Yellen threatens sanctions against Chinese banks doing business with Russia

Chinese banks that facilitate the export of military and dual-use goods to Russia may become targets of US sanctions, US Treasury Secretary Janet Yellen said on Monday.

During a press conference in Beijing after completing a four-day visit to China, during which she met with State Council Premier Li Qiang and other senior Chinese officials, Yellen said she had “tough” discussions on national security issues, which she expressed concerns about Chinese companies’ support for the Russian military-industrial complex. Yellen said she emphasized that Chinese companies should not provide “material support” to Russia’s military efforts or face “significant consequences.” “And I once again warned that any banks that facilitate significant transactions related to the supply of military or dual-use goods to Russia incur the risk of American sanctions,” the US Treasury Secretary emphasized.

A spokesman for the Chinese Foreign Ministry said in response that the United States is trying to “denigrate normal interstate relations between Russia and China” and that they “should not harm the legitimate interests of Chinese companies.”

Janet Yellen’s statements became one of the most visible public warnings from the United States to Chinese companies. Early last year, US Secretary of State Antony Blinken announced that China had provided “non-lethal assistance” to Russia and was considering providing “lethal assistance.” Since then, the United States has imposed sanctions on several Chinese companies for violating a ban on exporting goods to Russia that could be used in military production.

Despite official Beijing’s statements about the unacceptability of pressure from the United States, Chinese banks have begun to curtail relations with Russian clients, since the threat of excommunication from the American financial system is fraught with much greater losses for them than the benefits from transactions with Russian companies.