War in Ukraine: the European Union excludes seven Russian banks from the Swift system

"Russia out of Swift" placard at a protest in Barcelona on February 26.

REUTERS - NACHO DOCE

Text by: RFI Follow

2 mins

Economic sanctions against Russia coming to fruition.

The European Union has decided to disconnect seven Russian banks from the Swift international financial system.

A decision effective from March 12 but which remains below what was announced this weekend by Ursula Von der Leyen.

Establishments linked to the hydrocarbons sector were spared.

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Russian gas escapes economic sanctions.

Certain European states such as Germany and Italy, which are too dependent on Moscow's gas resources, have been campaigning in this direction for several days.

The exclusion from the swift system does not target Sberbank, the country's leading bank, or Gazprombank, the financial arm of the hydrocarbon giant.

Two establishments through which most of the payments for gas and oil deliveries pass.

►Also read: Sanctions against Russia: the banishment of the Swift network, a decisive weapon?

Intended to partially cut off the Russian economy from global finance in retaliation for Moscow's invasion of Ukraine, Swift's exclusion targets VTB, Russia's second-largest bank, as well as Bank Otkritie, Novikombank, intended in industry finance, Promsvyazbank, Rossiya Bank, Sovcombank and VEB, the regime's development bank.

These establishments " 

 " of Moscow in Ukraine, explained a European official, affirming that approximately a quarter of the volume of the Russian banking system is concerned by this exclusion.

The measure will be effective from March 12, according to the Official Journal.

The member states of the European Union had given the green light to this sanction on Tuesday evening, after several days of negotiations.

" 

Financial atomic weapon

 "

The exclusion of Swift is presented as a  financial "

 ": this secure messaging platform allows operations such as the transit of payment orders and funds transfer orders between banks.

It only targets seven establishments

Some 300 Russian banks and institutions use Swift's services.

But Moscow has set up alternative financial infrastructures for transfers, via a system called SPFS, payments - "Mir" cards, which are intended to be the equivalent of Visa and Mastercard - and rating, via the Akra agency.

The targeted banks will be able to continue exchanges with foreign banks via means other than Swift (emails, faxes, etc.), but slower, much less secure and more expensive, in particular for very large amounts.

Promsvyazbank, Rossiya Bank and VEB were already among the list of Russian persons and entities hit with an asset freeze in the EU in the first round of European sanctions decided a week ago, after the recognition of the separatist entities of Donbass .

In total, about 80% of the Russian banking system is targeted in one way or another by a battery of EU financial sanctions, adopted since 2014 following the annexation of Crimea by Moscow, according to the European manager.

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• European Union

• Russia

• finance

• Ukraine