Brussels prepares to sanction two Chinese banks over Russia ties

The European Union plans to add two Chinese banks to its sanctions list due to their commercial ties with Russia.

According to information from Bloomberg, based on European Commission documents, this step is being considered as part of the EU’s 18th sanctions package against Russia. The European Commission presented the 18th sanctions package on Tuesday. Sources indicate that two regional banks operating in Chinese provinces bordering Russia are expected to be blacklisted.

These regional banks became a key channel for payments between Russia and China after the US tightened its financial sanctions late last year, threatening secondary measures against all credit institutions transacting with Russia.

Following Russian President Vladimir Putin’s visit to Beijing in May of last year, a payment network was established, involving at least six regional Chinese banks.

According to the European Commission document, these banks are accused of providing crypto services that help Russia evade sanctions, in addition to facilitating payments and export financing. Under the sanctions regime, the banks in question will be completely cut off from the European Union’s financial system.

As part of the EU’s 18th sanctions package, more than 30 individuals and legal entities are also planned to be added to the list.

Furthermore, there are discussions about removing another 22 Russian banks from the SWIFT system and blacklisting 77 tankers belonging to the “shadow fleet.” These measures aim to further restrict Russia’s financial and logistical capabilities.

The European Commission is proposing a ban on restarting the Nord Stream natural gas pipeline and a reduction of the price cap on Russian oil from $60 to $45 per barrel. According to the announced plan, shipments above this price will be excluded from European insurance coverage, and European tanker companies will be prohibited from transporting such oil. These steps are expected to further reduce Russia’s energy revenues.

In a statement yesterday, German Chancellor Friedrich Merz indicated that the new sanctions package will likely be approved next week. Merz stated, “Russia poses a security threat on both sides of the Atlantic,” adding that the US Congress is also working on new measures.