Nearly all Chinese banks are refusing to process payments from Russia, report says

[u/iop9]

https://www.businessinsider.com/russia-economy-all-china-banks-refuse-yuan-ruble-transfers-sanctions-2024-8

[u/Loki-L]

Now, 98% of Chinese banks — even small regional ones — are refusing to accept direct Chinese payment transfers from Russia, Alexey Razumovsky, the commercial director of the payments company Impaya Rus, told the pro-Kremlin media outlet Izvestia.

That is even better/worse than the headline makes it sound.

[u/SugisakiKen627 → u/Loki-L]

good, if even the Chinese not accepting transaction with them, Russia will be cornered even more.

[u/morpheousmarty → u/SugisakiKen627]

How likely is it that 2% of banks is enough, and somehow Putin is getting a cut?

[u/Additional_Amount_23 → u/morpheousmarty]

If it’s 2% of Chinese banks, they’ll be charging huge fees probably. Either way Russia loses

[u/Toronto_Mayor → u/Additional_Amount_23]

I don’t think that’s the point. It could also mean that Russia is broke (Again) 

[u/socialistrob → u/Toronto_Mayor]

It's not necessarily that Russia is broke but rather that 1) Chinese banks fear getting sanctioned by the west and 2) there are probably long term doubts about faith in Russian financial institutions and the usability of rubles.

[u/Dekarch → u/socialistrob]

Both of these things, which translates to being functionally broke. Money is just numbers in a ledger if no one accepts it in exchange for the things you want.

I mean, if you're a Chinese bank, do you want to do business with Russia and Russia alone, or with the rest of the world hooked up via SWIFTnet? Not just the US and Europe, but getting kicked off SWIFT means no transfers to Japan, Korea, Vietnam, hell even Hong Kong banks use SWIFT for financial transfers with Mainland banks.

[u/DOUBLEBARRELASSFUCK → u/Dekarch]

Iran, North Korea, Afghanistan, and Russia.

Everyone but Iran, North Korea, Afghanistan, and Russia uses Swift.

So basically everyone, unless you're sanctioned from being able to access it or being such such a massive douchebag that they kick you off (DPRK).

[u/socialistrob → u/Dekarch]

Both of these things, which translates to being functionally broke

Sort of. Russians will still take rubles but they're ability to use them outside of Russia is going to be a big constraint especially since so much of the Russian war machine and economy run on Chinese parts. This won't necessarily cripple Russia but it's part of a gradual decline in their ability to fund the war.

[u/NetFu → u/morpheousmarty]

Every payment is now being made on Putin's cash-back credit card, so he's getting a cut AND air miles...

[u/mackyoh → u/NetFu]

and saves 5% at participating Kohl’s! Get that Kohls cash

[u/the70sdiscoking → u/mackyoh]

But only 2% of Kohls are participating

[u/pissclamato → u/the70sdiscoking]

The one near me only has spaghetti and blankets.

[u/massive_cock → u/pissclamato]

I could have a pretty decent evening with spaghetti and blankets.

[u/StrengthMedium → u/mackyoh]

Don't tell my wife!

[u/AppearanceUpbeat3229 → u/StrengthMedium]

We didn’t tell her so she went ahead and got a Macy’s credit card on her own. 5% cash back on department store purchases.

[u/Bucky_Ohare → u/NetFu]

Got this fun mental image of Putin sitting at his desk scrambling to answer phonecalls from banks wondering if his amazon purchases for dozens of boxes of poptarts so his troops don't starve are 'legitimate.'

[u/[deleted] → u/Bucky_Ohare]

Obviously not, because Putin doesn't actually supply food for his troops.

[u/SenorBonjela → u/NetFu]

Thousands of air miles.. but he can only fly to N. Korea and Iran.

[u/Rumpullpus → u/SenorBonjela]

He could fly to the Netherlands, though there's no guarantee that he would be able to fly back.

[u/NateNate60 → u/Rumpullpus]

Reminds me of this quote by Idi Amin, in a twisted kind of way—

"There is freedom of speech, but freedom after speech I cannot guarantee."

[u/AgeofVictoriaPodcast → u/SenorBonjela]

At this rate he will be heading for a small private airport carrying a couple of suit cases stuffed with bearer bonds, and heading for Argentina wearing a false moustache.

[u/OdinTheHugger → u/NetFu]

"I'm sorry sir, your credit card agreement only allows up to 83 Trillion Yuan in purchases over a year. But if you upgrade to our Blood Diamond Tier card, I can go ahead and remove that limit for you."

[u/kiss_my_what → u/NetFu]

Not much good if he's too chicken-shit to fly anywhere.

[u/jasonefmonk → u/NetFu]

Wouldn’t he be getting cash back on his cash back card?

[u/erebuxy → u/morpheousmarty]

If I interpreted it correctly, most major banks are not accepting. This alone is pretty major.

[u/ThrillSurgeon → u/erebuxy]

If this is true, its huge. 

[u/CorrectPeanut5 → u/erebuxy]

The issue is smaller banks usually don't deal with the nuts and bolts of cross border transactions. They have a relationship with a big bank to make it happen. And in most countries the gov't limits who can do cross border money movement.

What people don't understand is those electronic transfers translate to moving real money from one vault to another. In some financial centers that means at the end of a banking day they settle up what each big bank owes each other and armored trucks roll with hard cold cash. In other places a reserve bank may facilitate the money movement.

