The UK Has A Plan To Cut Off Russian Businesses From The Rest Of The Worls…(Oh, Great…)
Brett LoGiurato
BusinessInsider.com
Aug. 29, 2014
The United Kingdom will push the European Union this weekend to consider the most punitive sanctions yet against Russia for its involvement in escalating the crisis in Ukraine.
According to Bloomberg, the U.K. plans to propose blocking Russia from the SWIFT banking transaction system, a move analysts say would effectively cut off Russian businesses from the rest of the world’s financial system. U.K. Prime Minister David Cameron will put forward the proposal during a meeting with E.U. leaders in Brussels on Saturday.
“This would be a major escalation of the sanctions. Most international payments flow through SWIFT. Banning Russian banks and companies from SWIFT would effectively cut off Russian businesses from the rest of world,” said Bruce Johnston, a London-based analyst at Morgan, Lewis & Bockius.
“It would also have a major impact on European businesses who need to paid by Russians, and want to consume Russian energy.”
The move would have a significant effect on Russia’s banking sector, as many financial institutions across the world use the system. According to SWIFT’s website, it transmitted more than 21 million financial messages per day in July. It helped process payments among more than 10,500 financial institutions and corporations across 215 different countries.
Mark Dubowitz, the executive director of the Foundation for Defense of Democracies, compared the potential move to one leveled on Iranian institutions in 2012.
“SWIFT is the electronic bloodstream of the global financial system,” he told Business Insider in an email. “Cancelling Putin’s credit card could have far reaching consequences for the Russian economy as Iran discovered when scores of its financial institutions were expelled from SWIFT in 2012.”
The Rest…HERE
