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US and allies agree to restrict Russia’s access to SWIFT banking

US and allies agree to restrict Russia’s access to SWIFT banking, Transatlantic Today
President Joe Biden signs the American Rescue Plan, a coronavirus relief package, in the Oval Office of the White House, Thursday, March 11, 2021, in Washington. (AP Photo/Andrew Harnik)

WASHINGTON (Washington Insider Magazine) – The US and its allies revealed an accord on Saturday to use SWIFT, a program that facilitates worldwide transactions between hundreds of banking institutions, to target Russia.

“We commit to ensuring that selected Russian banks are removed from the SWIFT messaging system.” In a joint declaration, the heads of the European Commission, Canada, Germany, the United Kingdom, France, Italy, and the United States cautioned that disconnecting these banks from the global financial system would hurt their capacity to function internationally.

President Joe Biden addressed divisions between European countries on penalizing Russia through SWIFT while announcing additional US sanctions against Russia on Thursday. Biden stated that doing so is “always an option.” “However,  right now, that’s not the position that the rest of Europe wishes to take.”

One explanation for the administration’s prior reluctance to openly advocate for blocking Russia’s access to SWIFT, according to a European official, was a fear that this would expose and draw attention to divides among partners on the issue. According to the source, the Biden office has been attempting to sell the idea that the US and its European partners are in complete lockstep, and that it does not want to move ahead of the Europeans on SWIFT.

Italy and Germany were hesitant to incorporate SWIFT as part of Russia’s sanctions. According to NBC NEWS, Europe’s economy, which is considerably more tightly linked to Russia’s than the US economy, might suffer if Russia’s use of SWIFT is restricted or forbidden, especially if banks are denied access.

However, as Russia’s hostility has increased, the sentiment in Europe has shifted.

On Saturday, Germany’s government openly stated that it could be in favor of restricting or reducing Russia’s access to SWIFT in a selective manner, rather than removing it entirely.

SWIFT’s action was announced in a joint statement. Further economic sanctions that the countries will jointly apply were also disclosed on Saturday evening, including limits on the Russian Central Bank’s ability to deploy its overseas reserves in a bid to mitigate the effects of its sanctions.

Furthermore, the leaders stated that steps will be taken against anyone who enables the conflict in Ukraine and the Russian government’s detrimental operations.

In the United States and the European Union, there exist schemes that provide citizenship to foreigners who invest a particular amount of money in the country. Governments argue that issuing passports benefits the local economy by attracting investment, but the schemes have been challenged as a tool for affluent individuals to purchase citizenship.

These investor visa schemes in the United States comprise the EB-5 and E-2 programs.

Several EU countries, including Bulgaria and Malta, have been accused of providing “golden passports” to Russian oligarchs, and the EU has attempted to prohibit the practice.

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