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- On a state-by-state schedule: PRC banks tighten checks on payments from UAE, India and Hong Kong
On a state-by-state schedule: PRC banks tighten checks on payments from UAE, India and Hong Kong
Chinese banks have tightened checks on payments from the United Arab Emirates, India and Hong Kong, representatives of Russian business told Izvestia. Credit organizations in China now require documents confirming the shipment of goods to these countries. Previously, such checks were launched with transactions from Turkey. This is how the Chinese are trying to trace the so-called Russian trail. The situation has worsened recently - the Americans increased pressure on foreign banks after the election, the businessmen noted. Why this happened and what options for sending payments remain for Russian business - in the material "Izvestia".
Why Chinese banks have tightened checks on payments after the elections in the United States
Recently, Chinese banks have begun to conduct additional checks on payments passing through the UAE and Hong Kong, Ilona Gorsheneva-Doluntz, a representative of the "Support of Russia" in China (Guangdong Province), told Izvestia. She specified: they make sure that the shipment of goods was shipped to the country where the money came from.
Credit organizations of the PRC have introduced additional compliance of payments from many countries, confirmed "Izvestia" general director of JSC "First Group" Alexei Poroshin. According to him, they include the UAE, India and Hong Kong, among others. The situation with sending money to China through these states has indeed worsened, and, in his opinion, will remain so for the coming months. This is due to the past elections in the US.
Chinese banks are waiting to see how the U.S. regulator will behave in connection with the change of the Democrats' administration to the Republicans' team, and are reinsuring themselves, explained Alexei Poroshin. Besides, while the "blues" are still in power, they are trying to tighten the screws as much as possible.
The tendency to tighten checks on payments to China through other countries (including Hong Kong, India and the UAE) was also confirmed by Ekaterina Kizevich, general director of Atvira, an expert practitioner of foreign economic activity.
Checks have intensified even in relation to transactions through CIS countries, added Alexey Razumovsky, commercial director of Impaya Rus. According to him, it is becoming more and more difficult to make a payment: banks analyze shipping documents, final destination - who the goods are going to and why. Earlier such enhanced checks in China have already been launched with regard to transfers through Turkey.
This is how credit organizations are trying to track the "Russian trace" in the chain, explained Ekaterina Kizevich. This is due to their fear of being subject to secondary sanctions. Because of the increased control now there is no guarantee that the money will reach the Chinese counterparty and will not come back, the expert emphasized.
"Izvestia" sent an inquiry to the largest Russian banks, as well as to the Central Bank of Russia and the PRC, whether they note such tightening.
Problems with settlements began as early as the end of December 2023. This is due to the entry into force of the 12th package of anti-Russian sanctions. Against the risk of secondary measures, China, Turkey and the UAE began to limit settlements with Russia.
Since January, several credit organizations in China have stopped accepting transactions in yuan. Among them are Ping An Bank and Bank of Ningbo. In March, the list was expanded to include ICBC, China Citic Bank, Industrial Bank, and Bank of Taizhou, Izvestia reported earlier.
In the summer, Chinese suppliers began asking to export goods to Russia via third countries. This is mainly related to the categories on the stop list, including electronics. In addition, PRC banks have sometimes begun to refuse to accept funds, not only if they are coming from Russia, but even if the payment documents contain Russian names.
How business sends money to China
The situation with payments to China is unlikely to improve in 2025, believes Alexei Poroshin of First Group JSC. He explained: Donald Trump has long ago declared a trade war on China, so we can expect local banks to close even more. The elections in the United States directly affect the situation with transactions, agreed Alexei Razumovsky.
However, there are still options for sending payments to China, said Alexei Poroshin. For example, there are still direct transactions from regional Russian banks to Chinese banks. There are also payments through Malaysia and Indonesia.
The safest and fastest scheme is direct payments through a branch of a Russian bank in China, says Ekaterina Kizevich. However, the counterparty in China and the Russian buyer must have accounts in this financial organization - this is the most difficult condition. If it is fulfilled, the money reaches the supplier in two or three days, and the bank takes a fixed commission for transfers of 4%, said the expert.
But with some options for direct payments to China can appear "pitfalls", said Ekaterina Kizevich. For example, if the bank's commission is not fixed. Also, some players allow transfers only for the delivery of certain types of goods, and sometimes - the counterparty in China must be located in specific provinces on the list.
In addition, in recent months, payments in yuan have become increasingly difficult, and many large agents ask Chinese partners to accept money in dollars, said Alexei Poroshin. This is due to the fact that in the long run it is favorable for American regulators to make settlements in dollars, because it is easier for them to track such transfers, explained Alexei Poroshin.
Also, according to him, digital currencies have started to be used in payments from Russia to China. However, operations in crypto are still only being established, said Alexei Razumovsky. He added: the Central Bank is still skeptical about such operations. The fact is that digital currencies cannot be controlled, but they are becoming a way to resist the pressure of sanctions. Moreover, Russia is already preparing an experimental regime for cross-border operations with crypto, which has been agreed upon by the authorities.
Foreign partners are interested in continuing trade turnover with Russia, Alexei Tarapovsky, founder of Anderida Financial Group, is sure. Therefore, payment by cryptocurrency or through branches located in other countries is now actively developing. At the same time, many do not advertise their connection to Russia in their founding documents, and payments go on without interruptions, the expert added.
