JPMorgan Attacked by Moscow for Invoking Anti-Russian Sanction

JPMorgan has blocked a payment involving a Russian embassy: a move described as "illegal and absurd" by Russia's Foreign Ministry.

JPM prevented a remittance from the Russian embassy in Astana, Kazakhstan, to Sogaz Insurance Group "under the pretext of anti-Russian sanctions imposed by the United States," the ministry said in a statement on its website.

Interfering with the embassy transaction was an "absolutely unacceptable, illegal and absurd decision," Alexander Lukashevich, a ministry spokesman, said in the statement.

Sogaz-Bank Rossiya Ties

Sogaz lists OAO Bank Rossiya, a St Petersburg-based lender facing US sanctions amid the Ukraine crisis, as a strategic partner on its website.

The said transaction amounted to less than $5,000 (£3,004, €3,625), an unnamed source told Bloomberg.

The biggest US bank could still process the payment if US regulators give it the go-ahead, the source added.

"As with all US financial institutions that operate globally, we are subject to specific regulatory requirements," New York-based JPM said in a statement.

"We will continue to seek guidance from the US government on implementing their recent sanctions," the bank added.

Lukashevich said: "Any hostile actions against the Russian diplomatic mission are not only a grossest violation of international law, but are also fraught with countermeasures that unavoidably will affect activities of the embassy and consulates of the US in Russia."

US President Barack Obama authorised action against Bank Rossiya in March as part of an expansion of sanctions that targeted government officials and allies of Russian President Vladimir Putin, whose associates own Rossiya.

Ukraine Crisis

Putin's move to take control of the Crimean peninsula in March ignited Russia's worst conflict with the West since the Cold War.

It triggered US and European Union sanctions on several individuals, while the Group of Seven industrialised nations has threatened Moscow with economic sanctions.

Russia's Finance Ministry has done business with JPM before. It chose the lender to improve the nation's standing among US credit-rating firms.

Putin said in 2011 the rankings given to Russia were an "outrage" as they increased borrowing costs for domestic firms and the government.

Earlier, JPM was among several banks roped in to advise Moscow on a 1tn ruble ($28.5bn) privatisation plan.