Category
Latest news

Chinese Banks Halt Transactions With Sanctioned Russian Institutions Amid US Sanctions

Authors
Maryna_kulakova
Maryna Kulakova
Author
Chinese Banks Halt Transactions With Sanctioned Russian Institutions Amid US Sanctions
An elderly man walks past a China Construction Bank branch with digital signage displaying financial information and 24-hour self-service banking, on October 26, 2024, in Chongqing, China. (Source: Getty Images)

Chinese banks have begun severing ties with Russian financial institutions affected by the latest round of US sanctions, reports The Moscow Times on December 3.

According to Alexey Poroshin, CEO of First Group, most banks in China have already halted their operations with these institutions.

This has been confirmed by Alexey Razumovsky, commercial director at Impaya Rus, who stated that several Chinese banks, including Bank of China, have blocked payments from sanctioned Russian organizations.

Additionally, Bank of Kunlun, a bank frequently used by Russian importers for payments, has sent warnings to its clients about the suspension of payment services.

Previously on November 21, the US Department of the Treasury has 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.

In April 2024, several Chinese banks stopped accepting payments in yuan from Russia due to concerns over secondary sanctions imposed by the US.

Currently, 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.

Following the US Treasury Department’s decision to impose sweeping sanctions on 50 Russian banks, Russia’s ruble tumbled to 114.5 against the US dollar, according to Bloomberg on November 27.

See all