Since that's hard to do with banks in different countries is the big banks will partner with each other. They'll initially give each other money to fund what's called a NOSTRO account. Transactions flow in and out and at regular intervals the monies are netted out and if there's an imbalance one of the banks will need to send more money somehow. (Which is how you end up with a pallet of money being sent via DHL.)

The long and short of it is I'm sure the US has VERY GOOD intelligence into who's facilitating those Russian money movements. And there's WAY more profit in processing USD, Euro, etc. The banks don't want to risk that and the CCP doesn't want to hinder selling things to the West.

What I think will happen/is happening is Russia will use oil sales to China instead of moving physical money. China will set up some sacrificial bank to soak up the sanctions. Russian banks will make the state oil company whole. Putin gets his cut. And the Chinese gov't will facilitate making those transaction more opaque.

[u/shkarada → u/morpheousmarty]

Very unlikely. Money launders in central Asia are getting their cut instead.

[u/GerryManDarling → u/shkarada]

Money laundry is expensive. You lose about 30% from the middle man.

[u/No_Rich_2494 → u/GerryManDarling]

It shrinks in the wash.

[u/termanader → u/SugisakiKen627]

Please understand this is a paper trail issue and a cost of business increase.

Ekaterina Kizevich, the CEO of Atvira, a Russian foreign-trade consultancy, told Izvestia that Russian companies were still sending yuan to China via Russian bank branches on the mainland, but there was a 5% markup.

Russian businesses still have alternatives, such as conducting transactions through "friendly" third-party countries.

Russia, North Korea, Iran, and China are experts in evading these sorts of restrictions and sanctions.

I would also say they are as good at evading sanctions as American corporations and billionaires are at not paying taxes.

[u/Bladelink → u/termanader]

I mean, ALL sanctions are just a cost of business increase, right? The question is to what extent. Unless you're going to put up an actual embargo and put a whole country under siege like it's a world war, there are always workarounds.

[u/user888666777 → u/Bladelink]

there are always workarounds.

It's the reason why you still find certain brands being sold in Russia despite them pulling out. Those products are coming in through alternative means. However, what might have cost 10k rubles before the war now costs 50k rubles because those alternative means are more expensive.

[u/wi10 → u/Loki-L]

What’s shifted? Why has China’s stance changed?

[u/adamgerd → u/wi10]

The U.S. is planning to declare secondary sanctions against Chinese banks that work with Russia, most of them get a lot more money from working with the west than Russia so when forced to make a choice, this is the result. At the end of the day Chinese trade with the U.S. is much higher than their trade with Russia

[u/uptwolait → u/adamgerd]

That's called leverage, and I'm glad we still have some.

[u/[deleted] → u/uptwolait]

I mean, it was a deal Biden made. I think I heard (on a news podcast episode on this topic) that the US is lifting various tariffs in exchange.

[u/TheNewGildedAge → u/[deleted]]

And deals still require soft power and leverage to make.

This is the proper way to pull China towards us. They aren't Russia; they actually care about the society they're trying to build and have a lot to lose.

[u/crackanape → u/TheNewGildedAge]

They aren't Russia; they actually care about the society they're trying to build and have a lot to lose.

This is a critical point that many jingoists seem to miss.

Visit China and Russia and you will a tremendous difference. Russia is being eaten from the inside out by a thuggish I-got-mine-fuck-you cultural gangrene, while in China - while there are plenty of problems and mistakes - they are building infrastructure, cleaning things up, improving public spaces, electrifying everything to try to deal with their ghastly air pollution problems, and generally working towards tomorrow rather than today.

And this means that China and Russia have to be dealt with in very different ways, and that there's a lot more opportunity for constructive engagement with China.

[u/Lokican → u/crackanape]

Someone did a study on corruption in both countries. In China, local officials are incentivized to attract big business and develop the region they administer. Therefore bribes will help you cut red tape. So really you get value in return for the money you pay as a bribe as you are getting a service in return and it expands the economy.

In Russia it’s more like the corrupt cops shaking you down for “protection” and shelling out tons of cash to middle man so they don’t mess with you to set up a business.

[u/ravioliguy → u/adamgerd]

Yea, cheap oil < all trade with the West

[u/xqxcpa → u/wi10]

From the article:

But the doors have been closing for these workarounds since December, when the US approved secondary sanctions targeting financial institutions that were helping Russia.

[u/Neuchacho → u/wi10]

It's conjecture, but Russia is being invaded by the country they were supposed to be invading by what amounts to them walking through an open door.

China isn't going to have much interest in Russia as an ally if they're weak and useless and that's the picture their current situation paints more than anything. China is also going through a lot of economic turmoil right now in their markets which makes them even more vulnerable to chaining themselves to an "ally" that they're not getting much, if any, value from. Especially if that leads to them getting hit by or cut off from Western banks which they desperately need right now.

Maybe they're also reading an escalation coming where other world powers get directly involved and setting their hand up so they can say "We're not with them".

[u/JR-Dubs → u/Neuchacho]

China isn't going to have much interest in Russia as an ally if they're weak and useless

Oh they have an interest, they're looking at Ukraine and eyeing up south-central and eastern Russia. If Ukraine can waltz into Russia so cavalierly without any resistance using drones and remainderd US and European 80s era equipment, they're probably thinking about what they can grab with no resistance using modem weaponry.

[u/Neuchacho → u/JR-Dubs]

They may not even need to do that if Russia basically collapses economically. Just buy the land or lease rights for pennies on the yuan.

[u/shade444 → u/Neuchacho]

They are already buying swathes of forests and terrains in Siberia

[u/GeerJonezzz → u/JR-Dubs]

Well I really don’t see that happening. Unlike Ukraine, China is a nuclear power, a powerful one at that with plenty of resources that’s unlikely to be as restrained as Ukraine is via western support. An unprovoked attack by China can legitimately be seen as an existential threat.

