The suspension of the exchange of tax information will ensure that the UK is not supplying Russia and Belarus with information that could lead to a greater benefit or tax return for them.”

Lucy Frazer, Financial Secretary of the UK Treasury.

Coupon payments on Russian sovereign bonds due this week have been received and processed by correspondent bank JP Morgan, which made a subsequent credit to paying agent Citi, a source familiar with the situation said, which may represent a indicator that Russia avoided default.

The payment received was in US dollars, the source said. “After the paying agent is credited, it will be verified and distributed among the various bondholders,” she added.

Moscow was due to pay $117 million in coupons on two dollar-denominated sovereign bonds on Wednesday and some creditors received the payments, market sources said, averting Russia’s first foreign bond default in a century.

The payments were seen as the first proof that Moscow was meeting its obligations after Western sanctions hampered its financial operations.

The source said JP Morgan’s obligation as a foreign correspondent bank is to process payments, but in the circumstances it was necessary to consult with the authorities before doing so.

Citigroup will distribute the required sums to the holders of these obligations in a maximum of 30 days to prevent Russia from being considered in default on its foreign debt.

Early on Thursday, the Russian Finance Ministry said in a statement that “the payment order for the repayment of interest on the bonds, with a total value of 117.2 million dollars, has been carried out”, without giving more details about it.

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Sanctions imposed over the invasion of Ukraine have isolated Russia from the global financial system and locked up most of its gold and foreign exchange reserves, while Moscow has retaliated in turn, complicating payments.

The coupon payments due March 16 are the first in a series of maturities, with another $615 million due later in the month. The first principal payment is due on April 4, with a $2 billion bond.

Russia has 15 international bonds with a face value of about $40 billion outstanding, about half held by international investors.

Switzerland saves Russians $213 billion

Switzerland’s financial industry association estimated that secret Swiss banks hold up to $213 billion of Russian wealth.

The Swiss Bankers Association (SBA) estimated that the banks hold between 150 billion and 200 billion Swiss francs ($213 billion) of money from Russian clients.

Despite its estimate of the Russian count, the SBA stressed that the amount was small compared to total assets in Switzerland, considered a safe haven for money.

“The share of assets held by Russian clients probably represents a single-digit percentage of total cross-border assets held in Swiss banks,” he said in an emailed statement to Reuters, referring to money held for clients. who reside abroad.

UK freezes tax cooperation

For her part, Lucy Frazer, financial secretary of the British Treasury, issued a written statement to Parliament stating that: “The United Kingdom is freezing tax cooperation with Russia and Belarus, suspending all exchange of tax information with them”.

“The suspension of the exchange of tax information will ensure that the UK is not supplying Russia and Belarus with information that could lead to a greater benefit or tax return for them,” he added.

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Frazer said he does not expect the suspension to materially affect Britain’s ability to deal with tax default as it continues to share information with its extensive treaty network.

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