As Russia continues to embed itself in Ukraine following Thursday’s invasion, the West continues to contemplate the severity of sanctions it wishes to impose on the country.
Latest actions have included banning Russian entities and individuals from financial markets and their assets, as well as targeting the energy sector.
But the most aggressive sanction to date that has been seriously considered continues to divide the West: banning Russia from SWIFT.
What is SWIFT?
SWIFT is a global interbank payments system linking more than 11,000 financial institutions in over 200 countries, recording an average of 42 million messages per day in 2021.
It is a cooperative company under Belgian law, overseen by the G10 central banks and the European central bank, with the lead overseer being the National Bank of Belgium.
According to the Russian National SWIFT Association, Russia has the second-most users after the US, with around 300 Russian financial institutions belonging to the system. Russia accounted for 1.5% of all transactions on SWIFT in 2020.
The effect of removing Russia from these transactions would likely be immediate and long-lasting, cutting off Russia from profits of oil and gas production which make up more than 40% of the country’s income.
While the impacts of a ban for Russia would be intense, it would also cause knock-on impacts to those implementing it, particularly the EU, where dependency on oil from Russia amounts to 35-40% of total energy requirements.
Accordingly, Western powers are split on their desire to implement a SWIFT ban.
Biden and British prime minister Boris Johnson have pushed hardest to implement the SWIFT sanction, with EU sources indicating there is little appetite in the bloc to impose such restrictions now.
"It is always an option," Biden said.
"But right now, that's not the position that the rest of Europe wishes to take."
Germany chancellor Olaf Sholz opposed the move to cut Russia off from SWIFT, but refused to rule it out entirely.
"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.