AFP, Yerevan :
Armenian banks on Friday said they would stop processing transactions made by Russian Mir payment cards due to Western sanctions imposed on Moscow for its invasion of Ukraine.
In September 2022, the US Treasury Department threatened foreign banks with secondary sanctions for servicing Mir cards, a Russian card payment system.
The Treasury’s Office of Foreign Assets Control said in February that Russia has been using the system to evade Western sanctions, which have targeted Moscow’s financial system.
The Union of Banks of Armenia said the country’s commercial banks “will stop servicing Mir cards as of Saturday, because of the risk of secondary sanctions.”
An exception will be made for Mir cards issued by the Armenian subsidiary of Russia’s state-controlled VTB Bank, it added.
After the West slapped sweeping sanctions on Moscow, Armenian banks saw their profits triple due to a dramatic increase in cash flows from Russia.
Thousands of Russians fled to Armenia amid a crackdown on dissent and fears of being drafted for the war. Armenian companies have also been re-exporting Western-manufactured consumer goods to Russia.
Yerevan has been drifting from Moscow since 2020, when it lost a war to Azerbaijan. Relations further soured last year when Baku took control of the disputed Nagorno-Karabakh region in a lightning offensive.
