Russia Nears Financial Exclusion as Countries Agree to SWIFT System Ban

Italy has become one of the latest European countries to back kicking Russia out of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) global banking system to punish it for the invasion of Ukraine as the European Union weighs up the impact of such an action.

Rome has moderated its concerns about the move, which it is now publicly backing if the rest of the EU agrees to the measure, Bloomberg reported.

There has been a push to exclude Russia from the secure messaging service used to allow communication among more than 11,000 banks and other financial institutions as part of tough sanctions for its military aggression.

However, Italy and Germany are concerned that without SWIFT, it would be harder to buy Russian oil and gas.

Blocking Russia from the system will require the agreement of all the EU's 27 members. The European Central Bank and the European Commission are still considering the impact of such a drastic move.

Polish Prime Minister Mateusz Morawiecki tweeted on Saturday that his Hungarian counterpart, Viktor Orban, "once again assured me of his support for far-reaching sanctions against Russia— including about blocking the SWIFT system."

Meanwhile, Ukrainian Foreign Minister Dmytro Kuleba said on Saturday that Cyprus, which it was thought may have held out against the move, had confirmed it would not block the decision to withdraw Russia from SWIFT.

Bloomberg said the U.S. is also considering whether to seek Russia's expulsion from SWIFT, with officials from President Joe Biden's administration looking at whether to push for an EU directive on the move, although a decision is not imminent.

Biden unveiled new sanctions on Thursday but stopped short of saying the U.S. and its allies would expel Russia from SWIFT, but he did tell reporters, "it is always an option."

Expelling Russia from SWIFT was also considered after Moscow's seizure of Crimea in 2014.

Kuleba, has pushed for Europe to take a firm stand against Russia and expel it from SWIFT as part of sanctions.

In a direct appeal to European leaders, he tweeted on Friday "Each year at commemorative events you say 'Never again.'

"The time to prove it is now. Russia is waging a horrific war of aggression in Europe. Here is your 'never again' test: BAN RUSSIA FROM SWIFT and kick it out of everywhere."

However, Hosuk Lee-Makiyama, director of the European Centre for International Political Economy, told the BBC that disconnecting Russia from SWIFT could see the country expropriating money EU investors had put into the country.

"It's a nuclear option," Lee-Makiyama said, "that's going to basically exterminate yourself and your enemy."

Update 02/26/22, 10:25 a.m. ET: This article has been updated with further information.

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Currency exchange, Moscow
A currency exchange office in central Moscow on February 24, 2022 shows the ruble at a record low against the dollar. The Russian economy could be hit even harder as European countries look to kick Russia out of the SWIFT banking system. ALEXANDER NEMENOV/Getty