Furious Russia Will Retaliate Over "Illegal And Absurd" Payment Block By "Hostile" JPMorgan

Tyler Durden's picture

While everyone was gushing over the spectacle on TV of a pro-HFT guy and anti-HFT guy go at it, yesterday afternoon we reported what was by far the most important news of the day, one which was lost on virtually everyone if only until this morning, when we reported that "Monetary Blockade Of Russia Begins: JPMorgan Blocks Russian Money Transfer "Under Pretext" Of Sanctions." This morning the story has finally blown up to front page status, which it deserves, where it currently graces the FT with "Russian threat to retaliate over JPMorgan block." And unlike previous responses to Russian sanctions by the West, which were largely taken as a joke by the Russian establishment, this time Russia is furious: according to Bloomberg, the Russian foreign ministry described the JPM decision as "illegal and absurd."  And as Ukraine found out last month, you don't want Russia angry.


The biggest U.S. bank thwarted 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 yesterday in a statement on its website. Sogaz lists OAO Bank Rossiya, a St. Petersburg-based lender facing U.S. sanctions over the Ukrainian crisis, as a strategic partner on its website.


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


U.S. President Barack Obama announced the action against Bank Rossiya last month as part of a broadening of sanctions that targeted government officials and allies of Russian President Vladimir Putin, whose associates own Rossiya. The embassy’s transaction was for less than $5,000 dollars, a person with knowledge of the dispute said, asking not to be identified because such transfers aren’t public.

Did JPMorgan just move the second Cold War into semi-hot status? Very possibly:

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 U.S. in Russia,” Lukashevich said.

As we reported yesterday, for now the JPM party line is to plead ignorance, as it does not want to incur the wrath of the US government, because apparently lying to Congress is less of an issue than transacting with Russian oligarchs.

JPMorgan could still process the embassy payment if U.S. regulators approve, the person familiar with that dispute said.


“As with all U.S. financial institutions that operate globally, we are subject to specific regulatory requirements,” New York-based JPMorgan said in a statement. “We will continue to seek guidance from the U.S. government on implementing their recent sanctions.”


Russia’s Finance Ministry has done business with JPMorgan. It picked the lender to improve the country’s standing among U.S. credit-rating firms. Putin said in 2011 the rankings given to Russia were an “outrage” that increased borrowing costs for domestic companies and the government. JPMorgan also was among banks selected to advise Russia on a 1 trillion ruble ($28.5 billion) privatization program.

There's that. And then there's this, which we also said yesterday:

Wait, did JPM just take a unilateral action, not mandated by the state department (because nowhere in the Russian sanction list does it say putting a freeze on Russian bank transfers), and refuse to process a simple money transfer? Why? And if indeed JPM is doing this, how long until all other US banks, most of which are just as allegedly criminal in dealing with offshore sources of illegal money, follow suit and leave Russia entirely in the world when it comes to USD-backed transactions.


Because what JPM may have just done is launch a preemptive strike which would have the equivalent culmination of a SWIFT blockade of Russia, the same way Iran was neutralized from the Petrodollar and was promptly forced to begin transacting in Rubles, Yuan and, of course, gold in exchange for goods and services either imported or exported.


One wonders: is JPM truly that intent in preserving its "pristine" reputation of not transacting with "evil Russians", that it will gladly light the fuse that takes away Russia's choice whether or not to depart the petrodollar voluntarily, and makes it a compulsory outcome, which incidentally will merely accelerate the formalization of the Eurasian axis of China, Russia and India?

Once again: watch this space carefully - should more western commercial banks (here's looking at you Citigroup, Bank of America, and Citi, and of course "money launderer to criminals everywhere" extraordinaire HSBC) just say no to more Russian hot money, things get really interesting.... if for nothing else, then certainly the ultra-luxury end of the Manhattan real estate market.

Finally, we certainly can not be the only ones looking forward to the epic battle prospect that is Vlad "Shootin" Putin vs JP "Fail Whale" Morgan. Especially if it involves more such sudden moves in gold as what just happened.

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clymer's picture

"As will all US financial institutions that operate globally, we are subject to specific regulatory requirements.."

I thought you guys write the regulatory requirements?

Why can't zbigneiw, heinz and david R all just fucking croak already



GetZeeGold's picture



They're just bluffing.....they haven't even released the Obama files yet.


Fear the cuff-links comrades.

SafelyGraze's picture

lesson learned.

that's what happens to those who transact using units of "dollar"

give me control of international settlement/clearing, and I care not who issues the currency denominations

SWRichmond's picture

So JPM is probably among those banks "about to be indicted" and so wish to curry favor and show their "systemic importance".  Who is surprised by this?

Tabarnaque's picture

One has to wonder if they are just simply stupid or if they are deliberately poking the Russian bear in the eyes in order to provoke it to respond violently. Such response would then quickly be run through the Western World mass media propaganda war machine as an “unacceptable act of aggression” from Russia against the West therefore justifying more sanctions against Putin’s regime. It looks to me like the West really wants a war.

