Although Russian companies have so far managed to adapt to working under Western sanctions, many organizations have to form increasingly long chains of intermediaries to carry out transactions, writes the Financial Times.
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Arranging alternative payment solutions involves higher currency conversion costs and commissions. According to the newspaper, the effect of the sanctions was reinforced thanks to the decree of US President Joe Biden.
The head of the White House allowed the Ministry of Finance to apply secondary sanctions against violators of anti-Russian restrictions. In particular, this applies to financial organizations.
After this, foreign banks began to massively refuse to work with their Russian counterparts. Credit institutions are avoiding transactions in some currencies, say Western officials and several Russian financiers.
According to a major Russian investor, the situation is getting more complicated every month.
“One month in dollars, the next in euros; In six months you basically won’t be able to do anything. The logical end of this is the transformation of Russia into Iran,” concludes the newspaper’s interlocutor.
As a result of these changes, domestic companies are looking for smaller banks, lengthening the chain of intermediaries between buyer and seller, says the head of Estonia’s financial intelligence unit, Matis Mäeker, adding that confusing mechanisms can confuse Western regulators. According to him, Russian companies will continue to find solutions.
Furthermore, to circumvent restrictions, trade is increasingly carried out in rubles. The only way to avoid the attention of the US Treasury Department’s Office of Foreign Assets Control (OFAC), says a senior Russian banker.
Author:
Natalia Gormaleva
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
