Countries that Russia considers “friendly”, contrary to expectations, fully joined the Western sanctions against Russian banks. According to RBC, this was announced at the Kommersant conference on Tuesday by Vice President of Rosbank Alexander Rakhmanin.

According to him, “colleagues” from China, Turkey, the United Arab Emirates and even post-Soviet republics, including Kazakhstan, Uzbekistan, Kyrgyzstan and Turkmenistan, refuse to work with Russian credit institutions that have fallen under restrictions.

Expectations that a queue of those wishing to help Russia would line up in China turned out to be futile: the largest “states” – Bank of China, ICBC, China Construction Bank – refuse to accept payments from banks from the Russian Federation that fell under blocking sanctions, Rakhmanin said.

It is also not always possible to circumvent restrictions through trading in yuan. “The entire (Chinese) payment infrastructure is geared towards SWIFT. And if a Russian bank is disconnected from SWIFT for sanctioned or non-sanctioned reasons, then, accordingly, it ceases to have access to cross-border payments,” the top manager explained.

Turkish banks also strictly comply with the sanctions: they refuse to open correspondent accounts in lira for blacklisted Russian banks. “Given that a significant part of the Russian banking sector is affected in one way or another by sanctions, frankly speaking, only second-tier banks have the opportunity to work with Turkish banks,” Rakhmanin said.

In the UAE, where Russian companies are massively transferring business in an attempt to hide from sanctions restrictions, problems are also arising. The local regulator “does not allow to fully replace, for example, US dollars with dirhams in trade with Russia,” Rakhmanin said.

Similar problems, according to him, exist with the Kazakh tenge, the Uzbek sum, the Kyrgyz som and the Tajik somani.

The wave of sanctions following the invasion of Ukraine has made Russia the world champion in terms of the number of legal entities and individuals on the black lists, and the national banking system a global pariah.

More than 20 Russian banks fell under Western sanctions, and 9 of them, including Sberbank, VTB, BEB, Otkritie and Rosselkhozbank, were disconnected from SWIFT.

Of the large state-owned banks, until recently, only Gazprombank, which became the backbone for gas payments, retained access to settlements in dollars and euros. However, in January he also lost access to American correspondent accounts, without which dollar transactions are impossible.

(C)MOSCOW TIMES 2023