IN A major move aimed to cripple Russia’s economy, the US along with its key allies, including EU and the UK, have decided to disconnect key sanctioned Russian banks from the global financial system SWIFT and impose restrictive measures on its central bank in response to Moscow’s invasion of Ukraine. It was also decided to launch a joint task force to hunt down assets of sanctioned Russian companies and oligarchs, according to a joint statement issued by the leaders of the US, the European Commission, France, Germany, Italy, the UK and Canada on Saturday.

 

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is the world’s main banking messaging service which links around 11,000 banks and institutions in more than 200 countries, including India. Based in Belgium, the system is considered central to the smooth functioning of global finances and Russia’s exclusion from it would hit the country hard. “We stand with the Ukrainian Government and the Ukrainian people in their heroic efforts to resist Russia’s invasion. Russia’s war represents an assault on fundamental international rules and norms that have prevailed since the Second World War, which we are committed to defending.

 

“We will hold Russia to account and collectively ensure that this war is a strategic failure for (President Vladimir) Putin,” the allies said in the statement. Removing banks from SWIFT is deemed to be a severe curb because almost all banks use the system. Russia is heavily reliant on the SWIFT system for its key oil and gas exports. The US and its allies committed to “ensuring that selected Russian banks are removed from the SWIFT messaging system,” they said.