The French newspaper Le Figaro said that the exclusion of Russian banks from the global financial system (Swift) will have a huge impact on them, noting that this step is under study but has not yet been implemented.
She added that the Europeans and Americans have been talking for weeks about this issue as one of the sanctions that could be used to make Russia pay a heavy price for its military action against Ukraine.
But the newspaper pointed out that this matter is still under discussion because "Swift is the nuclear weapon," according to a French official familiar with the matter, and what it means in the financial field.
She stated that the move could be part of the next set of sanctions if the Russian army crosses the line of separatist territories towards the west.
Swift meaning
Le Figaro indicated that Swift's name may not be known to the general public, and to approximate the concept, the newspaper said, "If you previously submitted a transfer request to your bank - for example to book your vacation home in Italy - you used Swift without knowing it."
It is a secure messaging system used by thousands of banks around the world on their exchanges in order to make simple transfers to settle their clients' transactions or exchange securities, stocks or bonds.
Officially, Swift is a cooperative under Belgian law, established in the 1970s, and this system makes it possible to secure and automate exchanges, thus saving significant time compared to older fax machines.
To illustrate its importance to Russia, Le Figaro gave the following example: If the Russian oil group Novatek buys a pump for its wells from a German supplier, the Swift message from Russia's Novatek Bank sent to the supplier's German bank will automatically secure payment. Therefore, “Swift is a valuable lubricant for mechanics business in the world."
She said that there are about 11,000 members of the Swift system, including about 300 Russian banks. It is very time consuming.
It can also be done via the exchange of e-mail messages or messages of the type “Telegram”, but it requires human intervention and does not provide the same security guarantees, and these transactions will also be “boring and dangerous, and will involve legal risks, so there will be an impact on The real economy,” according to a government source.
Rejection of Russian banks
The newspaper states that Russia took a lesson from the sanctions imposed on Iran, which have deprived it of this regime since 2012, and its impact - according to the French official - was "enormous."
Iran does not have the same financial standing as Russia, and the Russian Central Bank developed the SPFS program since 2014 and entered service in 2019.
And the newspaper quotes Olivier Dorgans - a lawyer specializing in international sanctions - explaining that "about 400 financial institutions and a Russian bank are involved in it and only 8 foreign banks," which means that the domestic alternative to Swift will not allow smooth and secure exchanges with foreign countries, as Dorgans asserts that " Blocking Swift will make Russian banks a pariah."
"Russia relies heavily on Swift because of its billions of dollars in hydrocarbon exports," he added.
The separation of Russian banks from Swift will reduce the volume of international transactions, lead to currency fluctuations, and massive capital flight abroad.