BRUSSELS, March 2 – The European Union said on Wednesday it was excluding seven Russian banks from the SWIFT messaging system, but did not include those processing energy payments in the latest sanctions imposed on Russia over its invasion of Ukraine.
Russia’s second-largest bank VTB (VTBR.MM), Bank Otkritie, Novikombank, Promsvyazbank (PSKBI.MM), Bank Rossiya, Sovcombank and VEB will each receive 10 days to suspend their SWIFT operations, the EU said in a statement. diary. Read more
SWIFT is the dominant messaging system at the heart of global financial transactions, and the EU, the United States, Britain and Canada decided on Saturday to block some Russian banks from it, but did not say which ones would be affected. Read more
The United States and Britain have called for a ban on SWIFT, but some in the eurozone have been convinced, given the region’s dependence on Russian energy exports.
SWIFT said in a statement that it would disconnect the seven Russian banks from their network on March 12, as required by EU regulations.
The removal of Russian banks from SWIFT, a measure considered drastic and unlikely just a week ago, is one of the most powerful tools used by Western authorities to punish Russia for what Moscow describes as a “special operation” in Ukraine.
A senior EU official said the banks were chosen based on their ties to the Russian state, with public banks already sanctioned after Russia’s annexation of Crimea in 2014.
“All these banks that we have listed under SWIFT … they are all based on their connection to the state and their implicit connection to military efforts. .
Sberbank (SBER.MM), Russia’s largest lender, and Gazprombank were not included, as they are the main payment channels for Russian oil and gas that EU countries still buy despite the conflict in Ukraine.
The EU envoy added that the two Russian banks were still subject to other measures.
Officials were concerned about disrupting energy flows to Europe, and the official said it was not possible to simply allow energy-related transactions and exclude others, as SWIFT was unable to differentiate between types of payments.
Polish Prime Minister Mateusz Morawiecki said the decision to exclude Sberbank and Gazprombank from sanctions over “energy supply transactions for the EU” was unacceptable.
“Like Poland, we demand that all Russian actors, thanks to which Russia finances the war in Ukraine, be effectively and fully covered by sanctions,” he wrote on Facebook.
Lithuanian Prime Minister Ingrida Simonite told a briefing that more Russian banks could be excluded from SWIFT, which has 11,000 members and no clear global competitor.
Although China has set up its own system, it remains small, EU officials said, and despite the existence of a Russian system, SWIFT is still used for about 70% of translations there.
Banks could still make transfers through circumferential solutions such as fax machines or two-way messaging systems, if they existed.
VEB said it is focused mainly on internal projects that are not affected. For overseas companies, it will use SPFS, a messaging system developed by Russia’s central bank.
Sovcombank said SWIFT would not affect it because other sanctions had already blocked its ability to make payments abroad. Promsvyazbank said it was prepared to sever ties with SWIFT and would not have a significant impact on the bank’s operations.
VTB and Discovery said they would not be affected.
Novikombank and Bank of Russia did not respond to requests for comment.
(This story is corrected to correct the spelling of Bank Otkritie in paragraph 2)
Report by Philip Blankinsop; Writing by Tommy Wilkes; Additional reports by Anna Koper in Warsaw; Edited by Hugh Jones, Alexander Smith and Sandra Mahler
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