Last week, Portuguese Foreign Minister Augusto Santos Silva said that the European Union would have to discuss at length the legality of disconnecting Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system before any decision on the matter could be made.
Russia will not be disconnected from SWIFT, Roman Chernov, the executive director of the payment system’s Russia office, has said.
Chernov suggested that unplugging Russia from the payment system would not be at all beneficial to those suggesting such a step, since the Russian Central Bank has already created its own backup system for the transfer of financial messages and payments, “thereby cooling the ardor of hot heads talking about disconnecting the country from SWIFT.”
He added that disconnecting Russia from the international payment system would be unprofitable, since the country is a major international trade partner for many countries, and because a shutoff would leave US entities holding Russian state debt unable to receive dividends. Russia is known to be one of the system’s largest users.
Talk about Russia being disconnected from the interbank transfer system began in 2014 in the wake of the Ukraine crisis sparked by the US and EU-backed coup d’état in Kiev. Russia responded to the threats by developing a domestic alternative known as SPFS – a Russian acronym for “System for Transfer of Financial Messages.”
Discussions about the possible disconnect started up again in April after the European Parliament passed a non-binding resolution to the effect that a “Russian invasion of Ukraine” should lead to the immediate exclusion of Russia from SWIFT, the seizure of Russian oligarchs’ European assets, and a halt to the purchase of Russian energy supplies.
European Union foreign affairs chief Josep Borrell later stated that it was not within the EU’s purview to make a decision on cutting Russia off from the Belgium-headquartered cooperative society.
Meanwhile, Deputy Foreign Minister Alexander Pankin told Sputnik that SWIFT would suffer material losses and its reputation would be damaged if Moscow was shut off from the system. Late last month, another foreign ministry official confirmed that the latest threats to disconnect Russia were coming from the United States.
Established in 1973, SWIFT is designed to ease the transfer of bank information and to make payments between banks in different countries. Over 11,000 financial organisations from more than 200 countries around the world are connected to it, Russia among them.
The Russian backup to SWIFT, SPFS, currently has several hundred institutions connected to the system, with 23 foreign banks connected to as of late 2020.