Russia Unable to Pay Pensioners as West Blocks Gazprombank Transfers

Russian pensioners living abroad are facing delays in receiving their retirement payments amid Western financial restrictions that have disrupted transfers through Gazprombank, the Kremlin-linked institution long used for such transactions.

The Russian Ministry of Foreign Affairs placed the blame squarely on Western nations, accusing them of “artificially creating” the crisis by obstructing payments through Gazprombank.

“The responsibility for the artificially created crisis regarding this year’s delayed pension payments to Russian pensioners abroad falls squarely on the Western community and its financial institutions which are obstructing transfers from Russia’s Gazprombank,” the MFA statement said.

Thousands Left Waiting

Nearly 4,000 Russian pensioners in Estonia have not received their pensions for the first quarter of 2025, despite Estonia having fulfilled its part of the payment agreement and transferring the necessary funds to Russia.

The ministry summoned a Russian embassy representative and issued a diplomatic note, demanding explanations and resolution.

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Estonian officials said Russia attempted transfers twice, only to have the payments rejected, and there’s no clear timeline for when the funds will arrive.

Affected pensioners may apply for subsistence benefits from local authorities in the meantime.

Payments Finally Sent to Latvia and Estonia—but Late

On August 27, Russia’s Pension and Social Insurance Fund reported that it had transferred roughly €15.4 million (about $17.8 million) to cover delayed pensions for approximately 13,300 recipients in Latvia and Estonia.

These payments, covering Q1 and Q2 2025, had reportedly been blocked earlier by foreign banks citing sanctions.

Latvian and Estonian authorities said their approval enabled the funds to be released and distributed, expected in mid-September, to pensioners in both countries

Sanctions on Gazprombank Fueling the Problem

The difficulty lies in Western sanctions targeting Gazprombank, long a key institution for Russia in processing international payments, especially for energy and pensions.

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In November 2024, the U.S. Treasury placed Gazprombank and six of its foreign subsidiaries on a sanctions list, barring U.S. entities from engaging with them in energy-related or other transactions, as part of broader efforts to squeeze Russia’s access to the global financial system.

With Gazprombank isolated from the U.S. dollar system and companies wary of secondary sanctions, foreign correspondent banks have often refused to process transfers initiated via the bank, a key reason pension payments have stalled

The disruption of pension payments is not limited to the Baltics.

Reports indicate that thousands of pensioners, for instance, in Israel (home to some 50,000 Russian retirees), have also encountered obstacles receiving their payments despite formal bilateral arrangements; foreign banks have opted to freeze or suspend transfers under pressure from sanctions.

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