In recent years, Russian entrepreneurs engaged in imports from China have increasingly encountered suppliers refusing to accept payments directly to bank accounts. Although such a practice was considered standard until recently, the situation has changed. Chinese partners are becoming more cautious.
Why Chinese suppliers avoid direct payments
The main factor is the tightening of currency controls in China. The state closely monitors the receipt and movement of foreign funds, especially in the context of foreign economic activity. Non-standard payment for goods in China may attract the attention of regulators, and raise suspicions, especially if we are talking about large amounts, frequent transactions from countries under sanctions pressure.
Sanctions, international restrictions play a role. Some Chinese companies are afraid of being blacklisted due to cooperation with Russian companies. Even suppliers operating in the "white" sector may lose the opportunity to be serviced by international banks and lose access to dollar settlements.
Reputational risks are also important. There are many suppliers operating in the shadows in China. They avoid direct payments in order not to attract the attention of the tax authorities and banks, and to maintain flexibility. Direct payment may be automatically associated with "official" exports, which leads to additional obligations.
What risks do suppliers take when accepting direct payment
When a Chinese supplier accepts payment directly from Russia, they are actually taking on increased risks. Banks begin to check the origin of funds, especially if the counterparty is from a country with an unstable foreign policy situation. Such checks are often delayed, funds in the account are frozen.
If the bank considers the transaction suspicious, the company will receive a fine, and the account will be blocked. After this, it becomes impossible for the supplier to work with foreign partners. Reputational losses, tax audits, and the risk of criminal liability for violating the currency regime - this makes suppliers avoid direct transfers.
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What schemes are used instead of direct payments
To retain customers, Chinese suppliers are switching to alternative payment schemes:
- Working through agents. A popular option is intermediaries registered outside of China. Payment is not made directly, but to the agent's account, which then transfers money to China using internal mechanisms. Intermediaries often offer additional services - cargo inspection, shipment control, paperwork.
- Payment through Hong Kong, Singapore and offshore companies. These jurisdictions are less subject to currency control, and local company accounts are easily opened for international payments. The supplier issues an invoice from a Hong Kong subsidiary, a partner, receiving funds bypassing Chinese control.
- Barter, payment in cryptocurrency. Suppliers agree to barter or cryptocurrency. This is convenient for small batches, but is associated with risks, and is practically unregulated.
What Russian importers should do
The first rule is to check the payment scheme before starting cooperation. Find out whether the partner is ready to accept direct payment or will use intermediaries. It is important to understand who will receive the money, and what documents you will receive.
The second is to ensure legal protection of the transaction. If payment is made through a third party, you need to draw up an agreement confirming that the cargo is intended for you. This will help in case of a dispute, failure to fulfill obligations.
Thirdly, be careful with intermediaries. Some operate legally, others may be scammers. Check the company's registration, read reviews, demand transparency of the stages.
Finally, if you are not sure about the scheme, it is better to use the help of logistics or foreign trade operators. They know how import from China works, they will help organize payment for goods to China with minimal risks.
Conclusion
Direct payment is becoming less popular. Tightening controls, sanctions risks, and concerns about reputation are pushing Chinese partners to alternative schemes. It is important for Russian companies to adapt to the new reality: check schemes, take risks into account, and work with trusted suppliers.
