• Middlemen who organize cross-border payments for a commission are involved in up to 80% of cross-border payments, newspaper Vedomosti reported this week. Back at the start of the summer, before the West imposed sanctions on the Moscow Exchange and ramped up secondary sanctions on banks that serviced trade with Russia, such agents were involved in less than 20% of trade. But now there is no choice: it’s almost impossible to work with banks in third countries. “The risk of secondary sanctions had a largely paralyzing effect on Chinese banks,” a lawyer who specializes in international trade told Vedomosti.
• These middlemen are companies, often affiliated with Russian exporters, who have offices in Russia and countries from which goods are delivered to Russia, such as Hong Kong, Kazakhstan or China. Russian importers who need to pay for goods from, say, China, transfer rubles to the agent, who then pays the supplier in China. 
• The fees on these transactions vary according to the sums involved, the geography and the product. They are usually up to about 8%. It can take anything from five days to three weeks for funds to be credited, one importer of construction materials told The Bell. This is quicker and easier than working with banks, but it’s more expensive. 
• Financial sanctions are among the most effective measures taken by the West, and Russia has still not found a systemic solution to circumvent them. The flip side of these sanctions is the gradual fragmentation of the financial system. However, this is a slow process. The Kremlin's vision of "undermining the U.S. dollar" is still a long way off, and Russian companies will likely have to bear the additional costs caused by the sanctions for some time. For consumers, the impact is predictable: rising prices.

Read the full article at the Bell.

Opinions expressed herein are solely those of the author. Photo by AP Photo/Dmitri Lovetsky.