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U.S., allies agree to limit Russia’s access to SWIFT banking system

The United States and its allies announced Saturday an agreement to take aim at Russia through SWIFT, a service that facilitates global transactions among thousands of financial institutions.

“We commit to ensuring that selected Russian banks are removed from the SWIFT messaging system. This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally,” the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States, said in a joint statement.

In a written statement, SWIFT said it was aware of the joint statement on the new measures.

“We are engaging with European authorities to understand the details of the entities that will be subject to the new measures and we are preparing to comply upon legal instruction,” the statement said.

President Joe Biden on Thursday, when announcing new U.S. sanctions against Russia, noted differences among European nations on punishing Russia through SWIFT. Doing so is “always an option,” Biden said. “But right now, that’s not the position that the rest of Europe wishes to take.”

A European diplomat said one reason for the administration’s previous reluctance to push publicly for targeting Russia’s access to SWIFT has largely centered on concerns that doing so would expose and call attention to divisions among the allies about taking the step. The person said the Biden administration has been trying to sell the notion that the U.S. and European allies are in total lock-step and has not wanted to get ahead of where the Europeans are at on SWIFT.

Germany and Italy had been reluctant to include SWIFT as part of sanctions against Russia. Europe’s economy, which is far more closely tied to Russia’s than the U.S. economy, could suffer if Russia was restricted or prohibited from using SWIFT, including if banks are blocked from access.

But the mood on this in Europe has been shifting as Russia’s aggression has escalated.

On Saturday, Germany’s government indicated publicly it might be supportive of restricting or limiting Russia’s access to SWIFT in a targeted way, short of a total removal. 

“As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies,” the leaders said in the joint statement announcing the SWIFT move Saturday evening.

The statement also detailed additional economic penalties that the nations would collectively impose, including restrictions intended to prevent the Russian Central Bank from deploying its international reserves in an effort to blunt the impact of it sanctions.

In addition, the leaders said actions would be taken “against the people and entities who facilitate the war in Ukraine and the harmful activities of the Russian government.”

“Specifically, we commit to taking measures to limit the sale of citizenship—so called golden passports—that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems,” the statement said.

There are programs in the U.S. and the European Union that grant citizenship to foreigners who make investments of a certain amount in that nation. Governments contend that the granting of passports helps the local economy by bringing in investment, but the programs have often been criticized as a way for wealthy people to buy citizenship.

In the U.S., these investor visa programs include the EB-5 and E-2 programs.

Several EU nations such as Malta and Bulgaria have previously been accused of giving “golden passports” to oligarchs, and there have been efforts in the EU to ban the practice.

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