VIENNA, March 6 (Reuters) - A top U.S. sanctions

official will this week warn Austria and Raiffeisen Bank

International of the dangers of doing business in Russia, piling

pressure on the biggest Western bank there.

As part of a renewed push by Washington on sanctions

enforcement, Anna Morris, a U.S. Treasury official focused on

illicit money flows, will encourage banks in Austria to examine

their Russian exposure and "take mitigation measures".

Morris will speak about a new U.S. sanctions authority that

"heightened risks for banks" and encourage them to "protect

themselves from trade related to Russia's military industrial

base, or risk being cut off from the U.S. financial system," the

U.S. embassy in Vienna said on Wednesday.

The United States is the globe's most powerful regulator

chiefly because it can sever a bank's access to the dollar, a

cornerstone of international finance. Losing access to the

dollar would be likely to plunge any bank into a crisis.

Morris is the latest U.S. official to visit Austria, one of

the European countries with the closest ties to Russia. Her

stark warning represents another attempt to pressure RBI, which

processes large volumes of payments to and from Russia.

RESISTANCE

The visit follows an executive order from U.S. President Joe

Biden last December threatening penalties for financial

institutions that help Russia skirt sanctions.

A spokesperson for Austria's finance ministry said the

Morris would visit government authorities and companies to talk,

in general, about money laundering and sanctions.

RBI, part of an industrial combine that underpins Austria's

economy, said that it often discussed sanctions with regulators

and that it always respected such rules.

Washington is facing stiff resistance from Austrian

politicians and officials, some of whom have defended RBI.

Although Austria publicly supports Ukraine, several

officials who spoke to Reuters have said they are reluctant to

completely sever decades-old ties with Russia, thinking it will

still be possible to restore relations.

Recently, Austria pressured Ukraine to suspend RBI from a

Ukrainian blacklist, holding out on backing fresh European Union

sanctions on Russia until they did, people familiar with the

situation have told Reuters.

Austria and the bank wanted it to be taken off a Ukrainian

list dubbed "international sponsors of war" - which sets out to

shame companies doing business in Russia and supporting the war

effort by, for instance, paying taxes.

Vienna remains a hub for cash from Russia and its former

Soviet neighbours and Austria maintains close ties with Russia

through critical gas pipelines and finance.

Although Italy's UniCredit also has a business in Russia and

is similarly reluctant to leave, RBI is far larger and has

become a test of western resolve to end ties with Russia.

RBI had intended to spin off its Russian business, which

provides a payment lifeline to hundreds of companies there,

after coming under pressure from international regulators. But

two years into war, little has changed.

Russian authorities had made it clear to RBI, which has

around 2,600 corporate customers, 4 million local account

holders and 10,000 staff, that they wish it to stay because it

enables international payments, one source told Reuters.

RBI's presence in Russia has proved divisive within its

management as well as among the regional Landesbanks that

control it, with some advocating the bank leaves.

(Editing by xxxxxx)