May 16, 2022

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Swift: Biden is seriously considering whether to support the expulsion of Russia from the financial security net

Swift: Biden is seriously considering whether to support the expulsion of Russia from the financial security net

The decision to start the procedure has long been subject to approval by the European Union, which split in weeks of contentious debate over the measure, and ultimately chose Not going forward this week.

But US officials and their EU counterparts have continued to evaluate options, including removing banks and individual entities, rather than the entire Russian economy, from the network, officials say.

This move would be considered the nuclear option when it comes to responses to Russia’s invasion of Ukraine. Biden and his aides have highlighted the complexity of Russia’s ban on SWIFT – or the Society for Worldwide Interbank Financial Telecommunication – noting that the US cannot act unilaterally. “This is not the position the rest of Europe would like to take,” Biden told reporters on Thursday.

But since Biden’s press conference announcing new sanctions on Russia for its unprovoked attack, the administration appears to be getting closer to that position as other European allies have now given it their support.

The administration has discussed the matter with the Federal Reserve, which will have an interest in any decision, according to an official.

The White House faced calls from Ukraine and US lawmakers in Congress to get Russia out of the Swift regime after Putin ordered the invasion on Thursday. So far, the United Kingdom, Lithuania, Estonia and Latvia have supported Kiev’s calls to isolate Russia from the Swift regime.

On Saturday, Germany, which earlier warned of a “tremendous impact” on German business if Russia were to be banned from the Swift system, signaled its support for the restrictions in some form.

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German Foreign Minister Annalena Barbock and German Economy Minister Robert Habeck said in a joint tweet that they are “extremely pressured to avoid collateral damage when decoupling (Russia) from the SWIFT system until it hits the right people. What we need is a meaningful and practical SWIFT constraint tool.”

Earlier in the day, Italy indicated that it would also support measures to expel Russia from the Swift system after Prime Minister Mario Draghi told Ukrainian President Volodymyr Zelensky that “Italy fully supports the EU’s position on sanctions against Russia, including those related to the Swift system.” And she will have to do it. Keep doing it.”

Draghi’s remarks are particularly notable given the Italian economy’s energy exposure.

An administration official said additional sanctions were likely if Kiev, the besieged Ukrainian capital, fell. But it wasn’t clear if that would include SWIFT, or whether Russia’s removal from SWIFT might happen before.

A White House official told CNN that “as the president and administration officials have made clear, we are focused on coordinating with allies and partners to impose more costs on Russian President Vladimir Putin for his war of choice,” but declined to comment further.

Removing Russia from the SWIFT system would damage Russia as well as the major economies of Europe and affect energy exports to the continent.

It would make international financial transactions more difficult, shocking Russian companies and their foreign clients – especially buyers of oil and gas exports denominated in US dollars.

Meanwhile, the United States has Impose further sanctions on Russia, targeting the banking, technology and aerospace sectors in Moscow. On Friday, the United States announced that it would do so To impose sanctions Directly on Putin and on Russian Foreign Minister Sergey Lavrov.

This story has been updated with additional developments and background information.

CNN’s Charles Riley, Veronica Straqualorsi, and Inki Cappeller contributed to this report.