Russia and Pakistan switch to barter amid payment difficulties

Companies from Russia and Pakistan launched a barter trade mechanism.

Source: The Moscow Times

Details: Tangerines and rice from the Pakistani Meskay & Femtee Trading Company will be exchanged for chickpeas and lentils by the Russian company Astarta-Agrotrading.

According to the agreement, the Pakistani firm will deliver 20,000 tonnes of rice and the Russian company will supply 20,000 tonnes of chickpeas.

Under another transaction, the Russian side will send 15,000 tonnes of chickpeas and 10,000 tonnes of lentils in exchange for 15,000 tonnes of tangerines and 10,000 tonnes of potatoes.

Quote: "Russia and Pakistan have some difficulties in making mutual payments. Therefore, the two companies decided to launch a barter trade mechanism," said Pakistani Deputy Minister of Trade Nasir Hamid.

Barter trade techniques, which do not rely on bank payments or money transfers, assist businesses in evading scrutiny by Western controllers who oversee sanctions compliance.

There are a number of choices for barter and its design, including tripartite barter agreements, according to a guidebook on foreign trade barter transactions that the Russian Federation's Ministry of Economic Development has reportedly produced.

Background: Russia and China may begin trading via barter in the autumn as a result of Western sanctions-related difficulties with bank payments.

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