Antarctico's picture

...are just simply stupid or if they are deliberately poking the Russian bear in the eyes in order to provoke it to respond violently...

Who needs violence when there's polonium? A sprinkle here and a sprinkle there, a banker or two goes down, and problem solved.

Looney's picture

Jamie Dimon may end-up jumping off the ledge with a nailgun firmly lodged into his skull ;-)


I am more equal than others's picture




JPM declares war on Russia.

This will be fun to watch. 

Russia will turn all its electronic intelligence and hackers on JPM.

War without blood. 

Pure Evil's picture

Everyone was gushing?

I almost feel like a little girl.

Looney's picture

A Pure Evil little girl? ;-)


Pure Evil's picture

Well, personally, I would have preferred orgasmic as in:

While everyone was orgasmic over the spectacle on TV of two little girls going at it over HFT.

Almost sounds like a naked pillow fight between sorority girls.

Chupacabra-322's picture

This is nothing more than a battle between two crime syndicate's ( West Vs. East Banksters) which which make up The Global Criminal Oligarch Cabal Banking Intelligence Crime Syndicate.

They're "all in on it" at the highest Compartmentalized Elite. We're just the cannon fodder. Divided & Conquered.

Boris Alatovkrap's picture

Whatever you are say about Russia, JPM is spawn of Satan, agent of Rothschild. But still when forces of evil are battle together, always is at expense of citizenry.

philipat's picture

Boris, and Putin's Billions are stored in Moscow? Absolute power corrupts absolutely? But he seems like a nice guy...

Manthong's picture

"illegal and absurd."..

I thought he was talking about the entire Obama administration.

wintermute's picture

Odds on Russia declaring that JPM is a terrorist organization?

willwork4food's picture

Odds that JPM declares Russia a terrorist organization? Oh, wait...

Carl Spackler's picture


Time to move back to the "safety" and "security" of Cyprus.

At least it is warm there, and the Black Sea Fleet is not far away in Crimea.


CH1's picture

Someone please fly Fonestar to Moscow. He'll explain to Vlad precisely how to fuck the US money monopoly in one easy step!

Urban Roman's picture

He's busy trying to find buyers for his money from heaven. ... It's taking a swan dive.

Keyser's picture

So JPM is probably among those banks "about to be indicted" and so wish to curry favor and show their "systemic importance".  Who is surprised by this?

JPM has a perpetual get-out-of-jail-free card. This became evident when they were implicated in the Bernie Maddoff ponzi scheme. Dozens of complaints were filed against JPM with the DOJ, but amazingly so, the DOJ has refused to act on any of the complaints or even investigate them. As you say, who is surpised by this? No one. 



zerozulu's picture

only one person in this world got balls big enough to stand against tyrants.

Quus Ant's picture

I want to know who that 4 Trillion the vatican seized really belonged to. 


Things are heating up.

Unknown User's picture

The gloves are off in the second round of Banksters vs. Russia.  Pray for Russia because the alternative is nuclear war.

Aussie V's picture

I honestly think that Obama and his new wave of University educated but real world dumb administration, think they can push Putin into a corner and over come Russia without getting a scratch.

They're playing with fire but, think they have the only box of matches!

SF beatnik's picture

University credentialed. 


University educated? Qu'est-ce que c'est?

cynicalskeptic's picture

They're playing with fire but, think they have the only box of matches!


Aspiring Cub Scout pyromaniacs with matches vs. a platoon of Spetsnaz with flamethrowers......   wonder how that's gonna turn out?

hobopants's picture

Increasing nationalism is a sign of desperation and reaction to cracks in the system. The american fable of equality and world peace through violence and coercion is coming to it's logical conclusion. The dollar is the last bastion of hegemony and with it's demise we reset the gameboard.

The question is, what's next?


Blazed's picture

No doubt, and the international ethno-mafia will get their territory/resource wars.

Sheldon Adelson, War Party Oligarch



disabledvet's picture

"play both sides of the trade."

that's how Goldman did it. So lets go long on "both sides beating the crap out of each other."
Seems pretty simple.

JPM might be one thing...but GE and Citi...they've got shareholders to report to.

CuttingEdge's picture

I'd rather see the nail-gun lodged firmly up Dimon's arse, to be honest.

Either way we could all give this a rendition in sympathy: http://www.youtube.com/watch?v=2MVplfdNC6E

Canadian Dirtlump's picture

I'm starting to think either we have globalists hell bent on blowing up the system and are overtly and covertly working towards that aim - or else we have the unbridled hubris combined with abject sociopathy fueling this.


I look forward to Russia just working around this and starting new systems with the BRIICS nations in whole or in part. The west needs everyone on their system way more than everyone need's the west's system.

