Chinese banks continue to complicate payments in trade transactions with Russia.
Points of attention
- Chinese banks create obstacles in trade transactions with Russian companies, leading to payment delays and cancellations, causing financial difficulties.
- US sanctions have exacerbated the payment restrictions, prompting Chinese authorities to strengthen requirements for settlements in trade transactions with Russia.
- Russian companies resort to using intermediaries like payment agents or 'trading houses' to navigate the complex payment landscape.
- Delays in payments result in exchange and conversion losses for Russian companies, impacting their profitability and adding to financial uncertainties.
- The trade challenges between Russia and China highlight the need for efficient payment solutions and stable banking relationships to facilitate smoother transactions.
What is known about problems in trade between the Russian Federation and China
As reported by the Russian Kommersant media, the Chinese authorities are strengthening the requirements for settlements in trade transactions with Russian companies from the end of 2023, after the US President Joe Biden allowed the Ministry of Finance to introduce secondary sanctions against credit organizations of third countries for cooperation with Russian sanctioned companies and assistance to the military-industrial complex of the Russian Federation.
It is noted that a number of recent US sanctions have caused delays in payments for up to several weeks on the part of China.
What is known about problems with settlements in trade between Russia and China
At the same time, it is not uncommon for settlements with Russian companies to be canceled altogether without explaining the reasons.
In such conditions, Russian companies experience losses on the exchange rate and conversion, and also pay the corresponding commission.
From our experience, banks do not ask for anything: money simply hangs on correspondent accounts for 30-40 days and is returned, - explains the managing partner of the consulting company Oleksiy Sapozhnikov.
He noted that sometimes Russian companies receive goods, and Chinese suppliers cannot receive payment for them for 5-6 months.
However, more often than not, deliveries continue on postpaid terms.
Russian companies increasingly have to resort to the services of intermediaries - payment agents or "trading houses".
In the first case, the agents are responsible only for payment services, in the second - it means that such houses rely not only on the transfer of payment, but also the function of the movement of goods, - notes the founder of Sagrada Legal Oleg Ushakov.
