Scott, Hagerty, Colleagues Urge Administration to Sanction Russia’s National Credit Payment System

Source: United States Senator for South Carolina Tim Scott

Thursday | May 12, 2022

WASHINGTON – U.S. Senators Tim Scott (R-S.C.) and Bill Hagerty (R-Tenn.), members of the Senate Banking Committee, along with Senators Thom Tillis (R-N.C.), Steve Daines (R-Mont.), Cynthia Lummis (R-Wyo.), and Mike Rounds (R-S.D.), sent a letter to the U.S. Department of Treasury urging the Biden administration to extend sanctions against Russia’s National Credit Payment System (NSPK). 

“The Russian government established NSPK in 2014 after Russian forces seized Ukraine’s Crimean Peninsula, amidst Moscow’s concern that it would be cut off from international payment systems. The NSPK has a card brand known as Mir. Since Mir is interoperable with international payment brands, it poses the potential for sanctions circumvention through its ability to process transactions from other payment networks over the NSPK rails,” the senators wrote.

The senators note that Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, the United Arab Emirates, Uzbekistan, and Vietnam currently accept Mir payments and that Mir is also accepted in the Russian-occupied Georgian regions of Abkhazia and South Ossetia. 

“In response, the administration should both apply sanctions or other restrictive measures to the Russian central bank’s NSPK payment system, and review whether UnionPay’s or any other bank or network is helping Russia evade sanctions, so that sanctions may be applied,” the senators concluded.

Full text of the letter can be found here and below: 

Dear Mr. Adeyemo:

We are writing to respectfully request that the administration extend the application of sanctions against the Central Bank of the Russian Federation to target the National Card Payment System (NSPK) operated by that central bank.  

In early March, credit card networks Visa, Mastercard, and American Express suspended operations in Russia in response to Moscow’s invasion of Ukraine.  The Russian government established NSPK in 2014 after Russian forces seized Ukraine’s Crimean Peninsula, amidst Moscow’s concern that it would be cut off from international payment systems. The NSPK has a card brand known as Mir.  Since Mir is interoperable with international payment brands, it poses the potential for sanctions circumvention through its ability to process transactions from other payment networks over the NSPK rails.

While Mir has mostly been used for bank transfers related to welfare or pension payments, it does have an international footprint, and Russia has been eager to bring other countries into the Mir system since its inception.  Currently, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, the United Arab Emirates, Uzbekistan, and Vietnam accept Mir payments.  Mir payments are also accepted in the Russian-occupied Georgian regions of Abkhazia and South Ossetia.

China’s UnionPay – an international payment system that received international status in 2005 and can be used for payments worldwide – may be providing Mir a lifeline. Numerous Russian banks, including Sberbank and Alfa-Bank, have indicated they may issue Mir-UnionPay co-badged cards.  Other Russian banks already work with the Chinese UnionPay payment system, including Gazprombank, Bank St. Petersburg, Promsvyazbank, and others. 

In response, the administration should both apply sanctions or other restrictive measures to the Russian central bank’s NSPK payment system, and review whether UnionPay’s or any other bank or network is helping Russia evade sanctions, so that sanctions may be applied. 

Thank you for your time and attention to this matter. We look forward to receiving your response. 

Sincerely,

/s/

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