Posted at 9:15 p.m.
What is Swift?
It is a cooperative of banks, therefore a private company, founded in 1973 to allow secure electronic transactions between its members. Swift is the acronym for Society for Worldwide Interbank Financial Telecommunication. It is established in Brussels and therefore falls under European laws.
PHOTO JAMES ARTHUR GEKIERE, AGENCE FRANCE-PRESSE
Swift headquarters, Brussels
“Ninety-nine percent of banks around the world use Swift,” said economic sanctions lawyer Oliver Dorgans in an interview with the French magazine. The Obs.
Yes, banking exchanges existed before Swift, but today there is a whole generation of banking staff who are trained only on Swift.
Oliver Dorgans, economic sanctions lawyer
As a transaction facilitator and banking intermediary, we can compare its operation to Interac or Payments Canada. It is through Swift that the approximately 11,000 member financial institutions from 200 countries will exchange payment orders and transfer funds from their customers. In 2021, Swift brokered 10.6 billion orders globally.
It is she who is notably at the origin of the Bank Identification Codes (BIC), a code of 8 to 11 digits or letters which is an identifier specific to each bank. National Bank’s BIC, for example, is BNDCCAMMINT and Desjardins’s is CCDQCAMM. It is these BICs that ensure that the funds that are exchanged between countries end up in the right financial institution.
How effective would an exclusion of Russia be?
According to the Russian association of member institutions in that country, called ROSSWIFT, some 300 banks and organizations in 68 cities use Swift. Russia would be the second country in number of users after the United States.
PHOTO DADO RUVIC, REUTERS
Some 300 Russian banks and organizations in 68 cities use the Swift international banking system.
Excluding Swift would clearly be damaging to the Russian economy. But it would be tempered by the fact that Russia has been preparing its alternative plan since 2014. In particular, it has set up a credit card system, Mir, and the Akras agency for credit ratings. Above all, since 2017, the country has had its own interbank transactional system, SPFS, developed by the Central Bank of Russia, to which 400 Russian banks have joined. The SPFS network was integrated into its Chinese equivalent, CBIBPS, and at the end of 2020 included 23 foreign banks, notably from Armenia, Germany, Kazakhstan and Switzerland. The exclusion of Russia from Swift therefore risks encouraging the development of a competing system.
Why is there no consensus on this subject within NATO?
Tactically, “the advantages and disadvantages can be discussed,” said Guntram Wolff, director of the Bruegel think tank interviewed by Agence France-Presse. “Operationally, it would be a real headache. »
The Germans, in particular, are very dependent on Russian natural gas. Russia’s inability to execute transactions through Swift would technically prevent them from acquiring any. The French, on the other hand, have clearly shown their desire to go ahead with exclusion. European finance ministers have asked the European Commission and the Central Bank to assess the consequences of this move.
In the United States, President Joe Biden has not yet decided, contenting himself with specifying that the exclusion of Swift remained “an option”.
In Canada, Prime Minister Trudeau confirmed on Friday that he was calling for Russia’s withdrawal from Swift, saying Vladimir Putin could not threaten peace and “expect to benefit from the prosperity and economic opportunities” of such a move. banking network, he said.
Does Swift have to obey political decisions?
No. As a private company describing itself as neutral, Swift is not theoretically obliged to obey the orders of political authorities. However, it is not immune to threats of reprisals: this is how in 2012 and 2019, it complied with the request of the United States to prohibit transactions involving Iranian banks. Washington had threatened to extend sanctions on Swift if she allowed the Iranian deals.
In 2014, the UK unsuccessfully requested the exclusion of Russia.
With Agence France-Presse