. [citation]