Chinese bank under EU sanctions halts transactions with Russia, media report
Photo: Chinese bank stops payments with Russia (Getty Images)
The Chinese Heihe Rural Commercial Bank, which came under EU sanctions, has stopped accepting payments from Russia, the Russian news resource Vedomosti reports.
The information was disclosed by sources in two Russian banks and four importers who faced the problem.
Heihe Rural Commercial Bank was among the last Chinese banks willing to open correspondent accounts for Russian credit institutions that had not been sanctioned.
On July 19, the EU Council imposed sanctions against Heihe for allegedly providing services related to crypto assets that significantly undermine the purpose of anti-Russian restrictions. The decision came into force on August 9. Since then, individuals from the EU have been prohibited from participating in any transactions with the Chinese bank.
Earlier, after other Chinese banks stopped operating with Russia, part of the country’s small and medium-sized businesses switched to Heihe Rural.
For a month after the new restrictions were introduced, payments through Heihe Bank were carried out as usual, but last week problems arose and the bank stopped accepting money.
Together with Heihe Rural Commercial Bank, another Chinese bank, Suifenhe Rural Commercial Bank, also came under European sanctions. It had also been important for Russia, as it was willing to open correspondent accounts for Russian banks.
Under sanctions
China’s close relations with Russia have previously led some Chinese banks to come under similar US sanctions. This forced them to review client portfolios and business practices.
At the beginning of last year, several Chinese state-owned banks tightened restrictions on financing Russian clients after the United States allowed the application of secondary sanctions to foreign financial institutions supporting Moscow’s war efforts in Ukraine.
In February 2022, Industrial & Commercial Bank of China and Bank of China began restricting financing of Russian goods supplies, despite the fact that at that time Western sanctions did not affect Russia’s energy sector. China’s largest state-owned banks also have experience complying with previous US sanctions against Iran and North Korea in order to avoid being cut off from the dollar system.
