Banks reject payments from Russia: First China, now the UAE

The effects of sanctions against Russia continue to expand. In particular, the threat of secondary sanctions is negatively impacting the international trade activities of Russian companies.

According to a report by the Türkrus website citing Kommersant, banks in the United Arab Emirates (UAE) have stopped accepting payments from Russian companies for the purchase of electronic components and consumer electronics from China since the beginning of August.

According to information provided to the newspaper by market participants, the payment process has become even more complicated due to the risks that secondary sanctions may create.

The report also states that banks are rejecting payments if the products in question do not reach the United Arab Emirates.

According to Kommersant's sources, Russian entities were using companies in the UAE as a conduit to transfer money to Chinese firms, even though the products were being shipped directly to Russia.

Payments made through the UAE were advantageous for Russian companies due to low commission fees. Sources interviewed by the newspaper suggested that the Chinese side initiated the blocking.

News Source: 12punto