China firms go ‘underground’ on Russia payments as banks pull back

A delivery man stands in front of a billboard advertising international logistics transportation to Russia, outside a convenience store in Ritan International Trade Center in Beijing. (AFP)
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Updated 29 April 2024
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China firms go ‘underground’ on Russia payments as banks pull back

  • The US has imposed an array of sanctions on Russia and Russian entities since the country invaded Ukraine in 2022
  • Now the threat of extending these to banks in China is chilling the finance that lubricates trade from China to Russia
  • Nearly all major Chinese banks have suspended settlements from Russia since the beginning of March, said a manager at a listed electronics company in Guangdong

An appliance maker in southern China is finding it hard to ship its products to Russia, not because of any problems with the gadgets but because China’s big banks are throttling payments for such transactions out of concern over US sanctions.

To settle payments for its electrical goods, the Guangdong-based company is considering using currency brokers active along China’s border with Russia, said the company’s founder, Wang, who asked to be identified only by his family name.
The US has imposed an array of sanctions on Russia and Russian entities since the country invaded Ukraine in 2022.
Now the threat of extending these to banks in China — a country Washington blames for “powering” Moscow’s war effort — is chilling the finance that lubricates even non-military trade from China to Russia.
This is posing a growing problem for small Chinese exporters, said seven trading and banking sources familiar with the situation.




Ukrainian firefighters work to contain a fire at the Economy Department building of Karazin Kharkiv National University, hit during recent Russian shelling. (AFP/File)

As China’s big banks pull back from financing Russia-related transactions, some Chinese companies are turning to small banks on the border and underground financing channels such as money brokers — even banned cryptocurrency — the sources told Reuters.
Others have retreated entirely from the Russian market, the sources said.
“You simply cannot do business properly using the official channels,” Wang said, as big banks now take months rather than days to clear payments from Russia, forcing him to tap unorthodox payment channels or shrink his business.

Going ‘underground’
A manager at a large state-owned bank he previously used told Wang the lender was worried about possible US sanctions in dealing with Russian transactions, Wang said.
A banker at one of China’s Big Four state banks said it had tightened scrutiny of Russia-related businesses to avert sanctions risk. “The main reason is to avoid unnecessary troubles,” said the banker, who asked not to be named.
Since last month, Chinese banks have intensified their scrutiny of Russia-related transactions or halted business altogether to avoid being targeted by US sanctions, the sources said.
“Transactions between China and Russia will increasingly go through underground channels,” said the head of a trade body in a southeastern province that represents Chinese businesses with Russian interests. “But these methods carry significant risks.”
Making payments in crypto, banned in China since 2021, might be the only option, said a Moscow-based Russian banker, as “it’s impossible to pass through KYC (know-your-customer) at Chinese banks, big or small.”
The sources spoke on condition of anonymity, citing the sensitivity of the topic. Reuters could not determine the extent of transactions that had shifted from major banks to more obscure routes.
China’s foreign ministry is not aware of the practices described by the businesspeople to arrange payments or troubles in settling payments through major Chinese banks, a spokesperson said, referring questions to “the relevant authorities.”
The People’s Bank of China and the National Financial Regulatory Administration, the country’s banking sector regulator, did not respond to Reuters requests for comment.

Sanctions warning
US Secretary of State Antony Blinken, after meeting China’s top diplomat Wang Yi for five and a half hours in Beijing on Friday, said he had expressed “serious concern” that Beijing was “powering Russia’s brutal war of aggression against Ukraine.”
Still, his visit, which included meeting President Xi Jinping, was the latest in a series of steps that have tempered the public acrimony that drove relations between the world’s biggest economies to historic lows last year.
While officials have warned that the United States was ready to take action against Chinese financial institutions facilitating trade in goods with dual civilian and military applications and the US preliminarily has discussed sanctions on some Chinese banks, a US official told Reuters last week Washington does not yet have a plan to implement such measures.
The Chinese foreign ministry spokesperson said, “China does not accept any illegal, unilateral sanctions. Normal trade cooperation between China and Russia is not subject to disruption by any third party.”
A State Department spokesperson, asked about Reuters findings that Chinese banks were curbing payments from Russia and the impact on some Chinese companies, said, “Fuelling Russia’s defense industrial base not only threatens Ukrainian security, it threatens European security.
“Beijing cannot achieve better relations with Europe while supporting the greatest threat to European security since the end of the Cold War,” the spokesperson said.
Blinken made clear to Chinese officials “that ensuring transatlantic security is a core US interest,” the spokesperson said. “If China does not address this problem, the United States will.”
Nearly all major Chinese banks have suspended settlements from Russia since the beginning of March, said a manager at a listed electronics company in Guangdong.
Some of the biggest state-owned lenders have reported drops in Russia-related business, reversing a surge in assets after Russia’s invasion.
Among the Big Four, China Construction Bank posted a drop of 14 percent in its Russian subsidiary’s assets last year and Agricultural Bank of China a 7 percent decline, according to their latest filings.
By contrast, Industrial and Commercial Bank of China , the country’s biggest lender, reported a 43 percent jump in assets of its Russian unit. Bank of China (BOC), the fourth-largest, did not give the breakdown.




