For days there has been speculation as to which Russian banks the EU intends to exclude from the international payment system SWIFT in the future.

At the weekend, the impression was given that all major banks were affected.

But the negotiations between the EU member states have dragged on for longer than expected.

And the list, which was finally published on Wednesday, now only includes around a quarter of the Russian banking market - and only seven institutions.

Banks VTB, Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank and VEB are affected.

Werner Mussler

Business correspondent in Brussels.

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The largest and third largest banks - Sberbank and Gazprom Bank - are not included in the list.

This falls well short of the announcement made by the EU Commission over the weekend that around 70 percent of the Russian banking market would be affected.

A large Russian development bank is also exempt.

The EU is also granting the customers of the institutions affected by the sanctions a transitional period of ten days during which they can still process transactions via these banks.

Banks required to pay for gas

The main reason the sanction falls short of expectations fueled over the past few days is obvious.

A senior EU official said that Sber and Gazprom banks are needed to continue processing payments for Russian gas supplies to the EU.

The "technical problems" associated with these payments could not be solved;

therefore the two banks could probably not be left behind by SWIFT in the long term.

The EU must also ensure that the effects of the sanctions on European institutions remain manageable.

The Commission adds that the two banks have been affected by EU sanctions “to some extent” since Russia's 2014 raid on the Crimean Peninsula.

The risks of a SWIFT exclusion for Russian banks made both the EU Commission and the German government hesitate to take this step at the weekend.

Federal Finance Minister Christian Lindner (FDP) had warned of the risks to German gas supplies that one had to "know what one was doing".

In Brussels, therefore, a “partial exclusion” of Russian banks from SWIFT was brought up several times.

The EU has now apparently completed this partial exclusion.

Can exclusion be bypassed?

EU officials were reluctant to comment on the effectiveness of the sanction.

On the one hand, it was said in Brussels that the SWIFT exclusion would hit the Russian financial and economic system severely and directly.

The effects on the global economy and the EU economy, on the other hand, will only be felt in the medium term and are manageable in scope.

On the other hand, it was conceded that it was not known exactly whether and to what extent the sanction could be circumvented.

The obvious alternative channels would be transactions via banks that are not affected by the sanction.

The use of crypto assets cannot be ruled out.

The SWIFT ban is one of a whole series of sanctions that the EU decided to follow the Russian attack on Ukraine.

The same applies to the punitive measures against the Russian state media RT and Sputnik, the distribution of which is to be banned throughout the EU due to the accusation of war propaganda.

Meanwhile, Sberbank is withdrawing from the European market.

The European branches are confronted with strong cash outflows and there are threats against employees and buildings, the financial group announced on Wednesday.

According to an order from the central bank, the money house is no longer able to provide the European subsidiaries with liquidity.

However, the level of capital and the quality of the assets are sufficient to pay out all savers.

"In the current situation, Sberbank has decided to exit the European market," the statement said.

Sberbank owned assets in Europe of 13 billion euros at the end of 2020.

According to the bank, the withdrawal from Europe does not affect the business activities of the institute in Switzerland.

The Austrian Financial Market Authority (FMA) has already declared a compensation case for Sberbank Europe AG, based in Vienna.

The deposit insurance is in contact with the institute and is preparing to process the payment, the authority said on Tuesday.

The deposits of the savers are protected up to a sum of 100,000 euros.

According to information from the Austrian deposit insurance (ESA) on Monday, the deposits it covered at Sberbank Europe AG as of February 26 were around 1.1 billion euros.

Around 35,000 German customers have covered deposits – the proportion of Austrian depositors, on the other hand, is insignificant.