Lawyer, Family Office
After 2022, with dollar and euro clearing closed to sanctioned Russian banks, the yuan became the default currency for Russia's foreign trade. Currency was the easy part. A yuan payment still has to clear through a Chinese bank that holds the right correspondent relationships, and that capacity, not the choice of currency, is the real bottleneck. The two banks below have carried much of the Russia-facing flow; the Russian institutions under each are a snapshot of who has cleared through them at various points, not a fixed arrangement. As US and EU secondary-sanctions pressure has grown, those routes have narrowed and moved.
Harbin Bank
- Realist Bank
- Solid Bank
- SBI Bank
- Tsifra Bank
Bank of China
- DOM.RF Bank
- First Investment Bank
- Finstar Bank (formerly SIAB)
- BBR Bank
Why the yuan, and why a correspondent at all
The yuan solved a narrow problem. Once Sberbank, VTB and the other large Russian banks lost their dollar and euro correspondents, trade needed a currency that Chinese counterparties would accept and that did not route through Western banks. The renminbi fit, and the switch was fast: Russia and China now settle the large majority of their bilateral trade in rubles and yuan rather than dollars. But settling in yuan is not the same as moving it. Every cross-border payment needs a bank on the Chinese side willing to receive, clear and on-pay the money. Remove that willingness and the currency choice is academic.
This is ordinary correspondent banking, the same nostro-and-vostro plumbing that sits under every cross-border transfer, set out in Correspondent Banking and Safeguarding Accounts. The clearing layer for the yuan is CIPS, China's Cross-Border Interbank Payment System, launched in 2015 as Beijing's answer to a SWIFT-centric world. CIPS is large: it handled about 175 trillion yuan, roughly 24.4 trillion dollars, in 2024, up 43% on the year, with around 176 direct participants by mid-2025. But most of those direct participants are Chinese banks, and for messaging CIPS still leans heavily on SWIFT. Harbin Bank and Bank of China are both direct participants.
Why the large Chinese banks stepped back
The turn came from Washington. Executive Order 14114, signed on 22 December 2023, created the first real secondary-sanctions authority under the US Russia program: Treasury can sanction a foreign bank for facilitating significant transactions involving Russia's military-industrial base, with no US nexus required and even where the bank acted unknowingly (see OFAC). On 12 June 2024 OFAC widened that base to cover everyone blocked under Executive Order 14024, which pulls in every designated Russian bank, Sberbank and VTB included.
The response was immediate and self-imposed. By mid-2024 the Russian arm of Bank of China had stopped clearing yuan for US-sanctioned Russian banks, and ICBC and China CITIC followed. Russian exporters reported that roughly 80% of yuan payments were being bounced, sometimes after weeks in limbo. In the second quarter of 2024 Bank of China cut its Russia assets by 37% to 3.9 billion dollars and ICBC by 27% to 5.1 billion dollars. No single designation forced this; the banks weighed continued access to dollar markets against Russia-facing fees and chose access.
Where the flow went
Volume does not vanish, it reroutes. As the large state banks pulled back, Russia-facing settlement migrated toward smaller and regional Chinese institutions, and border banks above all. Harbin Bank, in Heilongjiang province directly across the river from Russia, is the archetype: a CIPS direct participant whose settlement reach covers Russia, one of the People's Bank of China's designated ruble dealers, with cross-border yuan business that grew roughly nine-fold in 2022. It has even flown physical yuan banknotes across the border. Smaller banks have less US exposure to lose, which is exactly why the flow finds them.
Banks are only half the picture. A large share of Russia-China settlement now runs through intermediaries: payment agents in Hong Kong, Kazakhstan and the UAE that collect and on-pay for a commission, with estimates that middlemen touch up to half of these transactions. Moscow has leaned into the workarounds too, legalising barter and opening cash and crypto channels. Any named bank pairing is therefore a snapshot: a designation lands, a route closes, and the traffic reappears somewhere with less scrutiny (to be verified). The geography of all this tracks Russia's own split of the world into friendly states and the countries it lists as unfriendly.
The legal pressure point
The exposure that matters does not sit with the Russian payer, or even with the Chinese bank's Russia desk. It sits with the Chinese bank's own dollar correspondent relationships and its access to the US market, which is what secondary sanctions put at risk. That is the design from Washington's side: it never has to touch the transaction to deter it. A bank in Harbin weighing a yuan payment for a Russian client is really weighing its New York clearing line.
Brussels has pushed the same way. The EU's 18th package, adopted on 18 July 2025, added 22 Russian banks to its transaction ban, listed two Chinese financial institutions for the first time, restricted exports of banking software, and cut the oil price cap to 47.60 dollars per barrel; these sit alongside the bloc's controls on goods under EU sanctions. Into 2026 the pressure has continued, with OFAC and the State Department designating hundreds of parties, even as two regional Chinese banks were taken off the list after they stopped settling for Russia (to be verified).
This material is provided for general information and is free to copy. It describes a fast-moving sanctions landscape and is not legal, tax, or compliance advice; specific routing and counterparty decisions should be taken with qualified sanctions counsel.