Keyser's picture

It is a fact that the western banking cabals are trying to blow up the system. All one has to do is look at economic policy from the Fed and our wonderful political system. Their goal is to enslave the entire world in western hegemony. The only thing preventing this is the BRICS, which is why we are seeing economic attacks on the BRICS. This will not end well and unfortunately the player with the biggest stick is going to win. The question is, will there be anyone left in the end to raise a cheer in victory except the neo-com MIC types. For some reason, the final scene from Dr Strangelove pops into my mind. We must protect our Purity of Essense. 

TahoeBilly2012's picture

Best post yet! Agreed. Controlled collapse into ONE WORLD ODOR (theirs, not urs!)

JR's picture

Well said.

Once again this is proof that the crisis over Ukraine is banker created and banker sustained. It is not a dispute between Russia and the Ukrainian people. It is a dispute between the controllers of the European Union, the Federal Reserve Banks and its owners, and the Russian Federation.

These times do not see any respect for justice, or international law, or a quest for peace, only the relentless drive of the spirit of the Rothschilds to control the world’s labor and resources as in Dr. Carroll Quigley’s dream of a unified world controlled by the plantation managers of the international bankers.

If anyone in the United States believes he is exempt from the tragic results of this worldwide military and financial aggression, he is sadly msinformed.

disabledvet's picture

"you have to convince Putin that he wants to invade. Crimea no less."

Mission Accomplished.
Move along.

Finland and Sweden to join NATO?
NATO exercises within Ukraine itself?

Entire NATO fleet in the Black Sea itself?

Got tons of options.
The window is closing on Putin and the longer he waits the more the pressure gets put on.

DaveyJones's picture

the two are not mutually exclusive

Drifter's picture

"I look forward to Russia just working around this and starting new systems with the BRIICS nations"

Yes, I suspect we're about to see large scale shift away from USD/Swift.  Jim Willie says Ukraine is Waterloo for USD petrodollar supremacy.

I believe China has enough gold now to launch gold-backed currency that would swiftly become defacto world reserve currency, even though US would fight it with everything they have (military), and it would be ineffective against a heavily nuclear armed nation like China (with Russia backing them up).

China is the "sleeper" in all this, laying low for now, letting Russia draw everyone's attention, but they'll burst forth and shock the world.

PTR's picture

The ol' vanity and greed in effect.


"I want it all."  "I can handle this."

disabledvet's picture

NATO exercises in Ukraine coming right up.

We're going in. Either Russia decides to do something abou it or "you've got NATO right on your front door."

The only "crazy pants" place is North Korea. Once you "take" Ukraine without firing a shot "all eyes on Un" who's been firing of artillery and rockets on a regular basis...and rumor has it will conduct a nuclear test sometime coming up.

that could be considered provacative enough to warrant some type of strike.

"all options on the political table" here.

Caobei's picture

While it's true US-EU have been encroaching on Russia's spehere of influence, for regional geo-political purposes, Russia must be taught a lesson, especially with Turkey destabilzing. The financial saber can be quite effective in reminding them of the world order and our reach with no political cost domestically. Russia doesn't want a war with anyone aside from its former satellites, because it knows the can attack with little fear of reprecussion from the satellite or the international community. 

disabledvet's picture

they're about to get right in their ass.

tarsubil's picture

You should have just stayed under that rock.

Sirius Wonderblast's picture

Umm, have you considered the crashing arrogance of "Russia must be taught a lesson", let alone the result? Clearly Obama and his fuckwit sponsors and sycophants haven't or they wouldn't be doing it. I've felt since 2008 that the least bad loser in the whole sorry saga is going to be the winner, and I more convinced with every malign act perpetrated by TPTB.

Keyser's picture

And please tell us why there has to be a pecking-order in geo-politics or in banking for that matter? 

kchrisc's picture

They may or may not get war, but they will get the faster death of the Petero$. LOL

Like my father liked to say: "You can get nothing you bargained for and everything you didn't. Be careful."


“Who bargained for the guillotine?”

richsob's picture

Nobody in their right mind wants a war.  What bothers me is there is a segment of U.S. policy makers who would not be adverse to a war with Russia.  The truth is NATO + the U.S. and its other allies would steam roll Russia.  The Russian military is a shadow of what it used to be under the old Soviet Union......and Putin knows it.  China is in the same boat: they haven't fought a "war" since 1979 against Vietnam and they didn't exactly set the world on fire then.  The Chinese military would also be rolled in an all-out war against the U.S and its allies.  That, in my opinion, is NOT enough reason to have a war with either Russia or China but who knows what some crazy bastards somewhere are planning before the day comes when the U.S. might not be able to win a war against either of them?  (Note: I am not referring to a nuclear war; I am talking about conventional warfare.)

Sirius Wonderblast's picture

Maybe. maybe not. The fact is though, I suspect that US/NATO might find there was a whole lot less support among the supposed allies than imagined before the match hits the touch paper.

DeadFred's picture

You may be right about what would happen in a conventional war but that won't be how it turns out. If it starts to get hot you will see a Russian or Russian/Chinese nuclear first strike. MHO