Momentum Grows to Cut Russia From SWIFT Global Banking System

The U.S. is revisiting cutting Russia from the global bank-to-bank payment system known as SWIFT, as the next step in a series of escalating sanctions punishing Moscow for the unprovoked invasion of Ukraine.

U.S. President Joe Biden initially held back on this crucial step that would isolate Russia on the world stage and have a serious impact on its economy, due to the concerns of European allies. But those concerns appeared to be eroding Saturday as Russian forces moved to encircle the Ukrainian capital of Kyiv.

Ukraine has lobbied for a SWIFT ban on Russia, urging Europe to act more forcefully in imposing sanctions against Moscow. However, some European nations, including Germany, are hesitant to take that step.

British Prime Minister Boris Johnson called Friday for nations to cut off Russia from the SWIFT international bank transfer system “to inflict maximum pain.”

Luxembourg Foreign Minister Jean Asselborn said “the debate about SWIFT is not off the table, it will continue.”

Putin, Lavrov sanctioned

The United States announced Friday that it would freeze the assets of Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov, following similar steps taken by the European Union and Britain, as nations around the world sought to tighten sanctions against Russia’s government over its invasion of Ukraine.

The U.S. Treasury Department announced the action Friday after EU foreign ministers meeting in Brussels unanimously agreed to freeze the property and bank accounts of the top Russian officials.

Britain’s government took the same action Friday, with Foreign Secretary Liz Truss writing on Twitter, “We will not stop inflicting economic pain on the Kremlin until Ukrainian sovereignty is restored.”

White House press secretary Jen Psaki said the move by the U.S., the European Union and Britain sends “a clear message about the strength of the opposition to the actions” by Putin.

Juan González, the National Security Council Senior Director for Western Hemisphere Affairs, told VOA, the sanctions were designed to apply global pressure on Russia.

“If you see the sanctions on 13 financial institutions, among the largest in Russia, that will have an impact with any government or business that has agreements with these institutions. But also, a lot of this money laundering and governments that operate outside the financial system international will feel the squeeze,” Gonzalez said.

Russian foreign ministry spokeswoman Maria Zakharova said the sanctions against Putin and Lavrov reflect the West’s “absolute impotence” when it comes to foreign policy, according to the RIA news agency.

World leaders are rarely the target of direct sanctions. The only other leaders currently under EU sanctions are Belarus President Alexander Lukashenko and Syrian President Bashar al-Assad, according to Agence France-Presse.

Austrian Foreign Minister Alexander Schallenberg said the move is “a unique step in history” toward a country that has a permanent seat on the U.N. Security Council but said it shows how united EU countries are in countering Russia’s actions.

The EU sanctions against Putin and Lavrov are part of a broader sanctions package that targets Russian banks, oil refineries and Russia’s defense industry.

EU leaders agreed, however, it was premature to impose a travel ban on Putin and Lavrov because negotiating channels need to be kept open.

German Foreign Minister Annalena Baerbock said Friday the package of banking sanctions the EU has passed would hit Putin’s government harder than excluding Russia from the SWIFT payments system.

“The sword that looks hardest isn’t always the cleverest one,” she said, adding, “the sharper sword at the moment is listing [the] banks.”

In response to the sanctions, Russia has taken its own measures, including banning British flights over its territory, after Britain imposed a similar ban on Aeroflot flights.  

The United States and several allies had imposed a first tranche of sanctions Tuesday, after Putin declared the disputed eastern Ukraine regions of Luhansk and Donetsk as independent states, much as he appropriated Ukraine’s Crimean Peninsula in 2014.

President Biden added another round of sanctions on Russia Thursday, hours after Russia began its invasion of Ukraine, declaring at the White House after meeting virtually with leaders of the G-7 nations and NATO that “Putin chose this war, and now he and his country will bear the consequences.”

Biden said the new U.S. sanctions, which target Russian banks, oligarchs and high-tech sectors and include export controls, will “squeeze Russia’s access to finance and technology for strategic sectors of its economy and degrade its industrial capacity for years to come.”

NATO allies, including Britain and the European Union, also imposed more sanctions Thursday, and the effects were felt almost immediately when global security prices plunged and commodity prices surged. Biden acknowledged that Americans would see higher gasoline prices.

Also Friday, an International Criminal Court prosecutor warned that the court may investigate whether Russia has committed any possible war crimes, following its invasion of Ukraine.

“I remind all sides conducting hostilities on the territory of Ukraine that my office may exercise its jurisdiction and investigate any act of genocide, crime against humanity or war crime committed within Ukraine,” ICC prosecutor Karim Khan said Friday in a statement.

Some information in this report came from The Associated Press, Agence France-Presse and Reuters.
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