Yesterday when we reported that a "Furious Russia Will Retaliate Over "Illegal And Absurd" Payment Block By "Hostile" JPMorgan [9]", in which we explained that 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, we said that "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." Alas the title fight lasted for just about a day, and was won, with a technical knock out in the first round, by none other than the former KGB spy who can now add the whale which manipulates all markets to its trophy case which includes about 100 statues of a crushed and beaten John Kerry.
Because after shocking the world with its unilateral decision to halt Russian money transfers without a direct order from the administration, Reuters reports that JPM has folded and will process said payment from Russia's embassy in Kazakhstan to insurance agency Sogaz, easing tension after Moscow accused the U.S. bank of illegally blocking the transaction under the pretext of sanctions.
In other words, Putin 1 - Jamie Dimon 0.
More from Reuters [10]:
The confrontation threatened to further strain ties between Washington and Moscow, locked in the worst standoff since the Cold War over Russia's annexation of Ukraine's Crimea region.
"Following consultation with our regulators, we are processing this transaction," JPMorgan said in a statement.
Last month, Washington imposed sanctions, including visa bans and asset freezes, against several Russians close to President Vladimir Putin and against Rossiya Bank, which it said was the "personal bank" for the leader's inner circle.
The destination for the embassy payment was insurance agency Sogaz, which is 48.5 percent owned by Abros, a wholly-owned subsidiary of Bank Rossiya.
Industry consultants in Moscow say financial institutions are unclear about how to apply the new rules in some situations, such as when dealing with subsidiaries of companies which have either been sanctioned or which have shareholders that have been punished.
Several Western investors and their banks are facing quandaries over individual situations.
Guidelines on the U.S. Treasury department's website from the U.S. Office of Foreign Assets Control says that property which is more than 50 percent owned by a person on the sanctions blacklist is affected and advises acting "with caution" when ownership interests are less than 50 percent.
"It is up to private companies and lawyers to figure out who is subject to sanctions," said one Moscow-based lawyer. "Of course (a U.S. bank) is more scared of the American (authorities than the Russian ones)."
Needless to say, this is quite anticlimatic, as we were certainly looking forward to the discovery of JPM documents which would be released into the public domain following the imminent annexation of all JPM offices in Russia. Looks like we'll have to wait a little longer.
Meanwhile, if even Jamie Dimon....
[11]
....can't stand up to Putin.... who can?