EU proposal to Russia to bypass SWIFT

According to the International Economy Group of Fars News Agency, citing Rashatoudi, the Russian news channel RBK reported today, citing the European Union directive, that Russian banks whose access to SWIFT has been cut off may be allowed to use alternative messaging channels to conduct transactions with foreign counterparts to use.

According to the report, alternatives include “non-specialized financial messaging services” such as telephone, fax or email.

According to this document, banks that are not on the EU sanctions list can use these channels to conduct transactions with European financial institutions, even though these transactions are not subject to sanctions.

In this instruction, payment for import and export of non-sanctioned goods is mentioned as an example.

Based in Belgium, SWIFT is a highly secure messaging system that enables financial transactions worldwide.

Last year, the European Union cut off access to SWIFT from 10 major Russian banks as part of sanctions related to Ukraine’s war against Russia. These banks can neither receive foreign currencies nor transfer assets abroad.

9 institutions are also subject to the freezing of assets and financial institutions of the European Union are prohibited from cooperating with them.

Similar punitive measures have recently been imposed on Tinkoff, Rosbank, Alfa Bank, VBRR and Far East Bank. While these banks are not separated from SWIFT, the blocking nature of the sanctions prevents them from using this system.

Russia has its own financial messaging system SPFS, which could replace SWIFT in the domestic market. While its coverage is much less than SWIFT, it covers 11,000 financial organizations worldwide and its usage has been growing in recent months.

Russia’s central bank announced in February that 469 companies now use it, including 115 foreign entities from 14 countries.

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