Chinese banks wary of US sanctions stop Russian payments

By Rhod Mackenzie

On February 21, experts interviewed by Izvestia explained that the three largest banks in China, Industrial and Commercial Bank of China, China Construction Bank, and Bank of China, have stopped accepting payments from Russian sanctioned financial organizations due to the risk of falling under secondary sanctions.

It has been reported that Chinese banks are limiting or stopping the acceptance of payments from the Russian Federation. Since December, when the law on secondary sanctions was adopted, this process has been gaining momentum. Refusals may have various official reasons, such as stricter compliance or a ban from the bank's owners. However, the main reason is the risk of falling under secondary sanctions,” according to Oleg Abelev, head of the analytical department of Ricom Trust Investment Company and a Candidate of Economic Sciences.

The founder of Anderida Financial Group, Alexey Tarapovsky, suggested that the parties may attempt to resolve the current situation, given that Russia is a significant strategic partner of the PRC.

He stated, 'Russia is an important strategic partner for China.' However, we understand that Russia ranks only fifth in terms of trade turnover. This ranking does not allow China to risk secondary sanctions against them, as it would pose a significant threat to their economy. Therefore, after the suspension, a search for a solution will follow, as Russia is an interesting partner for China,” the expert concluded.
Earlier today, it was reported that three out of China's four largest banks have stopped accepting payments from Russian credit institutions that are under sanctions since the beginning of this year. According to Alexey Poroshin, General Director of First Group JSC, these banks hold the first, second, and fourth positions in terms of assets in the PRC.