As a result of Western sanctions imposed on Moscow for its invasion of Ukraine, Armenian banks announced on Friday that they would no longer handle transactions made with Russian Mir payment cards.
The US Treasury Department warned international banks in September 2022 with secondary sanctions for providing support for the Russian card payment system known as Mir cards.
According to a February report from the Treasury’s Office of Foreign Assets Control, Russia has been exploiting the system to get around Western sanctions that have been aimed at Moscow’s financial sector.
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.”
It further stated that Mir cards issued by the state-owned VTB Bank of Russia’s Armenian branch will be exempt.
The imposition of broad sanctions by the West on Moscow resulted in a sharp rise in cash inflows into Armenian banks, which caused their earnings to quadruple.
A crackdown on dissent and fears of being conscripted into the war caused thousands of Russians to flee to Armenia. Additionally, Armenian businesses have been reselling consumer items made in the West to Russia.
Following its defeat to Azerbaijan in a conflict in 2020, Yerevan has started veering away from Moscow. When Baku launched a rapid offensive to seize control of the disputed Nagorno-Karabakh area last year, relations further worsened.
Yerevan has complained that Moscow failed to protect it in the face of a persistent security threat from Azerbaijan.
Ditching the use of Mir cards is the latest in a string of diplomatic rows between the two countries.
Armenia will stop airing programs hosted by Russian TV host Vladimir Solovyov, who the US State Department has dubbed “the most energetic Kremlin propagandist,” according to a government source on Friday.
Armenia has been attempting to establish alliances with Western nations, primarily France and the United States, after suspending its membership in the Collective Security Treaty Organization (CSTO), a security alliance led by Moscow that includes several former Soviet republics. This announcement was made by Prime Minister Nikol Pashinyan last month.
Despite Moscow’s concerns, the nation has also legally joined the International Criminal Court (ICC) and is now required to detain Russian President Vladimir Putin upon his arrival in Armenia in accordance with an ICC arrest warrant that was issued in March 2023.
