The Bank of America account ending in 0252 was not what you might expect.
It did not belong to a person or a business. In fact, the money did not belong to any single entity.
The account had funds pooled from countless customers of Zhejiang Chouzhou Commercial Bank, a regional lender in the eastern Chinese city of Yiwu.
And among Chouzhou Bank’s customers were Russian front companies that had burrowed into the global financial system as part of a sprawling effort to evade Western sanctions, a New York Times analysis of thousands of financial documents and bank transactions found.
Chouzhou Bank provides what are known as correspondent services, a common banking practice that allows local banks to offer international services across many currencies to customers without opening branches abroad.
Chouzhou is one of many institutions that have found a lucrative business as middlemen in places where Western banks are reluctant to serve. Often, smaller banks hire banks like Chouzhou that have correspondent accounts at big Wall Street firms, creating a nesting doll effect in the financial system that can mask illicit activity.
Since the invasion of Ukraine four years ago, finding and exploiting weak links in the correspondent system has become an important part of Russia’s effort to sidestep U.S. economic restrictions, the Times analysis shows
In addition to legitimate clients, more than 50 companies that sold restricted electronics, industrial chemicals, and other goods and services to Russia in the first four months of 2025 held accounts at Chouzhou.
Many of the documents reviewed by The Times were generated by A7, a Moscow-based financial services firm. A trove of its records from early 2025 was posted online by hackers. In addition, The Times obtained and analyzed thousands of business transactions and other documents from internal databases that the firm had left unsecured online. Chouzhou Bank appeared repeatedly throughout the documents, providing a detailed example of the role that correspondent services play in sanctions evasion.
A7 did not respond to a request for comment. The Times reported last month that A7 helps Russian businesses evade economic restrictions by sending money abroad to buy goods, often through shell companies that have little purpose other than to mask such purchases.
One shell company working on behalf of A7 in Kyrgyzstan made more than $10 million of restricted purchases during that period through a bank that held an account at Chouzhou.
In other instances, Russian companies bought industrial goods, including precision grinding machines that could be used to manufacturer components for weapons.
In January 2025, transaction documents show, a Russian company bought $73,000 of components used to build electronic warfare systems. The parts were supplied by a Hong Kong distributor with a history of sales to Russian buyers, according to trade data.
To complete the sale, First Abu Dhabi Bank, an Emirati bank, arranged to have the money sent to Chouzhou’s account at Bank of America.
As is standard practice in correspondent transactions, Bank of America received money transfer orders, but not details about the purchase itself. That allowed the nature of the goods, and who was buying them, to be obscured as the sale worked its way through the international banking system.
Without explanation in June 2025, Bank of America ended its relationship with Chouzhou Bank, closing Account 0252, whose existence was disclosed on a Kyrgyz bank website. Chouzhou has continued to provide access to the dollar — through Citibank, JPMorgan Chase and Standard Chartered — for dozens of banks that otherwise lack direct access to the U.S. financial system, including in countries that have close economic ties to Russia, The Times found.
Chouzhou did not respond to detailed requests for comment. Reached in person at a banking conference in Miami in late September, a manager for the bank’s correspondent banking division declined to comment.
Representatives from Bank of America, Citigroup, Standard Chartered and First Abu Dhabi all said that they worked closely with law enforcement officials and governments. The representatives added that their banks regularly monitored correspondent activity and reported suspicious activity to the authorities in order to identify and help disrupt illicit banking networks.
While a spokeswoman for Citi and a spokesman for First Abu Dhabi said they would not comment on specific customers, all four banks emphasized that they maintained rigorous internal controls to combat money laundering, sanctions evasion and other financial crimes. JPMorgan declined to comment.
An essential piece of plumbing
The correspondent banking system is an opaque and antiquated yet essential piece of financial plumbing that underpins international finance. It has played a crucial role in making the dollar the dominant currency for international trade and giving the United States unmatched leverage over financial transactions.
Here’s how it works: Imagine that a fabric exporter in rural China wants to sell its goods to customers abroad. It would be impractical for the exporter, or even its local bank, to maintain accounts in every country and in every currency that its customers might want to use.
Correspondent banking solves this problem. The exporter’s local Chinese bank holds dollar, euro and other currency accounts at a select few global banks. Through those accounts, the Chinese bank gains access to the broad networks of those international banks, allowing its customers to send and receive international payments and convert proceeds into local currencies.
