EU Confirms: No SWIFT Access for Russian Banks in Near Future

EU Confirms: No SWIFT Access for Russian Banks in Near Future

The EU denies the possibility of reconnecting Russian banks to the SWIFT banking system until the Russia-Ukraine conflict ends, pushing Russia to seek alternatives for foreign payments.

The European Union (EU) has no intention of allowing Russian banks to be reconnected to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) banking system anytime soon. Peter Stano, spokesperson for external affairs of the EU, indicated that these restrictions can only be lifted or softened when the Russia-Ukraine conflict ends.

EU Has No Intention of Lifting SWIFT Sanctions on Russian Banks

The European Union (EU) has rejected the likelihood of allowing Russian banks to be interconnected to the financial system using the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system, which allows the realization of cross-border payments using local bank accounts. In a recent interview with Inveztia magazine, EU spokesperson for external affairs Peter Stano remarked these sanctions could not be lifted or softened until the Russia-Ukraine conflict ended.

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Stano’s statements come after the EU had listened to the petitions of the Russian Federation on this matter, having stated it would consider lifting this measure for Russian banks 6 months ago. The reconnection of the Russian banking system to SWIFT, including the Rosselkhozbank, the Russian Agricultural Bank, is one of the conditions that Russia is demanding from the EU to extend the so- was known “Black Sea grain deal,” that allows safe passage for Ukrainian grain exports.

Stano likewise stated:

EU sanctions do not apply to trade in agricultural and food products, including wheat and fertilizers, betwixt third countries and Russia, there are still payment options betwixt them.

In other fields, corporations have been facing difficulties in obtaining payments from Russian counterparts. Four Indian corporations reported having up to $400 Million blocked in dividends from oil corporations owing to payment channel-related complications in April.

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Russia Seeking Alternatives

The disconnection of the Russian Bankls from the SWIFT system, which was part of the Western sanctions enacted in 2022 against Russia, has pushed the country to de-dollarize its economy and seek alternatives to make and receive foreign payments. In this regard, Russia has already linked its payments system with Iran, allowing for an easier way to make payments betwixt corporations and individuals in these countries.

Nonetheless, reports by recent statements from Dmitry Birichevsky, director of the Department of Economic Participation of the Russian Foreign Ministry, Russia is still actively looking to set up SWIFT alternatives and link them to its domestic payments system. Similarly, Russia announced in April that it was working with Venezuela on the creation of a SWIFT alternative system to lower reliance on the United States dollar for commercial transactions, within a visit of Russian foreign minister Sergey Lavrov to Caracas.

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