The European Union wants to ban seven Russian banks, including VTB, from Swift

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Swift, which transmits secure messages between more than 11,000 financial institutions and companies, is central to the global financial system.

(Photo: Reuters)

Hanover The European Union is discussing excluding seven Russian banks from the Swift financial messaging system, including VTB Bank and Bank Rossiya, according to a draft proposal.

The list is a subset of banks already subject to EU sanctions and does not include Sberbank, Russia’s largest, or Gazprombank. The final list has yet to be agreed with other countries, including the United States, said people familiar with the final list.

Other institutions on the list are Bank Otkritie, Novikombank, Promsvyazbank, Sovcombank and Veb.rf, according to the list, which is subject to change amid ongoing discussions among EU government envoys meeting in Brussels.

The decision to ban some Russian banks from the Swift messaging system, which handles transactions worth trillions of dollars worldwide, was announced over the weekend in a joint statement issued by the United States, the European Commission, France, Germany, Italy, the United Kingdom and Canada. announced. A European Commission spokesman declined to comment on the list.

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Separating Russia from Swift was considered taboo by many European countries even before Russia invaded Ukraine, as it could harm their economies. The European Union and the United States have been exploring ways to mitigate the impact on energy-related transactions, for example by excluding some of Russia’s largest banks from this specific measure.

The state-controlled VTB is Russia’s second largest bank and owns about a fifth of the system’s assets. The US announced last week that it would impose its toughest sanctions on the lender, banning US companies from doing business with it. The US also targeted Sovcombank, the third largest private bank by assets, as well as state-owned Otkritie. Novicombank and Promsweisbank, which finance Russia’s defense sector, have also been affected.

Veb.rf is Russia’s state development lender and is used to finance major projects. The United States also imposed sanctions on it last week. The United States also announced less stringent restrictions on Sberbank, Russia’s largest lender, last week.

Belgium-based Swift explained that while it is a neutral global cooperative with members in 200 countries, it is still required to comply with EU and Belgian regulations. “We are working with European authorities to understand the details of the facilities that will be affected by the new measures,” the organization said in an email over the weekend. “We are preparing to meet the legal requirements.”

Swift, which transmits secure messages between more than 11,000 financial institutions and companies, is central to the global financial system and the inability to access it could cause significant economic damage.

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