Attention! Export to Russia warning, many banks suspended, restricted, and closed accounts!

Attention! Export to Russia warning, many banks suspended, restricted, and closed accounts!

Attention to export to Russia!

Since February, many banks have strengthened the review of Russia-related business!
U.S. President Joe Biden signed an executive order at the end of December 2023 imposing "secondary sanctions" on financial institutions around the world that support Russia's special military operation in Ukraine. A few days ago, US President Joe Biden also said that the United States plans to announce a "significant" sanctions package against Moscow this Friday, although the specific affected industries have not yet been clarified, a move that marks a significant escalation of the US financial war against Russia. Subsequently, the European Union also announced that it had reached an agreement in principle and planned to launch the thirteenth round of sanctions against Russia.

As sanctions have advanced, many banks have begun to scrutinize their business dealings with Russia, especially cross-border transactions.

Banks in Turkey, the United Arab Emirates and other countries stopped accepting payments from Russia
Turkish banks stopped accepting payments from Russia on a large scale two months ago, bringing Russian imports to a standstill in Turkey, covering a wide range of sectors, including chemicals, auto parts, clothing and footwear. Although Russia had planned to resolve the issue by January 25, the situation continued to deteriorate, with Russian companies facing the closure of their accounts in Turkish banks in February and individuals facing difficulties in the second half of the month. Denizbank, one of Turkey's leading banks, is conducting a large-scale inspection of customers leaving Russia, requiring a residence permit and proof of stay in Turkey, otherwise the account will be closed.

At the same time, banks in the UAE have also restricted transactions with Russia and have begun to close personal and business accounts. Even Russian businessmen who have offices in the UAE have their corporate accounts closed. Here's the situation: "We buy goods in China. The commodity code is sanctioned (it is included in the prohibited list of goods imported into Russia from the EU or the USA), but the goods themselves are Chinese - without any European technology, this is the simplest product. The bank closed the account on the grounds that the commodity was a sanctioned item. They propose to work directly with China and not involve the UAE. ”

Many domestic banks have tightened remittance reviews
Since February this year, China's domestic commercial banks have also strengthened the review of the receipt of Russia-related remittances, resulting in many foreign trade businesses being unable to collect money normally because they do not meet the requirements of the receiving bank or intermediary bank. The banks involved include large state-owned banks, joint-stock banks, local small and medium-sized banks, etc.

According to a report by the Russian business newspaper Vedomosti on February 7, Zhejiang Chouzhou Commercial Bank, a major Chinese bank used by Russian importers, has stopped operations in Russia since February.

On February 21, domestic media quoted Russia's "Izvestia" newspaper as reporting that China's three largest banks that handle Russian payments have stopped accepting payments from Russian financial institutions. However, Bank of China, one of China's largest banks, refuted this on the same day, saying that the bank still accepts payments from Russian companies in rubles and yuan. "In Beijing, we can still accept payments in rubles," said a bank employee.
But recently, some foreign traders have indeed reported that in order to successfully collect money, they have to deal with a number of banks. From China Construction Bank, Bank of China, Industrial and Commercial Bank of China, China Merchants Bank, Bank of Shanghai, Bank of Ningbo, Tailong Bank, China CITIC Bank, Bank of Communications, Guangfa Bank, Ping An Bank and Shanghai Pudong Development Bank, they have been in contact with almost all major banks. Frustratingly, some accounts are just opened that day and receive a notification that they can't receive payments the next day.

However, the situation is even more tricky for foreign traders who want to open a new bank account in addition to the banks they currently work with in order to receive remittances from the Russian side. Because new banks often lack historical transaction records with these foreign trade enterprises, this makes it more difficult to open new accounts and successfully collect payments.

Special reminder: foreign trade people need to be more careful in choosing the right banks and products to ensure the smooth progress of transactions. At the same time, in this context, foreign traders with Russian customers must be highly vigilant about the security of foreign exchange collection, and pay close attention to changes in the international political and economic situation to cope with possible risks and challenges.

Post time: Feb-26-2024