UAE Banks Block Russian Payments for Chinese Electronics Amid Rising Sanctions Pressure
Pro-Kremlin outlet Kommersant reported on August 28 that banks in the United Arab Emirates (UAE) have been rejecting Chinese transactions for electronic parts and consumer electronics from Russian companies since early August.
The reason, Shop says, is the risk of secondary operations.
It comes as another example of the growing strain on Russian-Chinese economic ties amid pressure from US sanctions imposed over Moscow’s outright occupation of Ukraine.
According to Kommersant’s unpublished sources, Russian companies used UAE-based companies to transfer money to China to send goods directly to Russia.
Now, the outlet said it has blocked transactions for products that do not reach the Gulf country directly. China’s sources say the restrictions came at China’s initiative.
The Kiev Independent could not verify the claims.
Last week, the United States announced new sanctions against Chinese and Russian companies for supporting Moscow’s aggression. Despite efforts to avoid or minimize the impact of trade restrictions, Chinese companies have begun to reduce business activities with Russia.
In particular, many large Chinese banks have begun blocking electronic transactions for fear of secondary sanctions.
More recently, in June, the Russian subsidiary of the State Bank of China stopped accepting payments from Russian banks.
With trade between the two countries increasing by 121% since 2021, China has become Russia’s main economic backer during the total war. A functional payment system is necessary to maintain trade relations, and Russia remains disconnected from the international SWIFT system. 2022.
There are reports that Western countries have also put pressure on the UAE to avoid sanctions against Russian companies. The Gulf country is believed to be one of the main pipelines for dual-use goods such as electronics exported to Russia.
Throughout Russia’s full-scale war, the UAE has maintained economic and cultural ties with Russia, but has also signed new trade deals with Ukraine.