Russian banks excluded from SWIFT as a consequence of the conflict in Ukraine

Following the broader economic sanctions introduced by the United States and the European Union, economic measures have also been jointly imposed by the European Commission, France, Germany, Italy, the UK, Canada, and the USA. Among other things, the signatories decided to exclude a number of Russian banks from SWIFT (Society for Worldwide Interbank Financial Telecommunication), a Belgium-based network of 11.000 banks from 200 countries and territories that implements an international payment system used by thousands of financial institutions. SWIFT is also the organisation designated by the International Organization for Standardization (ISO) to be responsible for assigning Business Identifier Codes (BIC), which uniquely identifies member organisations within the messaging system.

SWIFT-related sanctions are intended to disrupt Russian economic activities. It is not clear if these measures could result in disruption of Russian gas and oil supplies, but they have already caused disruption to Russian customers, who have been unable to use mobile payment apps, such as Apple Pay or Google Pay or make online payments to countries that issued these sanctions.

Some analysts point out that removing Russian banks from SWIFT may have negative consequences on global governance by making rule-based international institutions ‘arbitrary and unpredictable tools of geopolitical rivalry’. Governments’ legitimacy to request a private network to implement their policy objectives remains unclear. There is also a lack of redress mechanisms for affected Russian banks if they wish to appeal the decision.