US threatens Russian payment system with sanctions

Natalia Trushina

The US Office for Foreign Assets Control (OFAC) has warned financial institutions in third countries against expanding cooperation with the Mir payment system. Immediately, the first disturbing reports began to appear from Turkey, where Russian tourists had problems using these cards. Whether the United States will be able to block the development of the Russian payment system, which countries may refuse to accept domestic payment cards, experts told MK.
As confirmation of the seriousness of the intentions of the US authorities, the head of the National Payment Card System (NSPK) Vladimir Komlev and the chairman of the board of the National Settlement Depository Viktor Zhidkov were included in the sanctions list. “This is a prohibited method of international financial pressure,” says the director of the Institute for the Economics of Growth. Stolypin Anton Sviridenko. “They want to limit competition, but there is no global antitrust agency for these actions.” NSPK is technically independent, it belongs to the state. This is a long overdue project, and if it had started 15 years ago, today it would be easier for us, the expert emphasized.
And although the situation with the work of Mir cards in Turkey soon cleared up – the NSPK said that everything was functioning normally, however, acquiring banks can reject transactions with cards of sub-sanctioned banks – the sediment remained. It turns out that even before the imposition of official sanctions, according to a mere message from the US authorities, the Mir cards of Russians can be blocked overnight abroad. Now the cards of the Russian payment system can be used in 11 states – Armenia, Be-larus, Vietnam, Kazakhs-tan, Kyrgyzstan, Turkey, Tajikistan, Uzbekistan, South Korea, South Ossetia and Abkhazia. There are plans to expand the list of host countries to 35 by 2030. Negotiations are alre-ady underway with Thaila-nd, Egypt, the United Arab Emirates, Cuba, Indonesia, India, Sri Lanka and China.
Experts disagreed whether all states. Favorably related to domestic cards, they will be ready to block their work on their territory “on a whistle” from Washington. “Most likely most countries. Those hosting Mir will refuse to continue such cooperation, fearing retaliatory measures from the United States and the West,” said Vladimir Kuznetsov, vice president of the Association of Lawyers for Registration, Liquidation, Bankruptcy and Legal Representation.
And Igor Semenovsky, a senior lecturer at the Financial University under the Government of the Russian Federation, notes that the financial sector, international settlements are the very areas where the US has the widest opportunities to influence other states. According to the expert, of the 11 countries where the Mir card is accepted, South Korea is the most dependent on the United States: there, in the event of a negative development of events, its use may be limited in the first place. It is followed by Turkey in terms of dependence. The least dependent on the US are Belarus, Kyrgyzstan, South Ossetia and Abkhazia. Between them are Vietnam, Armenia, Uzbekistan, Kazakhstan and Tajikistan. “Restriction of use is possible through the financial institutions of these countries: central banks, ministries of finance, which issue mandatory instructions to their credit institutions, – the scientist described the possible sequence of actions by the United States. “In addition, significant banks and other financial organizations that interact with the Russian payment system and use it in their work can directly fall into the sanctions list of the US Treasury.” This was done, perhaps, among other things, to create a precedent so that others would be discouraged – and this is a real threat.
The countries of the near abroad, where you can also use Mir cards, are economically closely interconnected with Russia. “The United States is well aware of this, therefore their warning is directed not at current NSPK partners, but at potential ones,” continues the conversation, the head of the department for working with wealthy clients of Fontvielle Investment Company, Sergey Solovykh. — Each case should be considered separately. So, for example, the American warning, which is under sanctions, Cuba or Iran, on the contrary, may stimulate to work more actively with Russian cards.” Egypt, Thailand and the Maldives have a stable income due to the tourist flow of tourists from Russia, and they are unlikely to want to lose it. The rest will also make decisions based on economic and political ties with the United States or the Russian Federation, the expert believes.
According to the Executive Director of InDeFi Smart Bank Sergey Mendeleev, the United States has effective mechanisms to put pressure on other countries. “Just remember the cards of the Chinese UnionPay system, the release of which is curtailed in the Russian Federation, but I don’t think that at least somewhere in Abkhazia they know what OFAC is,” he ironically. “Yes, with Thailand and South Korea, most likely, there will be difficulties, but with Turkey it is unlikely, or Erdogan will put forward such conditions to the West that Wishlist for Finland’s entry into NATO will seem like child’s play.” Of course, any political will can be backed up by specific technical actions, such as closing dollar correspondent accounts for banks involved in the processing of Mir system transactions. But you need to understand that by declaring a boycott consistently around the circle, you can suddenly find yourself in the minority, especially since
But even in the most negative scenario, blocking Mir cards abroad will not lead to economic problems in Russia. “The volume of cross-border payments using Mir cards, although growing, is still inferior to the volume of domestic Russian ones,” says Associate Professor of the Department of Organizational and Managerial Innovations of the PRUE. Plekhanov Mikhail Khachaturian. — Thus, according to the Central Bank of the Russian Federation, the volume of settlements within the framework of the NSPK in 2021 within Russia amounted to 1,821.5 billion rubles, and outside it – 77.7 billion rubles, so potential sanctions from the United States will only lead to a slowdown in this growth within 3-4%, but they won’t be able to stop it completely.” Inside Russia, potential secondary sanctions from America will not be a serious hindrance. It will also not be possible to harm the operator of the Mir cards of the United States with its prohibitions. “As for the NSPK,
But those Russians who have a rest or travel abroad on business, as well as transfer money abroad, may face obvious inconveniences. As TeleTrade analyst Aleksey Fedorov noted, there are no ready-made workarounds here. Alternatives involving private cryptocurrencies are too inconvenient for retail use, and central bank digital currency systems are only at the development stage. So, Russians abroad, with the exception of a number of friendly countries that will still not give up using Mir even under pressure from America, will have to return to the good old cash currency, or use bank cards received in other countries.