“The sanctions we’ve imposed exceed SWIFT,” Biden said in response to a question Thursday. “Let’s have a conversation in another month or so to see if they’re working.”
Still, some European leaders, including in the United Kingdom, favor taking the additional step of blocking Russia from SWIFT, the Belgium-headquartered consortium used by banks and other financial institutions that serves as a key communications line for commerce worldwide. The SWIFT system averaged 42 million messages daily last year to enable payments.
The British government says Prime Minister Boris Johnson pushed at a virtual meeting of the Group of Seven world leaders Thursday for Russia to be kicked out of SWIFT. It said there was “no pushback” but it was agreed that more discussion was needed. U.K. officials would not confirm Germany was resisting.
The problem is that banning Russia from SWIFT might not cut it off from the global economy as cleanly as proponents think. Also, there could be blowback in the form of slower international growth. And rival messaging systems could gain users in ways that erode the power of the U.S. dollar — all of which has left SWIFT as a sanction waiting to be deployed.
“By politicizing SWIFT you give incentive for others to develop alternatives,” said Brian O’Toole, a senior fellow at the Atlantic Council and former Treasury official. “SWIFT also is an important partner in U.S.-European counterterrorism efforts. It shares data with U.S. Treasury related to counterterrorism issues that has proven to be enormously valuable.”
Iran was blocked from the SWIFT system in 2014 because of its nuclear program. In 2019, then-Russian Prime Minister Dmitry Medvedev said losing access to SWIFT would be akin to a declaration of war against Russia. The statement by Medvedev is a sign that Russia viewed the platform as a vulnerability and developed workarounds to limit any economic damage.
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