EU cuts off key Russian banks from SWIFT system
- Reference: 1646225537
- News link: https://www.theregister.co.uk/2022/03/02/oracle_sap_sberbank/
- Source link:
"This measure will stop these banks from conducting their financial transactions worldwide in a fast and efficient manner. Today's decision has been closely coordinated with the EU's international partners, such as the United States and the United Kingdom," the EU said in a statement.
Russian majority state-owned Sberbank has so far managed to hold onto vital HR and CRM systems contracts with the world's largest software companies, despite political outcry from the firms' home nations over Russia's invasion of Ukraine.
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As for the bank's software contracts, in 2018, SAP said Sberbank had [2]deployed its SuccessFactors HR software to a workforce of 230,000 employees , the largest completed cloud project in Russia, according to the biggest software company in the EU.
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Meanwhile, [5]US enterprise software giant Oracle supports 170,000 users of Sberbank's Siebel CRM system .
The $40bn-revenue US tech giant has refused in recent days to respond to The Register's questions over whether it continues to support the implementation following Russia's military aggression in Ukraine.
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US president Joe Biden denounced the "unprovoked and unjustified attack by Russian military forces" on Ukraine last week.
The US government has [7]placed restrictions on Russian banks – including Sberbank, which represents around 30 per cent of the Russian retail banking sector – such as preventing it from conducting transactions through the US system. The sanctions are designed to restrict Sberbank's access to US dollar transactions.
The US has also restricted exports of semiconductors, encryption software, lasers, and aviation equipment to Russia. Companies [8]including AMD, Intel, TSMC, Dell, HP, Lenovo and HPE are complying with the export controls.
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HPE CEO Antonio Neri said during its Q4 earnings call yesterday: "From the business perspective, we have suspended all shipments into Russia at this time and we'll continue to adhere to all relevant sanctions and export controls."
However, although the ban includes sensitive technologies produced in foreign countries using software or other equipment developed in the US, it does not extend to enterprise software.
Even if Oracle is acting with rules set out in the sanctions, other US tech and manufacturing giants are setting a precedent by going beyond them. [10]Apple has said it will pause all product sales in Russia , following a request from Ukrainian officials. [11]General Motors has also suspended some business in the country.
The EU – which includes Germany as a member state – [12]has imposed its own sanctions following the invasion , adding to measures taken after Russia's annexation of Ukraine's Crimea region in 2014.
Last week the political and trading bloc banned the supply or transfer of aircraft parts and equipment to Russia and all related repair, maintenance, and financial services. It also sharpened existing sanctions on "dual-use goods" to target Russia's military-industrial complex, limiting access to drones and software for drones, encryption software, as well as semiconductors and advanced electronics.
SAP, the €27bn-revenue vendor headquartered in Germany, said in a statement sent to The Register that any business it did in support of Sberbank complied with EU sanctions.
A spokesperson said: "SAP has always maintained a strong commitment to ethics and compliance, including compliance with all applicable economic sanctions and export controls. SAP software products and services are subject to the export control and sanctions of various countries, including without limitation the laws of Germany, the European Union, and the United States of America.
"SAP is closely monitoring the situation related to Russia and Ukraine
sic
and is prepared to take immediate steps to ensure compliance with all applicable laws and regulations."In the days since the invasion, German chancellor Olaf Scholz announced an additional $113bn (€101m) for the armed forces.
In a speech to the European Parliament, European Commission president Ursula von der Leyen said the Russian invasion represented a "clash between the rule of law and the rule of the gun; between democracies and autocracies; between a rules-based order and a world of naked aggression."
Other US vendors aside from Oracle support Sberbank installations. Teradata provides data-warehousing technology for the bank, which runs offices and branches throughout central and eastern Europe.
A Teradata spokesperson said: "Sberbank is a Teradata customer. We have no specifics to share about their individual situation. Teradata is analysing the impact of recent sanctions, which are still evolving. We will, of course, continue to follow all government regulations and restrictions."
[13]Maxar Technologies: The eye in the sky tracking invasion of Ukraine
[14]ESA-Russia Mars rover launch on ice due to Ukraine invasion
[15]Microsoft: Russia invasion of Ukraine 'unlawful, unjustified'
[16]Russia is the advanced persistent threat that just triggered. Ready?
They added: "We have many employees located in proximity to Ukraine, so our first concern is for the safety and well-being of them and their families. We also have employees in many more countries around the world who have family and loved ones impacted. We are actively checking in with our colleagues to provide support to them."
SAS Institute provides analytics software for Sberbank. The US vendor said in a statement: "The events unfolding in Ukraine are tragic and rapidly changing. SAS continues to monitor these developments and their effects on the safety of our employees, our customers and on SAS.
"SAS is taking every step necessary to comply with the new US export laws, including any new sanctions. SAS is ceasing activity with entities we are prohibited from doing business with.
"In addition, we remain diligent in our security and resiliency efforts, and we are following guidance from the Cybersecurity and Infrastructure Security Agency (CISA) in relation to cyberattacks and malware developments that may stem from the ongoing conflict."
In December 2020, [17]Microsoft helped Sberbank develop an AI system that claimed to "teach robots to manipulate physical objects of unstable shape in almost the same way that humans do."
