Russia will face SWIFT bans and other penalties in retaliation for Ukraine
Russia Will Face SWIFT Bans and Other Penalties in Retaliation for Ukraine
While U.S. and European officials made clear they still were working out the mechanics of how to implement the latest measures, and intend to spare Russia’s oil and natural gas exports, the sanctions in total potentially could amount to some of the toughest levied on a nation in modern times. If fully carried out as planned, the measures will severely damage the Russian economy and markedly constrain its ability to import and export goods.
Analysts predicted intensifying runs on banks by Russians, and falling government reserves as Russians scrambled to sell their targeted currency for safer assets. Allies on both sides of the Atlantic also considered the SWIFT option in 2014, when Russia invaded and annexed Ukraine’s Crimea and backed separatist forces in eastern Ukraine. Russia declared then that kicking it out of SWIFT would be equivalent to a declaration of war. The allies — criticized ever after for responding too weakly to Russia’s 2014 aggression — shelved the idea back then. Russia since then has tried to develop its own financial transfer system, with limited success.
Announcing the measures in Brussels, the EU Commission president, von der Leyen, said she would push the bloc to “paralyze the assets of Russia’s Central bank” so that its transactions would be frozen. Cutting several commercial banks from SWIFT “will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally,” she added.
As another measure, the allies announced a commitment “to taking measures to limit the sale of citizenship — so-called golden passports — that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems.”The group also announced the formation this week of a trans-Atlantic task force to ensure that these and other sanctions on Russia are implemented effectively through information sharing and asset freezes.
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