The European Union on Wednesday said it was excluding seven Russian banks from the SWIFT messaging system that underpins global transactions, as sanctions were ratcheted up over Russia's invasion of Ukraine.
The banks, which will be given 10 days to wind down their SWIFT operations, are Russia’s second-largest bank VTB, along with Bank Otrkitie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank and VEB, the EU official journal said.
A senior EU official explained that the banks on its list were chosen based on their connections to the Russian state, with public banks already subject to sanctions following Russia's annexation of Crimea in 2014.
"All these banks that we have listed under SWIFT... they are all based on their connection to the state and the implicit connection to the war effort. We have not gone for a blanket ban across the whole banking system," the official said.
Sberbank, Russia's largest lender, and Gazprombank have not been included in the list because they are the main channels for payments for Russian oil and gas, which EU countries are still buying despite the conflict.
The EU official said it was not possible simply to allow energy-related transactions and exclude others as SWIFT was unable to differentiate between types of payments. The official added that these two banks were nevertheless subject to other measures.
The EU, United States, Britain and Canada moved on Saturday to block certain Russian banks from SWIFT, although did not say at that point which banks would be hit.
SWIFT has some 11,000 members and has no clear global rival. China has set up a system, although it remains small, EU officials said, while despite the existence of a Russian system, SWIFT was still used for some 70% of transfers within Russia.
Otherwise, banks could still carry out transfers through workarounds such as faxes or bilateral messaging systems, if they existed.