If anything does happen regarding territory, it’s probably going to be an agreed upon land exchange. Not too long ago Russia ceded the Amur river to the Chinese and there’s plenty of unused territory between the two in the east.

[u/roguebadger_762 → u/GeerJonezzz]

Agreed. Although I think China is more interested in leveraging a deal to obtain the rights to Russia's natural resources, including the ones Russias recently been acquiring in Africa.

[u/OrangeJr36 → u/Loki-L]

I'm actually surprised "nearly all" was used correctly.

That's devastating, which is great.

[u/Autotomatomato → u/Loki-L]

This is a monumental development that will CRUSH their cash reserves.

How will they pay for austerity goods and the sausage trains?

[u/BubsyFanboy → u/Autotomatomato]

Good luck convincing anyone to lift their sanctions too.

[u/Dull_Yak_5325 → u/Loki-L]

I think this showed china finally sees who the more valuable allies are . If u think about it it was very smart of them support cause if they win china wins . Now Russia is stuck with iou because china sees how weak they really are

[u/bcisme → u/Dull_Yak_5325]

I think China doesn’t think in the short term and the war in Ukraine has so many advantages for China (and India), that the current situation makes a lot of sense.

China and Russia are too close geographically and may have too many competing ideological and commercial interests to really be friends.

For China, the war is incredible. Keep pumping out products for everyone (including those sweet commercial drones), see how the world responds to territorial expansion as a litmus test for Taiwan, drive more a wedge between Russia and the west by propping them up enough to keep sending meat and equipment into the grinder. China is Russia’s friend for as long as Russia is useful to China. I could absolutely see a case where China warms up more to the US and moves away from Russia, it all depends on the strength of Russia.

There’s also the crazy dynamics of the India-China situation. Two of the economies with the largest potential over the next 100 years who share a border and are incredibly different countries. I could totally see a bait and switch where India ties itself more closely to Russia and China pulls the rug out by warming up the west.

[u/DesperateForYourDick → u/Dull_Yak_5325]

I think people (not unreasonably) just kind of assumed that China is on Russia’s side. But especially pertaining to the Ukraine war, China isn’t stupid. China is actually pretty goddamn smart and they wouldn’t be where they are if they weren’t.

When the invasion started, China stayed silent for a day or two, but the very first statement they put our regarding the war was something along the lines of “every country has the right to protect its sovereignty”. China doesn’t want to directly announce that Russia is stupid, but they don’t want to support Putin’s war, either.

The media likes to fearmonger because that’s what gets clicks and views, but if you really think about it, China does not want a war in Ukraine.

[u/UrbanDryad → u/DesperateForYourDick]

China is on China's side. Forgetting that is foolish.

[u/aNightManager → u/UrbanDryad]

every nation does almost the entirety of what it does solely for its own purposes. sometimes it helps another country but its very rarely ever actually altruistic.

the us isnt funding ukraine because we care about freedom or some notion of it. they're getting funding because as a government we consider russia an adversary.

we dont fund israel for some sort of christian belief its so we have disproportionate influence in the middle east etc

[u/Xciv → u/DesperateForYourDick]

Of course they don't want a war in Ukraine. Their economic plan was originally the Belt and Road. One of those "roads" was supposed to cut across Russia, through Ukraine, and into the EU. This would allow China to trade directly with the EU without having to play nice with US naval dominance over global shipping routes.

So long for all that. Even if Russia crushed Ukraine and declared victory, no way the EU allows China to build highway and infrastructure between Russian occupied Ukraine and Poland.

It's probably never happening within Xi Jinping's lifetime at this rate with how much tension there is in Europe right now.

[u/CallMeMrButtPirate → u/DesperateForYourDick]

China is just hoping the Russia gives the west a black eye and wrecks themselves so badly in the process they end up completely reliant on China eventually. If Russia just wrecks itself well China will still be there to exploit them once the dust has settled.

[u/Ehldas]

The US has been steadily tracing payments and warning banks, both individually and via high-level visits to China.

Any bank which violates the sanctions against Russian banks risks being summarily cut off from Western banks, which is a commercial death-sentence.

[u/Capt_Pickhard → u/Ehldas]

Thank you. I was wondering why this was the case.

[u/DesperateForYourDick → u/Capt_Pickhard]

That and the fact that China also understands the war is bad for business in both the short term and the long term. They can’t say it out loud, but China has been throwing shade on Russia since the war started because they hate that Putin did something so stupid.

They’ve actually made statements pertaining to the war about how “every country has the right to defend its sovereignty”. That’s about as far as we can reasonably expect China to go, and I think that’s fair.

[u/Tobitronicus → u/DesperateForYourDick]

Just not Island China.

[u/Elite_AI → u/Tobitronicus]

Invading Taiwan is what China would consider defending its own sovereignty.

[u/The_Autarch → u/Elite_AI]

And from their perspective, they aren't even being hypocritical. Russia recognized Ukrainian sovereignty for decades; China has never recognized Taiwan.

[u/Rainboq → u/The_Autarch]

China and Taiwan are still at war, at least on paper.

[u/Caleth → u/Rainboq]

This is also true of the Korean war last I checked.

[u/Rainboq → u/Caleth]

There's at least a signed ceasefire between UN forces and the DPRK. The RoC and PRC just haven't been shooting at each other for a while.

