Media: Chinese banks refuse to serve Russians because of sanctions risk Thursday, October 25, 2018 2:00:00 PM

Russians are facing difficulties working with Chinese banks because of sanctions risks, the newspaper Kommersant reported, referring to the record of the meeting of the Sub-Commission on Cooperation in Financial Fields between Russia and China where this problem was discussed.

According to the newspaper, the meeting took place on September 27 to 28 in Shenzhen. The parties discussed “barriers that prevent making interbank payments and opening correspondent accounts.” Moscow persistently raised the issue that Chinese banks have been blocking or delaying the operation of Russian companies.

Representatives of the People’s Bank of China, the equivalent of the Russian Central Bank stated only that “they are ready” to continue to provide Chinese commercial banks with information “on the nature of the ongoing sanctions restrictions”. According to the interlocutors of Kommersant, individuals from the sanctions list are not the only ones facing difficulties with Chinese banks. Those legal entities and individuals who were not subjected to sanctions have been affected as well.

Difficulties with attracting money from both western and eastern markets were first mentioned by then-head of the Russian Central Bank, Hermann Graf in December 2014. In June 2015, the same problems were confirmed by the First Deputy President and Chairman of VTB Bank, Yuri Soloviev, who said that “most Chinese banks refuse to do business with Russian financial organizations.” There were no more public mentions of those issues afterwards.

The representatives of three Russian and two Chinese banks with the offices in both countries that were interviewed by the Kommersant stated that the problem initially appeared after the first rounds of sanctions in late 2014. By the end of 2015 the problem was “more or less settled”.

According to them, the situation has deteriorated since May this year, especially for the companies that were added to the so-called list of the SDN (Specially Designated Nationals) of the US Treasury. Entrepreneurs and employees of companies who do business with China and just live in the country also confirmed to Kommersant that the problems increased in the last half year.

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