Back
Russia's most important defense bank, Промсвязь Bank, has launched cross-border settlement services for international trade contracts with "any country". A7 company, which was specifically established for this purpose, announced this news on its website, and Businessman expressed concern about it.
Mikhail Dorofiyev, Vice Chairman of ПСБ, stated that the bank utilizes its unique experience in infrastructure development, participation in national development projects, and scale of involvement in the country's financial system and economy to achieve this project. Other details were not disclosed. Timur Aitov, Chairman of the Financial and Information Security Committee of the Russian Chamber of Commerce, stated that due to the sanctions monitoring system tracking Russia's major foreign trade partners, the processing of cross-border payments has become a separate project involving the participation of multiple institutions, including additional contractors for buyers or sellers. He pointed out that these solutions will be weighed based on cost before being provided to customers, essentially these are some personalized solutions.
Ivan Tikhonnok, head of the banking working group at Amond&Smith law firm, stated that ПСБ is highly likely to have established a subsidiary that has no connection to the bank itself or even the Russian Federation. This company was able to handle settlement in many international directions until it caught the attention of Western sanctions agencies and was sanctioned.
Vladislav Valshavsky, the managing partner of the law firm, believes that a work mode called "envelope" may be used here. The key point of this method is that funds do not actually cross national borders, so regulatory agencies in unfriendly countries cannot track the flow of funds from Russia.
In fact, the role of banks in this regard will be limited to maintaining the balance of funds entering and leaving Russia. Andrei Gusev, managing partner of Nordic Star law firm, believes that A7 company may act as an intermediary and use tools such as prepaid contracts, letters of credit, and derivatives for operations. In his view, the statement by ПСБ about being able to settle with counterparties from "any country" looks quite optimistic: for countries that support sanctions regimes, direct settlement through banks like ПСБ will be difficult, even impossible.