SWIFT Removal
A coalition of NATO-aligned countries has committed to new measures meant to sever Russia from the global financial system, countries announced in a joint letter on Saturday. The letter, signed by the United States, UK, Canada, and European allies, lays out new measures to isolate Russia’s central bank, and announces a new trans-Atlantic task force to freeze the foreign assets of sanctioned individuals.
In a dramatic escalation, the order also blocks select Russian banks from using SWIFT.
The U.S., European allies and Canada agreed Saturday to remove key Russian banks from the interbank messaging system, SWIFT, an extraordinary step that will sever the country from much of the global financial system.
“This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally,” the global powers wrote in a joint statement announcing the significant retaliatory measure.
SWIFT, which stands for The Society for Worldwide Interbank Financial Telecommunication, is a cooperative company based in Belgium, whose owners include many of Europe’s largest banks. The organization’s eponymous payments network does not actually exchange money but is used to authenticate payment instructions between banks. Its services are used to process some 42 million exchanges in more than 200 countries each day.
“If one of these ‘de-SWIFT-ed’ Russian banks wants to make, or receive, a payment with a bank outside of Russia, such as a bank in Asia, it will now need to use the telephone or a fax machine,” the administration official said.
“In all likelihood, most banks around the world will simply stop transacting altogether with Russian banks that are removed from SWIFT,” the official said.
In addition, the U.S. and its allies announced that they will impose restrictive measures aimed at preventing Russia’s central bank from deploying its international reserves in ways that may undermine sanctions.
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