The European Union, U.S. and other Western nations on Saturday announced they would cut off a "certain number of Russian banks" from the SWIFT international payments system, and impose restrictions on Russia’s Central Bank.
Why it matters: The measures will effectively cut Russia out of the world's most important financial messaging system and undermine the Kremlin's ability to use its central bank reserves to blunt the impact of other sanctions.
- Ukrainian officials had demanded that Western allies cut Russia from SWIFT in response to the invasion and make the country a complete pariah on the international stage, while also doing maximum damage to its economy.
- Some European allies like Germany and Italy had previously expressed concern that disconnecting Russian banks' access to SWIFT would cause collateral economic damage, but agreed to take the step after public pressure and days of intensive meetings.
Details: The harsh new sanctions and other measures agreed to by the U.S., the EU, France, Germany, Italy, the United Kingdom and Canada on Saturday fall into five main categories, according to a joint statement.
- Disconnect select Russian banks from SWIFT, a move that a senior Biden administration official referred to as the "Iran model."
- Undermine the Russian Central Bank's ability to defend the ruble.
- Limit the sale of so-called "golden passports" that allow wealthy Russians to become citizens of Western countries and exploit their financial systems.
- Launch a trans-Atlantic task force to hunt down the assets of sanctioned Russians in order to ensure the penalties are enforced.
- Step up coordination of against Russian disinformation and other forms of hybrid warfare.
The big picture:...