80% of cross-border transactions between Russia and China are conducted through specialized intermediaries and payment institutions.
The Bank of China has begun blocking many yuan transfers from countries it considers to be linked to Russia, bne IntelliNews reported.
The move comes after the US increased pressure on secondary sanctions against the banking system that has Russia’s main trading partners.
Recent reports say that up to 80% of cross-border transactions between Russia and China are conducted through specialized intermediaries and payment institutions. Meanwhile, many companies involved in Russia-China trade are also said to be turning to black market foreign exchange brokers and small banks along China’s border with Russia.
According to bne IntelliNews, the Bank of China – acting as an intermediary bank – blocked such transactions when a company from the United Arab Emirates (UAE) transferred yuan from CenterCredit Bank (Kazakhstan) to Chouzhou Commercial Bank (China). Notably, neither the director nor the founder of the payment company had formal ties to Russia. The Bank of China is the fourth largest bank in China by total assets.
Several banks from Georgia and Armenia also reported complications with the transfer.
In February this year, Chouzhou Bank informed its customers that it was ceasing operations with Russia and Belarus via the SWIFT system, Russia’s SPFS, and China’s CIPS system.
