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During the upcoming G7 summit in Italy, led by Prime Minister Giorgia Meloni from June 13-15, U.S. officials anticipate that the group of seven wealthy democracies will issue a stern warning to smaller Chinese banks involved in aiding Russia circumvent Western sanctions.
This discussion is set to be a major agenda item as leaders deliberate the implications of the growing Chinese-Russian trade on the ongoing conflict in Ukraine.
Image Souce: CNN
According to sources familiar with the summit’s planning, these talks are expected to lead to public statements addressing the role of these Chinese banks. While no immediate punitive measures, like restricting SWIFT access or cutting off U.S. dollar access, are planned against any banks during the summit, the focus will remain on smaller institutions rather than China’s largest banks.
Negotiations about the precise wording and format of the warning are still ongoing, said sources who requested anonymity while discussing sensitive diplomatic engagements. The U.S. Treasury Department has not commented on the matter, but its officials have previously warned that financial institutions in Europe, China, and elsewhere risk facing sanctions for assisting Russia in evading Western sanctions.
Image Source: Bloomberg
Daleep Singh, the Deputy National Security Adviser for International Economics, expressed concerns at a recent Center for a New American Security event about China’s increasing role in supporting the Russian war effort.
“Our concern is that China is increasingly the factory of the Russian war machine. You can call it the arsenal of autocracy when you consider Russia’s military ambitions threaten obviously the existence of Ukraine, but increasingly European security, NATO, and transatlantic security,” he stated.
Furthermore, the summit will also discuss leveraging profits from Russian assets frozen in the West for Ukraine’s benefit. This move comes as the U.S. prepares to announce significant new sanctions on financial and non-financial targets to further restrict Russia’s ability to sidestep existing sanctions.
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