Updated May 11th, 2024 at 21:12 IST

US mulls sanctions on Chinese banks backing Russia in war with Ukraine

In a meeting with President Xi Jinping, Secretary Blinken urged China to stop its military aid to Moscow or face consequences.

Reported by: Business Desk
US to impose sanctions on banks of China | Image:Freepik

Chinese bank sanctions: The United States is contemplating imposing sanctions on Chinese banks for their involvement in supporting Russia-Ukraine conflict, aiming to cut off crucial financial support for Russian military activities, according to a report by Nikkei Asia.

During a recent meeting with Chinese President Xi Jinping, US Secretary of State Antony Blinken emphasised the urgency of ending China's military assistance to Moscow, warning of potential consequences if action is not taken.

Global banking crackdown

Washington is exploring measures that could restrict these banks' access to the American financial system, with President Joe Biden having already granted the Treasury Department authority to impose secondary sanctions on financial institutions in other countries aiding Russia in evading sanctions.

The Treasury Department has already initiated actions, announcing sanctions against ten organisations and twelve individuals associated with Belarus for their alleged support of Russia's arms industry. Amongst these entities is Shenzhen 5G High-Tech Innovation, a Chinese company accused of procuring precision instrument parts for Russia's munitions industry via Belarus.

Internal documents obtained by a Belarusian opposition group revealed that Moscow has been acquiring sights for 3,000 tanks from China through Belarus since spring 2023, despite existing sanctions from the West. These sights are expected to be deployed on over 1,000 tanks in a large-scale operation potentially taking place as early as late May.

Disruption in energy trade

In addition to targeting Chinese banks, the potential sanctions may also aim to disrupt Russian energy exports to China, which have been crucial in funding Russia's military efforts. However, the pressure is beginning to show effects, with major Chinese banks reportedly refusing yuan payments from Russia, leading to difficulties in transactions for Russian companies.

Furthermore, financial institutions in other countries, particularly those settling trade transactions in dollars, are keen to avoid US sanctions, which could severely impact their businesses.

Meanwhile, Chinese President Xi Jinping has pledged to French President Emmanuel Macron to strictly regulate the export of materials with potential military applications.

Russian President Vladimir Putin's upcoming visit to China in May adds further context to the escalating tensions between the US, China, and Russia.

(With ANI Inputs)


Published May 11th, 2024 at 21:12 IST