HSBC to Halt Transactions with Russia and Belarus in October
One of the world's largest international financial groups, the Hongkong and Shanghai Banking Corporation (HSBC), has made the decision to cease servicing corporate clients operating in Russia and Belarus starting in October. Previously, the bank continued to provide services to its corporate clients in these countries, despite sanctions, as reported by Nikkei Asia.
According to the announcement, other banks within the HSBC Group will also stop processing commercial payments starting from October 27th, citing a "more complex regulatory environment." HSBC Group explained that this decision was made to "minimize the impact on their operations in Russia and Belarus, even if such activity is permitted by laws and regulations."
HSBC's decision was preceded by a notification to its clients about a meeting between representatives of the U.S. Treasury Department and financial authorities in Hong Kong. American officials urged stricter control over financial transactions related to the export of high-tech American products to Russia, which fall under sanctions.
Last year, the United States stated that Hong Kong's status as a global financial center would be undermined if it did not adhere to international laws and standards.
"The potential use of Hong Kong as a safe haven by individuals evading sanctions from various jurisdictions further raises questions about the transparency of the business environment," said a spokesperson for the U.S. State Department in a statement following Hong Kong Chief Executive John Lee's remarks. The leader of Hong Kong stated that unilateral sanctions imposed by other jurisdictions would not be enforced.
In October 2022, HSBC had already discontinued retail investment services for Russian clients, citing European Union sanctions as the reason.
HSBC's subsidiary, "Expobank," continues to operate in Russia. HSBC Group has been in negotiations for its sale and even claimed that an agreement had been reached as early as July of the previous year. However, the deal was not finalized due to the Russian government's prohibition. The Russian government imposed a ban on the sale of subsidiary banks of foreign financial institutions in response to sanctions against Russian banks.
A representative of HSBC Group stated that they are continuing to work on the sale of their assets in Russia and hope to conclude the transaction by the end of this year, pending approval from local regulators.