According to Kommersant, about 80% of payments in yuan are currently returned to the Russian Federation. Direct transfers are becoming increasingly difficult, so clients have to resort to the services of intermediaries and include additional commissions in transactions. Risks in cross-border settlements are currently recognized by market participants as some of the most acute. A solution can be found in using, for example, digital financial assets (DFA) for settlements, experts believe.
Currently, about 80% of payments in yuan are returned back to the Russian Federation. This is how a Kommersant source assesses the situation on the financial market. Some other sources interviewed by Kommersant agree with this assessment. A number of Kommersant’s sources say that the situation with payments is getting worse. As one of them notes, the Chinese side is becoming increasingly demanding, in particular, requesting more and more documents. He assesses the stages of escalation of the situation as follows: the first alarm bells began in December 2023, after the US President issued an executive order on secondary sanctions (see Kommersant of January 17). Then, according to him, “it escalated”, with the next escalation occurring after a new package of US sanctions on June 12. A Kommersant source familiar with the situation confirms the existence of problems. According to him, on the Chinese side, transfers can hang for several weeks before recognition, that is, until a decision is made whether to make the payment or not, then the transfer can be cancelled without giving reasons. As a result, the client suffers losses on the exchange rate, conversion: “They will take all the commissions, but the payment will not be executed.”
Elvira Nabiullina, head of the Central Bank, July 26:
“We see this (the risks of secondary sanctions. — “Kommersant”) and in the difficult situation with payments. Companies are actively looking for ways to make payments.”
«Based on our experience, banks don't ask for anything: the money just hangs in correspondent accounts for 30-40 days and comes back,» says Alexey Sapozhnikov, managing partner of the consulting company «Sapozhnikov and Partners.» «Sometimes the goods are already in Russia and the Chinese supplier cannot receive their money for five or six months. But due to the trusting relationship with the client, they continue to supply the goods on the terms of so-called post-payment.» However, he explains, many clients open accounts not in one or two, but in five or six banks and thus achieve timely payment for the goods ordered in China.
According to the General Administration of Customs of the People's Republic of China, trade turnover between China and Russia exceeded $116.8 billion in the first six months of 2024 (an increase of 1.8% year-on-year). Chinese exports to Russia in the first half of the year decreased by 0.8%, to $51.6 billion, while imports grew by 3.9%, to $65.2 billion. According to the Central Bank, export revenues and import payments in the currencies of friendly countries increased in May and amounted to $17.5 billion and $9.9 billion, respectively (in April — $14.3 billion and $9.7 billion).
Sagrada Legal founder Oleg Ushakov confirms that the situation with direct bank transfers to China is indeed becoming more complicated. “Clients have to resort to the services of intermediaries — payment agents or “trading houses” (a conventional name for legal entities participating in international trade that act as intermediaries not only in relation to payments, but also in relation to the movement of goods),” he says. “In the first case, agents are responsible only for payment services, while in the second case, such houses are responsible not only for transferring payments, but also for the movement of goods.” According to Kommersant’s source, payment agents account for about 30% of payments. Using an intermediary increases the cost of the transaction; clients need to factor in an additional commission. On average, the commission is 3–5%, but can reach 8–10% depending on the complexity of the logistics chain and the amount of the transaction, warns Mr. Ushakov. At the same time, in order for the transaction not to fall under compliance risks and be unsanctioned, it may be necessary not only to make a «neutral» payment, but also to actually import the goods from China first to a neutral jurisdiction, and then to Russia.
In the future, payments in the form of digital assets and cryptocurrencies can help establish cross-border settlements, Mr. Ushakov believes. But now, he admits, DFA is not the most obvious tool for this, since in its current form it requires registration of foreign counterparties on Russian platforms, which may carry risks of secondary sanctions.
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