MOSCOW--Russia will substantially lower collateral demands
imposed recently on card giants Visa Inc. and MasterCard that aim
to prevent a repeat of payment problems caused by U.S. sanctions,
First Deputy Prime Minister Igor Shuvalov said Wednesday.
Some Russian banks faced disruption to bank-card payments with
Visa and MasterCard in March after the U.S. enforced sanctions in
response to Russia's annexation of Crimea. To prevent it happening
again the Russian Parliament passed a law forcing the two companies
to keep hundreds of millions of dollars at the Bank of Russia as
collateral against any future freeze.
At a meeting with Prime Minister Dmitry Medvedev, Mr. Shuvalov
said the requirements and restrictions will be lowered
significantly but the law won't fully relieve the companies of
responsibility, Interfax news agency reported.
The law initially envisaged allowing Moscow to confiscate 25% of
the companies" average daily turnover in Russia over one quarter if
their services were suspended again.
Visa and MasterCard officials have said the new legislation,
which comes into force July 1, will hit profit. The law also
stipulates that all card operations in Russia should be cleared
within its borders through a national payment system.
Mr. Shuvalov's comments came the day after a Visa statement.
"While the government's action is a positive near-term step, it
does not provide the certainty related to the guarantee deposit
provisions that Visa requires in order to continue offering our
services over the long term," Visa said.
"Visa's position with respect to the deposit provisions of the
National Payment System law has not changed. As we have stated
consistently since the NPS amendments became law, the guarantee
deposit is unworkable and goes beyond what we are willing to do,"
the company said.
A preliminary agreement between the government and the card
companies on how to deal with the law was reached in May. The
finance ministry said that Russia can't ditch the two U.S.
companies' as they provide services to 90% of the country's card
holders. Both Visa and MasterCard said they are interested in doing
business in Russia.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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