Removal of Select Russian Banks from SWIFT

After much speculation as to whether Russia would be denied access to SWIFT, on February 26, 2022, the U.S., the European Commission, France, Germany, Italy, the UK, and Canada issued a joint statement announcing that “select” Russian banks will be removed from the SWIFT messaging system. SWIFT stands for the “Society for Worldwide Interbank Financial Telecommunication” and is a secure messaging system used by banks and other financial institutions to exchange information, such as details regarding money transfers. Without access to SWIFT, the “selected” Russian banks will effectively be cut off from participating in the global economy. The names of the initial banks which will be barred from SWIFT have not yet been published, though the Biden administration has indicated the banks that have already been sanctioned the EU and the U.S. will be the first ones considered. Similar to the “drum beat” approach to SDN designations, it is likely that, after this first wave, additional Russian financial institutions will be denied access if the conflict in Ukraine continues. The only country to date to be completely barred from the SWIFT platform is Iran.

Individuals and companies who have banking relationships with impacted Russian banks or who need to send or receive funds from an impacted bank should assess whether there are alternative banking relationships available to maintain operations.

In addition, the joint statement also announced forthcoming actions to “prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions.”  The scope of these actions has not yet been published. The joint statement concludes by stating that beyond what has already been published, allied countries are prepared to take further measures to hold Russia accountable. As Russia so far has not shown signs of de-escalation, additional sanctions and restrictions are all but guaranteed.