By its nature, however, the correspondent system can add distance between big banks and small companies seeking to circumvent their controls. Big banks often delegate the vetting of customers and transactions to smaller banks further down the correspondent chain.
When new regulations were put in place to stop terror financing after the Sept. 11, 2001, attacks, banks began cutting correspondent relationships around the globe.
Sudan, which the United States labeled a state sponsor of terrorism, was hit especially hard. Many banks stopped handling payments from the country, raising fears that it could be cut off from the global financial system and pushed toward shadow banking networks in order to supply its citizens with even basic necessities.
Since then, regulators have tried to balance the risk of sanctions evasion with the goal of keeping the dollar used around the world. In 2016, the Treasury Department issued guidance that said banks did not need to individually vet their correspondent’s clients, a practice called “know your customer’s customer.”
The expectation is that banks offering correspondent services need only to understand whether another bank is capable of monitoring its clients, rather than vet those clients themselves, said Daniel Tannebaum, a partner at Oliver Wyman, a consulting firm that advises banks on anti-money laundering and sanctions matters.
Before opening a correspondent account, banks conduct extensive due diligence on prospective partners, said Alan Ketley, the former executive secretary of the Wolfsberg Group, a consortium of global banks that advises on correspondent activity. Wolfsberg produces a detailed questionnaire that banks use to evaluate prospective clients’ sanctions compliance and other risk-management practices.
When transactions pass through an American bank, the Treasury Department has broad jurisdiction to regulate and police the activity. Last month, for example, the U.S. government issued economic restrictions against two foreign banks that used the correspondent system to help Iran gain access to the dollar system in order to launder money and evade sanctions on behalf of the Islamic Revolutionary Guards Corps.
U.S. banks can face legal liability for processing restricted transactions even when acting only as a correspondent for another financial institution. However, the Treasury Department has discretion over the cases it pursues.
Depending on the extent of the illicit activity and the level of the bank’s due diligence, it would be difficult to imagine an American bank being penalized for unwittingly playing a role in a sophisticated sanctions evasion scheme, according to a former senior Treasury official who was not authorized to speak publicly about enforcement procedures.
A critical lifeline
Chouzhou was founded in Yiwu in 1987 and grew as the midsize Chinese trading city blossomed into a manufacturing hub for goods that are sent around the world.
Over the years, it carved out a niche by offering correspondent services to dozens of banks in countries identified by Western officials as high risk for money laundering or sanctions evasion, including Afghanistan, Yemen and South Sudan, according to the documents obtained by The Times and data from BankCheck, a correspondent banking compliance platform.
Chouzhou has an especially large presence in Kyrgyzstan, Georgia and Uzbekistan — countries with close economic ties to Russia that have become important hubs for rerouted trade.
According to the BankCheck data, Chouzhou provides access to dollar accounts to nearly 70 other banks, most of which otherwise lack direct access to the U.S. financial system. Those banks, in turn, market dollar accounts to their customers.
By comparison, Industrial and Commercial Bank of China, the largest bank in the world by assets, provides dollar access to 20 banks. HSBC Bank in London provides just seven dollar correspondent accounts to other banks, BankCheck data shows.
In 2024, Chouzhou processed more than $200 billion in international transactions, according to a bond prospectus, nearly four times the amount of its total assets. But that is likely a small fraction of its activity now: At the financial services conference in Miami last month, Chouzhou advertised relationships with more than 1,000 banks and the ability to process payments in 27 currencies.
Chouzhou stopped processing transactions directly with Russian and Belarusian banks in early 2024, according to news releases and trade documents. But it has continued working with customers and banks in countries considered high risk for Russian sanctions evasion.
One invoice from New Year’s Day last year for a shipment of containers to Russia from Shenzhen, China’s electronics capital, listed Chouzhou as the company’s bank. It carried a message in bold red letters suggesting the bank was willing to traffic in activity that larger, more established Chinese institutions would not:
The two logistics companies listed on the invoice, Utrust Logistics and Shark Intermodal Systems, did not respond to requests for comment.
Soon after Bank of America ended its relationship with Chouzhou last year, the Chinese bank opened two new dollar accounts at Citibank and Standard Chartered, BankCheck data shows.
The accounts remain open.
Discussion about this post