Russia moves to shelter banks funding arms makers from sanctions

Russia has proposed ending the publication of the names of banks which finance Russian state-controlled arms producers, in a possible sign that Moscow is preparing for new U.S. sanctions.

The draft law would, if adopted, mean the Russian central bank no longer has to publish a list of banks dealing with the arms industry, which included eight lenders as of Oct. 1.

Russia`s government and the president would be able to include any banks they wanted to in such deals and would no longer publish the criteria for their involvement.

Under current regulations only state-controlled or central bank-controlled lenders with capital of not less then 100 billion roubles ($1.7 billion) may get such contracts.

Russian President Vladimir Putin chaired a meeting on Tuesday to discuss building up the country`s military.

The U.S. State Department last month named 39 Russian defence and intelligence-related entities following the signing in August of a new sanctions law by President Donald Trump to punish Moscow after U.S. intelligence agencies concluded it meddled in the 2016 U.S. presidential election, allegations the Kremlin has repeatedly denied.

The U.S. law calls on the president to impose sanctions on anyone he identifies as having engaged "in a significant transaction with a person that is part of, or operates for or on behalf of, the defence or intelligence sectors" of the Russian government..

The action does not itself impose new sanctions, and determinations will be made on a case by case basis, State Department officials said in October.

Banks on the list include state-controlled majors Sberbank, VTB and Russian Agriculture Bank, along with private-owned Rossiya and Gazprombank, in which gas producer Gazprom holds a stake.

Sberbank has proposed establishing a special bank to finance Russia`s military industry as a means of side-stepping the sanctions, three sources familiar with the talks told Reuters.

Sberbank declined to comment.

($1 = 59.1900 roubles)

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)