December 8, 2022

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International Payment Platform SWIFT | The EU and the United States are the international community that will partially sever Russia from this

The EU is implementing a threat that it will impose “huge sanctions” on Russia if Vladimir Putin does not order an invasion of Ukraine. He will launch a “financial nuclear weapon” this Sunday after vetoing the entry of Russian politicians and senior officials. He noted French Finance Minister Bruno Le Myre said the proposal was to dismantle the system Swift, A site that allows international fees. “We are obliged to expel some Russian banks from the SWIFT system. That fact must be taken into account. “

With this move and the shipment of war materials to Ukraine, the European Union is preparing to close its airspace to Russian airlines. Throughout Saturday, countries (Germany, Poland, Bulgaria, Romania, Czech Republic, Lithuania, Latvia, Estonia …) announced that they would close their airspace to Russian airlines. Social circles point out that the EU is going to follow in the footsteps of these countries, but with the approval of ministers.

“We propose to European leaders that a certain number of Russian banks be expelled from the SWIFT,” European Commission President Ursula von der Leyen announced on Saturday night. About Strict ban imposed on Moscow After the invasion of Ukraine. Trying to allow the continued passage of hydrocarbons (gas and oil) should not be incomplete and should be selective when restricting access to the payment mechanism.

The move is expected to be approved at a meeting of EU foreign ministers next Sunday. The assets of the Russian central bank are being filled by others, such as freezing it, which cannot be turned into liquid resources to finance the war. “The European Union and its allies are working to disable funding for Putin’s war machine,” said Van der Leyen, which also aims to prevent Russian oligarchs from using their financial assets in European markets.

The decision to expel “a certain number of Russian banks” from the Swift system was significant Quality leap in sanctions against Vladimir Putin’s regime. Already this week two sanctions have been approved, affecting almost all Russian strategic sectors: banks, defense and aerospace companies, construction companies, transport companies, airlines … and it has come to punish the Russians privately. The United States has joined forces with President and Foreign Minister Sergei Lavrov to freeze assets they hold in Europe. But was not taken to reach Disconnected from SWIFT system (Global Banking Telecommunications Community or Global Banking and Financial Communications Community).

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Already in 2014, when Russia invaded Crimea, the possibility of cutting off access to this exchange system was considered. Alexei Gudrin, the then Russian finance minister, predicted that the move would cause a drop in GDP 5%. The total closure of SWIFT access to one country has so far only affected Iran. According to the Carnegie Moscow Center, he spends almost half of his earnings on oil exports and 30% of his foreign trade.

This Saturday at noon, social sources pointed out that Berlin was the last obstacle to taking this step. At the Ecofin meeting, an organization of 27 finance ministers, which acknowledged that there were countries in doubt as to whether it was time to tighten it, they followed the same path as Le Maire had said the day before. Red button. These ideas were in Hungary and Italy, and this morning have allayed doubts. In the afternoon, Germany made a significant change in its position on both arms shipments to Ukraine and funding cuts from Russia.

What happened at the SWIFT is a clear example of the chaos that has arisen in the EU in response to sanctions, despite the serious and dramatic nature of Russia’s total invasion of Ukraine. Many countries in the EU are heavily dependent on Russian gas, although in recent weeks it has dropped from the usual 40% to 22%, cutting off access to the international trading system altogether, according to Goldman Sachs. Russia put the tariffs on hydrocarbons at risk.

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Germany is one of the most expensive countries to take this step. “We urgently need to look at how to control the joint damage caused by the withdrawal from the SWIFT in a way that affects the right people. We need a specific and operational control of the SWIFT,” Foreign Minister Annalena Barbach and Economy Minister Robert Hebek promised a few hours ago. Mers called on the Social Democrats’ Olaf Scholes-led tripartite government to impose a moratorium on access to Moscow’s SWIFT, but a few days ago, Mers warned against using the move and warned that the consequences for the German economy would be catastrophic. He said over-reliance was “not the right argument against the sanctions now necessary.” Suu Kyi promises that Russia’s energy supplies will continue to be paid for in the future, despite the SWIFT ban.

SWIFT was formed in 1973 and brings together more than 11,000 financial institutions from more than 200 countries. Its regulator is based in Belgium and is overseen by the central banks of Germany, Belgium, Canada, France, Italy, Japan, the Netherlands, the United Kingdom, the United States, Sweden and Switzerland, and the European Central Bank (ECB). , Although located on Belgian soil, the head of supervision is similar to Belgium.

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