What is the "Swift" financial system that the West is threatening to kick Russia out of?
What is "Swift"?
What part does Swift play?
Who represents "Swift" in Russia?
Are there precedents for excluding countries?
Is exclusion a real danger?
After the exclusion from the "Swift" system for banking transactions. one of the most prominent tools in the global financial system. one of the harshest sanctions that Western countries can impose on Russia in response to its invasion of Ukraine.
Calls for action have been made in recent days, notably by Ukrainian President Volodymyr Zelensky, British Prime Minister Boris Johnson has confirmed.
However, the movie has not yet been unanimously agreed upon, and some European parties are still wary of resorting to it.
Especially in light of its potential impact on the ability of the continent's countries to pay their dues to Russia in exchange for energy sources such as natural gas or oil.
During a press conference Thursday night, US President Joe Biden stressed that removing Russia from this system is still an option in response to its invasion of Ukraine.
But he made it clear that this proposal is not a current common position among Europeans.
According to "French", European officials hinted that the possibility of excluding Russia from "Swift" will remain on the table. But most likely within future rounds of sanctions. In case the European Union needs to escalate its measures against Moscow.
What is "Swift"?
The Society for International Interbank Financial Telecommunication abbreviated "SWIFT" in English was founded in 1973 and does not perform any transfers or swaps of financial assets.
However, its messaging system, created in the 1970s for solutions rather than "telex" devices, allows banks to communicate quickly, securely, and inexpensively.
This company, which is headquartered in Belgium, is essentially a banking co-operative that asserts its neutrality.
What part does Swift play?
Sources use SWIFT to send messages about money transfers between them, money transfers for customers, and orders to buy and sell assets.
More than 11,000 financial institutions in 200 countries use SWIFT.
However, due to its dominant position in the financial sector, the institution is grappling with the issue of preventing financing and radioactive operations, especially terrorism.
Who represents "Swift" in Russia?
According to the National Assembly ("Rosneft"). Russia has nearly 300 financial institutions and is the second-largest country within "Swift" in terms of the number of users after the United States.
According to the association, these members constitute more than half of the country's financial institutions.
According to estimates, the volume of financial transactions linked to Russia via "SWIFT" reaches hundreds of billions of dollars annually.
In addition, Russia has its own financial infrastructure, including the "SBFS" system for bank transfers, and the "Mir" card payment system similar to the "Visa" and "MasterCard" system.
Are there precedents for excluding countries?
In 2019, Iranian banks' access to the SWIFT system was suspended, following the announcement by the United States to re-impose sanctions on Tehran.
The US Treasury warned at the time that unless Swift followed Washington's rules, it could face sanctions.
Iran had been separated from the "Swift" system since 2012 with the imposition of US sanctions on it, until 2016, when the sanctions were lifted after the conclusion of the nuclear agreement between Tehran and the major powers.
Is exclusion a real danger?
The Belgian director of the Bruegel Institute, Guntram Wolff, told AFP that the advantages and disadvantages of excluding Russia remain a matter of debate.
In practice, excluding Russia from the SWIFT system means that its banks are unable to use it to transfer or receive funds with foreign financial institutions for commercial transactions.
Wolf explains that this will cause a headache on a practical level, especially for European countries that have important trade exchanges with Moscow, most notably natural gas, of which Russia is the most important source of Europe.
In 2014, Western countries threatened to exclude Russia from Swift over its invasion of Crimea from Ukraine.
However, the exclusion of a large country, such as Russia, which wields significant trade clout, particularly in terms of gas and oil exports, may prompt Moscow to build its own transfer mechanism, possibly in cooperation with China.
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