Russia Economy: Payments to China Can Take 6 Months. Most Bounce Back.

According to media reports, such returns could lead to exchange rate and fee losses for Russian companies.

The Kommersant report highlights growing pressure on outside parties doing business with Russian companies, which have continued their international operations despite widespread sanctions.

Earlier this month, several major Russian commodity exporters Bloomberg Trade with China has become increasingly difficult, with even direct payments in Chinese yuan frozen or delayed.

The problem is that in December, the U.S. Secondary sanctions Targeting financial institutions that help evade Russian sanctions.

As a result, banks around the world, from China to the United Arab Emirates, Turkey to Austria, have cut back on their dealings with Russia to avoid being targeted.

payment The problem was exacerbated last month when the US Treasury Department announced a new package. Broad US sanctions The attacks on Russia caused Russia’s main stock exchange, the Moscow Exchange, to suspend trading. Dollar and euro trading.

To get around the tougher controls, some Russians who want to buy goods through Chinese companies are having to pay extra to go through intermediaries, Kommersant reported.

The US and its allies are punishing those who do business with Russia

The development comes 29 months after Russia’s full-scale invasion of Ukraine.

In order to get Russia to stop the war, the Western countries Some Russian banks Early in the conflict, funds were funneled through the SWIFT messaging system, a widely used means of payment, but Russia and its trading partners were able to circumvent the sanctions by using smaller banks, other payment methods, or currencies other than the U.S. dollar.

Continued business activity between the two countries helped Russia and China reach a record high of $240 billion in trade last year. China’s Yuan-denominated exports Exports to Russia increased 4.76% year-on-year in June.

Beijing has not condemned Moscow’s all-out invasion of Ukraine and has not imposed sanctions on Russia, although the two countries are not formal allies. A long and complicated relationship it is It has come even closer in recent years.

Still, the United States and its allies are tightening restrictions.

Earlier this month, Russia’s top banker said sanctions evasion methods continue to be blocked so quickly that they should be made a “state secret.”

“Whatever measures are taken, we see that the reaction is very swift,” said Andrey Kostin, CEO of VTB Bank, Russia’s second-largest lender.

Russia Working with groups of countries To build a platform that doesn’t require dollars.

Some Russian companies use cryptocurrencies with payments routed through Hong Kong, but through intermediaries in Central Asia. Bloomberg Reported last week.