EU proposes sanctioning two small Chinese banks for Russia trade

The European Union has proposed sanctioning two small Chinese banks for helping Russia get around the bloc’s existing trade restrictions, according to documents seen by Bloomberg, Report informs.

Under the proposed sanctions, EU-based financial institutions would be banned from conducting any transactions with the two regional lenders which are based near China’s border with Russia.

Bloomberg did not identify the banks because the measures had not yet been published.

The banks would be added to a list of financial institutions that have allegedly aided Moscow “by processing transactions or providing export financing for trade operations” that circumvent EU sanctions, one of the documents says. Some banks on the list have also provided “crypto asset services” that help Russia’s sanctions-evasion efforts, according to the document.

China has become a key enabler for Russia’s war in Ukraine as its companies supply Moscow with restricted parts and technologies needed to make weapons. The proposed package would also add a handful of Chinese firms to those already sanctioned by the EU.

Beijing has repeatedly denied aiding Moscow’s war efforts.

The proposals, which will require the backing of all member states and could still change, are contained in what would be the 18th EU sanctions package since Russia’s full-scale invasion of Ukraine began in 2022.

As part of the measures under discussion, the EU is proposing to cut off more than 20 banks from the SWIFT international payments system and impose full transaction bans on those lenders. It also wants sanctions on the Nord Stream gas pipelines to ensure they aren’t brought back into operation in future.

In addition, the bloc wants to lower an oil-price cap imposed by the Group of Seven from $60 to $45, but that would likely need the support of the G-7 leaders, who are meeting in Canada next week.

The European Commission has also proposed prohibiting imports of petroleum products made from Russian crude in third countries unless from partner countries.