Russian companies prepare to be disconnected from SWIFT

Russia’s largest companies continue to report that they are ready for a possible disconnection from the SWIFT international payment system.

Gazprom Neft announced that it has followed Rostec and Rosneft in transitioning to the Central Bank of Russia’s SWIFT equivalent - the Financial Message Transmission System (FMTS).

The nearly 100% Gazprom-owned company, which holds the 4th place for oil extraction in Russia, has begun to use the Russian SWIFT equivalent instead of the traditional one, TASS reports, citing the company’s press service.

The transition to FMTS is a “major step towards increasing the payment independence of Gazprom Neft, which can now be certain that its payment obligations will be carried out independently of external factors,” explained Alexey Yankevich, deputy general director of economics and finances.

In addition, the Russian SWIFT is cheaper: transition to it “will help to optimize costs’, the senior executive observed.

Russia’s Central Bank has been working on an equivalent to the international payment since President Vladimir Putin gave the order in 2014. Elvira Nabiullina announced that the preparations had been completed at the start of 2017. Initially, only banks were connected to the FMTS, but since the end of 2017, companies in the non-financial sector have joined the system too.

Rosneft reported its connection to the new system in March, and Rostec in April.

“We are also able operate without SWIFT” said Arkady Dvorkovich, then First Deputy Prime Minister of Russia, at an international economic forum in Davos.

A month later, Dvorkovich announced that banks and companies were “morally and technologically prepared” for such a development. He emphasized that the government was ready to meet any challenge, including disconnection from the world financial system.

Russia’s possible disconnection from SWIFT has been discussed since 2014, when the first anti-Russian sanctions relating to the situation in Ukraine were introduced. At that stage, the European Parliament adopted a resolution which called for Russia to be cut off from SWIFT. However, SWIFT itself said that doing so would break laws and be harmful to companies.

  Russia, SWIFT