Russia unlikely to withdraw from SWIFT payment system, but can survive without it – VTB bank

Russia’s withdrawal from the SWIFT payment system will happen only if the EU toughens sanctions on Moscow, which is unlikely, the head of Russia’s VTB bank believes.

“I don’t think [Russia’s withdrawal from SWIFT] will ever happen – unless European governments want to take such harsh measures against Russia. But so far, even the United States does not have such plans. They would prefer to cut us off from the dollar system and impose secondary sanctions on European banks to prevent them from working with us,” VTB head Andrei Kostin said in an interview with Handelsblatt newspaper.

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Kostin stressed that Russia remains part of the international community and does not want to separate itself from the rest of the world; however, if Europe and the United States choose to sever ties, Russia has other valued partners and will get by.

“We want good relations with other countries. If the West does not want to work with us, we will work with China, India and African countries. The United States and Europe are not the whole world,” Kostin stated.

The topic of a possible disconnection of Russia from SWIFT – the Belgium-based global network facilitating international bank transactions – initially arose back in 2014 after the EU introduced its first round of anti-Russian sanctions following the reunification with Crimea. Earlier this year the European People's Party (EPP), the largest faction in the European Parliament, again called for Russia’s withdrawal from the payments system in the event of the “invasion of Ukraine.”

Last week former senior adviser to the UK Defense Department Maximilian Terhalle urged the European Union to take the step in order to “prevent future attacks” from Russia. He made the statement in an article in Politico magazine, in which he warned Europeans of the threat Russia supposedly poses as it prepares to supply the continent with natural gas through the Nord Stream 2 pipeline.

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The head of VTB says that the introduction of additional sanctions against Russia is pointless.

“They [sanctions] are counterproductive and do not solve anything. The political dispute cannot be resolved by economic sanctions – negotiations are needed,” Kostin said.

In May this year SWIFT stated that it would continue to work in Russia as usual and there is no risk that the country will be disconnected from the payments system.

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