SWIFT Falls in Line with EU Sanctions, Cuts Off Seven Russian Banks, Six Others

· No Export of Euro Currency to Russia

· Alternate Payments, Crypto, Gold, Energy as IMF and WTO mum on Sanctions Affecting World Trade and Payments

An Update to our Message for the SWIFT Community

COUNCIL DECISION (CFSP) 2022/346 of 1 March 2022

EU Agrees to exclude Key Russian Banks from SWIFT

[ABS News Service/05.03.2022]

Bank transactions with Russia have come to a standstill despite several lenders being excluded from the SWIFT ban.

The Reserve Bank of India (RBI) is understood to have had discussions with SBI and UCO Bank on options available for Indian trade. “We do not have correspondent relations with Russian banks. We deal with mostly other European banks who act as intermediaries as both we and Russian banks have account with them and settlement takes place through them,” said a senior banker. (A failure on the part of RBI which keeps itself busy with monitoring through complex circulars which nobody understands and few follows).

“Multinational banks have stopped dealing with Russia, which makes it impossible for us to do any transactions. The only way now is to have a system similar to what was done for Iranian oil payments,” he said. The direct trade arrangements are almost akin to barter and work when there is a balance in the trade.

“Diplomatic decisions taken by the European Union — in consultation with the UK, Canada and the US — bring SWIFT into efforts to end this crisis by requiring us to disconnect select Russian banks from our financial messaging services. As previously stated, we will fully comply with applicable sanctions laws,” SWIFT said in a statement.

SWIFT cited a March 2 legal instruction by the European Commission (EC) as the reason behind the bank. The EC notification said that the banks targeted were chosen as these are already subject to sanctions by the EU and other G7 countries.

The ban comes into effect from 12 March. Previous contracts will be honoured

“It will take effect as of March 12. This will give SWIFT and other operators a brief transition period to implement the measure, thereby mitigating any possible negative impacts for EU businesses and financial markets. Depending on Russia’s behaviour, the commission is prepared to add further Russian banks at short notice. In addition, the EU has prohibited investing in projects co-financed by the Russian Direct Investment Fund. The provision of euro-denominated banknotes to Russia has also been prohibited,” the notification said.