Русский
An estimated 50% of all financial transactions conducted between Russia and China are facilitated by means of intermediaries to avoid exposure by Chinese lenders to the risk of secondary sanctions, Reuters have reported, citing trade consultants and bankers, as well as importers and exporters.
In December, US President Joe Biden signed an executive order that took additional measures against facilitating transactions with Russia. At the time, the US Treasury was calling on foreign banks to boost compliance with anti-Russia sanctions.
As a result, come March 2024, several Chinese banks, including the Industrial and Commercial Bank of China, stopped accepting payments in RMB Yuan from Russia for fear of secondary sanctions, with almost 80% of payments to China being returned.
However, to get around the transactional ban, middlemen carry out cross-border payments from Hong Kong, Kyrgyzstan, Kazakhstan, the UAE and other countries that have not supported US measures. Some Russian companies have switched to payment agents, creating chains of temporary firms to make payment processes faster.
Nearly half of Russian entities working with Chinese firms are opting for their services, while major Russian businesses, most of which were targeted by Ukraine-related sanctions, established schemes with middlemen a year ago.
Shipment delays and prolonged transactions have forced Russian businesses to turn to intermediaries, despite increased fees that may amount to charges of 10-20% for each transaction, as well as a major risk of sanctions-related shipment seizures in third countries. According to one of the sources, a large batch of servers being transferred to Russia from China via Kazakhstan was confiscated after the shipment fell under the scope of US sanctions.
The use of intermediaries doesn’t provide companies with guarantees, as payments can still be refused by Chinese banks, while the less official nature of those settlements means that Russian firms may struggle to get their money back. Only a fifth of Russian firms reportedly have full access to their Chinese bank accounts, while 30% have limited access.
Russian businesses have expressed hope that President Vladimir Putin’s visit to China next month will help resolve the issue, while others are less optimistic, one remarking that Russia is not a top priority for Chinese banks, despite booming trade between the nations.
