The World Chess Federation says its Swiss bank accounts will be immediately frozen because its president is under US sanctions for alleged dealings with the Syrian government.
Kirsan Ilyumzhinov, a Russian who has headed Fide for over two decades, was placed under sanctions in November 2015, accused of aiding the Syrian government.
The millionaire businessman and ex-politician – who is embroiled in a power struggle with the Fide secretariat – has denied the accusations.
"Mr Kirsan Ilyumzhinov denies the outrageous and false allegations made against him and is not aware that Fide's bank accounts have been frozen by UBS," said his London solicitor, Nigel Kushner.
"Mr Ilyumzhinov believes that the allegations form part of an ongoing smear campaign related to a power struggle at FIDE in advance of elections taking place this year."
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UBS said it could not comment on whether individuals or organisations were clients of the bank.
"We can't comment on whether individuals or organisations are clients of UBS. We follow all laws and regulations that are applicable to us," the bank said.
Last March, Mr Ilyumzhinov accused Fide of an attempted "revolution" to oust him by falsely announcing his resignation. He said he intended to serve his full term and would decide this year whether to run for re-election in September.
Fide, the secretariat of which is based in Athens, says it transferred presidential powers to Mr Ilyumzhinov's deputy in December 2015 though its website still lists Mr Ilyumzhinov as president.
"The Swiss Bank UBS has announced that they will immediately close our accounts," Fide's treasurer, Adrian Siegel, said in a February 12 letter posted on its website.
"The white money strategy in Switzerland does not allow to do business with institutions or persons on the sanction list of the US Department of the Treasury. Thus, it was only a question of time until we face this serious problem."
Mr Siegel said Fide had so far been allowed to keep its accounts because Mr Ilyumzhinov had informed the federation on several occasions that he would soon be removed from the sanctions list.
