Expat Kiwi Paul Goldfinch sues US Treasury to contest sanctions over him sitting on Russian bank board

US Secretary of State Antony Blinken's sanctions in response to Russia's invasion of Ukraine designated a New Zealand-born investment banker. The designation was later withdrawn. NZ Herald photo by Mark Mitchell

An expat New Zealand banker sanctioned for being on the board of a Russian bank when that country invaded Ukraine in 2022 has filed a lawsuit against senior White House officials in a bid to escape financial purgatory.

Lower Hutt-born Paul Goldfinch filed his case in the US District Court for the district of Columbia on July 17, naming Secretary of State Antony Blinken, Treasury Secretary Janet Yellen and other government officials and departments as defendants in a bid to get his name off sanctions blacklists.

In court filings, Russian resident Goldfinch acknowledges having been a board member of Bank Otkritie, but argued he had resigned shortly after the Ukraine invasion and sought to be delisted from sanctions registers.

A Herald interview request, sent to Goldfinch’s US-based lawyers, went unanswered this week.

Bank Otkritie as an institution was sanctioned by the US Treasury on February 24, 2022, the same day Russia launched its full-scale invasion of Ukraine. At the time, Yellen said: “Treasury is taking serious and unprecedented action to deliver swift and severe consequences to the Kremlin and significantly impair their ability to use the Russian economy and financial system to further their malign activity.”

On April 20, 2022 Blinken further extended financial sanctions against Russia to hundreds of other individuals and entities, specifically naming 16 Bank Otkritie board members, including Goldfinch.

Blinken said the Bank Otkritie sanctions designations were “for being or having been a leader, official, senior executive officer, or member of the board of directors, or members of an entity whose property and interests in property are blocked”.

Goldfinch’s lawyers filed evidence to the court that said Goldfinch had resigned from Bank Otkritie on April 8 - prior to his designation by Blinken - based on feeling “extreme personal discomfort continuing to work with Bank Otkritie in light of Russia’s ongoing aggression against Ukraine” as well as the risks in continuing his role to both his personal reputation and his new employer in the United Arab Emirates.

His lawyers told the court Goldfinch had joined the bank in March 2020 to help float the bank in an Initial Public Offering, a project which was first delayed by Covid restrictions and then scuppered when international attitudes towards Russian financial entities soured following the Ukraine invasion.

Filings said Goldfinch studied accounting and finance at the University of Auckland before working for KPMG and then Citibank in New Zealand. In 1996 he left for London and Credit Suisse First Boston, before moving to Moscow and holding a series of roles - including chairman - at UBS Russia. During this time he married a Russian citizen and had two children who now attend high school in Moscow.

In 2021 he became the chief financial officer to Abu Dhabi-based blockchain fintech Pyypl, and his lawyers said he was presently a resident of both the United Arab Emirates and Russia but remained a citizen of - and travelled on his passport from - New Zealand.

Court filings show Goldfinch sought legal advice from Bank Otkritie in late February 2022 over potential exposure to sanctions from New Zealand after the passing of the freshly minted Russia Sanctions Act.

Auckland barrister Daniel Kalderimis provided an opinion in late March 2022 noting while neither Goldfinch nor Otkritie Bank has been named as a subject of sanctions from New Zealand, he nonetheless cautioned that the bank should exclude Goldsmith from any board meetings which discussed the assets or affairs of anyone who was.

Kalderimis said Goldfinch “may wish to be able proactively to explain this policy, and his compliance with it, when communicating with government agencies or state bodies from New Zealand”.

Weeks after this legal advice, on April 19, 2022, New Zealand sanctioned Bank Otkritie in response to the Russian invasion. Goldfinch, however, does not appear on the list of sanctioned individuals maintained by Wellington’s Ministry of Foreign Affairs and Trade.

Goldfinch’s lawyers said the US sanctions had “caused substantial harm”, including the loss of his job with Pyypl, and seen his offshore accounts frozen. This had led to “persistent difficulties in being able to engage in those basic transactions needed to sustain him and his nuclear family”.

Goldfinch said the account freezes and loss of employment had led to problems with mortgage payments, and he had also “been declined medical insurance and has had pre-existing life insurance in New Zealand cancelled”.

“To underscore the nature of this delisting matter: Mr Goldfinch is not an oligarch of the Russian Federation, nor is he a titan of Russia’s financial industry, nor a high-net-worth individual residing in the Russian Federation. Instead, Mr Goldfinch is a citizen of New Zealand who moved to Russia more than two decades ago for employment at UBS Bank - a Swiss-headquartered global financial institution,” Goldfinch’s lawyers wrote.

Goldfinch appears to have recently reconnected with his home country, with property recordings showing him buying two homes in Papamoa in late 2020 for a combined price of $1.8 million.

UPDATE: After publication of this story the US Department of Treasury announced that Goldfinch had been removed from its sanctions list.

Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism - including twice being named Reporter of the Year - and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.