Three questions about the Swift system presented as a deadly weapon against Russia

What are the post-sanctions of Russia’s invasion of Ukraine? On Thursday, February 24, the President of Ukraine urged the international community to exclude Russia from the Swift interbank messaging system. This decision was seen as a deadly weapon for the Russian economy. “We exclude Russia from Swift and demand that Ukraine introduce a no-fly zone.”, Volodymyr Zelensky said on Twitter after a telephone interview with Emmanuel Macron.His American counterpart Joe Biden felt it was left “option” Sanction Moscow. But he pointed it out“Currently this was not the (a) position.” Shared by Europeans

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Franceinfo explains what makes up this important gear in global finance.

1What is Swift?

Swift is an acronym for Society for Worldwide Interbank Financial Telecommunication. The co-operative is based in Belgium in La Hulpe near Brussels. Founded in 1973 by the world’s largest banks. This is an intermediary whose principle is simple. Replace Telex with an automated messaging service for creating and sending payment orders between different banks around the world. Swift does not hold or transfer funds, but can notify you about the exchanges associated with your bank. It currently connects more than 11,000 institutions * in more than 200 countries. In 2021, we sent an average of 42 million messages per day.

2What is the impact on Russia?

The international community has already prevented countries from using Swift. In 2012, the company expelled 30 Iranian institutions, including the central bank, in line with European Union sanctions on the Islamic Republic and its nuclear program. After signing Iran’s nuclear deal in 2015, Tehran was reconnected to the system and disconnected again in 2018 when the United States imposed new sanctions under Donald Trump.

As a result of these cuts, Iran lost almost half of its oil export revenues and 30% of its foreign trade, according to the Carnegie Moscow Center *.For this Moscow-based international think tank, the impact on the Russian economy “Equally devastating” : “Russia relies heavily on Swift for billions of dollars in exports of dollar-denominated hydrocarbons.”

Russian banks can rely on the national system of domestic banking exchanges. However, they face great international difficulties. “The economic impact will be serious and immediate.”An American diplomat in December world.. In 2014, when the threat of this sanction was swayed after the invasion of Crimea, the then Russian Finance Minister estimated the impact of such measures at 5% of Russia’s GDP.

Russian authorities have minimized the possible impact. “Yes, it will be more difficult, it’s obvious, but it won’t be a disaster.”, Guaranteed former President Dmitry Medvedev.shortly New York Times *Russian expert Maria Snegovaya believes: “It won’t be as painful for Russia as Westerners imagine.”..

What are the risks of the world economy?

The problem for the international community is that Russia is not the only country suffering from this sanction. “The Russian economy is a completely different story. It’s twice as much as the economy already licensed by the United States.”,analysis New York Times *Adam Smith, Former Minister of Economy under Barack Obama.

France, for example, has many economic benefits to the country. As the Directorate General of the Treasury reminds us, France is Russia’s second largest foreign investor and the largest foreign employer with 160,000 employees in French companies. Societe Generale owns Rosbank, one of Russia’s major banks.

Recently, Russia has warned the international community of a backlash. “If Russia is disconnected, we will not receive foreign payments, but our buyers, European countries in the first place, will not receive our goods: oil, gas, metals and other imported products. . “, Warned Senator Nikolai Jurablev in an interview with TASS *. This could raise energy prices in Europe.

* All links followed by an asterisk are in English.