Western countries, including Canada, decided on Saturday to exclude a number of Russian banks from the SWIFT banking system, which could hit the country’s economy hard. What exactly is it and why is it so talked about? We explain to you.
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Are concerned “all the Russian banks already sanctioned by the international community, as well as if necessary that other institutes”, specified the spokesman of the German government, whose country currently chairs the G7 forum. These measures have been taken by the United States, France, Germany, Great Britain, Canada, Italy and the European Commission.
SWIFT, an acronym for “Society for Worldwide Interbank Financial Telecommunication”, was established in 1973. The cooperative enables transactions between financial institutions around the world. Currently, more than 200 countries, including Russia, do business with the communication platform to complete banking transactions.
In Russia, 300 banks currently use the SWIFT system. Excluding Russia from this system would represent an “atomic weapon” in financial matters since Russian banks would be unable to make transactions with anyone. At the same time, banks foreign to Russia would also see their financial exchanges with Russia blocked.
Until now, world leaders had been coy about imposing such a harsh sanction, but the tone seemed to change on Saturday.
At the end of the day, the European Union had proposed to exclude from SWIFT “a certain number of Russian banks”.
British Prime Minister Boris Johnson and Ukrainian President Volodymyr Zelensky have agreed on the “need for the international community to completely isolate Russia diplomatically and financially,” a Downing Street spokesman said in a statement.
“They welcomed the increased willingness to take action to exclude Russia from SWIFT,” he added.
On Saturday, Germany said it was open to this “targeted restriction”, while wanting to “limit collateral damage”. The country previously refused to remove Russia from SWIFT.
Several other European countries, previously reluctant on the subject, such as Austria, Italy and Hungary, have also indicated that they are now ready to accept the radical sanction.
For its part, France is considering “new measures”, but specifies that they will have to be taken “with European partners concerning the SWIFT facility”.
European foreign ministers will meet by videoconference on Sunday to strengthen military aid to Ukrainian forces in the face of the Russian invasion.
– With Agence France Presse