The United States and its allies decide to impose new sanctions on Russia.
The country led by Vladimir Putin is partially withdrawn from the World Interbank Financial Telecommunications Society (SWIFT).
The announcement was made this Saturday by the White House, which claims to have found the approval of its allies in this new attempt to dissuade the Russian head of state to abandon the war in Ukraine.
Until recently, the major European powers in the EU were reluctant to remove Russia from the international banking system, which they argue will have negative consequences on the Russian economy.
Other financial measures are also adopted against Russia. The Russian Central Bank will not have access to the reserves of the United States and the European Union, according to the White House. “We stand with the Ukrainian people in this dark hour. Even beyond the measures we are announcing today, we stand ready to take further action to hold Russia accountable for its attack on Ukraine,” the nations announced in a joint statement.
Russian banks account for about 1% of transactions through SWIFT, which is about 5% of Russia’s national income.
Cutting off Russian banks from the global financial system will have negative impacts not only on Russia, but also on Western countries.
What is SWIFT?
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) facilitates international financial transactions. Nearly 42 million transactions are executed daily. This system is particularly vital for the stock market and multinational companies.
Other Sanctions
Earlier this week, the United States announced economic sanctions against Russia. Thus, 5 major Russian banks have already been sanctioned. These financial institutions will not be able to do business with the United States and European Union member countries, according to the American president.
With these sanctions, the five Russian banks will not be able to trade in dollars, euros, pounds, and Japanese yen. This should limit Russia’s ability to develop its military arsenal, Joe Biden hopes. The assets of some Russian oligarchs held in the United States estimated at a thousand billion dollars will also be frozen, said Joe Biden at a press conference Tuesday at the White House. The U.S. head of state had denounced “flagrant violations of international laws and treaties by his Russian counterpart Vladimir Putin who, he said, “rejects all good faith efforts to engage in dialogue” to avoid war in Ukraine. Putin is the aggressor. “Putin chose war. Now he and his country must pay the consequences,” the Democratic president had hammered.