Chouzhou Commercial Bank of China has announced the termination of its banking operations in Russia and Belarus.
This decision comes as a direct response to complications arising from Western sanctions, which have severely affected the bank’s ability to process payments in these countries.
The development was reported by the Russian state-controlled media outlet Vedomosti on Wednesday, highlighting the broader implications of the US’s tightened sanctions regime introduced in December 2023.
The US had expanded its sanctions authority in December, targeting financial institutions that facilitate Russia’s war efforts by conducting significant transactions or providing services to sanctioned individuals or entities within Russia’s military-industrial complex.
According to Vedomosti, the sanctions have disrupted all forms of payments, extending beyond transactions made through the SWIFT international payment system. Even alternative Russian and Chinese payment systems, which are not reliant on SWIFT, have not escaped scrutiny.
Records of transactions through these systems are still accessible to Western regulators, prompting a crackdown on Chinese banks over their dealings with Russia.
Major Chinese banks, especially ones with branches in the US, have reportedly increased their compliance efforts to avoid penalization in response to the enhanced sanctions.
Deputy Treasury Secretary Wally Adeyemo emphasized that the sanctions would affect even those financial institutions that unintentionally support Russia’s military activities, urging banks and exporters in third-party countries to diligently avoid any collaboration with sanctioned Russian entities.
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