The Society for Worldwide Interbank Financial Telecommunication (SWIFT) issued a statement on the 3rd and said that according to the diplomatic decision made by the European Union after consultation with the United Kingdom, Canada and the United States, SWIFT is required to disconnect from some Russian banks. From March 12, 2022, the Society for Worldwide Interbank Financial Communication (SWIFT) payment system will be disconnected from seven Russian banks.

According to the statement, the seven Russian banks sanctioned are: VTB Bank, Rossiya Bank, Otkritie, Novikombank, Sovcombank, Promsvyazbank and the Russian State Development Group (VEB.RF).

SWIFT statement

The banks will have a 10-days deadline to wind down SWIFT operations. On the same day (2nd), the EU issued a statement saying that SWIFT and other operators will use this short transition period to implement the measure, thereby "mitigating the possible negative impact on EU businesses and financial markets" and "according to Russia , ready to add more Russian banks in a short period of time.”

European Commission President von der Leyen said in a statement that the sanctions were the "largest sanctions package in the history of the EU" and would "send another very clear signal" to Putin and the Kremlin.

According to Reuters, a senior EU official said: "Our determination of which Russian banks have been expelled from SWIFT is based solely on their ties to the Russian government and their role in the war. Not targeting the entire Russian banking system."

However, Sberbank, Russia's largest by assets, and Gazprombank are not included in the sanctions list. According to Reuters, the two banks are the main payment channels for Russian oil and gas, and EU countries will still import Russian oil and gas during the Russian-Ukrainian conflict.

Although not on the sanctions list, on March 2, Sberbank said in a statement on its website that it had decided to withdraw from the European market. The bank's subsidiaries in Europe experienced abnormal outflows of funds, and the personal safety of some of the company's employees was threatened, the statement said.

Earlier, on February 26, local time, the United States, the European Union, the United Kingdom and Canada issued a joint statement announcing that some Russian banks would be removed from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) international settlement system. Since then, Japan and South Korea have followed suit and joined sanctions against Russia.

SWIFT is used for about 70% of Russia's global business. After being sanctioned, Reuters said banks could still transfer money through workarounds such as faxes or bilateral messaging systems.

In response to the sanctions, a number of Russian banks responded that their business would not be affected. According to Reuters, the Russian Foreign Trade Bank (VTB Bank) responded that it will mainly focus on unaffected domestic projects, and for overseas related business, it will use Russia’s self-built Financial Information Transmission System (SPFS).

Bank Promsvyaz said it was ready to cut ties with the SWIFT system, which would not have a significant impact on the bank's business. Otkritie Bank also said they would not be affected.