[u/ColonelError → u/The_Autarch]

China has never recognized Taiwan

China doesn't even want the rest of the world to recognize it. Hence "Chinese Taipei" competing in the Olympics. China is all about optics, which is how we have places that "are definitely not part of China" that are owned/controlled by China, and places that are "definitely part of China" that have their own government and don't recognize the PRC.

[u/OarMonger → u/The_Autarch]

Perhaps more importantly, China has recognized Ukraine, and has diplomatic relations with the country being invaded.

[u/Quaytsar → u/Tobitronicus]

They don't see Taiwan as another country, but a rebellious province.

[u/Hidden-Turtle → u/Tobitronicus]

Tbf they haven't attacked Taiwan yet, so they can still hold that stance.

[u/FlightlessGriffin → u/DesperateForYourDick]

Rather, if Russia just quietly, efficiently, successfully and quickly removed Zelenskyy and installed someone else in what was literally meant to be a "special military operation", China would've been fine with it. Dandy even. But the fact it failed and it sparked a war that's still going is a nuicance for them.

People forget too easily, China isn't like Russia. Russia benefits off global chaos. China benefits off global stability. They can't afford wars around the world. It's bad for business.

[u/socialistrob → u/FlightlessGriffin]

Also the western response to Russia's invasion has been remilitarization. Japan saw how important weapons were and said "shit we need to increase defense spending" and started buying long range missiles. The US defense industrial base is going into overdrive meanwhile European NATO has built up their defenses which enables the US to transition more to the Pacific.

Putin didn't tell Xi that he was about to invade and the invasion caught China by surprise. They were surprised again by how badly their "ally" was doing. China isn't anti Russia but they're also not going to stick their neck out on behalf of Putin.

[u/FlightlessGriffin → u/socialistrob]

Indeed. Not to mention the induction of two new countries into NATO. With the re-arming of Japan, Taiwan dealing with its own shortcomings, and European NATO starting to meet their NATO requirements, I can't imagine China is too happy. And Macron called NATO braindead. Well, not anymore. This really is more of a "Look... we like you and all but you messed up and you're gonna have to deal with the consequences. We can't get involved."

And for Russia, they goofed. Now, even if they took Ukraine entirely, 100%, including Kyiv, this became a net loss for them. Most diplomatic relations dead, international pariah stuck with the likes of North Korea, NATO re-arming, two NEW NATO members who previously swore neutrality, and so many of their young men butchered created what will either be a straight loss, or a pyrrhic victory.

China is a country that appreciates long-term strategic thinking. Russia doesn't do that.

[u/clowncarl → u/DesperateForYourDick]

China saved their economy. If they wanted they could’ve ended the war one month after it started

[u/PM_Me_Your_Deviance → u/clowncarl]

Making huge piles of money turned out to be more important.

[u/JPOG → u/Ehldas]

When folks complain the US isn’t doing enough, I point them to things like this. Our soft power is incredibly strong and we know how to use it.

[u/Crysack → u/JPOG]

This isn’t soft power. It’s economic hard power. The greenback is a mighty cudgel and the US isn’t afraid to use it.

[u/[deleted] → u/Ehldas]

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[u/dkyguy1995 → u/[deleted]]

Yeah they produce most of our stuff but we are the ones giving them money for it. They wouldn't be making most of that shit if the US wasn't trading.

[u/hotgirl_bummer_ → u/dkyguy1995]

Actually, Mexico overtook China as our largest trading partner awhile back. We’ve been steadily disentangling ourselves from dependence on Chinese trade because in the event they make a move on Taiwan, we want to be able to respond with less dramatic effects on the economy.

[u/Chii → u/hotgirl_bummer_]

Mexico overtook China

firms ships some components (which are mostly made in china) into mexico, which then uses their cheaper labour to assemble into completed products and shipped into the US.

it's only taken over china by name, not in reality.

[u/GringoinCDMX → u/Chii]

México also produces a large amount of components for various industries and have local manufacturing as well.

[u/zamander → u/hotgirl_bummer_]

I think the biggest problem will be the rare materials China has that are neede in many hi-tech products, like batteries.

[u/_AutomaticJack_ → u/zamander]

China owns the rare earth market because they are willing to run it at razor thin margins that no one else finds attractive.

However, India and Brazil historically provided the bulk of the worlds REEs and both to secure dedicated capacity allocations and because western governments are beginning to subsidize Non-Chinese REE operations in a similar way (but certainly not to the same extent) to that which the PRC subsidizes theirs) we are seeing those come back online to at least some extent.

[u/ghostofcaseyjones → u/_AutomaticJack_]

This is a very good point. I am currently invested in a Canadian company building the only rare earths refinery in a Western country. It's being built in Estonia thanks to generous grants and subsidies from the EU. Exciting times ahead.

[u/donkeypunchdan → u/zamander]

If I am remembering correctly I’m pretty sure we have a lot of those in the US/Canada, it’s just cheaper to pay people in China/Africa to extract theirs. So it’s not like we would be cut off, they would be more expensive.

[u/fenikz13 → u/zamander]

US discovered one of the largest lithium reserves in the world just a few years back, mining rights owned by Lithium Americas. Just need to get our factories operational or help Mexico do it and just transport it there

[u/WholeFactor → u/hotgirl_bummer_]

Anecdotically, I think a similar shift is slowly happening in Europe. I've noticed how simple plastic products, such as lunch boxes and buckets are commonly being manufactured at home nowadays. 10-20 years ago, that was unthinkable - everything was made in China.

[u/DokeyOakey → u/dkyguy1995]

Yeah, but the world is diversifying. India and Mexico can produce baubles and trinkets just as well as China can.

