U.S. and EU decide against cutting off Russia from SWIFT banking system

© AP Photo / Christian Weidemann, Ricardo Bofill Taller de Arquitectura

SWIFT HQ

The United States and European Union don't consider it possible to bar Russia from the SWIFT international banking-payment system as it can cause serious damage to western companies, the Bloomberg agency reported Friday citing souces familier with the situation.

According to the agency, the issue has been considered as a possible variant of extending sanctions against Russia.

The talks of disconnecting Russia from SWIFT started last year. The proposal was made by UK Prime Minister David Cameron and was also mentioned in a resolution of the European parliament.

SWIFT representatives said, however, they were not going to disconnect Russia from their system, despite political pressure they were experiencing. Being EU-based, SWIFT may disconnect Russia only if a relevant decision is made by the EU authorities, the international bank message system said.

The Russian Central Bank has already started testing alternatives to SWIFT in Russia over the threat of Russia's possible disconnection.

The Central Bank provided domestic banks access from December 2014 to its alternative to the SWIFT bank message system for transactions inside Russia.

Russia's Central Bank has said the new service is intended to ensure uninterrupted and secure transfer of financial messages inside the country.

Deputy Director of the Central Bank's National Payment System Department Ramilya Kanafina said in November the regulator planned to complete establishing an alternative to the SWIFT international financial message system in May 2015.

The regulator also planned to establish a separate SWIFT-format processing center, she added.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) transmits 1.8 billion communications a year, remitting payment orders worth $6 trillion a day. The system comprises over 9,000 banks from 209 countries.

Under the SWIFT charter, groups of members and users are set up in each country covered by the system. In Russia, these groups are united in the RosSWIFT association.