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The payment method for exports from Yangzhou to Russia
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I'm from a mechanical parts export company in Yangzhou. Recently, we received an order from a Russian client, but they require payment on credit. I'd like to ask for your advice on how to handle this situation.Which payment method is the safest? I heard that Russian banks have been sanctioned. Will there be any problems?
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
Currently，when choosing payment methods for exports to Russia，the primary consideration is not which one is the safest，but which one can still function under the current sanctions framework. From a compliance perspective，traditional TT and letters of credit both face the risk of being rejected by banks. The key is to ensure that your receiving bank is not on the sanctions list and that the remittance path does not pass through sanctioned intermediary banks. It is recommended to prioritize RMB cross-border settlement through Russia-friendly banks such as Kunlun Bank and Heilongjiang Bank，or through offshore accounts in third countries (such as Turkey and the United Arab Emirates)。
Special note: The HS code，amount，and currency on the customs declaration must exactly match those on the receipt voucher，otherwise it will be impossible to clear customs and claim tax rebates. If the client insists on using EUR/USD，it is essential to include a clause in the contract stating that "if payment cannot be made due to sanctions，the buyer shall complete the payment through RMB or other unrestricted methods," and to clarify the division of responsibilities.
Andy GuoYears of service：3Customer Rating：5.0
Supply Chain Management ExpertStart a Chat
The payment method is directly linked to your trade terms and logistics control rights. For CIF terms, you can specify the freight forwarder and insist on a 30% prepayment plus 70% payment upon receipt of the bill of lading copy. By holding the original bill of lading in hand and not releasing the ownership of the goods, the risk can be controlled. For FOB terms, if the client specifies the freight forwarder, never accept "post TT" or payment terms. Once the goods are loaded onto the ship, the freight forwarder may release the documents according to the client's instructions, leaving you with neither money nor goods.
For shipments to Russia, maritime transport to St. Petersburg takes about 45 days, while rail transport to Moscow takes 15-18 days. For small and medium-sized orders, rail transport is recommended due to its low value and short cycle. You can require 50% prepayment plus 50% payment before shipment. For large-scale sea shipments, it's essential to purchase export credit insurance.
On the documents, the invoice, packing list, and certificate of origin must bear the same consignee information as the payer to avoid being questioned by Russian customs regarding "third-party trade" during customs clearance.
Kevin LinYears of service：4Customer Rating：5.0
Trade Solutions ManagerStart a Chat
When discussing payment terms with Russian clients, don’t reject credit periods outright from the start, as this can appear impersonal. You could approach the conversation this way: "We understand your current funding pressures, but as a small or medium-sized enterprise, we also face practical difficulties with banks tightening restrictions on Russian business. We suggest a compromise solution: 30% down payment + 40% payment before shipment + 30% settlement upon receipt of the bill of lading copy, or 50% prepayment + 50% sight L/C. If credit periods are truly necessary, could we arrange a guarantee letter from a local Russian bank, or jointly purchase short-term export insurance from China Export & Credit Insurance Corporation (Sinosure), with the premium split between both parties?"
For long-term clients, you could gradually extend payment terms to 15 days after shipment, based on successful collections of previous orders. The key is to demonstrate that you’re actively working to resolve issues rather than simply refusing. Additionally, hint that orders with favorable payment terms will receive priority production and shipment, offering clients soft incentives to encourage cooperation.