Chinese Banks Halt Payments from Russian Importers Amid Sanctions Concerns

Chinese banks have taken a significant step in response to international sanctions concerns, halting payments from Russian importers. This move is likely to have a substantial impact on trade between the two countries.

Major Chinese banks, including the Industrial and Commercial Bank of China (ICBC), China Construction Bank, and Agricultural Bank of China, have stopped processing payments from Russian importers. This decision was made in an effort to comply with international regulations and avoid any potential penalties.

The sanctions concerns are centered around Russia's actions in Ukraine, and the international community's efforts to isolate the country economically.

Chinese banks have started to sever ties with Russian financial institutions affected by US sanctions. This has resulted in several Chinese banks, including Bank of China, blocking payments from sanctioned Russian organizations.

The US Department of the Treasury imposed new sanctions on dozens of Russian banks, including Gazprombank, securities registrars, and financial sector officials, in an effort to restrict Russia's access to the international financial system. This was done on November 21.

As a result, around 80% of payments in yuan are being returned to Russia. There are also reports that the Central Bank of Russia is preparing for a scenario where trading of the yuan on the Russian stock exchange may be suspended.

Several Chinese banks have stopped accepting payments in yuan from Russia due to concerns over secondary sanctions imposed by the US. This happened in April 2024.

Here are some key Chinese banks that have been impacted by US sanctions:

These banks have halted transactions with Russian firms, tightened compliance checks, or stopped accepting payments in yuan from Russia. This has caused concerns for Russian businesses, who are worried about a "logistics collapse" if the banks do not resume payment settlements after the Chinese New Year holiday.

In response to the issues, the Kremlin has acknowledged the problems and said it is working with Beijing to solve them.

Chinese banks have been taking a cautious approach when dealing with Russian importers, and it's not hard to see why. The US has imposed several rounds of sanctions on Russia, and Chinese banks are trying to avoid getting caught in the middle.

Most banks in China have halted their operations with Russian financial institutions affected by the latest round of US sanctions. This includes several Chinese banks, including Bank of China, which have blocked payments from sanctioned Russian organizations.

Chinese banks are also stepping up compliance checks when dealing with Russian businesses. This means they're being more careful about who they do business with and are trying to avoid any potential risks.

Russian businesses are now worried about a "logistics collapse" should the bank not resume payment settlements after the Chinese New Year holiday. This is because Chouzhou Commercial Bank, a key Chinese bank used by Russian importers, has stopped all settlements with Russia.

Here's a breakdown of the Chinese banks that have been affected:

It's worth noting that Chinese banks have been refusing to process payments from senders with Russian names since mid-July. This means that Russian importers are now forced to prepare a full set of documents for transactions through third parties to avoid any visible connection to Russia.