Western countries are removing Russia from the swift system

Concrete steps were taken in the quick sanctions that came on the agenda after Russia's attack on Ukraine.

In a statement made by the White House, the European Commission announced that France, Germany, Italy, Canada, and the USA have decided to remove certain Russian banks from the international payment network, the Swift system.

In the statement, it was also stated that restrictive measures will be taken in order to prevent the Central Bank of Russia from accumulating international reserves in order to eliminate the effect of the said sanctions.

A similar statement came from the European side as well.

Ursula von der Leyen, President of the European Commission, announced that designated Russian banks will be removed from the SWIFT global interbank messaging system. She said, "We will paralyze the assets of the Central Bank of Russia. This will freeze its operations, making it impossible for it to liquidate its assets."

Von der Leyen stated that they will work to ban Russian oligarchs from using their financial assets in EU markets.

What is Swift?

Swift (Society for Worldwide Interbank Financial Telecommunication), that is, the World Interbank Financial Communication Society, was established in 1973 with the participation of 239 banks from 15 countries, and its headquarters are in Belgium.

Swift's primary goals are to standardize and streamline financial transactions, reduce costs, and reduce transaction risks. To achieve these goals, banks and financial institutions in more than 200 countries have become members of Swift.

Swift created new business opportunities and income streams by providing a standardized communication environment to its members. Money transfers are made with the use of passwords specific to each bank. At the end of 2019, the number of member banks or financial institutions exceeded 11,000.

Before Swift, Telex was the only instrument used for international fund transfers. Telex, which did not have a holistic code system like Swift, was causing security and speed problems. The system was started to be used in 1973 to solve these problems.

Who uses this system?

Swift offers many services for businesses and individuals to transfer money. Swift's founders system aimed to establish an easier payment communication with the Treasury and other parties. But later on, Swift became more and more widespread and started to be used by many institutions.