Chinese Heihe Rural Commercial Bank has stopped accepting payments from Russia after coming under European Union sanctions.

Source: Russian media outlet Vedomosti, citing sources in Russian banks and company representatives that encountered the issue

Details: One importer shared that payments to Heihe went through normally for about a month after the restrictions were introduced, but last week the bank stopped accepting funds.

Heihe explained this as “adjusting internal infrastructure”.

At the same time, the media outlet found that Heihe had begun suspending work with Russian banks as early as 11 August.

The two-week pause before a full halt may have been related to internal coordination within the credit organisation and with the People’s Bank of China.

Other Chinese banks are refusing to accept money from Heihe after it was added to the EU sanctions list.

It is noted that the bank does not yet know how to proceed and therefore is not accepting payments from Russia.

Heihe is a small rural bank, of which there are hundreds in China. However, Russian expert Dmitriy Dvoretskyi said it was one of the last Chinese banks willing to open correspondent accounts for Russian credit organisations not under sanctions. After larger banks stopped processing payments with Russia, part of Russia’s small and medium-sized businesses switched to Heihe’s services.

For reference: The Council of the EU imposed sanctions on Heihe on 19 July for providing crypto-asset services that undermine restrictions against Russia. The decision took effect on 9 August. From that moment, EU persons and companies were prohibited from participating in any transactions with the Chinese bank.

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