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14th Aug 2022

International banking giant pressured to block Israel and Russia

  • Russia's banks will continue to use Swift (Photo: SWIFT)

The international wire transfer system Swift will not block Russia or Israel from its services following requests for it to do so.

The Belgian-based firm on Monday (6 October) said it had received calls to disconnect institutions and entire countries – most recently Israel and Russia - from its network.

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“Any decision to impose sanctions on countries or individual entities rests solely with the competent government bodies and applicable legislators,” it said in a statement.

It did not specify who made the requests.

But Haaretz reports pro-Palestinian organizations made the requests in reaction to Israel's occupation of the West Bank and recent military campaign in the Gaza Strip.

Bloomberg reports the UK had proposed blocking Russia from Swift in the run-up to an EU summit in August even though the option was not formally considered.

Summit leaders at the time were discussing wider economic sanctions and travel bans in response to Russia’s annexation of Crimea.

Behind the scenes, the Americans had also floated the Swift idea on Russia.

The Financial Times, citing Russia’s former finance minister, says blocking Russia’s access to Swift could see the country’s gross domestic product contract by up to 5 percent.

Russian banks rely on Swift to make domestic and international payments, it notes.

The European Parliament, for its part, in September made similar demands in a resolution. It asked the EU to “consider excluding Russia from civil nuclear co-operation and the Swift system”.

It would not be the first time the firm has been asked to impose a ban.

In March 2012, it disconnected 25 Iranian banks from its networks following an EU regulation on financial sanctions.

Swift in its statement on Monday said the political pressure and media speculations run the risk of undermining its operations and services.

“As a utility with a systemic global character, it has no authority to make sanctions decisions,” it reaffirmed.

The company was already dragged into the wider scandal of indiscriminate global surveillance last year when leaked documents from a former National Security Agency contractor said the US was hacking into Swift to access people’s financial details.

Swift describes itself as a neutral global cooperative set up under Belgian law.

The firm provides services to over 10,500 financial institutions and corporations in over 200 jurisdictions around the world. Payment orders are said to total around €4.7 trillion a day.

The company was set up in 1973 and is overseen by the G-10 central banks: Belgium, Canada, France, Germany, Italy, Japan, The Netherlands, United Kingdom, United States, Switzerland, and Sweden as well as the European Central Bank.

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