The Redmond software giant has not responded to an email we sent on 28 February on whether it continues to work with the Russian bank.
Separately, [18]Microsoft is decrying what it calls the "tragic, unlawful and unjustified invasion of Ukraine" by Russia, and vowed to continue protecting the country from cyberattacks and state-sponsored disinformation campaigns.
The European Central Bank [19]has said Sberbank's European subsidiaries could face failure as a result of sanctions.
In the Czech Republic, for example, the National Bank said it would revoke Sberbank's licence and ban it from providing new loans and accepting deposits as the bank suffers a liquidity crisis due to mass client withdrawals.
President von der Leyen said: "[T]he European Union has adopted three waves of heavy sanctions against Russia's financial system, its high-tech industries and its corrupt elite. This is the largest sanctions package in our Union's history." ®
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[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yh@itsEkJS5PC5DvaVAJJwAAAAE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://news.sap.com/2018/05/sberbank-and-sap-complete-russias-largest-cloud-project/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yh@itsEkJS5PC5DvaVAJJwAAAAE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[5] https://blogs.oracle.com/siebelcrm/post/achieving-extreme-scale-with-siebel-crm
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[7] https://www.ft.com/content/1600cbab-3c9d-4059-872a-c5cf512169a1
[8] https://www.theregister.com/2022/03/01/us_chip_stocks_russia/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yh@itsEkJS5PC5DvaVAJJwAAAAE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theguardian.com/technology/2022/mar/01/apple-russia-ukraine-facebook
[11] https://www.reuters.com/business/autos-transportation/auto-truck-makers-suspend-some-business-russia-following-invasion-2022-02-28/
[12] https://ec.europa.eu/commission/presscorner/detail/en/fs_22_1402
[13] https://www.theregister.com/2022/03/01/maxar_satellite_imagery/
[14] https://www.theregister.com/2022/03/01/rosalind_franklin_russia_mars_rover/
[15] https://www.theregister.com/2022/03/01/microsoft-russia-ukraine/
[16] https://www.theregister.com/2022/02/28/russia_information_security/
[17] https://news.microsoft.com/ru-ru/sber-microsoft-ai-robot-control-system/
[18] https://www.theregister.com/2022/03/01/microsoft-russia-ukraine/
[19] https://www.ft.com/content/1bce0494-6242-461b-bfe2-9501e7d88ab1
[20] https://whitepapers.theregister.com/
Never mind that. The next instalment of their licencing/support contract fees isn't going to be paid because there is no way to transfer the money to them.
I wonder if the license fees are specified in local currency?
Could turn out to be ridiculously cheap for them in a nother week or two
as the meme goes, "in Russia, 50 Cent is called 4 million Rubles"
It depends on the contract. Usually there's a clause about the US Dollar exchange rate.
My experience of "enterprise" software suggests that the most effective tactic might be to offer it free to anyone willing to install it.
"General Motors has also suspended some business in the country."
And this is a bad thing?
Could be considered a blessing in disguise! :D
Re: "General Motors has also suspended some business in the country."
Their injection system that they stuck on to the Lada Niva has absolutely ruined the car.
For my own part...
For my own part I've sent my mail-order bride back to her bearded mother in Magadan with the receipt.
On the upside it's a lot fucking quieter in the house, there is less mayonnaise in the fridge, and the kids will love the snow there.
Their EU subsidiaries are already declaring bankrupcy
https://www.france24.com/en/live-news/20220301-european-subsidiary-of-russia-s-sberbank-to-enter-bankruptcy
My guess is that its easier for Apple who is almost exclusively selling to end users to stop operations in Russia with no legal fall out.
Where as SAP and Oracle might find the contracts they agreed with Sberbank means they are legally bound to continuing supporting Sberbank unless EU or US sanctions specifically forbid them or risk breaching the contract and potentially getting sued.
So, caught between the hammer and the anvil then ?
Right, exit stage left . .
"heavy sanctions against Russia's [..] corrupt elite"
Somehow I doubt that said corrupt elite is going to feel much of a pinch at all.
Putin has been preparing his move since a while already, and I'm convinced that financial sanctions were on his list of things to mitigate. He will, obviously, have warned his ultra-rich friends, and the word will have spread because the rich have ways of finding things out when it comes to money.
So I'm guessing that the Russian rich will just have to take an extended vacation in their datchas on the shores of the Black Sea. Oh, the humanity.
Re: "heavy sanctions against Russia's [..] corrupt elite"
"He will, obviously, have warned his ultra-rich friends, and the word will have spread because the rich have ways of finding things out when it comes to money."
If they converted their dsllars, pounds and Euros to roubles they're not going to be happy.
They have non-monetary assets which they will find difficult to shelter. A very effective threat might be to put in motion arrangements to sequester them and use the proceeds for post-conflict reconstruction in the Ukraine. It's surprising how quickly you can find you don't have any friends when the choice between friendship and being ultra-rich.
Sounds like a strong-arm tactic. If you forced me to use Oracle and SAP I's give in to any demands pretty quickly.
Is it possible the Russian army has outsourced its supply chain to Capita? That would certainly explain the fact they've had to have two operational pauses to sort their fucked up logistics out in a war that's only been going for a week.
And are we surprised?
I suppose they might get upset when they find they can't send anyone to Russia to do a license audit.