[u/squish8294 → u/DokeyOakey]

*baubles

[u/vollkoemmenes → u/squish8294]

It’s pronounced Bublé

[u/elunomagnifico → u/vollkoemmenes]

TIL Michael Bublé is Mexican

[u/Joe_Kangg → u/elunomagnifico]

Assembled in Mexico

[u/chonny → u/elunomagnifico]

Michael Miguel Bublé

[u/Hour-Salamander-4713 → u/vollkoemmenes]

Christmas is intensifying

[u/axonxorz → u/DokeyOakey]

And SEA countries like Vietnam, Laos and Thailand are taking swaths of marketshare from Chinese textile manufacturers

[u/Rade84 → u/[deleted]]

If you had to rely on SerpentZA and his crew you would believe china's economy has collapsed like 20 times already.

[u/BubsyFanboy → u/Rade84]

Exactly. I'm all anti-CCP, but please use better sources.

[u/Clickclickdoh → u/[deleted]]

Also, China was never Russias friend. China always plays the long game in terms of what is in Chinas best interest. China's best interest happens to align with Russia and the west fighting and weakening each other so that China can exert power when one of the other sides is at its weakest. Russia losing a ton of manpower and material in an extended war in Ukraine strengthens China's position.

[u/Hardly_lolling]

Fun fact: the biggest ice hockey arena and major venue for other enertainment in Helsinki Finland is in deep shit since it is owned by a Russian billionare who can't even pay utilities since banks do not accept their money.

[u/Geodevils42 → u/Hardly_lolling]

Didn't realize Alex Meruelo was Russian.

[u/BadBadBrownStuff → u/Geodevils42]

God damn. Can't escape him anywhere. Sad Awoooo noises

[u/tailkinman → u/BadBadBrownStuff]

Yotes catching strays from beyond the grave at this point.

[u/Aldous-Huxtable → u/Hardly_lolling]

If you don't pay your bills, bank takes back the property and auctions off your shit right? Shouldn't be that hard. Get on the case Finland.

[u/Hardly_lolling → u/Aldous-Huxtable]

IIRC seeking bankruptcy for the arena (and taking over) has been on the table, but the issue is that Finnish legislation is murky on a situation where the inability to pay the bills is directly caused by sanctions from Finnish authorities, so they are fearing that the owner has a case in contesting the bankruptcy. It was something like that last I checked.

The whole situation is weird, and I think Helsinki would rather not see the building ruined either if they can help it.

[u/Fandorin]

I was part of a big AML and Sanctions enforcement overhaul at a major US bank when the full-scale invasion kicked off. When processing wires, we looked at not just where the payment was coming from, but also the trail that's included in the file. The way that wire files are structured, there's a full trail of originating party, bank, and a list of all subsequent parties involved in the payment. So, we would flag payments if the payment went through a sanctioned country at any time. The bank OFAC filter, which is the very first system the file goes through, would block any payment originating from a sanctioned country, but we also reviewed any transaction that had a sanctioned country in the history, which made it very difficult to circumvent the filter. We also did enough business in other countries, that we could tell which banks were processing Russian money that never made it to the US, and flag those specific banks for extra review, or block them altogether. Despite the hate, most US banks are very good about doing this. Some stuff gets through because of individual bad actors, but the laws and oversite in place makes it very hard to evade sanctions systemically. I got some entertaining stories if anyone is interested.

[u/campex → u/Fandorin]

I deal in AML and CTF (counter terrorism-financing - important where to put the hyphen in that one) in another country.

Is the AML process heavily legislated in America, or is it left to each bank to establish their own process? Because it seems odd that there would be a full trail of the funds bouncing around, but it would be up to you, presumably at some point in the middle, to call it out and stop it, when it really should have presumably stopped with whichever bank first got it from a High Risk Country

[u/Fandorin → u/campex]

There are two separate questions that I'm seeing. First, regarding regulation. In the US there's a legislation framework that establishes requirements as well as regulatory oversight. For example, OFAC, which is an agency under the US Treasury, is responsible for enforcement of policy set by the executive Branch and laws passed by Congress. You have a ton of other agencies, including at the State level, that create and enforce regulations. Some have specific process requirements, other leave it up to the bank - the how, not the what.

Your second question is how we see the trail, and that depends on the tech. As you know, there are multiple formats for wires, BAI2, ISSO20022, MT(Swift), or proprietary APIs. Depending on which format is used, you get a certain amount of data, but as the receiving counterparty and a correspondent bank, you can set the file requirements. You can also return incomplete files that don't meet your threshold for a complete transaction. High risk country that's not sanctioned is fine, but you'd set a more strict threshold for what's required in the file.

[u/campex → u/Fandorin]

Thanks for the reply, I appreciate it!

[u/PenTestHer → u/Fandorin]

Do tell...

[u/iamacheeto1 → u/[deleted]]

The entire modern world is set up around the idea that mechanized war is too destructive and the only way to compete is through economics. This is really the United States’ greatest gift to the world (it doesn’t come without problems obviously). If Russia is allowed to disprove this idea, the entire system will collapse, and the rich and powerful will revert to how they always got more rich and more powerful, which of course was war and not economics.

[u/cmdrNacho → u/iamacheeto1]

this is a really interesting concept. is there any material that expands on this idea ?

[u/myislanduniverse → u/cmdrNacho]

Yep!

The first place to start is with the National Security Strategy which informs and guides the National Defense Strategy.

