As tensions amplify on the border dispute between Ukraine and Russia, Prime Minister Boris Johnson has outlined sanctions to deny Russia access to global payments system Swift (Society for Worldwide Interbank Financial Telecommunication) – deemed as a ‘very potent weapon’.
It comes amid a backdrop of a significant struggle to find effective solutions from the NATO allies, specifically the EU, as a deterrent to Russian encroachment on Ukraine’s border, as Vladimir Putin expands military presence elevating fears of a conflict that will impact Europe’s supply chain.
Taking charge of actions, PM Johnson stated this week that discussions with the United States are ongoing over potentially removing Russia from Swift, in what many believe would hold deep economic consequences for the region.
As the UK looks to spearhead the approach of the west, Johnson told lawmakers: “There is no doubt that that would be a very potent weapon.”
Given Swift’s pivotal role in supporting the global economy through its provision of secure financial messaging services’ shutting out Russia from the network would have severe and widespread economic consequences, heightened by Russia’s significant presence in the network.
Swift, which is overseen by the European Central Bank and the G-10 central banks (Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, United Kingdom, United States, Switzerland, and Sweden), imposed similar sanctions to those that are being touted on Russian on Iran in 2012.
Furthermore, in 2018, the global payments network restored certain US sanctions on Iranian banks, subsequently hindering steps being taken at the time from the EU to trade with Iran.
The collateral damage of removing Russia from Swift would, however, result in far more collateral damage than the previous moves against Iran, therefore widespread support specifically from EU nations may be seen as essential in taking the economic sanctions.
As part of an interview with the Sueddeutsche Zeitung newspaper, German Foreign Minister Annalena Baerbock sought to usher the narrative away from potentially removing Russia from Swift.
She emphasised to the national paper: “Decoupling all payment transactions would perhaps be the biggest stick, but not necessarily the sharpest sword.”
Her comments come as Germany has drawn criticism for its reported hesitancy in taking sanctions against Russia and lack of support for Ukraine.
As the EU has scrambled to portray a united front on the issue, Western allies have urged the Union to strengthen their stance on the issue and elevate the deterrent against Russian hostility in Ukraine.