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The Russian division of the Bank of China has suspended operations with Russian lenders sanctioned by the United States in order to avoid being hit with secondary sanctions, the Kommersant business newspaper reported Monday, citing industry insiders.

The Bank of China’s Russian division — which specializes in yuan payments between Russia and China — is the second-largest Chinese banking subsidiary in the country [...]

Experts [said that this] would likely increase fraud risks given the subsequent shift to opaque intermediaries to process payments between Russian and Chinese entities.

“This is not very good news for the Russian market,” an anonymous industry insider was quoted [...]. “There will be additional costs both in time and the price of processing payments.”

"But the most important problem is that payments go beyond the banking sector, resulting in the state having less control,” the source added.