List of sanctioned banksSanction background and impact

Impact on the Chinese financial market

According to the sanctions list released by the U.S.Treasury Department on June 12,2024,the following five Russian financial institutions in China have been included in the Specially Designated Nationals (SDN) list:

VTB BANK PJSC SHANGHAI BRANCH

Address: 1266 Nanjing West Road,Shanghai (Plaza 66,now relocated to Lujiazui)

STATE CORPORATION BANK FOR DEVELOPMENT AND FOREIGN ECONOMIC AFFAIRS VNESHECONOMBANK

Address: 20A,CITIC Tower,19 Jianguomenwai Avenue,Beijing

PUBLIC JOINT STOCK COMPANY SBERBANK OF RUSSIA

Address: C305/306A,Lufthansa Center,No.50,Liangmaqiao Road,Chaoyang District,Beijing

PROMSVYAZBANK PUBLIC JOINT STOCK COMPANY

Address: Room 1308,Science and Technology Building,No.22,Jianguomenwai Street,Beijing

VTB CAPITAL HOLDINGS CLOSED JOINT STOCK COMPANY

Address: Room 2301,23rd Floor,Cheung Kong Center,No.2,Queens Road Central,Hong Kong

In addition,a representative office was also sanctioned: the Beijing Representative Office of VTB Bank (Public Joint Stock Company),with the address at Room BC,18th Floor,CITIC Tower,No.19,Jianguomenwai Street,Chaoyang District,Beijing.

According to the sanctions list released by the US Department of the Treasury on June 12,2024,the following five Russian financial institutions in China were included in the Specially Designated Nationals (SDN) list:

This sanction is part of a package of U.S.sanctions against Russia aimed at further restricting Russia’s activities in international financial markets.Although these Russian financial institutions had already been sanctioned earlier,the names and addresses of these overseas branches were not explicitly mentioned in the May 2024 SDN list.This time,the U.S.Treasury Department further clarified the scope of the sanctions by listing these branches separately and explicitly highlighted the risks of major transactions involving Russia.

The direct consequence of the sanctions is that the assets of these financial institutions in the US will be frozen,and all US persons and entities in the US will be prohibited from conducting any transactions with these sanctioned institutions.For the Shanghai Branch of VTB Bank in Shanghai and other branches in China,this means that their international transactions and businesses will be severely restricted,and they may face customer loss and a trust crisis in the financial market.

Address: 1266 Nanjing West Road,Shanghai (Plaza 66,now relocated to Lujiazui)

For the Chinese financial market,this sanction action may have various impacts:

• TrustCrisisofFinancialInstitutions:ThebusinessesofthesanctionedfinancialinstitutionsinChinamaybeaffected.Customersandpartnersmayre-evaluatetheirbusinessrelationshipswiththesebanksduetocomplianceandriskconsiderations.
• AdjustmentofInternationalBusiness:OtherChinesefinancialinstitutionsmaystrengthencompliancereviewsandavoidmajortransactionswiththesanctionedfinancialinstitutionstopreventthemselvesfrombeingaffectedbythesanctions.ThiswillposecertainchallengestothefinancialcooperationbetweenChinaandRussia.
• MarketVolatility:Duetotheuncertaintiescausedbythesanctions,itmaybringfluctuationstotherelevantfinancialmarkets,andinvestorssentimentmayalsobeaffected.
• PolicyAdjustment:TheChinesegovernmentandfinancialregulatoryauthoritiesmaytakecorrespondingmeasurestoensurethestabilityofthefinancialmarketandmayexplorecountermeasureswithothersanctionedcountries.