SWIFT: Biden seriously considering whether to back Russia’s expulsion from financial security network

The decision to take the action was always contingent on the approval of the European Union, which had been divided in a contentious debate for weeks over the action, ultimately choosing not to go ahead this week.

But U.S. officials and their European counterparts have continued to weigh options, including removing individual banks and entities, rather than the entire Russian economy, from the network, officials said.

This move would be seen as the nuclear option when it comes to responses to the Russian 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 if this would include SWIFT, or if 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.

Source link