Russia-Ukraine Crisis Day 8: SWIFT says will comply with EU instructions, disconnect 7 Russian banks
Categories: FOREIGN COUNTRIES
The EU's official journal said on Wednesday that seven Russian banks will no longer be part of the SWIFT network. The move is the result of sanctions over Russia's invasion of Ukraine.SWIFT has also notified that they will be complying with the EU's instructions.The banks, which have been given 10 days to discontinue SWIFT services, include Russia's second-largest bank, VTB, as well as Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank and VEB.
"All these banks that we have listed under SWIFT... they are all based on their connection to the state and the implicit connection to the war effort. We have not gone for a blanket ban across the whole banking system," the official saidThe list does not include Sberbank, Russia's largest lender, and Gazprombank. This is because these companies handle most of the payments for Russian oil and gas, which EU countries are still buying despite the conflict.The EU official said it was not possible simply to allow energy-related transactions and exclude others as SWIFT was unable to differentiate between types of payments. The official added that these two banks were nevertheless subject to other measures.
There is no clear global rival to SWIFT, a global payments network with over 11,000 members. EU officials said China has established a system, but it remains small, whereas SWIFT is still used for 70 per cent of transfers within Russia despite the existence of a Russian system.If such systems existed, banks could still transfer funds via workarounds such as faxes and bilateral messaging systems.