In July, payment refusals for Russian businesses through banks in Central Asian countries surged by 30%, according to materials provided by transport companies PEC, Digital VED, GTL, and Logita Trade. This growing issue impacts banks across Kazakhstan, Kyrgyzstan, Uzbekistan, and Tajikistan, creating challenges for Russian companies operating in the region.
Roman Romashevsky, the financial director of PEC, highlighted that banks in these Central Asian countries have started demanding additional documents and explanations from Russian companies. These requirements include detailed information about founders, customers, deals, and sources of funds. Romashevsky warned,
"The problems will intensify in the second quarter of 2024."
Payments are frequently delayed or returned without explanation, causing considerable frustration among Russian businesses. Romashevsky pointed out that the Russian banks providing the services are often in the dark about the issues, as the problems originate with the receiving banks abroad.
"The Russian bank that provides the service does not know what is the matter and cannot explain, because the problem arises on the side of the receiving bank abroad," he explained.
Anna Fomicheva, the founder of Digital Foreign Economic Activity, noted that the most significant issues are observed in transferring money to China through Central Asia. This bottleneck complicates financial transactions and disrupts business operations, particularly for companies reliant on smooth cross-border payments.
The complications with payments through so-called "Friendly" banks began in 2023 but have intensified in 2024. The escalation is attributed to the threat of secondary sanctions imposed by the United States in connection with the Russia-Ukraine war. Nikolay Dunaev, chairman of the International Relations Committee for the Support of Russia, explained,
"Banks are explaining their refusal by the fact that they do not want to be under the sanctions imposed by the USA in connection with the Russia-Ukraine war."
The increasing payment refusals and delays show the growing financial isolation faced by Russian businesses in the wake of international sanctions.
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