According to RosZMI, the banks of the aggressor countries refuse to transfer payments to China without receiving written guarantees regarding their receipt.
Points of attention
- Russian banks are demanding written guarantees from Chinese banks for payment acceptance, citing concerns over sanctions and conversion losses.
- Over 98% of Chinese banks do not accept payments from Russian companies, leading to significant trade difficulties between the two countries.
- The payment security system depends on various factors such as product category, transaction amount, and recipient location, adding complexity to settlements between the Russian Federation and China.
- Chinese companies supplying goods to Russia must navigate unofficial channels in banks to secure payment confirmations, contributing to lengthy refund procedures and currency conversion losses.
- The worsening payment situation between Russia and China escalated in December 2023 following US sanctions, resulting in major Chinese banks halting payment acceptance from Russian entities, further complicating trade transactions.
What is known about the problems of the Russian Federation with settlements in trade with China
RosZMI, citing sources, note that in order to find out the prospect of making a payment, Chinese companies supplying goods to Russia are forced to contact the managers of their own banks, describe the details of trade transactions and send a request for accepting payments.
This information is passed on to Russian companies, which must confirm in writing to their bank that the payments will be accepted.
It is noted that this scheme is used during settlements in yuan for goods that are not under Western sanctions.
Requests to confirm receipt of payment are due to the fact that Chinese banks often return payment due to the risk of falling under secondary sanctions.
It is emphasized that the refund is a long procedure that makes customers nervous and leads to losses during currency conversion.
At the same time, not all Chinese companies supplying goods to Russia are able to clarify information through private channels in the bank.
This is an unofficial service, and in serious banks, no one can guarantee anything to anyone. Payment processing primarily depends on the category of goods, the amount of the transaction and the recipient of the goods in Russia.
What is known about the reasons for the deterioration of the situation with payments in trade between the Russian Federation and China
The situation with payments from Russia to China took a sharp turn for the worse in December 2023, when US President Joe Biden signed an executive order imposing secondary sanctions, including against foreign banks, for facilitating deals with sanctioned persons and supplying the Russian military.
After that, large Chinese banks stopped accepting payments from Russia, particularly in yuan. Small regional banks joined them in July and August this year. Thus, more than 98% of Chinese credit organizations currently do not accept payments from Russian companies.
