Documentary letters of credit under sanctions

Abstract

This article considers the impact of sanctions against Russia’s financial sector on documentary operations and trade finance. It is noted that there is limited access to the capital markets, the rising cost of trade finance for clients of Russia’s banks, the transition from the traditional funding currencies to the regional ones, increase in the time for processing payment by documentary credit due to the requests of foreign banks with regard to the details of a transaction. The article examines the possibility of disconnection of Russia from the SWIFT system, the ICC’s experience in working with documentary instruments under conditions of sanctions.