Vietnamese financial institutions create challenges for Russian companies during transaction proceedings
In recent times, Vietnamese banks have significantly tightened their banking procedures for Russian businesses operating in Vietnam. This shift is a direct response to the U.S. sanctions and Western secondary sanctions that have been increasingly targeted at Russia’s financial institutions and business sectors since early 2025.
The new regulations now require Russian companies to provide extensive documentation proving that transactions are genuinely connected to Vietnam. This includes contracts, invoices, transportation, and customs papers. Payments are only allowed if goods are actually delivered to Vietnam or if the Russian counterparty includes a Vietnamese citizen among its founders or has a strong local business presence, such as a local partner or office.
These measures aim to avoid the risk of Vietnamese banks being penalized by secondary U.S. or Western sanctions for processing prohibited or circumvented transactions. Key impacts include stricter document requirements, restrictions on transit schemes, delays, and blocking of payments.
Russian companies directly supplying or processing goods in Vietnam face fewer changes, but those employing transit or indirect schemes are most affected. Ilya Zharsky, a partner at Veta's expert group, believes that Vietnam can dictate terms given the decreasing number of countries willing to facilitate transit payments for Russian businesses.
The demand for extensive documentation and compliance is a common trend in jurisdictions facing Russian businesses. Offshore operations and dealings with FATF’s "blacklist" countries can also result in account suspensions or closures in the UAE.
The tightening was triggered by external factors: the U.S. President’s December 22, 2023, decree on sanctions against deals in Russia’s defense industry’s interests and the U.S. Office of Foreign Assets Control’s (OFAC) June 12, 2024, clarification on secondary sanctions.
Vietnam, however, maintains its status as a working platform for "white" trade - real purchases and processing of goods, as well as transit schemes. The State Bank of Vietnam's circular specifying the order of opening and using dong accounts for non-residents' indirect investments further enforces this local nexus.
In the UAE, regulators have been increasing their scrutiny of companies with Russian roots. If a deal does not involve actual shipment to Vietnam, banks look for another "anchor" such as a local founder, director, office, or long-term contract with a Vietnamese partner. Non-compliance with declared turnover can lead to account suspensions or closures in the UAE. Local regulators in the UAE demand up to twenty documents, often with translation and notarization.
In summary, the U.S. sanctions on Russia have forced Vietnamese banks to intensify scrutiny and documentation requirements on Russian business payments, significantly complicating banking procedures and forcing many Russian firms active in Vietnam to adjust compliance practices or seek alternative jurisdictions for financial operations.
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