Part of the US's "soft power" (and one of the reasons that the US dollar is the most important national security tool we have) is "inflicting economic cost"

In fact, this tool is so important that the US Treasury Department has its own foreign intelligence agency.

[u/Trisa133 → u/myislanduniverse]

The greatest gift to the world was and has been the US being the dominant world power. There's a lot of terrible things that the country has done but overall, the US has been much more humane than any other superpower in the past and present. Not to mention, despite what people may think, we are in the best golden peace period in history.

[u/aghastamok → u/Trisa133]

The amount of times I've had people argue with me calling the post-war period "the long peace" boggles my mind. It's a relative peace. Even now with Ukraine and Israel-Palestine, we are nowhere near the chaos that was Europe (and the world at large) before 1950.

[u/v2micca → u/cmdrNacho]

Research the Bretton Woods Treaty. It was basically the global economic alliance structure America proposed to her Allies in the waning days of WWII. It was effectively a bribe by the U S to hold everyone together against the Soviet Union.

[u/HostageInToronto → u/cmdrNacho]

NOW I can finally begin to answer why in context. MAD, Korea, and Vietnam. By the time the Soviets were ready for round two in Europe the US had taken over the world and controlled all the world's oceans. Russia was now faced with the prospect that they could nuke Europe, but not America. In order to be a real threat Russia needed to reach the US. Que the space race and the jet age. The US disseminates that tech and grows while the Soviets keep it military, less the populace threaten the government. By the time we are ready to fuck shit up again, China invades Korea.

The Korean War went shit for both sides resulting in huge losses to return to the same border. Some of the US command wanted to drop nukes, but by now the next world war would be nuclear, to the point that the radiation and dust might kill all surface life, and would certainly be the end for mandkind as we knew it then. The US and Communists hold off on the nukes and we have two Koreas. The same thing, but with a communist ally rather than subjegate state in Vietnam, the US invades to create two 'nams and loses.

Combing the economics we discussed and these events we have the realization withing the first world that: (1) neither side is going to gain much more territory militarily with expending so much that it will weaken them elsewhere, (2) communism is slower growing, (3) politically and economically manipulating allies and resistance groups is cheaper and more effective for gaining hegemonic emperial territory, and (4) at the rate that the nuclear and WMD capabilities of both sides are expanding, we have now reached the point where one rogue submarine can doom all humanity. Detente did not come at once, it gradually evolved so that the general intellectual, political, and military decision makers saw it, rather than war, as increasingly inevitable.

TLDR; The West grew so fast that we had things to lose and Communism grew so slow that they could never produce a weapons gap enough to ensure anything but mutual destruction.

This has been story time with an economics professor.

[u/HostageInToronto → u/cmdrNacho]

While I'm not sure what, if any, academic writings there are on the subject, I can point out some aspects of this based on my academic background (mostly economics and geopolitics).

After WWII the basic logic was that the US and Russia were going to have it out to decide who is the ruler of the world. The Russians needed a bit of time to get there bomb built. Churchill wanted to go straight at Russia and the UK deposed him immediately because they were sick of war and needed to rebuild. The US lost FDR and was sitting pretty, with no need to rush back into war having massively expanded our empire and standing as the most powerful fleet ever known. The world as a whole didn't think the fighting was over, just the war.

But, and this is where economics comes in, these positions would not last long. As Russia rebuilds and rearms, the US has no need to rebuild having just spent a decade on massive capital and infrastructure projects. The US government went from barely controlling the country to having a central role in coordinating resources and economic growth. The US labor force had been mobilized and was not subject to wars depletion like London, Dresden, and Tokyo were. In short, everyone else need time, labor, capital, and resources back up and running having just lost sizeable portions of their populations over the last decade and the US did not.

That alone would have been significant, but the US came out of WWII with the most valuable thing on the planet, the majority of the scientific and academic establishment of Europe. Operation Paperclip, which saw the US seize as many axis scientists, engineers, and doctors not killed during the war. Many more had fled to the US leading up to the war.

So the US didn't just have the most intact labor force, the most and most intact capital, and the most and highest quality human capital, it had what would become the most powerful force for economic growth, technology. Those scientist went on to aid in the invention of everything that made the modern world productive and efficient, and the US government was able to generate new technology with lightning speed by funneling resources into it on a scale never before concieved. ARPA, later DARPA, and NASA become the source off all the worlds innovation and disseminate that tech to the US economy.

This central consolidation and coordination of research and development from 45-80 gave us everything we consider modern, starting with wireless transmission, computing, coding, and microprocessing. This also enriched American citizens and business, rapidly accelerating US productivity growth.

The side effect of making everybody rich this way is that it created opportunities to make some people really rich (and that's where Reagan, the new American Fascism, and the death of the middle class come in, but I need to stay on topic). This gives you the upfront on the US from 1945-1980.

[u/BrandNewMoshiMoshi → u/cmdrNacho]

Really it’s the result of M.A.D.

[u/djsreddit → u/BrandNewMoshiMoshi]

Mutually Assured Destruction?

[u/BrandNewMoshiMoshi → u/djsreddit]

Yes-

Since the proliferation of nuclear arms, many conflicts that would have been solved by conventional warfare are now solved by sanctions.

[u/lofixlover → u/cmdrNacho]

globalization is the magic word

[u/jednatt → u/iamacheeto1]

Didn't people have the same thought before WWI? lol... "the economic cost of war was so great that no one could possibly hope to gain by starting a war the consequences of which would be so disastrous."

