wire service he had used for years to pay vendors in Ukraine had suddenly stopped working.
He contacted AmEx for an explanation. A representative told him that the company had suspended service in the country. “I understand Russia, but why Ukraine?” Mr. Nayandin, who is based in Fairfax County, Va., said he told the AmEx rep.
Like many American companies, AmEx suspended operations in Russia and Belarus after Western governments bombarded the two countries with sanctions. But AmEx went a step further by shutting down a service in war-torn Ukraine that businesses use to make cross-border payments.
“In light of the war in Ukraine and the changing sanctions environment, which has made it difficult to provide a reliable customer experience, we have suspended a wire transfer service, FXIP, which is used by a small number of companies to make vendor payments to recipients in Ukraine,” an AmEx spokesperson said in a statement.
AmEx’s better-known card business remains fully functional in Ukraine, the spokesperson said.
Sprawling sanctions meant to cripple Russia’s financial system sometimes trip people and businesses out of their reach, even in Ukraine, the country they were meant to help.
Financial firms often take an overzealous approach to interpreting penalties due to the harsh penalties for violations. The potential extension of sanctions to new targets may also make companies cautious about who they do business with.
“From a business perspective, if the deal size is small, why take the risk? said Robert Clifton Burns, senior counsel at the law firm Crowell & Moring LLP.