The White House has announced that the United States and allies are taking action that could potentially cripple Russia’s economy in response to the Ukraine invasion.
Western nations have agreed to ban certain Russian banks from accessing the SWIFT international banking system (Society for Worldwide Interbank Financial Telecommunication).
The move has been described as the “financial nuclear option” due to the impact it could have on Russia’s economy.
Steps are also being taken that will “paralyze” the Russian Central Bank, making it hard to use its reserves to avoid the sanctions.
President of the EU Commission Ursula von der Leyen said: “I will now propose new measures to EU leaders to strengthen our response to Russia’s invasion of Ukraine and cripple Putin’s ability to finance his war machine.
“First, we commit to ensuring that a certain number of Russian banks are removed from SWIFT.
“It will stop them from operating worldwide and effectively block Russian exports and imports.
“Second, we will paralyze the assets of Russia’s central bank.
“This will freeze its transactions.
“And it will make it impossible for the Central Bank to liquidate its assets.”
In coordination with ???????????????????????????????????????????????? I will now propose new measures to EU leaders to strengthen our response to Russia’s invasion of Ukraine and cripple Putin’s ability to finance his war machine. https://t.co/iU2waDzo9s
— Ursula von der Leyen (@vonderleyen) February 26, 2022
Leaders of the European Commission, France, Germany, Italy, United Kingdom, Canada, and the United States said in a joint statement:
“We stand with the Ukrainian people in this dark hour.
“Even beyond the measures we are announcing today, we are prepared to take further measures to hold Russia to account for its attack on Ukraine.
“We commit to ensuring that selected Russian banks are removed from the SWIFT messaging system.
“This will ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.
“As Russian forces unleash their assault on Kyiv and other Ukrainian cities, we are resolved to continue imposing costs on Russia that will further isolate Russia from the international financial system and our economies.
“Specifically, we commit to taking measures to limit the sale of citizenship—so called golden passports—that let wealthy Russians connected to the Russian government become citizens of our countries and gain access to our financial systems.”
Zeke Miller, White House Reporter for the AP said Biden has joined Europe.
He said: “US, EU, UK pledge to remove ‘selected’ Russia banks from SWIFT, impose restrictions on Russian central bank.”
According to The Hill:
“Banks across the world use SWIFT to finalize transactions and transfers. Cutting Russia off from SWIFT would make it incredibly difficult for its banks to operate efficiently, but could also wreak economic havoc for European nations that depend on Russian oil and natural gas exports.”
First, we commit to ensuring that a certain number of Russian banks are removed from SWIFT.⁰
It will stop them from operating worldwide and effectively block Russian exports and imports.— Ursula von der Leyen (@vonderleyen) February 26, 2022
