(NewsReady.com) – The US has levied multiple sanctions against Russia and others doing business with the country. Washington is trying to stop the Eastern European nation from rebuilding its war machine. Now, a Chinese bank has suspended its business with sanctioned Russian companies.
The Bank of China’s Russian division stopped processing payments in yuan, the Chinese currency. Newsweek reported the bank stopped processing the payment on July 1. Several other banks have also stopped doing business with Russia out of fear of being slapped with secondary sanctions from President Joe Biden’s administration.
At the end of 2023, Biden expanded the US Treasury Department’s tools to disrupt Russia’s war machine by allowing sanctions on foreign financial institutions that are providing help to the Russian military-industrial base. In June, the Treasury broadened the measures again by revising the definition of the military-industrial base to include foreign financial institutions that conducted business with any person or entity sanctioned by the US.
The Bank of China’s Russian Division is the second-largest Chinese banking institution in Russia. As of the spring of 2024, it was holding about $6.7 billion in assets in the country. The Moscow Times reported that experts believe there will be an increase in the risk of fraud because intermediaries will now have to process payments between China and Russia.
One insider said it’s “not very good news for the Russian market” and there will be more “costs both in time and the price of processing payments.” Worse, they said the state will now have less control.
The expansion of US sanctions could have a severe impact on Russia. The country has greatly increased its trade with China in the last year, with it hitting a record high of $240 billion in 2023. However, it’s dependent on the guarantee that payments between the countries remain smooth, and that’s what Biden’s administration disrupted.
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