US Expects The G7 to Warn Chinese Banks Over Ties With Russia: Report

By Jace Dela Cruz

Jun 09, 2024 11:34 PM EDT

TOPSHOT - In this pool photograph distributed by the Russian state agency Sputnik, Russia's President Vladimir Putin and China's President Xi Jinping shake hands during a signing ceremony following their talks in Beijing on May 16, 2024. (
(Photo : SERGEI BOBYLYOV/POOL/AFP via Getty Images)

The United States anticipates the Group of Seven (G7) nations to issue a stern warning to smaller Chinese banks to halt their assistance to Russia in avoiding Western sanctions, according to a report by Reuters

The G7 Summit Will Likely Tackle Chinese-Russian Trade

The upcoming G7 summit in Italy, hosted by Prime Minister Giorgia Meloni from June 13-15, will likely center on the growing Chinese-Russian trade relationship and its impact on the conflict in Ukraine.

Leaders are expected to discuss how to address the issue during private meetings, potentially resulting in public statements regarding the involvement of Chinese banks. 

READ NEXT: Vladimir Putin Issues Rare Apology for the Price of Eggs as Russia's Inflation Soars  

Smaller Chinese Institutions

A U.S. official and another source briefed on the matter told Reuters that while no immediate punitive measures against the banks, such as limiting access to the SWIFT messaging system or the dollar, are expected, the focus will be on smaller Chinese institutions rather than major banks.

Negotiations on the exact format and content of the warning are reportedly ongoing. The White House and the U.S. Treasury Department have also not provided official statements. 

The possibility of sanctions has already led to China's major banks restricting payments for cross-border transactions involving Russians or withdrawing from any involvement entirely.

This has led Chinese companies to seek out smaller banks near the border and increase their reliance on unofficial financing channels or prohibited forms of cryptocurrency. Western officials are growing concerned regarding the involvement of certain Chinese financial institutions in facilitating trade in goods that have both civilian and military applications.

Beijing has refuted the allegations made by Washington regarding what it considers to be regular trade interactions with Moscow.

READ MORE: Russia Could Turn Against Vladimir Putin as Economic Strength Wanes and Western Sanctions Heighten, Economists Warn  

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