The main bank of China has stopped settlements with Russia for Russian importers. What caused it?

Chinese Chouzhou Commercial Bank suspended all transactions with Russia, notifying clients. Businesses with partners from Belarus have also been terminated. Payments do not work in all payment systems.

Chouzhou is important because it has essentially become the main bank for Russian importers. The reason for this decision may be fears of Western sanctions.

The suspension of operations is already having consequences

Bank managers notified clients of the termination of relations with any Russian and Belarusian organizations in early February. Moreover, settlements have been stopped through all payment systems – be it SWIFT, Russian SPFS or Chinese CIPS. Payments are returned to buyers with an explanation that the transfer “does not comply with the internal rules of the receiving bank.”

As the interlocutors noted “Vedomosti”, because of this, at least several deals have already fallen through. It is alleged that due to the Chinese New Year (officially the holidays will last from February 10 to 17), buyers will not be able to remove the goods until March.

The reason for the suspension may be fears of Western sanctions

At the end of December, US President Joe Biden allowed the Ministry of Finance to simplify the punishment of banks that violate sanctions against Russia. After this, banks even from friendly countries tightened their policies towards Russian clients. State-owned banks of China, in particular, introduced restrictions on servicing Russian clients in mid-January.

Chouzhou may also fear sanctions. The source of the money can be seen in the bank’s statements, which Western counterparties may require from it. And the SWIFT system requests information from the Chinese CIPS about the volume of financial transactions with Russia, the publication’s source noted.

As an unnamed Russian businessman notes, back in December Chouzhou notified him of stopping payments for a certain list of goods, the import of which into Russia is prohibited by Western sanctions. Now the calculations have been completely suspended.

Opinions differ on the impact of restrictions on trade in the future

Lawyer Pavel Bazhanov told Vedomosti that the likelihood of restrictions on payments being lifted after the Chinese New Year is small. He advises Russian counterparties to look for other options for settlements – for example, with the help of Russian branches in China.

At the same time, Denis Rudenko, head of the customs practice of the Moscow law office “Ri-Consulting”, believes that there is still an opportunity to pay for Chinese products, payments are still being made. It is impossible to talk about a mass shutdown based on just a few examples, he points out.

Russians and Turkey have problems with payments

Earlier it became known that Turkish banks began to close accounts of Russian companies and tightened requirements for ordinary citizens from Russia intending to open a card in organizations due to US sanctions. A number of Turkish exporters have encountered banks refusing to accept transfers to pay for goods.

The first complaints about the suspension of payments between states began to be received from the beginning of 2024. Calculations remain frozen to this day. This was also due to Biden's December executive order.

Later it was noted that the departments of the two countries are discussing the creation of a joint bank as an option to solve the problem with transfers. This possibility is called “one of the points,” but so far the parties have not come to any specifics. According to RIA Novosti, the situation can be discussed at the highest level during the expected visit of Russian President Vladimir Putin to Turkey in the near future.