Trade Policy

A few days ago, the U.S. Department of State and the Treasury's Office of Foreign Assets Control (OFAC) announced sanctions against more than 300 individuals and entities, including the overseas branches of Russian financial institutions such as VTB Shanghai and VTB Hong Kong.

Many people are very concerned about this issue, wondering whether VTB will still be able to receive payments normally。

Hunchun Rural Commercial Bank has fully resumed receiving payments from Russia!

Previously, we also announced that four major members were added to the Russian payment system in June: Jilin Bank, Changchun Rural Commercial Bank, Changchun Development Bank, and Yanbian Rural Commercial Bank.

Breaking News! Four Major Banks Added for Russian Transactions!

These four banks will jointly utilize the Hunchun Bank ruble channel for transactions.

The "Ruble Treasure" service provided by Hunchun Bank leverages the bank's direct connection with the entire Russian banking system, offering a swift channel that bypasses the SWIFT system, facilitating trade between China and Russia.

After more than a month of system upgrades, Hunchun Bank successfully completed the upgrade at midnight on June 17, 2024, and has fully resumed operations, including the restoration of all payment services from Russia.

This upgrade not only ensures the stability and security of the system but also specifically optimizes the payment services with Russia, guaranteeing smooth and unobstructed fund flows between the two countries.

Previously, many customers had opened accounts not only with Hunchun Bank but also with other border banks, such as Changchun Rural Commercial Bank and Suifenhe Bank. These banks, which operate based on the Hunchun Bank system, are also gradually resuming operations.

Although some banks have resumed operations, they have not fully notified their customers. Therefore, customers who have opened accounts with these banks need to proactively contact their account managers to confirm that they can smoothly use the Russian payment services.

It is important to note that to receive payments successfully, the customer's paying bank must also not be on the sanctions list!

Resuming Payment Settlements

Ilya Shchelochev, director of the Logistics Project at the Russian Ministry of Industry and Trade's Foreign Trade Center, revealed that some Chinese banks, which had previously halted accepting Russian payments due to US sanctions, are gradually resuming full operations for Russian business. This move demonstrates the strong determination of both China and Russia to rebuild stable financial channels. Meanwhile, transactions approved by banks typically see funds arrive within 1-3 days, indicating positive developments in the financial settlement system between China and Russia. With adjustments and preparations made during this period, alternative plans are believed to be in place for worst-case scenarios.

Payment Risks and Solutions

Despite improvements in financial flows between China and Russia, there remains some risk when using the Chinese yuan for payments, as no bank can guarantee that yuan payments will reach the recipient within a specified time frame. In contrast, using VTB Bank's Shanghai branch remains a relatively reliable channel. Another viable settlement method involves payments in rubles, which, despite potential exchange rate losses, offer faster processing times.

Due to the US sanctions against VTB Shanghai Bank, some domestic banks in China are concerned about secondary sanction risks and have partially suspended accepting transfers from VTB Shanghai Bank. This means that even if funds have been received through VTB Shanghai Bank, there may be obstacles when transferring funds domestically. Therefore, clients who have accounts need to stay updated on related changes to avoid difficulties in fund circulation.

Regarding the US sanctions imposed on over 300 entities and individuals from China and Russia on June 12, China's stance is clear. Foreign Ministry spokesperson Lin Jian stated that China does not accept any illegal unilateral sanctions or extraterritorial jurisdiction. Normal economic and trade cooperation between China and Russia should not be disrupted by any third party. China will take all necessary measures to firmly protect the legitimate rights and interests of Chinese enterprises.

With firm national support, it is believed that as the issue of Russian payments is effectively resolved, the profound potential of the Russian market will become more apparent to more people.

For partners aiming to enter the Russian market, Guotong can provide you with the most comprehensive Russian data.

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