The United States, the European Union and the United Kingdom agreed on Saturday to block “selected” Russian banks from the global financial messaging system SWIFT and impose “restrictive measures” on its central bank in retaliation for its invasion from Ukraine.
The measures were jointly announced as part of a new round of financial sanctions intended to exact a heavy toll on Russia for the invasion.
Saturday’s decision includes removing major Russian banks from the SWIFT financial system, which moves countless billions of dollars daily through more than 11,000 banks and other financial institutions around the world.
Allies on both sides of the Atlantic also considered the SWIFT option in 2014, when Russia invaded and annexed Ukrainian Crimea and backed separatist forces in eastern Ukraine. Russia then declared that kicking him out of SWIFT would amount to a declaration of war. The allies – since criticized for responding too weakly to Russia’s 2014 aggression – dropped the idea. Since then, Russia has tried to develop its own financial transfer system, with limited success.
The United States has already succeeded in persuading the Belgian-based SWIFT system to expel a country – Iran, because of its nuclear program. But kicking Russia out of SWIFT would also hurt other economies, including those of the United States and key ally Germany.
The disconnection of SWIFT announced by the West on Saturday is partial, leaving room for Europe and the United States to further aggravate the sanctions thereafter.
In Brussels, European Commission President Ursula von der Leyen said the removal of several commercial banks from SWIFT “will ensure that these banks will be disconnected from the international financial system and will harm their ability to operate globally”. . She said more banks could be hit “if appropriate”.
Von der Leyen said the EU would “commit to taking action to limit the sale of citizenship – the so-called golden passports – which allow wealthy Russians linked to the Russian government to become citizens of our countries and access our financial systems”.
This is a live update. Click here for comprehensive coverage of the crisis in Ukraine.