World meat industry news

Concerning Russia-ASEAN trade, as of now major banks (Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VEB, VTB, Sberbank) have suspended remittances between Russia and Singapore in view of the sanctions imposed by the west on the use of the SWIFT system on remittances to or from Russia. This has made it practically very difficult for Russian businesses to establish accounts in Singapore, which acts as a regional financial hub for the ASEAN region.

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam, and is a major Free Trade Area of about 600 million consumers, a GDP of just over US$3 trillion (many times larger than Russia’s) and a growth rate of about 7% per annum.

ASEAN also has free trade agreements with China, India, and the Regional Comprehensive Economic Partnership (RCEP) bloc which additionally includes Australia, New Zealand, Japan, and South Korea. It also has significant trade agreements with the European Union.

However, while Singapore as an ASEAN member is currently off-limits to Russian businesses wishing to establish a business and bank accounts there, this route is available to some of the other ASEAN nations, including Indonesia and Vietnam.

This will require some strategic thought as concerns trade, as the Indonesian Rupiah and Vietnamese Dong currencies are not freely tradable on global markets. However, that hasn’t stopped Vietnam-Russia trade booming in recent years – Vietnam signed a Free Trade Agreement with the Eurasian Economic Union in 2016, which has proven successful. Vietnam will accept Russian rubles in FX. Lesser known are the Indonesian-Russian connections, although significant Russian investments have been made into the country including in automotive. Several Indonesian banks will accept ruble trade and will establish bank accounts for Russian businesses. Both options are dependent upon the formation of a local company.  

The loss of Singapore as a centralized banking unit for ASEAN is a blow, as the country accepts all other ASEAN currencies with the ability to convert these (at the prevailing FX rates) into other globally traded currencies. The procedures for doing so elsewhere in ASEAN are typically more expensive, and administratively difficult and varies from country to country. This means some strategic thought needs to be put in place to facilitate this, perhaps using holding bank accounts in Dubai or elsewhere in the middle east. The situation for now remains fluid.