Calls for Russia to be stricken off the SWIFT list have been active since 2014, and now Russia has said in an official statement that if it were to happen, it is prepared for it.
The Society for Worldwide Interbank Financial Telecommunication allows for quicker transactions between overseas banks. All the institutions identified under this umbrella can exchange funds using their own unique SWIFT code. Russia first faced the prospect of being removed from SWIFT coverage in 2014, and now, it says that it is prepared for it if it should indeed happen.
The announcement was made by Deputy Prime Minister Arkady Dvorkovich in an official statement.
“Certainly, it is unpleasant, as it will prove a stumbling block for companies and banks, and will slow down work. It will be inevitable to deploy some aged technologies for information transfer and calculations. However, the companies are technically and psychologically ready for the shutdown as this threat was repeatedly voiced. In general, disconnecting Russia from SWIFT would be a crazy step on the part of our Western partners. It is obvious that for the companies which work in Europe and the US it would be harmful. And this applies not only to the shutdown of the service.”
The first calls for Russia to be removed from SWIFT came from the EU and US following allegations of Russia’s involvement in Ukraine’s crisis. The calls were heard all over the world, but the European Parliament weighed into the matter. It deemed the proposal as damaging to international business and a violation of rights. Russia indeed would have been in serious trouble had that notion received widespread backing and implemented. Damaging as it would have been for international trade for their western counterparts, Russia’s damage would have been catastrophic.
Fast forward three years and Russia’s Deputy Prime Minister makes this announcement. Elvira Nabiullina, Governor of Russia’s Central Bank, had informed Vladimir Putin last year that the banking sector was equipped with all the required systems for facilitating lending and payments should the SWIFT disconnect happen. The Mir payment system is used, which is Russia’s own version of Visa and MasterCard and first came into use in 2015. With more than 90% ATMs in the country able to deal using Mir, there won’t be a problem in living outside of SWIFT.
As this statement confirms Russia’s preparation, it remains to be seen whether the country is indeed cut off from the SWIFT system.