The US Treasury Secretary warned German banks about the consequences of circumventing sanctions against Russia

The day before, US Treasury Secretary Janet Yellen called on the heads of German banks to step up efforts to comply with sanctions against Russia and stop trying to circumvent them. Otherwise, the banks themselves will fall under secondary sanctions that will block access to the dollar.

She stated this at a meeting with representatives of the banking sector in Frankfurt, Reuters reports.

Western banks, in particular the German Deutsche Bank and Commerzbank, are in no hurry to leave the Russian market. Last year, the largest Western banks that remained in the Russian Federation paid more than €800 million in taxes there. This is four times more than in the pre-war period.

Yellen recalled the new authority of the US Treasury Department to apply secondary sanctions to banks if they facilitate Russian military operations. The Minister of Finance noted that it helped thwart Russiaʼs efforts to purchase certain goods needed for the war against Ukraine, but it is necessary to continue working on it.

"I urge all institutions to take increased action and focus on Russiaʼs attempts to evade sanctions," Yellen said.

According to her, the Russian Federation desperately wants to get critical goods from countries with developed economies, such as Germany and the USA.

"We must remain vigilant to prevent the Kremlinʼs ability to strengthen its defense industrial base and gain access to our financial systems to do so," Yellen said.

However, she later said the Treasury Department would be "judicious" in applying any secondary sanctions to the banks, and executives she met with expressed a "very strong commitment" to doing their part.

Yellenʼs warning came shortly after the US Treasury Department forced Austriaʼs Raiffeisen Bank, Russiaʼs largest western bank, to back out of a €1.5 billion stake in an industrial stake linked to Russian oligarch Oleh Derypaska.