At the end of December 2023, US President Biden signed an executive order authorizing the United States to impose so-called "secondary sanctions" on financial institutions around the world that support Russia's special military operations in Ukraine. There are reports that the US move has significantly expanded its financial war against Russia.
Subsequently, multinational banks have begun reviewing their business dealings with Russia, with a particular focus on cross-border transactions.
Turkish banks stopped accepting payments from Russia on a large scale two months ago. As a result, Russian imports from Türkiye have been paralyzed, hitting importers of chemicals, auto parts, clothing and footwear.
A RIA Novosti source familiar with the situation said Russia planned to resolve the issue by January 25. In fact, the situation is getting worse: in February, Russian companies faced closure of their accounts in Turkish banks, and individuals also faced difficulties in the second half of the month.
Denizbank, one of Türkiye's largest and most loyal banks to Russians, began large-scale checks on customers leaving Russia, asking for residence permits and proof of stay in Türkiye, and closing accounts if there are no documents.
Meanwhile, banks in the UAE have restricted transactions with Russia and started closing personal and business accounts. Vedomosti, a Russian news outlet, said that UAE banks do not accept funds from Russia, do not provide payments in the opposite direction to Russia, and continue to close corporate accounts owned by Russian citizens.
A Russian businessman with offices in the UAE said that one of his companies’ accounts at a bank was closed like this: “We buy goods in China. The product code is sanctioned (it is included in the prohibited list of goods imported into Russia from the European Union or the United States), but the goods themselves are Chinese - without any European technology, it is the simplest product. The bank closed the account on the grounds that the product was sanctioned. They suggested working directly with China and not involving the UAE.”
Since February this year, China's domestic commercial banks have also tightened the review of receiving remittances related to Russia. Many foreign trade business are unable to receive payments normally because they do not meet the verification requirements of the beneficiary bank or intermediary bank. The banks involved include major state-owned banks, joint-stock companies banks, local small and medium-sized banks, etc.
Maxim Blunt, an independent Russian journalist, said: “All the troubles are stacked up during the Lunar New Year period, and Russia will not begin to solve the problem until early March. This will not prevent mutual trade, but it will certainly increase problems with railways and ports. The logistics chain between Russia and China are already overloaded and are now exacerbated by inventory backlogs and other problems. Russian consumers could face shortages or inflation as a result.”
In the latest news, US President Biden said the United States plans to unveil a "significant" sanctions package against Moscow on Friday, although he did not specify which industries would be affected.
Foreign traders with Russian customers must pay attention to the safety of foreign exchange collection!
