RAMBLER NEWS SERVICE. Russian sanctions-affected banks no longer have problems when making settlements in China because of the international sanctions, VTB Bank first deputy management board chairman Vasily Titov and Andrey Onikienko, executive director of the financial institutions department at Rosselkhozbank, told RNS.
VTB Bank first deputy management board chairman Yury Solovyev wrote in a Finance Asia column in 2015 that after the United States imposed the sanctions Chinese lending institutions took a contradictory position and refused to conduct inter-bank operations with the involvement of Russian banks. In addition, the scope of trade operations contracted as well. "We have straightened all our mutual relations with China, they are quite business-like," Titov said. According to him, difficulties faced with Chinese banks were "initial-stage difficulties when nobody understands what the sanctions mean".
An executive from mining company Mangazeya described one of such instances last week at a meeting held by the Russian-Chinese Business Council.
"Quite unexpectedly for us, the branch of Construction Bank of China said that it will be unable to deal with VTB Bank PJSC that was initially specified by VTB Bank in the contract as an authorized settlement bank, citing unfortunately instances when Chinese banks, which received payments from Russian sanctions-hit lending institutions, were fined by the US Treasury Department, namely by the Office of Foreign Assets Control (OFAC). Notably, thanks to our mutual interest we managed fast enough to incorporate another Russian bank, Promsvyazbank, into the contract, said Vladimir Polyakov, deputy general director for public relations and communications at Mangazeya Group.
Such things happened at a certain stage, Rosselkhozbank's Onikienko told RNS on the sidelines of the meeting held by the Russian-Chinese Business Council. Last year Rosselkhozbank opened up a representative office in China, its fifth representative office abroad. "We had to explain the largest Chinese banks how things are, including by using the central bank's possibilities. It turned out that maybe the Chinese banking community is not fully aware of details of the sanctions. In this case they were super accurate and cautious…As far as we know and were informed by head offices of the biggest Chinese lending institutions, after explanations of this kind explanatory notes were sent out throughout the system of these banks, in which branches and additional offices of these banks were instructed, when dealing with Russian banks, to conduct those operations which are beyond the sanctions," he specified.
