Bank of China restricts Russian transfers of yuan to E.U., U.S

Since June 13, the Bank of China has been restricting clients of Russian banks’ ability to transfer yuan to the E.U., U.S., U.K., and Switzerland.

Russian state broadcaster RBC and Frank Media, a Russian outlet focused on finance and economics, reported notifications from Russian banks about the restrictions. Transfers of yuan can now be made only by banks in the Bank of China group.

Dmitry Lesnov with Russian bank Finam told RBC that since June 13, the Bank of China had stopped transfers in yuan, as well as in U.S. Dollars, Euros, and Hong Kong Dollars.

“The decision wasn’t made by China, but by the E.U. and U.S. They’re trying to up sanctions pressures by blocking alternative channels like yuan,” Pavel Semenov, chairman of the board of Russian bank Modulbank said.

Lesnov believes the restrictions are related to the risk of secondary sanctions or other restrictions on other Chinese banks, which could lose their accounts in American and European banks.

Experts interviewed by RBC noted that the share of yuan transfers to the E.U. and the U.S. is small compared to the total amount of transfers in yuan. Such transfers may be used by private investors or businesses trying to skirt sanctions against Russia, including the exclusion of Russia’s banking from SWIFT.