2 Mar 2022 15:40

Deadline for disconnection of sanctioned banks from SWIFT is March 12

MOSCOW. March 2 (Interfax) - As of March 12, the European Union has banned the provision of financial messaging services to sanctioned Russian banks. The decision was published in the Official Journal of the EU.

The list includes VTB , Otkritie, Promsvyazbank , Sovcombank, Rossiya Bank, Novikombank, as well as the VEB state corporation.

SWIFT (Society for Worldwide Interbank Financial Telecommunications) is a system for transmitting financial messages (payment orders, central bank transfer orders, reference information) to perform transactions in the payments, securities, and derivatives markets. The system unites more than 11,000 financial institutions in more than 200 countries.

SWIFT is a private association headquartered in Belgium. The company has repeatedly stated that it has no authority to make decisions on sanctions. Any decision to impose or lift sanctions on countries or individual entities is made solely by competent government authorities, the association said. At the same time, being registered under Belgian law, it is obliged to follow EU norms.

SWIFT said Tuesday that it would disconnect from individual Russian banks after receiving legal instructions. "We are aware of a joint statement by the leaders of the European Commission, France, Germany, Italy, Britain, Canada, and the United States expressing their intention to introduce new measures to restrict individual Russian banks from accessing our financial messaging services. Diplomatic decisions have led SWIFT to efforts to end this crisis, and we will always comply with applicable sanctions laws," SWIFT said in a statement.

"We are working with the authorities of these countries to understand which entities will be subject to the new measures and will disconnect them as soon as we receive legal instructions," the company said.

In 2014, Russia began to create a System for Transfer of Financial Messages (SPFS), which is referred to as a SWIFT analogue. In 2020, the share of messages transmitted through the SPFS exceeded 20% of intra-Russian SWIFT traffic, almost doubling in a year. According to the Central Bank, 331 organizations are now connected to it, including banks from Belarus, Armenia, Kyrgyzstan, Kazakhstan, Tajikistan, and Cuba. All banks under U.S., EU, and UK sanctions are connected to SWIFT, according to information on the Central Bank website.

"Banks may use the System for Transfer of Financial Messages for the transfer of financial information to counterparties in domestic transactions in Russia. It provides for information exchange, including in the SWIFT format. Around 340 users are connected to the SPSF today, including 39 foreign participants from nine countries. Banks are actively using this system, and the number of transactions is growing. Banks also have other channels for interaction with foreign correspondents besides this, including their own," the Russian Central Bank said, commenting on the European Union decision.

VTB has said that disconnection from SWIFT will not affect transactions within Russia, and corporate clients have already received recommendations on performing international transfers.