This photo taken on June 25, 2015 shows residents in the main shopping street in Hunchun, which shares a border with both Russia and North Korea, in China's northeast Jilin province. (AFP/File)

‘Channel can be shut’
The four banks did not respond to requests for comment on their Russian businesses or the impact on Chinese companies.
Some rural banks in northeast China along the Russian border can still collect payments, but this has led to a bottleneck, with some businesspeople saying they have been lining up for months to open accounts.
A chemical and machinery company in Jiangsu province has been waiting for three months to open an account at Jilin Hunchun Rural Commercial Bank in the northeastern province of Jilin, said Liu, who works at the firm and also asked to be identified by family name.
Calls to the bank seeking comment went unanswered.
BOC has blocked a payment from Liu’s Russian clients since February, and a bank loan officer said firms exporting heavy equipment face more stringent reviews in receiving payments, Liu said.
The manager at the listed Guangdong company said their firm had opened accounts at seven banks since last month but none agreed to accept payments from Russia.
“We gave up on the Russian market,” the manager said. “We eventually didn’t receive more than 10 million yuan ($1.4 million) in payments from the Russian side, and we just gave up. The process of collecting payments is extremely annoying.”
Wang is also having second thoughts about his Russian business.
“I may gradually shrink my business in Russia as the slow process of collecting money is not good for the company’s liquidity management,” he said.
“What’s more, you don’t know what will happen in the future. The channel can be shut completely one day.”

 


Bangladesh probe into Hasina-era abuses warns ‘impunity’ remains

Updated 6 sec ago
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Bangladesh probe into Hasina-era abuses warns ‘impunity’ remains

  • Ex-PM Sheikh Hasina’s government was accused of widespread human rights abuses
  • That includes extrajudicial killing of political opponents, abduction and disappearances

DHAKA: A Bangladesh government-appointed commission investigating hundreds of disappearances by the security forces under ousted premier Sheikh Hasina on Monday warned that the same “culture of impunity” continues.

The Commission of Inquiry into Enforced Disappearances is probing abuses during the rule of Hasina, whose government was accused of widespread human rights abuses.

That includes the extrajudicial killing of hundreds of political opponents and the unlawful abduction and disappearance of hundreds more.

The commission was established by interim leader, Nobel Peace Prize winner Muhammad Yunus, 84, who is facing intense political pressure as parties jostle for power ahead of elections expected early next year.

Bangladesh has a long history of military coups and the army retains a powerful role.

“Enforced disappearances in Bangladesh were not isolated acts of wrongdoing, but the result of a politicized institutional machinery that condoned, normalized, and often rewarded such crimes,” the commission said, in a section of a report released by the interim government on Monday.

“Alarmingly, this culture of impunity continues even after the regime change on August 5, 2024.”

The commission has verified more than 250 cases of enforced disappearances spanning the 15 years that Hasina’s Awami League was in power.

Commission chief Moyeenul Islam Chowdhury said earlier this month that responsibility lay with individual officers, who were “involved in conducting enforced disappearances,” but not the armed forces as an institution.

Earlier this month, a joint statement by rights groups — including Amnesty International and Human Rights Watch — called on the security forces to “fully cooperate with the commission by guaranteeing unfettered and ongoing access to all detention centers... and providing free access to records regarding those seized or detained.”

Hasina,77, remains in self-imposed exile in India, where she fled after she was ousted last year.

She has defied orders to return to Dhaka to face charges amounting to crimes against humanity. Her trial in absentia continues.


