UK says it will work ‘all day’ to persuade Europe to cut Russia off from Swift

The UK has said it will work “all day” to persuade fellow European states to cut Russia off from the international Swift payment system.

The UK defence secretary, Ben Wallace, ended the pretence that Britain was not at odds with its fellow European leaders over the issue. He said there was still time for Russia to be excluded, and the foreign secretary, Liz Truss, said: “The UK is working with allies to exclude Russia from the Swift financial system.”

Wallace added: “We will work all the magic, do everything we can in diplomacy.”

Truss is to undertake a round of shuttle diplomacy to try to rally support for the British position after the EU refused to adopt what has been billed as the “nuclear option” of sanctions.

Quick Guide

What is Swift?

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What is it?

Swift (the Society for Worldwide Interbank Financial Telecommunication) is the main secure messaging system banks use to make rapid and secure cross-border payments, allowing international trade to flow smoothly. It has become the principal mechanism for financing international trade. In 2020, about 38m transactions were sent each day over the Swift platform, facilitating trillions of dollars worth of deals.

Who owns it?

Swift, founded in the 1970s, is a co-operative of thousands of member institutions that use the service. Based in Belgium, it remains neutral in trade disputes, being run principally as a service to its members.

Why would a Swift ban be so serious?

Boris Johnson told MPs it would harm the Russian economy if it was locked out of Swift. Run of the mill transactions would need to be conducted directly between banks, or routed through fledgling rival systems, adding to costs and creating delays.

Why is the US reluctant to effect a ban?

One reason is that the impact on Russian businesses might not be so serious. The head of a large Russian bank, VTB, said recently he could use other channels for payments, such as phones, messaging apps or email. Russian banks could also route payments via…

Read full story at the guardian.com

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