Major Chinese bank begins blocking yuan transfers to Russia from "friendly" countries – media

Bank of China, the fourth largest bank in China, has begun to increasingly block yuan transactions from countries that Russia uses to procure goods. 

Source: RBC with reference to business representatives, lawyers and consultants, as reported by The Moscow Times

Details: Recently, a company from the United Arab Emirates was unable to transfer yuan from the Kazakhstani Bank CenterCredit to the Chinese Zhejiang Chouzhou Commercial Bank. The transaction was blocked by the Bank of China, which acts as a correspondent bank for the Kazakh bank, according to Vladislav Donchenko, deputy chair of the Legal Committee of the Russian Association of Exporters and Importers.

Quote from Donchenko: "Meanwhile, neither the director nor the founder of the company had formal ties to Russia."

More details: According to Donchenko, Chouzhou Commercial now only accepts payments from banks in Kazakhstan with which it has direct correspondent relationships. Similar issues have arisen during transfers to China from banks in Georgia and Armenia, claims Giorgi Okromchedlishvili, a senior analyst at the consultancy firm ITSWM.

Maxim Spassky, Secretary of the General Council of the Russian-Asian Union of Industrialists and Entrepreneurs, is also aware of such cases. He reiterated that the Bank of China has the most stringent and complex compliance system among Chinese banks. 

"Even a slight suspicion of danger and they immediately refuse to process the payment," Spassky said.

He explained that when it comes to purchasing goods from China, "payments for non-critical goods go through small regional banks". However, everything becomes more complex when dealing with sophisticated equipment or electronics and when the payer is a company from the UAE, Kyrgyzstan or Kazakhstan.

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