US citizens in Qatar told to ‘shelter in place’ as Iran mulls reprisals

Updated 53 min 50 sec ago
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US citizens in Qatar told to ‘shelter in place’ as Iran mulls reprisals

  • Qatar’s foreign ministry spokesman Majed Al-Ansari said warnings by foreign embassies ‘do not necessarily reflect the existence of specific or credible threats’

DOHA: The United States embassy in Qatar advised Americans there to “shelter in place” Monday, with other Western embassies echoing the warning after Tehran threatened to retaliate for US strikes on its nuclear sites.
Qatar, which lies 190 kilometers (120 miles) south of Iran across the Gulf, is home to the US’s largest military base in the region, Al-Udeid.
“Out of an abundance of caution we recommend American citizens shelter in place until further notice,” the US embassy said on its website.
Britain and Canada later cited the US security alert in their own recommendations to nationals.

“Following a US security alert for US nationals in Qatar, out of an abundance of caution, we recommend that British nationals in Qatar shelter in place until further notice,” the UK Foreign Office said on Monday.
Iran’s armed forces threatened on Monday to inflict “serious, unpredictable consequences” on the US after its heavy strikes on three nuclear sites.
In Bahrain, a close neighbor of Qatar that hosts the US Fifth Fleet, the American embassy “temporarily shifted a portion of its employees to local telework,” it said on X.
Bahraini authorities had already told most government employees to work from home until further notice, citing “regional circumstances.”
Following the US warning in Doha, Qatar’s foreign ministry spokesman Majed Al-Ansari said warnings by foreign embassies “do not necessarily reflect the existence of specific or credible threats.”
“We would like to reassure the public that the security situation in the state remains stable,” he wrote on X. “Qatar continues to exert intensive diplomatic efforts to de-escalate tensions in the region.”
On Sunday, the US State Department advised Americans worldwide to “exercise increased caution” because of the war between Israel and Iran.
After Israel’s first strikes on Iran on June 13, the US embassy in Qatar had told its staff and other Americans to “exercise increased caution” and “limit non-essential travel to Al Udeid Air Base.”


Bangladesh probe into Hasina-era abuses warns ‘impunity’ remains

Updated 23 June 2025
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Bangladesh probe into Hasina-era abuses warns ‘impunity’ remains

  • The Commission of Inquiry into Enforced Disappearances is probing abuses during the rule of Hasina, whose government was accused of widespread human rights abuses

DHAKA: A Bangladesh government-appointed commission investigating hundreds of disappearances by the security forces under ousted premier Sheikh Hasina on Monday warned that the same “culture of impunity” continues.
The Commission of Inquiry into Enforced Disappearances is probing abuses during the rule of Hasina, whose government was accused of widespread human rights abuses.
That includes the extrajudicial killing of hundreds of political opponents and the unlawful abduction and disappearance of hundreds more.
The commission was established by interim leader, Nobel Peace Prize winner Muhammad Yunus, 84, who is facing intense political pressure as parties jostle for power ahead of elections expected early next year.
Bangladesh has a long history of military coups and the army retains a powerful role.
“Enforced disappearances in Bangladesh were not isolated acts of wrongdoing, but the result of a politicized institutional machinery that condoned, normalized, and often rewarded such crimes,” the commission said, in a section of a report released by the interim government on Monday.
“Alarmingly, this culture of impunity continues even after the regime change on August 5, 2024.”
The commission has verified more than 250 cases of enforced disappearances spanning the 15 years that Hasina’s Awami League was in power.
Commission chief Moyeenul Islam Chowdhury said earlier this month that responsibility lay with individual officers, who were “involved in conducting enforced disappearances,” but not the armed forces as an institution.
Earlier this month, a joint statement by rights groups — including Amnesty International and Human Rights Watch — called on the security forces to “fully cooperate with the commission by guaranteeing unfettered and ongoing access to all detention centers... and providing free access to records regarding those seized or detained.”
Hasina,77, remains in self-imposed exile in India, where she fled after she was ousted last year.
She has defied orders to return to Dhaka to face charges amounting to crimes against humanity. Her trial in absentia continues.