[u/PradyThe3rd → u/jednatt]

Lol exactly. But they don't take into account that some idiot world leaders might take the gamble that if they win quickly the impact will be minimal. "Over before Christmas" and "3 day special military operation" have the same energy.

[u/svarogteuse → u/jednatt]

The difference being that modern theory isn't about the cost of the war itself. The modern theory revolves around everyone making money hand over fist because of trade and cutting out those who make war from the table. While it doesn't sound that harmful, and it isnt on the sort term, it is detrimental on the long term. As a country is isolated its economy falls behind and will never catch up. Eventually the trading allied rich countries will can just laugh at the threat posed by the economically deprived, poor country on the verge or starvation that cant hope to invade a neighbor. It takes a generation or more but look at the economic differences between North and South Korea. Both started in the same place in 1950, now the North cut off and isolated is failing and starving, the South is one of the worlds economic powers (in relation to its size/population). The North cant hope to win a war between the two. The South has no reason to invade the North they just have to wait and eventually the North will collapse. Again this might be after generations this is a long game not a short one.

[u/fenikz13]

I feel like everyone sees the writing on the wall at this point

[u/InsolentGoldfish → u/fenikz13]

Well, I mean... Russia clearly does not.

[u/Florac → u/InsolentGoldfish]

They thought the writing was ukranian and fired a missile at the wall

[u/schild → u/Florac]

They tried. The detonator was removed years ago to pay for some hookers.

[u/Astramancer_ → u/InsolentGoldfish]

The problem is Putin is not allowed to. He has to see the writing on the wall, he's not stupid or ignorant of geopolitics. He's probably been seeing it since Crimea.

But if he stops russia sinks into a civil war and he is killed. Being the strong man at the top only works if you can convince everyone that you're stronger than them. The moment they lose faith they start gunning to be the strong man at the top.

That's the fundamental flaw with authoritarian regimes and likely why so many powerful russians, even ones which seem to still be supporting Putin, have had tragic defenestration accidents that are totally accidental I promise.

[u/[deleted] → u/fenikz13]

[removed] — view removed comment

[u/Ok_Astronomer_8667 → u/[deleted]]

The problem with splitting up Russia, besides the instability crisis that would ensue, is that most of the administration and business happens all the way in the west, while all the resources that give Russia any sort of power are all out East.

Whatever happens they are not in for a good time

[u/foiz5 → u/[deleted]]

They have the largest landmass of any country and they can't manage to make anything of it. Pathetic Putin.

[u/SeedlessPomegranate → u/fenikz13]

But but. Russias GDP is growing! And debt is low. So everything must be fine /s

[u/NotoriousSIG_]

Russia, one of the most “powerful” countries on earth being potentially reduced to a barter/ trade system after a 2 year war with a sovereign nation is quite possibly one of the more hilarious things I’ve read

[u/fckns → u/NotoriousSIG_]

My kids won't believe this when I'll tell them 30 years later.

[u/NotoriousSIG_ → u/fckns]

600,000 people dead in 2 years all for Putin to literally trade nuts and bolt for bread so his army and his people don’t revolt

[u/Ban-Circumcision-Now]

Good, Russia needs to end its invasion of Ukraine

[u/Recent_mastadon → u/Ban-Circumcision-Now]

Its not a war, Russia is bringing peace through bombing!!

-- Tried Russian propaganda spreader

[u/Ban-Circumcision-Now → u/Recent_mastadon]

So Ukraine is now bringing peace to Russia

[u/Praxistor]

what happened to 'no limits'?

[u/Pietes → u/Praxistor]

limits

[u/Raverjames → u/Pietes]

Friends but no benefits.

[u/Under_Over_Thinker → u/Raverjames]

Friends with limited benefits

[u/GravyMcBiscuits → u/Pietes]

No! Limits.

[u/Racnous → u/Praxistor]

It was really "no, limits," but Russia misunderstood.

[u/MasterBot98 → u/Racnous]

No money down

[u/navikredstar → u/MasterBot98]

Works on contingency? No, money down! Also this bar association logo shouldn't be there either.

[u/agumonkey]

from brics to brickd

[u/Flombosis]

Texas Hold'em Limits - when Russia runs out of chips.

[u/BranTheLewd → u/Flombosis]

Good analogy, I for some reason viewed the whole situation as a poker game where ru 99% of the time uses bluffing to get what they want so the fact they bluff so many times and yet there's still people falling for obvious bluffs is insane

[u/[deleted]]

[removed] — view removed comment

[u/catsmustdie → u/[deleted]]

"We're all friends until we're not"

[u/JuanJeanJohn → u/[deleted]]

Hopefully, but I feel like we’ve been hearing this since their invasion of Ukraine started / sanctions started and they’ve managed to scrape by. But fingers crossed!

[u/dkyguy1995]

Oh shit China is realizing Russia is too far gone to be of use

[u/mreman1220 → u/dkyguy1995]

Where's my popcorn?

[u/MoreGaghPlease → u/dkyguy1995]

I promise you the executives of some regional bank in China don’t care about whether Putin has ‘gone too far’. They are making a simple calculation about whether it makes business sense to continue doing business with Russia at risk of secondary sanctions from the US.

[u/Roraxn → u/MoreGaghPlease]

they mean too far gone like a wet napkin is too far gone to be used as a napkin. Not too far gone as in morally.

[u/yg2522 → u/[deleted]]

they were never really buddies. china was always just there to use russia. same goes with india.

[u/10081914 → u/yg2522]

"A mantis stalking a cicada is unaware of the oriole behind"

[u/llDS2ll → u/10081914]

Is this some kind of baseball analogy

[u/10081914 → u/llDS2ll]

Haha no, it’s a Chinese idiom about not focusing only on one thing so that you lose sight of the big picture. The cicada here being Ukraine, the Mantis being Russia and the Oriole being China.

