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. Last Updated: 07/27/2016

Russia Firm on WTO Banking Sector Talks

Moscow will not yield to pressure to allow U.S. banks to open branches in Russia, one of several sticking points in negotiations on the country's accession to the World Trade Organization, top officials said Thursday.

The United States, with which Russia is seeking to reach an agreement for WTO accession, has been pressing Moscow to loosen its rules, which currently stipulate that foreign banks can open only subsidiaries that are regulated by the Central Bank rather than branches covered by U.S. regulations.

"I do not see Russia retreating and giving in to the U.S. pressure," Yekaterina Mayorova, a top trade negotiator with the Economic Development and Trade Ministry, was quoted as saying by RIA-Novosti.

Meanwhile, Central Bank First Deputy Chairman Andrei Kozlov suggested that Washington would eventually retract its demand -- which he said would make Russia the first country to join the WTO without agreeing to let foreign banks open branches.

Richard Hainsworth, of the Rusrating agency, said the Russian restrictions were largely irrelevant since foreign subsidiaries had already been permitted to open outlets throughout the country, meaning that foreign banks were already competing with Russian banks.

He said that the proposed U.S. changes would potentially allow money launderers to take advantage of looser regulations in some other countries.

While WTO talks have dragged over financial services reforms, access to the aviation industry and intellectual property protection, Chris Weafer, chief strategist at Alfa Bank, said there were larger nontrade, political issues that were clouding the talks.

Moscow has refused to support the U.S. push for international sanctions against Iran, and the U.S. position in WTO talks is widely seen as punishment for what is seen as Russia's stubborn stance on Iran's nuclear program.

Kremlin officials, meanwhile, have suggested that Russia would delay its decision to choose foreign partners to develop the giant Shtokman natural gas field -- and possibly block U.S. companies from participating -- if WTO negotiations failed. "While they're talking about these issues, they would be very quickly resolved if there was the political will," Weafer said.

 Russia plans to sign an agreement on WTO membership with Australia next week, Interfax said, citing Yekaterina Mayorova, head of the Economic Development and Trade Ministry's commercial talks department, Bloomberg reported. The U.S. is only nation with which talks have not yet been concluded, the newswire cited Maiorova as saying.