From applying for Indonesian ATM cards to looking into cryptocurrency to temporarily using friends’ bank accounts, Russian nationals in Bali are reportedly looking for ways to receive money following financial restrictions resulting from sanctions.
When the news of Russia’s invasion of Ukraine broke out, Elena (not her real name), a 36-year-old graphic designer and entrepreneur from Russia who resides in Bali, was working on her laptop while enjoying her coffee at a café in Canggu.
“There was a lot of propaganda from both Europe and Russia’s sides,” she said, adding that she did not expect Russia to carry out the invasion – until it did.
“We [Russians] kind of expected something would happen but we didn’t think it would be this massive,” she said.
“We were expecting some sanctions [that result in a Ukrainian] economic crisis. But no, nothing as crazy as [the war].”
Immediately, Elena, whose family from her father’s side originated from Ukraine, was immersed in the harrowing news.
“I practically forgot about my coffee,” she said.
Like many Russian nationals abroad, Elena and others in Bali have felt the sting from financial restrictions as a result of the war. American payment card firms Visa and MasterCard have blocked numerous financial institutions in Russia following the US’ sanction against the country after its devastating attack on Ukraine.
Elena said she had already withdrawn all of her money before her MasterCard was blocked.
“It was a mission on its own because when I went to the ATMs [last week] there was no cash in any of the machines. A bunch of Russians queued at ATMs in Batubolong [in Canggu] but [there was no cash in] all of the ATMs,” she said.
“A lot of people are looking at crypto. This is why, I think, people want to open local bank accounts so [they] can cash out cryptocurrency,” she added.
Elena said that one way for herself and other Russians to get money from home is to buy cryptocurrency via their Russian bank accounts, and transfer the digital commodity to their friends in Bali who have non-Russian bank accounts.
Alternatively, Russians in Indonesia can get around the SWIFT blockade on Russian institutions by opening an Indonesian bank account. Elena said that her friend recently went to a local bank and saw many Russians queuing there to apply for an Indonesian ATM card.
“The whole thing is kind of dodgy, [the bank said ] you kind of need to find a sponsor. It’s pretty much illegal if you have a tourist visa [to apply for a local card],” Elena said.
Elena was informed that such exploitation of loopholes was actually quite common but largely under the radar. However, with many Russian nationals reportedly applying for local ATM cards following the invasion, she heard that the whole practice was being shut down.
“Unless you have KITAs,” she added, referring to the limited stay permits issued by the authorities for non-Indonesian residents.
A social media post on a local Facebook community in Canggu claimed that they could get Russian nationals without KITAs a local bank account as long as they are “sponsored” by an Indonesian who has had an account at said bank for at least six months. And that’s where their “services” come into play.
Coconuts has reached out to several local banks for confirmation.
Contacted via Instagram, PermataBank said that valid KITAS, KITAP (permanent stay permit), passport, and NPWP (tax identification numbers) are needed by a foreigner who wants to open an account at their bank.
However, in the absence of KITAS or KITAP, applicants can submit a reference letter in their place, the bank said, without elaborating further.
Separately, Giri Tribroto, the head of the Bali and Nusa Tenggara office of Indonesia’s Financial Services Authority (OJK), told Coconuts that they would monitor reports of Russians rushing to local banks to open accounts.
“We haven’t received any information, but bank queues are normal as long as there’s no rush [long lines]. If this causes trouble, the bank will report to the OJK,” he said.
Furthermore, Giri explained that banks generally would accept foreigners with KITAs in addition to valid passports, but a bank is also allowed to accept those with tourist visas provided that there are additional documents included that convince the bank that the customer does not pose any threats.
He added that some banks generally have their own risk appetite and evaluation and may “treat” Russia as a high-risk country, and thus Russian applicants may undergo enhanced due diligence to ensure that they are not part of a terrorism network or drug trafficking crime group.
“[But] Russia is not on the Financial Action Task Force’s high-risk list like Iran and North Korea,” he said, before adding that OJK does not forbid Indonesian banks to accept account opening applications from Russian nationals, as long as they abide by local rules.
Amid the convoluted financial mess, Elena branded the invasion “ridiculous” and said she hoped it would end soon.
“[President Vladimir] Putin’s days are over. He made a massive mistake. I hope there will be a revolution soon,” she said.
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