European Union sanctions 2 Chinese banks over aid to Russia

The European Union has sanctioned two small Chinese banks in its latest package of measures designed to hobble Russia’s war machine, despite a warning from Beijing to expect consequences.

Suifenhe Rural Commercial Bank and Heihe Rural Commercial Bank, two regional lenders from cities close to China’s border with Russia, were blacklisted in the 18th package of sanctions agreed on Friday morning, diplomatic sources confirmed.

The development has been weeks in the making, with Slovakia withdrawing a long-standing veto to allow the package to pass. The central European country had been blocking the move over an EU plan to stop gas imports from Russia beginning in 2028.

The move could prompt retaliation from China, which has lobbied intensely behind the scenes to get the banks removed from the package. It also comes less than a week out from a high-stakes summit in Beijing.

During a meeting with the EU’s top diplomat, Kaja Kallas, this month, Chinese Foreign Minister Wang Yi warned her “three or four times” that there would be a response to the banks’ inclusion, according to sources familiar with the exchange.

In Brussels, Chinese diplomats – including ambassador Cai Run – have held “frank exchanges” with EU officials to try to prevent the listing, according to people involved.

  

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