Austrian authorities have urged Raiffeisen Bank International (RBI) to drop a deal linked to a Russian oligarch fearing a backlash from the United States, people familiar with the matter said, a blow to RBI's plans to unlock funds stranded in Russia.
In recent weeks, Austrian central bank officials have warned Raiffeisen about the deal, cautioning that it could backfire if the U.S. penalises the bank, said one person with direct knowledge of those discussions.
The central bank is responsible for oversight of Western sanctions in Austria and also watches for broader financial stability.
The move had come under fire from the U.S. Treasury because Deripaska is sanctioned, exacerbating tensions between Washington and Raiffeisen, which is already under scrutiny from U.S. sanctions enforcement agency OFAC.
Other Austrian public officials have also privately cautioned the bank against the sale, believing it could be declared a breach of sanctions, said two people with direct knowledge of those discussions.
One of those people said RBI had been warned by U.S. authorities that they could not give their blessing for the deal and could impose a penalty if it pressed ahead.
Although it is unclear what penalty could be imposed, U.S. authorities have the power to fine or even take the drastic step of shutting a bank out of dollar payments.
The sale is embarrassing for Austria, given international criticism of the country for being too friendly towards Russia, one of the people with direct knowledge of officials' thinking told Reuters.
A spokesperson for Raiffeisen said the "acquisition of Strabag shares remains subject to the compliance review of RBI", adding that it "will not buy the shares from Mr. Deripaska nor any other sanctioned person or entity".
A central bank spokesperson declined to comment.
A spokesperson for Deripaska said he had "had nothing to do with Strabag for a long time" and would not comment, describing Western sanctions against him as "totally misguided" and "based on false information".
($1 = 0.9321 euros)
