No foreign-owned bank in Serbia is expected to allow a blockade of payment transactions and will likely unilaterally stop cooperation with the Naftna Industrija Srbije (NIS), according to economist Đorđe Đukić. He warned that Serbia is now facing a fait accompli, and earlier inaction has created a serious risk to the financial system.
Đukić, a professor at the University of Belgrade Faculty of Economics, told Bloomberg Adria that foreign banks will not risk being involved in a payment freeze, and will independently suspend all business with NIS. He added that this raises another key issue: the claims these banks hold against NIS.
He stressed that Serbia is effectively cornered and criticized the lack of earlier action, noting that the U.S. administration’s moves could have been largely anticipated.
“It is well known that OFAC has never compromised in such procedures; at most, it gives time for authorities to comply, which in this case means completely removing Russian ownership from the domestic company,” Đukić explained.
According to him, the current situation leaves the National Bank of Serbia in a position where any action could have negative consequences, and the central question is now which external dictates it must follow.
Đukić emphasized that the government will likely act to avoid the worst-case scenario—a total blockade of payment transactions—which could even prevent frozen funds abroad from being used to pay foreign partners.
He also noted that headquarters of foreign banks operating in Serbia have likely already prepared for such a scenario, instructing local executives to implement an absolute suspension of NIS transactions, as central offices will not tolerate potential repercussions on the international financial market.
