HSBC to restrict commercial payments to and from Russia and Belarus

Move comes as conflict in Ukraine has resulted in an 'unprecedented volume of sanctions and trade restrictions' on Moscow, the bank says

HSBC said it has become challenging to operate amid 'complex restrictions' placed on Russia. Reuters

Europe's biggest bank HSBC will restrict commercial payments to and from Russia and Belarus as the West's sanctions net widens amid Moscow's continued war in Ukraine.

“The ongoing conflict in Ukraine has resulted in an unprecedented volume of sanctions and trade restrictions imposed against Russia and Belarus," an HSBC representative said.

"While HSBC has taken multiple steps to comply with applicable regulatory obligations, it has become increasingly challenging to operationalise these complex restrictions globally.

"We have therefore reached the decision to restrict commercial payments by our corporate entity customers to or from Russia and Belarus through HSBC.”

Russia has faced various rounds of western sanctions after its assault on Ukraine, which began in February last year.

The EU, the US and other western partners cut off a number of Russian banks from the Swift global interbank payments system shortly after the invasion of Ukraine.

This restricted the country’s access to financial markets across the world. Swift handles more than five billion financial messages a year, supporting fast and secure cross-border payments, and allowing international trade to flow smoothly.

In July, the US also placed more than 120 companies from Russia on its sanctions blacklist over alleged contributions to the war.

Russian banks, private military groups and energy, shipping and defence businesses were among those listed on new State Department and Treasury Department lists.

The measures are designed to restrict Moscow's access to products that support its military efforts, as well as undermine its energy capabilities, diminish its access to the international financial system and “starve Russia of G7-produced technology”, the Treasury said at the time.

A number of companies closed their operations in Russia last year after sanctions imposed by western countries on Moscow.

In August last year, Citigroup announced plans to wind down its consumer and local commercial banking business in Russia and said it expected to incur about $170 million in costs over the next 18 months.