© Kenny Holston/The New York Times
Russia's state-backed payment firm A7 took in at least 283 tons of cash rubles, worth more than $14 billion, between November 2024 and July 2025, and turned much of it into payments to China that hide where the money came from, the International Consortium of Investigative Journalists (ICIJ) and Russian investigative outlet Proekt reported on 21 October, citing leaked internal records.
Cut off from Western banks over its war against Ukraine, Russia now moves money the way drug gangs launder theirs: cash goes in, and clean-looking wire transfers come out abroad. The overlap is literal.
Last year, UK investigators found that a network laundering British drug gangs' cash had bought a Kyrgyz bank that was handling payments for Promsvyazbank, Russia's state defense bank. That same bank co-owns A7, which "is also likely to facilitate cash-based money laundering," anti-money-laundering expert George Voloshin told ICIJ. On 1 October, the US Treasury named A7 a "significant transnational criminal organization." Most of the market cash pays Chinese suppliers, and China supplies about 90% of the high-priority Western-restricted items Russia imports for its weapons. Drone makers working for the Russian army are among A7's clients, Proekt found in April.
Much of the cash came from Moscow's giant Sadovod market, where broker teams known as "departments" collect bags of rubles from traders, the records show. Vans take the numbered bags to an A7 office, where about 50 cashiers count the money before it is trucked to Promsvyazbank. The bank vaults it and credits A7. At its peak, A7 handled at least 58 tons of cash a month.
Russia's central bank has flagged the problem itself. Money of unknown origin comes "primarily" from Moscow's wholesale and retail markets and from illegal crypto exchanges, a senior Central Bank official said in September, as quoted by ICIJ.
A7 then orders shell companies outside Russia to pay its clients' suppliers, mostly Chinese exporters. The money moves through Kyrgyzstan, largely via the state-owned Trading Company of the Kyrgyz Republic, and the wire transfers carry no trace of cash or of Russia. The records list accounts at ICBC, Bank of China, Agricultural Bank of China, and China Construction Bank. One $287,000 transfer went through Standard Chartered's Hong Kong branch with "Sadovod" recorded as the client.
Chinese banks began refusing Russia-linked payments in December 2023 under the threat of US secondary sanctions. Stripping the funds of their origin makes them easier for Chinese banks to accept, illicit-finance expert Zachary Tvarozna told ICIJ. "The only company that sees everything is A7 itself," Voloshin said.
A7, Promsvyazbank, the Chinese banks, and Kyrgyzstan's economy ministry did not answer ICIJ's questions. A7 has publicly rejected the US accusations, saying it runs "a modern, multi-tiered compliance system."
A7 launched in late 2024, co-owned by Promsvyazbank and led by Moldovan oligarch Ilan Shor, a "sanctioned and convicted criminal fraudster," according to the US Treasury. Ukraine sanctioned its network in February, and the UK followed in May. A7 claimed to have moved more than 7.5 trillion rubles, about 13% of Russia's 2025 foreign trade transactions, and its network also helped Iran sell oil and buy weapons, the Treasury said.
Sanctions did hit A7's crypto side. Daily volume of its ruble token A7A5 fell 96% from its peak by June 2026, blockchain analytics firm Elliptic found. The cash channel is harder to touch: Western banks can see where A7's money lands, but not where it starts.
© The New York Times
Commission President Ursula von der Leyen outlined the initiative during a speech to the European Parliament in Strasbourg on Wednesday, 21 October, following discussions among EU leaders over growing global trade imbalances.
The proposal would form part of a wider package addressing economic dependence on foreign suppliers and attempts by third countries to exert commercial pressure on individual EU member states. Although the Commission has not yet published detailed legislation, the announcement signals Brussels’ intention to expand its capacity to intervene in international trade disputes.
European manufacturers have faced increasing competition from imported products in sectors including chemicals, machinery, vehicles, steel and industrial components.
Much of the concern centres on China, where extensive manufacturing capacity and government support have enabled companies to expand their presence in international markets.
European producers argue that differences in subsidies, production costs and market access place them at a competitive disadvantage.
According to the European Commission, the EU’s goods trade deficit with China exceeded €1 billion per day in 2025.
Von der Leyen has described the imbalance as unsustainable and argued that European trade policy must respond more effectively to market distortions.
During her 21st October address to Parliament, she confirmed that the Commission was working on additional safeguards intended to address sudden increases in imports affecting European businesses.
The proposed measures follow a Franco-German initiative calling for stronger instruments to counter systemic economic imbalances.
France and Germany have urged Brussels to act more quickly where existing trade investigations and enforcement procedures prove insufficient.
The announcement follows recent negotiations between Brussels and Beijing aimed at reducing tensions over industrial competition.
Earlier this month, the two sides reached an arrangement restricting Chinese hybrid vehicle exports to the European market.
As EU Today reported on 13rd October, the agreement established an annual ceiling of 350,000 vehicles, potentially reducing Chinese manufacturers’ expected market access.
However, European officials acknowledge that restrictions covering a single automotive category cannot resolve the wider trade imbalance.
Other industries remain concerned about Chinese production capacity, including chemicals, machinery and manufactured components.
Beijing has warned against further unilateral European restrictions, arguing that protectionist measures could damage commercial relations.
The Chinese authorities have also demonstrated a willingness to pursue trade investigations involving European products.
As previous EU Today coverage established, China opened an anti-dumping investigation into an EU chemical product in early October, adding to existing commercial disputes.
Further European restrictions could therefore prompt additional Chinese countermeasures affecting exporters from member states.
The proposed market-access mechanism is intended to give Brussels greater scope to act when existing safeguards cannot address economic threats quickly enough.
However, its legal structure, enforcement thresholds and relationship with existing anti-dumping and anti-subsidy legislation have not yet been specified.
The EU already possesses several trade-defence instruments, including duties against unfairly priced or subsidised products and safeguards designed to protect industries from damaging import surges.
Those mechanisms generally require formal investigations and evidence demonstrating the conditions for intervention.
The new proposal could introduce a faster response, but questions remain over how any restrictions would comply with international trade obligations and the EU’s commitments under World Trade Organisation rules.
Member states would also have to consider the consequences for European businesses that depend on imported materials, components and finished goods.
The Commission’s strategy extends beyond restrictions on imports. Von der Leyen confirmed that a separate initiative, known as DiversifyEU, would be presented in December.
The programme is intended to help European companies reduce excessive dependence on individual suppliers and countries, particularly where critical raw materials and strategic technologies are involved.
The Commission also plans a solidarity mechanism designed to assist member states and industries facing external economic coercion or retaliation. Such arrangements could become relevant when a foreign government targets exports from a particular member state in response to an EU policy decision.
The initiative follows growing concern that Europe’s access to strategically important industrial supplies can be disrupted through export controls or political disputes.
The Commission will still have to translate the proposed measures into legislation and secure sufficient political support among member states and the European Parliament.
National governments have different commercial relationships with China and varying levels of dependence on imported industrial goods. Countries with substantial export markets in China may be particularly concerned about retaliation, while manufacturers facing foreign competition are likely to press for faster intervention.
The Commission must also determine whether new trade powers should be exercised centrally in Brussels or require additional approval from national governments. For European industry, the immediate question is whether the new mechanism can provide effective protection without increasing production costs through restrictions on essential imports.
The Commission’s forthcoming legislative proposals will establish how far the EU intends to move towards a more interventionist trade policy.
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