Bank of Georgia slaps €300 limit on Russian luxury purchases worldwide

Bank of Georgia (BoG), one of the largest banks in Georgia, has imposed new restrictions on its Russian clients, preventing them from using their cards to pay for luxury goods costing more than €300 at high-end stores globally.

This marks the first time the bank itself will directly enforce international sanctions introduced in 2022, rather than relying solely on external bodies.

A BoG representative told the Russian news agency RBC that the move is not a voluntary initiative but a regulatory requirement. The restrictions have been in effect since May 21 and apply specifically to clients residing in Russia.

RBC reviewed the client notification, which explains that these measures align with international sanctions. It states that in certain luxury retail outlets abroad, payments made with Bank of Georgia cards exceeding 300 EUR/USD/GBP will face limitations or be blocked. The bank also advises clients to notify them if their residency status changes.

The enforcement relies on payment systems’ ability to identify merchants using standardised Merchant Category Codes (MCC), which are consistent worldwide. This means the restrictions on Bank of Georgia cards will apply internationally, in any country where cardholders attempt to make payments via Visa or Mastercard networks.

These restrictions stem from the European Union’s March 2022 ban on exporting vehicles and luxury goods priced over €300 to Russia. The sanctions prohibit sales of such goods to both individuals and legal entities in Russia or for use within the country.

Prior to this, Russians had occasionally encountered difficulties purchasing luxury items in boutiques located in cities like Rome, Nice, or Dubai, but such incidents were sporadic and not systematically enforced.

Experts interviewed by RBC noted that no other banks are currently known to actively monitor and restrict Russian clients’ luxury payments in this manner. Opinions among specialists are divided on whether this practice will become widespread. Some believe that such payment controls may be limited to banks and countries that have already imposed stricter rules on Russian clients, while others predict it could become a growing trend among banks in countries neighbouring Russia.