SWIFT: White House and EU countries announce expulsion of “certain Russian banks” from SWIFT

“This will ensure that these banks are disconnected from the international financial system and will impair their ability to operate globally,” they wrote in a joint statement released by the White House, also committing to “restrictive measures that prevent the Russian Central Bank from deploying its international reserves in a way that undermines the impact of our sanctions,” and by restricting the sale of “golden passports” that allow Russian oligarchs to avoid the brunt of sanctions already imposed.

Earlier Saturday, CNN reported that Biden was considering kicking Russia out of SWIFT, but had yet to make a final decision. Expelling Russia completely from SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, had been touted as a financial “nuclear option”, with the president and his aides pointing out how complicated such a lockdown would be and noting that the US could not not act unilaterally.

“That’s not the position the rest of Europe wants to take,” Biden told reporters on Thursday.

The nations announced on Saturday the launch next week of a “transatlantic task force” to “ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist in our jurisdictions”. .

As part of the announcement, they also promise to step up their efforts to fight misinformation.

“We stand with the people of Ukraine in this dark hour. Even beyond the actions we are announcing today, we stand ready to take further steps to hold Russia to account for its attack on Ukraine.”

The statement still leaves the actual technical details – and the specific Russian lenders that will be cut from SWIFT – unclear, with US and European officials still working out the final details of the action.

But the commitment to take action that just days ago seemed out of place due to European objections marks a purposeful but seismic escalation in response to Russia’s invasion of Ukraine. Biden and his aides pointed out how complicated it would be to block Russia from SWIFT — or the Society for Worldwide Interbank Financial Telecommunication — noting that the United States cannot act unilaterally. “That’s not the position the rest of Europe wants to take,” Biden told reporters on Thursday.

But since Biden’s press conference announcing new sanctions on Russia for his unprovoked attack, the administration appears to be moving closer to that position as other European allies have now thrown their support behind him.

The administration has discussed the issue with the Federal Reserve, which would have a stake in any decision, according to an official.

The White House has faced calls from Ukraine and US lawmakers in Congress asking that Russia be removed from SWIFT after Putin ordered the invasion on Thursday. So far, the UK, Lithuania, Estonia and Latvia have backed Kyiv’s calls to cut Russia off from SWIFT.

On Saturday, Germany, which had previously warned of the “massive impact” on German businesses if Russia was banned from SWIFT, signaled its support for restrictions in one form or another.

German Foreign Minister Annalena Baerbock and German Economy Minister Robert Habeck said in a joint tweet that they were “under high pressure to avoid collateral damage during the decoupling (from Russia) of SWIFT so that it reaches the right people. What we need is a focused and functional constraint from SWIFT.”

Earlier today, Italy indicated it would also support taking steps to expel Russia from SWIFT after Prime Minister Mario Draghi told Ukrainian President Volodymyr Zelensky that “Italy fully supports the line European Union sanctions against Russia, including those involving SWIFT, and must continue to do so.”

Draghi’s comments are particularly noteworthy given the exposure of the Italian economy to energy.

An administration official said additional sanctions would be likely if Kyiv, the beleaguered Ukrainian capital, fell. But it was unclear whether this would include SWIFT, or whether Russia’s removal from SWIFT might happen before then.

A White House official told CNN that “as the president and administration officials have made clear, we are focused on coordinating with allies and partners to impose additional costs on Russian President Vladimir Putin. for his war of choice,” but declined to comment further.

Removing Russia from SWIFT would harm Russia but also major European economies and impact energy exports to the continent.

This would make international financial transactions more difficult, shocking Russian companies and their foreign customers, especially buyers of US dollar-denominated oil and gas exports.

Meanwhile, the United States has imposed further sanctions on Russia, targeting Moscow’s banking, technology and aerospace sectors. On Friday, the United States announced that it would impose sanctions directly on Putin and Russian Foreign Minister Sergei Lavrov.

This story has been updated with additional developments and background information.

CNN’s Charles Riley, Veronica Stracqualursi and Inke Kappelle contributed to this report.

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