With Moscow’s invasion of Ukraine, the Kremlin regime almost completely lost the European market, but was also removed from the SWIFT international financial system as part of Western sanctions. Now Russian companies have panicked because they have great difficulties with payments to China, and half of them turn to intermediaries in countries such as the United Arab Emirates, Hong Kong, Kazakhstan and Kyrgyzstan. However, analysts say that China “will not sacrifice its market for the sake” of Putin and Russian companies.
Efforts by Russian firms to make payments for goods in China as fears of secondary US sanctions have spooked local banks and created a booming market for middlemen, according to MSN.
The US Treasury has warned it could impose sanctions on those who facilitate transactions with Russia, asking foreign banks to increase compliance. Undeterred by the threat, Chinese banks are limiting their transactions with Russian companies, which in turn are rushing to open accounts with the only Russian lender with a Chinese branch, causing a deadlock at VTB Shanghai.
Unexpected statement by a Western diplomat. He knows Putin’s surprise move to stop the war, in 5 minutes
Trade consultants, bankers and importers and exporters said on condition of anonymity that long delays in transactions and deliveries have led businesses to turn to middlemen, despite high fees and risks of seizure of shipments in third countries.
Lose weight quickly and easily with the help of Lipovon. Natural ingredients. Immediate delivery.
“There are a lot of (Russian businessmen) who are just going from bank to bank, opening current accounts,” one of the sources said. “If their payment doesn’t go through, they move on to the next one.”
The intermediaries are legal entities in Hong Kong, Kyrgyzstan, Kazakhstan, the United Arab Emirates and other jurisdictions considered “friendly” to Russia, using Moscow’s term for countries that have not imposed sanctions over the conflict in Ukraine.
How to keep the doctor away without heart disease and stroke: A night habit is the best method
Using intermediaries can create its own problems. They can charge several thousand dollars in fees for each transaction and there is a risk of assets being seized when third countries are involved. One of the sources said a large shipment of servers being transported to Russia from China via Kazakhstan was seized because the goods in question fell under US sanctions.
Payments handled by intermediaries can still be refused by Chinese banks, and the less official nature of the transactions means Russian firms may struggle to recover their money. Chinese shipments to Russia were 64.2 percent higher last year compared to 2021, according to customs data, while total trade between the two countries rose to a record $240 billion.
“In terms of international payments … we see the risk that secondary (US) sanctions will increase and payments will become more complicated,” Bank of Russia Governor Elvira Nabiullina said on Friday. “We are in contact with our partners to look for ways to make payments easier.”
Danger of collapse for Putin’s regime: It is on the verge of collapse after losing something essential
Some companies hope that President Vladimir Putin’s visit to China next month will help solve the problem. “Something may change after the visit of the official Russian delegation to China.”
Others are more pessimistic, with one expert saying that Russia has not been a priority for Chinese banks because, despite expanding trade between the two countries, China’s trade turnover with the United States and the European Union remains much larger. “They will not sacrifice their market for the sake of payments to Russian companies.”
See comments (27)
Tags: Panic spreads Russia measures China blocking Putin sacrificing
-
