Russia will be disconnected from SWIFT – Dmytro Kuleba

Russia will be disconnected from SWIFT

Russia will be disconnected from SWIFT: Russia is disconnected from the system of international bank payments SWIFT.

This was announced by the Minister of Foreign Affairs Dmytro Kuleba.

“The official decision has not yet been formalized, but technical preparations have already begun for making a decision and implementing this sanction. We gnawed and gnawed and gnawed. The entire vertical of Ukrainian diplomacy worked – from the President of Ukraine to the attaché at the Ukrainian embassy,” Kuleba wrote.

“Thank you also to the thousands of people, in particular the Ukrainian diaspora, who put pressure on their governments to support this decision. Ukrainian diplomats dedicate this victory to all the defenders of Ukraine,” he added.



The West is preparing to disconnect Russia from SWIFT

The US and EU countries are considering the possibility of disconnecting the Russian Federation from the SWIFT system of international bank payments. This move could have a severe impact on the Russian economy, shutting down the financial operations of businesses and banks.

What is SWIFT and how its shutdown will affect the Russian Federation – in the material Medico topics.


What is SWIFT?

SWIFT (Society for Worldwide Interbank Financial Telecommunications) allows you to make payments around the world and receive data about these transactions. More than 11 thousand companies and organizations around the world are connected to the system. More than $330 billion is sent via SWIFT every day.


How its shutdown will affect the Russian Federation?

According to Rosswift, in the Russian Federation, 291 banks in 48 cities were connected to SWIFT by the beginning of the year. The aggressor country was ranked 13th in terms of message traffic in the system two years ago. Disconnection from it threatens Russian banks and their clients with blocking and restricting access to financial markets around the world.

It will be much more difficult for Russian businesses to carry out export-import operations and receive loans from foreign companies. It may also discourage local investors from dealing in Russian debt.

Russia’s military invasion of Ukraine forced even those countries that were previously against the imposition of such sanctions against Moscow to reconsider their opinion on this issue. Western countries ambiguously assessed the blocking of SWIFT as a measure against the Kremlin regime.

US President Joe Biden, even after the invasion, said that the sanctions against Russian banks are quite tough, and therefore disconnecting from SWIFT is not so important. However, according to Bloomberg, the White House administration has again returned to discussing this issue, starting negotiations with the US Federal Reserve.

In addition, the authorities of Cyprus and Italy, who were previously skeptical about this idea, declared their readiness to participate in disconnecting the Russian Federation from SWIFT. Hungary also said that they did not intend to prevent the introduction of this sanction against the aggressor.

Unilaterally, countries cannot make such a decision – neither the US nor the EU. SWIFT as an organization isolates the Russian Federation from its system only if all countries support this decision.

There have already been precedents in the world when Iran fell under such sanctions in 2012. It was one of the measures aimed at containing its nuclear program. The unprecedented aggression of the Russian Federation against Ukraine, threatening consequences for the whole of Europe, is clearly a much greater reason to impose such sanctions now.


What can Russia do in response?

The System for Transfer of Financial Messages (SPFS) is Russia’s own payment system, however, it is a considerably smaller operation than SWIFT.

Because SPFS has roughly 400 users and is responsible for around 20% of domestic transactions, the country’s financial troubles would be severe if it were cut off from SWIFT.


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