Network based systems

US and EU allies bar Russian banks from accessing SWIFT’s crucial banking network

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The United States and its allies announced on Saturday (local time) the withdrawal of Russian banks from the SWIFT messaging system in response to Moscow’s invasion of Ukraine. “We are committed to ensuring that certain Russian banks are removed from the SWIFT messaging system. This will ensure that these banks are disconnected from the international financial system and will harm their ability to operate globally,” said the leaders of the European Commission, France, Germany, Italy, the Kingdom. United States, Canada and the United States, in a joint press release. declaration. “We pledge to impose restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in such a way as to undermine the impact of our sanctions,” the statement read.

Ursula von der Leyen, president of the European Commission, said the allies would prevent Russia “from using its war chest”, by crippling the assets of its central bank. They also agreed to freeze its transactions and prevent the central bank from liquidating its assets. She added that there would be a crackdown on so-called “golden passports” which “allow wealthy Russians connected to the Russian government to become citizens of our countries and access our financial systems.” “We are committed to ensuring that a number of Russian banks are removed from SWIFT. We will cripple the assets of the Russian central bank. This will freeze its transactions,” the European Commission president said.

SWIFT is the acronym for Society of Worldwide Interbank Financial Telecommunication. The Belgium-based cooperative is used by thousands of financial institutions in more than 200 countries, including Russia, and provides a secure messaging system to facilitate cross-border money transfers. The statement said the leaders are determined to act against individuals and entities that facilitate the war in Ukraine and the harmful activities of the Russian government.

“Specifically, we commit to taking action to limit the sale of citizenship – the so-called golden passports – that allow wealthy Russians linked to the Russian government to become citizens of our countries and access our financial systems.” , the statement said.

The leaders, in the statement, said they are committed to launching a transatlantic task force this week that will ensure the effective implementation of their financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist. in their jurisdictions. “As part of this effort, we are committed to applying sanctions and other financial and coercive measures to other Russian officials and elites close to the Russian government, as well as their families and their enablers to identify and freeze the assets they hold in our jurisdictions. We will also engage other governments and work to detect and disrupt the movement of ill-gotten gains, and to prevent these individuals from hiding their assets in jurisdictions around the world,” the statement read. .

The leaders further reiterated their support for the Ukrainian people in this “dark hour”. The Biden administration has already sanctioned five Russian banks, including Sberbank and VTB Group, which collectively account for about half of the country’s banking assets. Russia had more than 360 licensed banks at the start of the year. By targeting the central bank, the United States could complicate the implementation of monetary policy while removing a potential source of liquidity for the government.

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