Russian banks to be excluded from SWIFT
Last week we released a newsflash on sanctions in light of the Russian invasion of Ukraine. The full extent of the sanctions is at the moment not fully known and the situation develops quickly, but one of the most powerful sanctions imposed this weekend is the intended exclusion of certain Russian banks from the international payment messaging system SWIFT.
SWIFT (the Society for Worldwide Interbank Financial Telecommunication) is a global provider of secure financial messaging services used by over 11,000 financial institutions in more than 200 countries around the world. By using SWIFT, financial institutions can track payments and receive information about executed and completed payments. It is estimated that around 40 million messages are sent through SWIFT each day, facilitating for its users to make secure international payments.
Exclusion of Russian banks from SWIFT
On 27 February 2022, the European Commission announced that certain Russian banks will be excluded from SWIFT and that some transactions made by Russia’s central bank will be frozen, for the purpose of ensuring that certain Russian banks are disconnected from the international financial system and prevented to operate globally. The sanctions are intended to further exclude Russian companies from international finance and commerce.
It will be difficult for companies to maintain any business relationships with the Russian banks that will be excluded from SWIFT and companies should be aware that payments with any Russian connection may be or may become subject to sanctions. European banks are highly unlikely to execute or receive payments outside the SWIFT system. We strongly recommend our clients to closely monitor the development of this situation.
Please feel free to share this newsflash with colleagues and friends and do not hesitate to contact us if you have any questions about how the sanctions may affect your business.
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