The Board of governors rejected the appeal of Russia on the illegality of the ban on Bank financing of new projects in the country. The Minister of economic development Maxim Oreshkin said that the EBRD had become a “foreign policy tool”
The Board of governors of the European Bank for reconstruction and development (EBRD) annual meeting in Nicosia on Wednesday, may 10, rejected Moscow’s claims about decisions 2014 about suspending indefinitely any new operations in Russia. Representing the shareholders of the Bank, the Board acknowledged that the decision, which challenged Russia is completely legal and does not violate the Charter of the organization, told RBC representative of the Bank.
According to him, the complaint of Russia was rejected “overwhelmingly”. He did not disclose the exact results of the vote, citing the fact that the Bank never does. EBRD President Suma Chakrabarti told journalists in Nicosia that the vote on this issue was “final and binding”, reports Reuters. The EBRD representative said that no other issues related to Russia, the governing Council had not discussed.
A large number of countries abstained from voting, and Belarus, Kyrgyzstan, Armenia, and Mongolia supported the position of Russia, according to RIA “Novosti”, citing an unnamed participant of the meeting. The largest shareholders are the United States (10%), Japan (9%) and the EU, which in total owns 63% of the share capital. Russia — 4,1%.
In July 2014 the EBRD Board of Directors decided to halt all new EBRD operations in Russia. The decision was taken in the form of “guidance” (guidance), in coordination with the European Council of the European Union, which earlier agreed on another round of sanctions against Russia for “actions that undermine the sovereignty, territorial integrity and independence of Ukraine”. Russia believes that the refusal by the EBRD to Finance new projects in the country were not in any way legally admissible and violates the Charter of the multilateral institution.
Managing from Russia to the EBRD, the Minister of economic development Maxim Oreshkin said on Wednesday in Nicosia that the decision of the Bank “created an extremely dangerous precedent in international financial relations and, in fact, a new regulation, according to which an international financial institution may limit the rights of members, without taking into account the statutory documents”. “We see that the Bank has become a foreign policy instrument and not a development institution,” he said. (quoted by TASS).
Before the Ukrainian conflict, Russia was the largest recipient of investment and EBRD financing, but in 2015, the main region for the Bank was Turkey, which last year accounted for 18.8% of the credit portfolio of the EBRD (Russia in second place with a 12.4%), follows from the statements of the EBRD. In the pre-sanctions 2013, the Bank invested in Russian projects €1,82 billion to that annual investments reached €2.9 billion Russia believes that because of the ban on new investment in Russia the financial condition of the Bank worsens and it in future may require the capitalization. The President of the Bank Chakrabarti on Wednesday called such statements of the Russian government “speculative”.