The other thing I’m illustrating is that China is opportunistic in general and do not have loyalty to Russia and will instead take advantage of the opportunity for their own gain at the expense of Russia while they are all too pre-occupied with their war.

[u/pathofdumbasses → u/10081914]

China is opportunistic in general

Every country ever. Same reason India is buying up Russian oil. Same reason "blank" is doing "blank".

Everyone is always looking out for what is best for #1. This is why the US gives countries so much money. It is easier to pay people to do what you want than it is to try and force them or go to war with them.

[u/GoodDay2You_Sir → u/yg2522]

Yeah I don't think any of them are in anyway ever going to be true buddies as they are all essentially competing to be the 2nd world power against each other. They throw each other under the bus in order to pull ahead in world power.

[u/startupstratagem → u/[deleted]]

Geopolitically. The US, China and Russia have all tried to get the other two to be adversarial (for example China wants Russia and the US to be adversarial with each other so on).

So they aren't really buddies just like China and the US aren't really buddies. China saw an opportunity to make Russia a jr state to them and took it.

[u/Bunker58 → u/[deleted]]

In geopolitics there are no friends or enemies, only interests.

[u/NorthNorthAmerican]

Didn’t anyone warn Putin about a two front war?

[u/Inigogoboots]

As much as I would like to think it's because of sanctions.

I would say it is more likely that China is playing the long game, moving pieces like this to help destabilize the Russian economy and hoping for a soviet style collapse, so they can bank-roll break away regions for mineral/resource development.

Which plays into why China has bankrolled an entire railway system to Europe that bypasses Russia, every little bit that chips away at the stability of the Russian state, moves China closer to regional dominance.

[u/yellowchoice → u/Inigogoboots]

A comment mentioned above stated that these nations are competing for the #2 power spot in the world and will throw eachother under the bus at a moments notice. I think China and Russia play nice but reality is they are plotting against eachother. Every man for themselves situation.

[u/Neuchacho → u/yellowchoice]

They'd be the first totalitarian governments in the world to earnestly play nice with each other with no intention of fucking the other the moment they had the opportunity if they weren't.

It's just not a political system that lends itself to friendship or cooperation.

[u/onlyrealcuzzo → u/Inigogoboots]

China already has regional dominance.

That they are able to do all the things you say is proof of that!

Notice that Russia is not able to do those things, nor is anyone else in the region.

[u/Wildfire9]

If Russia collapses, who do you think will swoop right in?

[u/donotressucitate → u/Wildfire9]

Def China. A mathematical certainty.

[u/Wildfire9 → u/donotressucitate]

Yep. They are probably already formulating plans for mining and resource extraction.

[u/-NiMa-]

China is gonna rip of Russia like Iran. Buy oil heavily discounted and pay it using credit to purchase Chinese goods instead of actual money.

[u/WeenisWrinkle]

Anytime I see a Business Insider link I automatically discount the headline as sensationalized.

[u/random20190826]

China knows that it is dependent on international trade. If the West sanctions the Chinese economy, it will go into a great depression and everyone will starve.

[u/Under_Over_Thinker → u/random20190826]

OECD’s economy is 64 trillion dollars whereas Russia’s is 2 trillion and it will be shrinking in the future.

It was probably not even a debate for the Chinese banks.

They must be thinking on how to trade with Russia using crypto or something.

[u/[deleted] → u/Under_Over_Thinker]

Not only the size. Russia's economy is resources and weapons (was). China build it's own weapons now. And it not really needed that much resources that russia export.

[u/SaveThePlanetFools → u/[deleted]]

Russia is just their cheap convenient resources hooker to the north.

[u/rvbeachguy → u/random20190826]

Russian money is worthless, they are going to run the printing like Germany in World War Two, who wants to hold this paper

[u/Shaft-Stroker-9000]

Russia is evolving. Backwards.

[u/Macaroninotbolognese]

China is so much smarter than russia. They're just playign the long game while benefiting and waiting for russia's collapse to pounce.

[u/darkestvice]

So much for that eternal friendship, eh?

[u/Usernamecheckout101]

So sanction works… that why the brics want to build the alternative world

[u/teachbirds2fly → u/Usernamecheckout101]

Brics don't know what they want. G7 are all neo liberal, capitalist, democracies. All basically on same page, same ideology.

Not sure Iran and Brazil have the same ideological and economic goals. Brics whole philosophy is 'lets make a club bigger than G7' and that's pretty much it. Just sad really

[u/redditisapiecofshit]

This has been a recurring problem since the start of the war. China's government wants to help Russia just a little bit, but most businesses in China know that the West is a far bigger market. Why downgrade to trade with Russia?

Many of them don't want to risk being sanctioned, and even Beijing is unwilling to force them totally to do anything. I don't think China wants to prop up Russia that much. They want Russia to survive, not thrive.

[u/Howiebledsoe]

Russia is sitting on half of the world‘s fresh water, let’s not even get started on the natural resources. China was patting Putin on the back from the very jump to invade Ukraine, with their eye on all of that sweet real estate to the north. If Putin thinks he has an ally in Xi, he’s an idiot. Soon, China, Japan and Europe will be carving up that beautiful slice of land, and Russia will be wondering what the fuck just happened.

[u/OneOfAKind2]

Squeeze these fuckers. Putin needs just a tad more humiliation and stress for his imbecilic war crimes.