Exclusive-Banking bottleneck causing six-month delays for Russia-China payments, sources say

South Shore school lunch program setting the standard | SaltWire #school #lunch #educationMOSCOW - As the threat of secondary sanctions deters Chinese banks from facilitating trade with Russia, companies are flocking to the one Russian bank with a Chinese branch and facing up to six months of delays, five people familiar with the matter said.

The queue of prospective account holders and limited staff to deal with the demand means some companies are waiting as long as six months to open an account, the sources, who declined to be named as they are not authorised to speak to the media, said.Alternative payment methods remain available, such as through the subsidiaries of small Chinese banks in Russia, but the delays show how U.S. restrictions can have a strong knock-on effect.

The problems often stem from the huge number of people wanting to do business there - both Russian companies and large Chinese firms who want to deal with sanctioned companies in Russia, the person said.Another person engaged in payments said only having one Russian bank in China was posing difficulties, but that patience was required.

Russian business people started drawing attention to settlement issues with Chinese banks in January. An additional three sources said Chinese banks were turning away Russian business. The person referred to a U.S. Treasury executive order published on Dec. 22, 2023, which warned that Washington could apply sanctions for the evasion of the Russian oil price cap on foreign banks and called on them to boost compliance.Another person familiar with the situation said there was a queue of two to three months for Chinese suppliers trying to open accounts with VTB Shanghai.

Source: Financial Digest (financialdigest.net)

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