New owner of VTB's Serbian bank to keep it separate from sanctioned Agrosoyuz

MOSCOW/BELGRADE, Sept 24 (Reuters) - Andrey Shlyakhovoy, who bought Russian state-controlled bank VTB’s Serbian business in July, has no plans to merge it with his Agrosoyuz bank, which is subject to U.S. sanctions, a representative for the Russian businessman said.

Shlyakhovoy paid $14.3 million for VTB Banka a.d. Beograd but two weeks after the deal was announced, the U.S. Treasury Department added Shlyakhovoy’s Russian bank Agrosoyuz to its Specially Designated Nationals (SDN) list, effectively blocking its access to the U.S. financial system.

The U.S. Treasury Department alleges Agrosoyuz facilitated “significant transactions on behalf of the person who was on the sanctions list for activities related to weapons of mass destruction in connection with North Korea.”

VTB, Russia’s second biggest bank by assets, is itself subject to U.S. sanctions which limit its ability to raise funds abroad, though it is not on the Treasury Department’s SDN list.

Shlyakhovoy, 58, is the sole shareholder in Agrosoyuz but is not himself under U.S. sanctions.

“(U.S.) sanctions are clearly divided into personal and corporate. The decision to include Agrosoyuz on the list does not apply to Andrei Shlyakhovoy himself,” his representative told Reuters in an email.

Shlyakhovoy does not plan to integrate his Serbian bank with Agrosoyuz or any other bank, the representative added.

Serbia’s central bank said that there had been no request from Agrosoyuz to take over VTB Banka a.d. Beograd, while declining any further comment.

VTB’s decision to divest its Serbian unit is part of a broader sell-off of foreign assets by Russian lenders.

“The deal for its sale was closed in full compliance with the law in July 2018. Since that moment, VTB has nothing to do with the Serbian bank,” VTB said, declining further comment.

Before 2014, Russian banks had been pursuing ambitious plans for foreign expansion, but that changed when U.S. and European Union sanctions, imposed over Russia’s annexation of Crimea, coincided with an oil price slump to tip the Russian economy into recession. (Writing by Ivana Sekularac and Katya Golubkova Editing by Alexander Smith)