- Three of China’s four largest state-run banks have stopped accepting payments from sanctioned Russian financial institutions, Izvestia news agency reported.
- This suspension follows the 12th round of EU sanctions against Russia and secondary sanctions from the United States.
- Western countries are now targeting international companies doing business with Russia.
Three of China’s four largest state-owned banks have suspended payments from sanctioned Russian financial institutions, Russia’s Izvestia news agency reported on Wednesday.
Alexei Poloshin, general director of investment and consulting firm First Group, told Izvestia that Industrial and Commercial Bank of China, China Construction Bank and Bank of China have suspended trading since early 2024.
Three Chinese banks notified Russian customers of the move in January, but the problem began in December after the European Union imposed its 12th round of sanctions against Russia, Poloshin said. . In December, the United States also approved secondary sanctions targeting financial institutions that help Russia evade sanctions.
Chinese banks are stepping up compliance checks on Russian companies, fearing they will be drawn into the West’s increasingly tough sanctions regime against Russia over its invasion of Ukraine.
Poloshin told Izvestia that Chinese banks are currently reluctant to do business with sanctioned companies because the trade balance between the United States and China is much larger than that between China and Russia.
Industrial and Commercial Bank of China, China Construction Bank and Bank of China did not respond to Business Insider’s requests for comment.
Western countries are tightening sanctions against Russia as Russia’s economy shows resilience, two years after the invasion of Ukraine triggered widespread trade restrictions. This is partly because Russia has diverted trade towards the east, particularly with China and India.
In particular, Russian companies trading internationally have become increasingly dependent on Chinese institutions; Chinese yuan Since then Several Russian banks withdraw from international financial messaging system SWIFT.
So Western countries are now trying to find a way to break through Russia’s economy by targeting international companies that still do business with Russia instead.
The Kremlin has acknowledged there are problems with Chinese banking, and spokesman Dmitry Peskov said earlier this month that authorities were “working” with the Chinese government to address the issues.