Money from the sale of fossil fuels is Russia’s main income to finance its war campaign in Ukraine, which is why the West has imposed a number of sanctions against Russia in this area, including a price ceiling on Russian oil of $60 per barrel.
However, Moscow was able to effectively circumvent the sanctions when, among other things, it increased exports to countries that did not participate in the sanctions and that did not buy oil from Russia in large quantities before the war.
In recent weeks, however, less money has been traveling to Russia for the sale of oil and fuel. Banks in China, the UAE and Turkey are to blame, as they have tightened their requirements to comply with secondary US sanctions, leading to delays or even denials of money transfers to Moscow, eight banking and business sources told Reuters.
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The war in Ukraine
Banks, wary of US secondary sanctions, have begun asking their clients to provide written assurances that no person or entity on the US Special Designated Nationals (SDN) sanctions list is involved in the transaction or is the recipient of the payment.
Thanks to this, Washington manages to fulfill two political goals at the same time. On the one hand, this disrupts the flow of money going to the Kremlin’s coffers, while at the same time there is no interruption of the world’s energy supplies, Reuters reported.
First Abu Dhabi Bank (FAB) and Dubai Islamic Bank (DIB) in the UAE have suspended several accounts linked to trading in Russian goods, two sources said. Another UAE bank, Mashreq, Turkey’s Ziraat and Vakifbank, and China’s ICBC and Bank of China continue to process payments, but with delays of weeks or even months, four more sources added.
“Of course, the unprecedented pressure of the United States and the European Union on the People’s Republic of China continues. This creates certain problems, but it cannot become an obstacle to the further development of our trade and economic relations (with China),” Kremlin spokesman Dmitry Peskov said on the issue in a daily call with journalists.
Concerns began in December
According to another source, problems began to emerge last December after banks realized the threat of US secondary sanctions was real.
In this context, the source mentioned the executive order of the US Treasury Department dated December 22, 2023, in which it is stated that the US could impose sanctions on foreign banks for circumventing the Russian price ceiling. The US has therefore called on banks to tighten compliance. This was the first direct warning of the possibility of secondary sanctions originally imposed on Russia.
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