U.S. and Key Allies Will Bar Some Russian Banks From SWIFT
On Saturday, Germany’s chancellor, Olaf Scholz, announced that his government was approving a transfer of anti-tank weapons to the Ukrainian military, ending his insistence on providing only nonlethal aid, such as helmets.
At the same time, in a post on Twitter, Germany’s foreign minister, Annalena Baerbock, and its economy minister, Robert Habeck, acknowledged that the country’s government was now moving from opposing a SWIFT ban to favoring a narrowly targeted one.
“We are working intensively on how to limit the collateral damage of a disconnection from #SWIFT so that it hits the right people,” they wrote. “What we need is a targeted and functional restriction of SWIFT.”
European officials have said they have been in lengthy, sometimes tense discussions with American and British officials, who were pressing for a cutoff as soon as the Russian invasion of Ukraine began.
Understand Russia’s Attack on Ukraine
What is at the root of this invasion? Russia considers Ukraine within its natural sphere of influence, and it has grown unnerved at Ukraine’s closeness with the West and the prospect that the country might join NATO or the European Union. While Ukraine is part of neither, it receives financial and military aid from the United States and Europe.
But even some American officials had reservations about completely severing Russia. Among other concerns, they worried that it could strengthen alternatives to the SWIFT system that Russia and China have been developing. That could, over time, erode the United States’ ability to track and control payments.
Before the announcement on Saturday, U.S. and E.U. leaders were discussing how many and which Russian institutions to block, according to three European diplomats and another person familiar with the matter. Officials were deliberating about possible spillover effects and unintended fallout from the targeted restrictions.
The announcement did not specify which banks would be cut off from SWIFT.
SWIFT, a Belgian messaging service formally known as the Society for Worldwide Interbank Financial Telecommunication, connects more than 11,000 financial institutions around the world. It does not hold or transfer funds, but lets banks and financial institutions alert one another of transactions about to take place.