Sberbank, the main banking institution in Russia, assures that this sanction will only have a limited effect because the bank has already been affected by other sanctions since the offensive against Ukraine in February.
What is the real impact of this financial weapon, which has already been applied to seven Russian banks since March?
Swift, founded in 1973, is a banking and financial messaging system. The company, an acronym for Society for Worldwide Interbank Financial Telecommunication, is based in Brussels.
Swift, which is not publicly traded, is organized as a bank cooperative. The company presents itself as neutral.
She was the creator of the BIC codewhich identifies a bank through a unique code consisting of between 8 and 11 characters, taking into account the name of the bank, its country of origin, its location and the branch that processed the order in question.
The system, implemented to replace telex technology, serves to ensure the transit of payment orders between banks, bank customer fund transfer orders, securities purchase and sale orders, among others.
All this through standardized messages, which allows fast, confidential and economical communication between financial entities.
The company highlights its reliability on its website and claims to work with “more than 11,000 banking and securities organizations, market infrastructures and corporate clients in more than 200 countries and territories.”
Swift’s role goes beyond finance: an agreement signed in 2010 by the United States and the European Union officially allows the US Treasury to access European bank data through the network, in the name of fighting terrorism.
According to the website of the national Rosswift association, Russia is the second country, after the United States, in number of users, and some 300 Russian banks and institutions are part of the system.
More than half of Russian credit institutions are represented in Swift, according to the same source.
Nevertheless, Moscow is creating its own financial infrastructurewhether for payments (“Mir” cards, which want to be the equivalent of Visa and Mastercard), financial qualification (Akra agency) or transfers, through a system called SPFS.
Sberbank stressed on Tuesday that Brussels’ decision does not affect Russia’s internal operations, which do not depend on Swift.
The exclusion of Sberbank and two other Russian banks is not an isolated case: in March, seven Russian banks were disconnected from the international financial system.
Gazprombank, the financial arm of the hydrocarbon giant through which most payments for Russian oil and gas deliveries to the EU are made, remains in the system.
Before the Russian invasion of Ukraine, Swift had already “suspended” in November 2019 the access of some Iranian banks to its network as part of the sanctions decided by the United States against Iran.
Iran had also been disconnected from the Swift system from 2012 to 2016.
Cutting off a bank’s access to the SWIFT network means prohibiting it from receiving or issuing payments through this channel. At the same time, it also supposes the prohibition of foreign institutions negotiating with that bank.
This complicates economic exchanges between countries using SWIFT and Russia, especially for the purchase of gas, of which Moscow is a major supplier.
In the case of Sberbank, the United States and the United Kingdom had already imposed heavy sanctions. “Swift’s exclusion does not change the situation for international transactions at all,” the bank said on Tuesday.
Taking a country as important as Russia out of Swift could also accelerate the development of an alternative system, with the participation of China for example.
Source: Ambito
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