In late February and early March of 2022, nations across the world began levying sanctions against Russia in response to its hostilities against Ukraine. These sanctions were aimed at the entire Russian economy.
In accordance with these sanctions, Visa® and Mastercard® suspended operations in Russia and announced a gradual winding down of network activities. The suspension includes chargeback and dispute resolutions.
The following is a high-level overview of the changes implemented by Visa and Mastercard and how they affect chargebacks.
Comparison of New Russia Chargeback Rules: Visa and Mastercard
The new policies are fairly detailed. The following is a brief explanation of the new rules broken down by brand.
 |  | |
|---|---|---|
| Implementation Date | Staggered - March 10, March 17, April 9, and May 24 | March 11, 2022 |
| Regulated Entities | Non-sanctioned Russian issuers and acquirers | Non-Russian, non-sanctioned entities initiating disputes against non-sanctioned Russian entities |
| Ability to Initiate New Chargebacks? | Available until April 9 | Yes |
| Ability to Respond to Chargebacks? | Available until May 24 | No. Merchants were reimbursed for liability on in-flight disputes. New disputes are not being delivered to the opposing party. |
Visa’s Response to Russian Sanctions
On March 10, 2022, Visa began blocking all issuing and acquiring associated with Russian members.
The brand published an FAQ sheet to help merchants understand how chargeback management would be impacted.
The following policy updates apply to non-Russian, non-sanctioned entities initiating disputes against non-sanctioned Russian entities.
In-Flight Disputes
“In-flight disputes” is defined as cases that were initiated before 3:00am PST on March 11, 2022.
At 3:01am PST, Visa closed all previously opened cases. Since cases have been closed, no one could contest liability that had been assigned to them. To compensate for this loss of privileges, Visa reimbursed all parties that were holding liability when the sanctions went into effect.
For example, if you received a chargeback and were unable to challenge it, Visa reimbursed your bank for the disputed amount.
Visa expected to complete the disbursement process by April 8, 2022.
New and Valid Disputes
Issuers and cardholders are still able to initiate valid disputes. When they do, Visa will reimburse the disputed amount. This means cardholder complaints are still being handled.
What constitutes a “valid” dispute?
The new Visa policies outline which situations warrant a chargeback.
If you canceled services for your own reasons and not in response to any government prohibition
In some cases, you may be unable or unwilling to sell products or provide services to customers for reasons other than government-imposed sanctions.
In response to this decision, affected cardholders should try to resolve the issue with you directly. If a solution isn’t available, the cardholder is entitled to a chargeback. Cases should be filed under Reason Code 13.1 – Merchandise/Services Not Received.
If the cardholder is entitled to a refund but it can’t be processed because Visa operations were suspended in Russia
Due to Visa’s suspension of activities in Russia, you may owe a cardholder credit that is unable to be processed. In these situations, the only resolution option available to the cardholder is a chargeback.
In order to facilitate the dispute, send the cardholder a notification via letter, email, or other digital communication that includes:
- The truncated account number
- The credit amount
- Any available order information (such as an invoice number, flight details, etc.)
Doing so is considered sufficient documentation for Reason Code 13.6 – Credit Not Processed.
If a cardholder purchases merchandise and it’s being held by your country’s customs agency
If the customs agency in your country is holding merchandise due to sanctions, the cardholder has chargeback rights. The bank can initiate a chargeback under Reason Code 13.1 – Merchandise/Services Not Received.
Which disputes are invalid?
There are a few instances where a chargeback may not be allowed.
If a cardholder chooses not to travel
Some customers who have completed a transaction with your business and are under no travel restrictions may still be unable or unwilling to travel.
Because there are no travel prohibitions in these situations, issuers do not have dispute rights and Reason Code 13.1 isn’t valid.
If a cardholder purchases merchandise and it’s being held by his/her country’s customs agency
If purchased merchandise is being held by the customs agency in the cardholder’s country, the situation does not warrant a chargeback.
FOR MORE INFORMATION: Visa has provided more guidance and information on sanctioned entities in its “Dispute Resolution Guidelines and Frequently Asked Questions Related to Sanctions and Global Incidents” article, published on February 27.
Mastercard’s Response to Russian Sanctions
On March 10, 2022 the Mastercard network stopped supporting cards issued in Russia for both domestic and international transactions. Cards issued in Russia and used for domestic transactions must be handled outside of the Mastercard network.
Details regarding the suspension of Mastercard activity in Russia are outlined below.
Chargebacks Not Involving Russian Acquirers or Issuers
Mastercard advises merchants that normal chargeback procedures remain in place for all transactions not involving a Russian issuer or acquirer, unless an entity has been impacted by other restrictions or sanctions.
Chargebacks Involving Non-Sanctioned Russian Issuers or Acquirers
On March 10, 2022 Mastercard set a one-week window to allow customers to settle any previously authorized transactions and initiate refunds.
It also established a 30-day window for issuers to file chargebacks on any transactions that were approved prior to March 10. At 5:00pm Moscow time on April 9, 2022 issues will be prohibited from initiating new chargeback cases.
If you receive a chargeback during the “wind-down” window, you still have the opportunity to respond. However, your response must be submitted within the normal time frame (30 calendar days for domestic Russian transactions and 45 days for other transactions).
All response opportunities will cease at 5:00pm Moscow time on May 24, 2022.
A NOTE: Mastercard reserves the right to alter any of the positions outlined above in compliance with laws and regulations or as deemed appropriate by the company.
If you have questions about the new policies, contact your processor or acquirer. Acquirers can reach out to Mastercard’s Dispute Resolution Management team for help. (However, team members are unable to communicate with sanctioned entities.)
Stay Up-to-Date as the Situation Evolves
Midigator® is intelligent chargeback technology. We help merchants of all sizes in all industries prevent, fight, automate, and analyze chargebacks. If you’d like help navigating new card brand policies in Russia — or managing chargebacks in any region — contact our team of experts.
We will update this page if the situation changes and networks adjust their restrictions in response to actions against Russia. We encourage you to bookmark this page and check back often.
Also, follow Midigator on social media to be notified of changes. You can find us on LinkedIn and Facebook. Or, sign up for our newsletter here and receive tips to make the transition easier.
