US and key allies will block some Russian banks from SWIFT

On Saturday, German Chancellor Olaf Scholz announced that his government was approving the transfer of anti-tank weapons to the Ukrainian army, ending his insistence on providing only non-lethal aid, such as: helmet.

At the same time, in a post on TwitterGerman Foreign Minister Annalena Baerbock and Economy Minister Robert Habeck acknowledged that the German government is now moving from opposing the SWIFT ban to supporting a narrowly targeted ban.

“We are working intensively on how to limit the collateral damage of disconnecting from #SWIFT so it reaches the right people,” they wrote. “What we need is a functional and targeted limitation of SWIFT.”

European officials said they had been conducting lengthy, sometimes tense discussions with US and British officials, who had urged a severance as soon as Russia’s invasion of Ukraine began.

But even some U.S. officials are wary of cutting off Russia altogether. Among other concerns, they worry that it could strengthen the alternatives to the SWIFT system that Russia and China are developing. Over time, that could erode the United States’ ability to track and control payments.

Ahead of Saturday’s announcement, US and EU leaders discussed how much and which organization to block Russia, according to three European diplomats and another person familiar with the matter. Officials are pondering possible spillovers and unintended losses from targeted restrictions.

The notice did not specify which banks would be cut off from SWIFT.

SWIFT, a Belgian messaging service officially known as the Society for Global Interbank Financial Telecommunication, connects more than 11,000 financial institutions around the world. It does not hold or transfer money, but allows banks and financial institutions to notify each other of upcoming transactions.