Russian banks banned from using SWIFT for transfers within Russia as of October 1

MOSCOW. Oct 2 (Interfax) - Russian banks as of October 1, 2023, cannot use SWIFT to transmit financial information when transferring funds within Russia, and they are instead required to use only Russian services and domestic financial infrastructure for these operations, according to the requirement of the Central Bank of Russia (CBR).

According to the requirement, banks must now transmit information about transfers within the country only through the Financial Messaging System (FMS), as well as through their own banking systems or services of third-party Russian companies that ensure transmission and information storage on financial messages only within the Russian Federation.

However, the requirement is not applicable to cross-border transfers, as well as to cases when transmitting information within the payment system in order to review client applications for transactions using electronic payments.

The Society for Worldwide Interbank Financial Telecommunications, SWIFT, is the well-known system for transmitting financial messages for payment orders, instructions for securities transfers, and reference information in order to complete transactions in the market of payments, securities, and derivative financial instruments. SWIFT unites more than 11,000 financial institutions in more than 200 countries. A number of Russian banks subject to blocking sanctions have already been disconnected from SWIFT.

The system for transmitting financial messages appeared in response to the first wave of sanctions against Russia in 2014, which included a number of banks. FMS is similar to SWIFT, thus ensuring uninterrupted transmission of financial messages within both Russia and abroad. According to data for the first half of 2023, FMS has 514 participants, including more than 130 non-residents, Central Bank First Deputy Governor Olga Skorobogatova said in a statement.