The United States and the European Union have opted not to cut Russia off from the SWIFT global interbank payments system as part of their sanctions against Moscow for invading Ukraine, but could revisit that issue, U.S. President Joe Biden said on Thursday.
Asked why that step was not taken, Biden told reporters the sanctions imposed against Russian banks exceeded the impact of cutting Russia off from SWIFT, and other countries had failed to agree on taking the additional step at this point.
“It is always an option,” Biden said. “But right now, that’s not the position that the rest of Europe wishes to take.”
Several EU sources had told Reuters before the sanctions were announced that the EU was unlikely to agree to the move, despite calls from various quarters to do so.
German Chancellor Olaf Scholz said Germany – a key trading partner of Russia – opposed cutting off Russia’s access to the payment system at this point, but also suggested such a step could still follow at a later stage.
“It is very important that we agree those measures that have been prepared – and keep everything else for a situation where it may be necessary to go beyond that,” Scholz told reporters, responding to a question on SWIFT, as he arrived to an emergency summit set to discuss Russia’s invasion of Ukraine.
The foreign ministers of the Baltic states, once ruled from Moscow but now members of NATO and the EU, called on Thursday to stop Russia’s access to SWIFT.
Other EU member states are reluctant to make such a move because, while it would hit Russian banks hard, it would make it tough for European creditors to get their money back and Russia has in any case been building up an alternative payment system.
“Urgency and consensus is the utmost priority at the moment,” said an EU diplomat, adding that at this stage it meant no move on SWIFT, because doing so would have such wide-ranging consequences, also in Europe.
Another EU diplomat said: “I am not aware of an agreement (on SWIFT sanctions) at this point.”
Data from the Bank of International Settlements (BIS) shows that European lenders hold the lion’s share of the nearly $30 billion in foreign banks’ exposure to Russia.
Belgium-based SWIFT, a messaging network widely used by banks to send and receive money transfer orders or information, is overseen by central banks in the United States, Japan and Europe. Reporting by Jan Strupczewski, Gabriela Baczynska, John Chalmers, Robin Emmot in Brussels, and Steve Holland, Andrea Shalal and Nandita Bose in Washington; Writing by Ingrid Melander; Editing by John Chalmers and Marguerita Choy’.