Separating Russia from the Swift Interbank Network

This is an important step forward in economic sanctions against Russia, which has just been made by the German government. Announcements that could lead to the most important sanctions against Moscow, except for military conflicts. That is, separating Russia from Swift’s banking and financial messaging networks, this unobtrusive but essential gear on international bank exchanges is the transfer of payment orders between banks, orders for the transfer of funds from bank customers, securities. Measures that are often considered “economic nuclear weapons” because their impact is significant on the economic relations between the punished country and the rest of the world.

Exclude Russia from the global banking system: Swift network in 6 questions

So far, Germany has been reluctant to support this solution for fear of its dependent Russian gas and coal supply, but Germany has “targeted” access to Swift to Russia this Saturday. He said he was ready to accept the “narrowed limits”. I want to “limit collateral damage” of such sanctions.

“We are working on ways to limit the secondary damage caused by disconnection from Swift (…) What we need is targeted and functional limits,” the Minister of Business said in a statement on Saturday. Said. , Robert Habeck.

As part of that, Elysee said European Union member states are approaching to enter into an agreement to exclude Russia from the Swift interbank network. No member state opposes the sanctions, but discussions are ongoing, the French president added.

Russian gas: why Europe is trapped

Unbearable position

Berlin’s position actually dispelled the controversy over dependence on Russia and excessive complacency over the Kremlin by shutting down the German and Russian gas pipeline Nord Stream II in Kiev’s view. It has become difficult to maintain. Partners in the US and Eastern Europe.

While other countries (Italy, Hungary, Austria, etc.) that have been shown to be reluctant to take this radical measure have plummeted, Germany is now in retaliation for the invasion of Ukraine, despite its constant continuity. It was the only European country that hesitated to take radical steps. The demands of Ukraine’s President Oleksandr Zelensky, as well as other European countries such as Poland, were very worried about Russia’s attack. During a visit to Berlin on Saturday, Polish Prime Minister Mateusz Moravietski described Germany’s attitude towards Swift as “concrete selfishness.”

“I came here and came to Prime Minister Olaf Scholz to shake the conscience of Germany, to shake the conscience of Germany,” he said.

There were three German resistances. First of all, I’m afraid to see gas faucets and other Russian materials blocked (Russian gas accounts for 55% of imports). There is also concern that if the exchange is maintained, energy payments will not be able to be settled (specifically, this system will allow Germany to purchase Russian gas without having to pay Gazprom in cash. You can pay electronically). I fear that such measures will not work, especially as long as Moscow has close ties with China.

Many voices were raised to remove Russia from Swift in order to hit Russia against the wallet and put pressure on it. According to Joe Biden, this is an “option,” but the US president has so far rejected it, emphasizing that certain European countries are currently opposed to it.

According to the site of the Russian National Association Rosswift, Russia is the second country after the United States in terms of the number of users of this system, with about 300 Russian member banks and institutions. More than half of Russian credit institutions are represented by Swift and are designated by this source. However, Moscow is unique in whether it is payment (intended to be the equivalent of “Mir” card, Visa and Mastercard), rating (Akra Agency), or forwarding through a system called SPFS. You are setting up your financial infrastructure.

Touch Russia in your wallet

So far, without releasing a swift card, Western nations have decided to attack the wallet by freezing the assets of Russian President Vladimir Puttin and his foreign minister Sergei Labrov and sanctioning the Russian financial sector. did. All members of the House of Representatives, Duma, are blacklisted by the EU along with 26 businessmen. EU banks will be banned from accepting deposits from Russian citizens in excess of € 100,000 and some Russian state-owned enterprises will be blocked from access to European funds. Canada sanctions not only MM, but also “58 Russian individuals and groups” including “members of the Russian elite”, “major banks of Russia” and “members of the Security Council of Russia”. Putin and Viklov. Tokyo has announced that it will freeze assets and suspend the issuance of visas to Russian individuals and organizations. Australia is specifically targeted at all members of the oligarchs and Duma and is preparing to sanction MM. Putin and Viklov. London and Washington in particular are targeting many Russian banks, including VTB Bank. The latter also announced that the use of Visa and Mastercard type bank cards abroad is currently “impossible”. Russia also has a foreign exchange reserve of about $ 640 billion on February 18 (about twice the amount recorded in 2014, according to a note from Natixis) and a 175 billion sovereign wealth fund. This can be primarily useful for financing public strategic companies, despite economic sanctions.

Sanctions on Russia “promote inflation, accelerate capital outflows and erode the country’s industrial base”: Von der Leyen

“Russia’s aggression threatens the postwar order” (Scholz)

In addition, Germany will deliver 1000 rocket launchers and 500 Stinger surface-to-air missiles to Ukraine “as soon as possible” to help confront the Russian invasion, the government announced on Saturday.

“Russia’s invasion of Ukraine has changed the times and threatened the order established after the war,” Prime Minister Olaf Scholz justified in a press release. “In this situation, it is our duty to support Ukraine as much as possible, to protect ourselves from the invading forces of Vladimir Putin.”

The announcement comes when Russia announces that it will expand its attacks on Ukraine, despite rising international protests and stricter sanctions, especially after the night of clashes and bombings targeting Kiev.

But the Kremlin already says he doesn’t care about sanctions. “All units were ordered to spread the attack in all directions according to the attack plan,” the Russian Defense Ministry said in a statement on Saturday.