The European Union has imposed restrictions on two small Chinese banks in its 18th package of sanctions against Russia, a week before the EU-China summit.
This is reported by the South China Morning Post, citing diplomatic sources.
Sources confirmed that sanctions were imposed on two regional banks from cities near China’s border with Russia: Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank. The move could lead to retaliation from China, which has been lobbying hard behind the scenes to have the banks excluded from the package.
During a meeting in early July with the European Union’s High Representative for Foreign Affairs and Security Policy, Kaia Kallas, Chinese Foreign Minister Wang Yi warned her “three or four times” that there would be a backlash against the banks’ inclusion. In Brussels, Chinese diplomats, including Ambassador Cai Rong, held “frank exchanges of views” with EU officials to try to prevent the Chinese banks from being added to the list.
While Beijing was unable to prevent the banks from being blacklisted, it appears to have managed to soften the terms. The European Commission informed ambassadors on July 18 that it would review the lists of creditors in six months, according to two diplomatic sources. If the banks can prove that they have stopped supporting the Russian military, they could be removed from the list.
The EU has imposed sanctions on dozens of Chinese companies since the start of Russiaʼs full-scale aggression against Ukraine, accusing them of helping the Russian military evade sanctions. However, this is the first time that banks have been sanctioned.
China has strongly opposed previous listings and rejected proposals to impose Western sanctions on it. It insists it has “normal” trade relations with Russia and denies supplying lethal weapons to any side in the war.
This issue will be revisited at the EU-China summit on July 24. European leaders plan to put tough pressure on China over its economic support for Russia.
- On July 18, the European Union adopted its 18th package of sanctions against Russia, targeting 14 people and 41 organizations. The sanctions target the energy and banking sectors, the military industry, and enterprises in Belarus and China. In particular, the EU lowered the ceiling price for Russian crude oil from $60 to $47.6 per barrel.
- Ukrainian defenders have repeatedly taken Chinese citizens prisoner. In April, President Zelensky stated that the Russian army includes at least 155 Chinese citizens.
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