Greenpeace joins protests against gala Bezos wedding in Venice

Updated 23 June 2025
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Greenpeace joins protests against gala Bezos wedding in Venice

  • Some locals see the celebration as the latest sign of the brash commodification of a beautiful but fragile city that has long been overrun with tourism while steadily depopulating

VENICE: Global environmental lobby Greenpeace added its voice on Monday to protests against this week’s celebrity wedding in Venice between American tech billionaire Jeff Bezos and journalist Laura Sanchez.
The event, expected to attract some 200 guests including US President Donald Trump’s daughter Ivanka and son-in-law Jared Kushner, as well as scores of stars from film, fashion and business, has been dubbed “the wedding of the century.”
But some locals see the celebration as the latest sign of the brash commodification of a beautiful but fragile city that has long been overrun with tourism while steadily depopulating.
Activists from Greenpeace Italy and UK group “Everyone hates Elon” (Musk) unfolded a giant banner in central St. Mark’s Square with a picture of Bezos laughing and a sign reading: “If you can rent Venice for your wedding you can pay more tax.”
Local police arrived to talk to activists and check their identification documents, before they rolled up their banner.
“The problem is not the wedding, the problem is the system. We think that one big billionaire can’t rent a city for his pleasure,” Simona Abbate, one of the protesters, told Reuters.
Mayor Luigi Brugnaro and regional governor Luca Zaia have defended the wedding, arguing that it will bring an economic windfall to local businesses, including the motor boats and gondolas that operate its myriad canals.
Zaia said the celebrations were expected to cost 20-30 million euros ($23-$34 million).
Bezos will also make sizable charity donations, including a million euros for Corila, an academic consortium that studies Venice’s lagoon ecosystem, Italy’s Corriere della Sera newspaper and the ANSA news agency reported on Sunday.
Earlier this month, anti-Bezos banners were hung from St. Mark’s bell tower and from the famed Rialto bridge, while locals threatened peaceful blockades against the event, saying Venice needed public services and housing, not VIPs and over-tourism.
The exact dates and locations of the glitzy nuptials are being kept confidential, but celebrations are expected to play out over three days, most likely around June 26-28.


Beijing issues weather warning for hottest days of year

Updated 23 June 2025
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Beijing issues weather warning for hottest days of year

  • An orange heat warning — the second-highest in a three-tier system — was issued on Monday as officials encouraged people to limit outdoor activity and drink more fluids to avoid heatstroke

BEIJING: Beijing residents sought shade and cooled off in canals on Monday as authorities issued the second-highest heat warning for the Chinese capital on one of its hottest days of the year so far.
China has endured a string of extreme summers in recent years, with heatwaves baking northern regions even as parts of the south have seen catastrophic rain and flooding.
Authorities in the city of 22 million people urged the public to take precautions, with temperatures expected to peak at around 38 degrees Celsius (100 degrees Fahrenheit) on Monday.
“It’s been really hot lately, especially in the past few days,” intern Li Weijun told AFP on Monday afternoon.
The 22-year-old said he had stopped wearing formal clothes to work and delayed his daily exercise until after 10:00 p.m. to stay safe.
“I think it’s related to climate change, and maybe also to the damage done to nature,” he said.
An orange heat warning — the second-highest in a three-tier system — was issued on Monday as officials encouraged people to limit outdoor activity and drink more fluids to avoid heatstroke.
Construction workers should “shorten the amount of time consecutively spent at labor,” while elderly, sick or weakened individuals ought to “avoid excessive exertion,” according to the guidelines.
Zhang Chen, 28, said she carried an umbrella outdoors to prevent sunburn.
“I used to ride a bike, but once it gets this hot, I basically stop doing that,” the IT worker told AFP.
Despite the beating sun, legions of delivery drivers zipped through downtown areas at noon to bring sustenance to Beijing’s office workers.
A few lazed on the backs of their scooters in a shady spot, while elsewhere, people cooled off with ice creams or by taking a dip in the city’s canals.


Beijing is still a few degrees short of breaking its record for the hottest-ever June day, set at 41.1C in 2023.
Human greenhouse gas emissions are driving climate change that causes longer, more frequent and more intense heatwaves.
China is the world’s largest producer of carbon dioxide, a potent greenhouse gas, though it has pledged to bring its emissions to a peak by the end of this decade and to net zero by 2060.
The country has also emerged as a global leader in renewable energy in recent years as it seeks to pivot its massive economy away from highly polluting coal consumption.
In a shady spot near an office building, 42-year-old Lucy Lu spent her lunch break with friends, kicking a shuttlecock through the air — a traditional Chinese game known as “jianzi.”
“I was born and raised in Beijing, and summer here has always been like this,” she said.
“But I do think when the temperature goes over 40C, there should be some time off or work-from-home options to reduce the risk of heatstroke.”