There are a number of foreigners doing foreign trading business in China, but what if the countries of your clients were sanctioned by USA or EU, which may lead to difficulty in remittance?
Thus, it is suggested that you must check and inspect in advance to ensure the success of remittance when doing business with clients from high-risk countries.
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Why remittance can't be transferred
into account successfully?
Why USD from sanctioned countries can not be transferred into Chinese banks? The reasons are that on the one hand, as for international trading, traders should observe the relevant laws of China; on the other hand, international conventions are also taken into consideration. It is true that banks are rather sensitive to the funds from high-risk areas for the reason that they will be punished or even cancelled if they got caught.
Are there any practical methods
to maintain normal trading?
Ways of checking & inspecting
Ask clients to remit deposits first to see if the bank accounts can receive them, which can not only reduce the credit risks of clients but also can follow the changes of latest overseas sanction and banks’ policies.
Check the sanction and risk information of the clients and the paying banks after knowing the objects of clients and paying banks.
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Measures for preventing from risks
Generally, we don’t suggest doing business with clients from sanctioned countries.
If the remitting bank is normal and available, make an written agreement with clients to avoid unnecessary risks and disputes, stating that this is the bank for later payment.
In terms of documents against payment (D/P), make orders after ensure the receive of USD.
Prepare export credit insurance(ECI) to transfer risks.
High-risks Countries/Regions
Category 1
Countries sanctioned by UN and/or USA, including Iran, Sudan, North Korea, Syria and Cuba, with which the majority of banks in China refuse to provide any international services.
Inquiry mode
Website of Sanctions List from the United Nations Security Council(UNSC):
https://www.un.org/sc/suborg/zh/sanctions/un-sc-consolidated-list
Website of USA Office of Foreign Assets Control (OFAC) Sanctions List
http://sanctionssearch.ofac.treas.gov
Category 2
Entities sanctioned by USA and/or EU unilaterally, such as Russia. It is reported that there are 94 Russian banks(including branches) in USA sanctions list, including one of the biggest banks in Russia, Bank of Moscow.
Inquiry mode
Website of USA Office of Foreign Assets Control (OFAC) Sanctions List
http://sanctionssearch.ofac.treas.gov
Website of EU Sanctions List
http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm
Category 3
Countries without sanction but are suspected of providing sanctioned countries with financial services, such as United Arab Emirates(mainly Dubai, Abu Dhabi and Sharjah), Saudi Arabia and Turkey, ect.
The USD payment from these countries will be suspected of being involved in providing high-risk individuals / organizations (such as Iran and ISIS) with financial services and might be inspected by USA. Besides, some domestic banks will check and inspect initially in order to avoid getting into troubles.
Inquiry mode
Policies vary from bank to bank, please consult banks for details.
Category 4
High-risk countries that are not sanctioned, such as Turkey and Pakistan with unstable political situations, which have a great possibility of being sanctioned. Chinese banks will also be cautious of the services from these countries.
Inquiry mode
Policies vary from bank to bank, please consult banks for details.
High-risk Countries List
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Please avoid company bank remittance with the above countries! For these high-risk countries, Western Union, MoneyGram and Telegraphic Transfer (T/T) of Chinese personal account are available.
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Ref: HaiyunWeb
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