U.S. and Europe abandon the idea of disconnecting Russia from SWIFT

The United States and the European Union abandoned the idea of disconnecting Russia from the SWIFT interbank payment system as part of a package of sanctions for aggression against Ukraine, Handelsblatt reports, citing sources in the German government.

The initiative, which was first launched back in 2014 after Russia's annexation of Crimea and the war in Donbas, is again considered too risky. This step could destabilize the global financial system and provoke the development of an alternative payment system, Handelsblatt sources explained.

Instead of SWIFT, the United States and the European Union are discussing targeted measures against the largest Russian banks. At the same time, Germany insists that these measures should not prevent Moscow from receiving payments for gas and oil supplied abroad.

The head of the U.S. Department of State, Anthony Blinken, plans to discuss the policy of sanctions with European colleagues this week. He is expected to visit Berlin on Thursday and meet with Chancellor Olaf Scholz.

The US draft sanctions, submitted to Congress on January 11, involve measures against at least three of Russia's 12 largest banks. These are Sberbank, VTB, Gazprombank, VEB.RF, Russian Direct Investment Fund, Credit Bank of Moscow, Alfa-Bank, Rosselkhozbank, Otkritie, Promsvyazbank, Sovcombank and Transcapitalbank.

The US Treasury will prohibit any operations with sanctioned Russian banks, including correspondent accounts, which will block the possibility of dollar settlements for them.

It is still unclear whether the EU plans to introduce similar measures that will cut off Russian banks from the euro.

In addition, the "Defending Ukraine Sovereignty Act" submitted earlier to the U.S. Senate  requires the introduction of personal sanctions with visa bans and blocking of all assets of Russian President Vladimir Putin, Prime Minister Mikhail Mishustin, as well as Foreign Minister, Minister of Defense, Chief of the General Staff and commanders of all branches of the Russian armed forces.

At the same time, sanctions are proposed to be introduced not only in the event of a direct Russian invasion of Ukraine, but also in the event of a "significant escalation" of the situation, including by Russian "proxies" in the Donbas (DPR and LPR).

  SWIFT, Russia, Ukraine, Germany, USA