News of the World

[kyonides]

US and Western Allies to Remove Selected Russian Banks From SWIFT

The United States, European Union, and other Western allies announced Saturday they will cut off certain Russian banks from the SWIFT international payments system, and put restrictions on the Russian Central Bank, in retaliation for Russia’s attack on Ukraine.

Thousands of banks as well as financial institutions around the world use the SWIFT system to settle cross-border payments. SWIFT, the “Society for Worldwide Interbank Financial Telecommunication,” is used by more than 11,000 financial institutions in over 200 countries and is regarded as crucial for financing international trade.

In a joint statement, the United States and EU, as well as France, Germany, Italy, the United Kingdom, and Canada, “commit to ensuring that selected Russian banks are removed from the SWIFT messaging system.”

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They also commit “to imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.”

Barring banks out of the world’s main international payments network “doesn’t make transactions impossible” but will make them “much more difficult,” Paul Marquardt, a lawyer with international law firm Davis Polk, told Reuters. “It makes them much more difficult—getting kicked out of SWIFT would increase transaction costs significantly,” he said.

In another measure, the United States and allies will also limit the sale of citizenship that lets Russians tied to the Russian government become citizens of their countries, to prevent them from accessing the countries’ financial systems.

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The measures will be implemented in the coming days, the nations said in a joint statement, and also vowed further action to come.