The United States and key allies will cut Russian banks out of the global financial messaging system SWIFT and begin to target Russia’s central bank, according to a White House statement on Saturday.
The move is the most drastic financial sanction yet on Russian President Vladimir Putin over his brutal, ongoing invasion of neighboring Ukraine.
The statement said the U.S., top European economies, Britain, and Canada would disconnect selected Russian banks from SWIFT, which will severely hurt their ability to operate internationally, and prevent Russia’s central bank from using its foreign currency reserves to evade Western sanctions. The pro-Ukraine countries will also make it harder for wealthy Russians to obtain Western citizenship and launch a task force to freeze the assets of Russian elites — a bid to pressure Putin by hurting his friends.
“We stand with the Ukrainian people in this dark hour,” the statement continued. “Even beyond the measures we are announcing today, we are prepared to take further measures to hold Russia to account for its attack on Ukraine.”
In a call with reporters later in the day, a senior Biden administration official said that between the new measures and previously announced sanctions, “Russia has become a global economic and financial pariah.”
The U.S. expects the move to cause “most banks around the world [to] simply stop transacting altogether with Russian banks that are out of SWIFT,” the official added, saying the list of affected banks would be released soon and will ultimately be determined by the European Union because Belgium administers the SWIFT system. The official noted that China, from which Russia has sought support despite the Chinese leadership’s uncertainty about Putin’s plans, “has tended to respect the force of U.S. sanctions.”
While much of the international debate has recently focused on SWIFT, the steps against the Russian central bank and rich Russians could be even more striking and painful for Moscow. “We’ll go after their yachts, their luxury apartments, their money and their ability to send their kids to fancy schools in the West,” the official said. “The ruble will fall even further, inflation will spike and the central bank will be left defenseless.”
The announcement came as Russian forces continued to try to capture Ukraine’s capital of Kyiv and strategic targets elsewhere in the country. It represents a significant escalation by America’s European partners, many of whom worry about the economic toll their own countries will experience if they cut off ties with Russia.
Earlier in the day, Germany — a key holdout on the SWIFT sanctions — signaled a harder position against Putin by sending anti-tank weapons to the Ukrainians and lifting a hold on the Netherlands doing so with German-made arms.
“The Russian invasion marks a turning point. It is our duty to support Ukraine to the best of our ability in defending against Putin’s invading army,” German Chancellor Olaf Scholz said.
The Biden administration official emphasized that the ultimate goal of the U.S. and its allies is to stop the fighting ― not to continue punishing Putin and Russians.
“This is a sad outcome, this is not where we wanted to be,” the official said. “Only Putin can decide how much more cost he is willing to bear.”