Nikos Chrysoloras, John Follain and Alberto Nardelli, Bloomberg News
BRUSSELS?LONDON
EnergiesNet.com 03 01 2022
The European Union is discussing the exclusion of seven Russian banks from the SWIFT messaging system, including VTB Bank PJSC and Bank Rossiya, according to a draft list of the proposal.
The list is a subset of the banks already facing sanctions from the bloc and doesn’t include Sberbank of Russia PJSC, Russia’s biggest lender, or Gazpromank. The final list would need to be agreed upon with other jurisdictions including the U.S., people briefed on the matter said.
The other institutions included on the list are Bank Otkritie, Novikombank, Promsvyazbank PJSC, Sovcombank PJSC and VEB.RF, according to the list, which is still subject to change amid ongoing discussions bewteen EU government envoys meeting in Brussels.
The decision to exclude some Russian banks from the SWIFT messaging system, used for trillions of dollars worth of transactions around the world, was announced over the weekend in a joint statement by the U.S., European Commission, France, Germany, Italy, U.K. and Canada.
A spokesperson for the European Commission declined to comment on the list.
Cutting Russia off Swift had long been seen as a no-go for several European countries before Russia invaded Ukraine due to the potential damage it could inflict on their own economies. The EU and U.S. have been working on ways to mitigate the impact on energy-related transactions, such as by excluding some of the biggest Russian banks from this specific measure.
State-controlled VTB is Russia’s second-largest bank, holding about a fifth of the system’s assets. The U.S. last week announced it will impose its strictest sanctions on the lender, banning U.S. entities from any transactions with it. The U.S. also targeted Sovcombank, the number-three lender by assets, as well as state-owned Otkritie. Novikombank and Promsvyazbank, which finance Russia’s defense sector, were also hit.
VEB.RF is Russia’s state-run development lender, used to fund major projects. It was slapped with U.S. sanctions last week, as well. The U.S. announced less-severe restrictions last week on Sberbank, Russia’s largest lender, as well.
SWIFT, based in Belgium, said that while it is a neutral global cooperative with members in 200 countries, it’s obliged to comply with EU and Belgian regulations. “We are engaging with European authorities to understand the details of the entities that will be subject to the new measures,” the organization said in an email over the weekend. “We are preparing to comply upon legal instruction.”
SWIFT, which delivers secure messages among more than 11,000 financial institutions and companies, is central to the global financial system and an inability to access it could cause significant economic damage.
bloomberg.com 03 01 2022
