Subsidiary of Chinese bank stops settlements with sanctioned Russian clients

The Russian Bank of China, which is a subsidiary of the Chinese Bank of China, has stopped servicing payments from Russian banks included in the US sanctions list. This is reported by the Kommersant newspaper, citing its own sources among market participants.

Experts interviewed by the publication noted that Bank of China handled most of the yuan payments between Russia and China. According to the newspaper's sources, the refusal to handle such payments is due to the threat of secondary sanctions by the US authorities.

As Kommersant writes, under Western sanctions, Russian and Chinese companies are increasingly using non-bank payment agents as intermediaries to make payments, which is why “the transaction chain is becoming less and less transparent.” According to the publication’s sources, the work of such intermediaries is not transparent and is not subject to regulators’ control.

In April, the newspaper already reported that Chinese banks had begun blocking payments from Russian companies for components for assembling electronics. According to the publication, this involved processors, servers, and screens, among other things.

Market participants then told the newspaper that payments were not going through “even for those organizations that had concluded long-term contracts for the production and supply of components for the assembly of electronics with Russian clients.”

According to them, in December 2023, problems began with Russian clients paying for deliveries of finished electronic products from China, such as computers, servers and data storage systems, and in April, Chinese credit institutions stopped servicing payments for electronic components.

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