Four ex-Gazprombank executives probed over illicit €9M sanctions scheme

The Ministry of Finance of Luxembourg petitioned judicial prosecutors and the Commission de Surveillance du Secteur Financier (CSSF) banking watchdog to investigate potential sanctions violations and illicit insider trading orchestrated by four former executives of Gazprombank Luxembourg.

The former banking officials allegedly secured illicit profits exceeding €9 million ($9.9 million) during 2022, according to reporting by the Financial Times.

"The minister essentially stated that it is not up to him to determine whether EU sanctions were breached — that is now a matter for law enforcement authorities," the Financial Times quoted Luxembourg lawmaker Franz Fayot as stating.

The alleged scheme centered on acquiring foreign-currency Gazprom corporate bonds that plummeted in secondary markets following Russia's full-scale invasion of Ukraine, and later swapping them inside Russia for newly issued ruble-denominated bonds at full nominal par value. Executing the transactions required non-public advance knowledge of the Russian bond-swap structure and specific exchange terms.

The CSSF earlier reviewed the banking entity in 2023 after receiving reports regarding the bond swaps, though the regulator restricted its response at the time to mandating internal compliance updates.

Fayot emphasized that the revelations have generated considerable public and political scrutiny, expressing hope that state prosecutors will keep the public updated on the progress of the legal proceedings.

All four managers subject to the criminal referral no longer work at Gazprombank Luxembourg.

Gazprombank sanctions exemptions

Dec. 20, 2024: The United States issued a targeted sanctions waiver for Gazprombank to enable Hungary to maintain settlement channels for Russian natural gas deliveries. American authorities concurrently provided a parallel exemption for Turkiye.

March 2025 extension: The United States agreed to extend the sanctions waiver for Gazprombank through May, preserving Turkiye’s ability to conduct energy transactions for Russian pipeline gas imports.