The EU has expanded sanctions against Russia’s financial sector: 32 more Russian banks are being cut off from SWIFT
24 July 16:09
The European Union has expanded its financial sanctions against Russia and added more than 90 Russian banks, as well as the Moscow Exchange, to its “blacklists,” according to a notice published in the EU’s Official Journal, as reported by "Komersant Ukrainian" citing Reuters.
The sanctions package—the largest in terms of the number of Russian financial institutions since the start of the war—includes Rosselkhozbank, the fourth-largest state-owned bank in Russia by assets, as well as Dom.RF, the operator of state construction programs, and Pochta-Bank. Also on the lists are Bank “St. Petersburg,” MTS Bank, “Yandex Bank,” and Tsifra Bank—all of which rank among the top banks by assets—as well as the credit organizations of the largest marketplaces: Ozon Bank and VB Bank.
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The 32 banks are subject to a complete ban on transactions with European individuals and companies, which effectively means they will be cut off from the SWIFT system. The new sanctions package is aimed at cutting off the last channels Russia uses for international payments, diplomats involved in its preparation told Reuters.
Following a series of sanctions that targeted nearly all major Russian banks, Moscow began using a network of small credit institutions that retained access to SWIFT, as well as relying on cryptocurrency payments. Now the EU wants to add these credit institutions to the sanctions list to make it harder for them to do business with foreign partners, sources told Reuters.
As for the Moscow Exchange, its key clearing house—the National Settlement Depository (NSD)—was already subject to European sanctions. Starting in 2024, the NSD and the exchange were added to U.S. and British sanctions lists, after which trading in dollars and euros on the Russian exchange came to a halt.
Most likely, following the expansion of sanctions against the exchange, the process of exchanging assets frozen in the EU and Russia—which has been proceeding, albeit slowly, in recent years—will come to a halt again, notes Freedom Global analyst Natalia Milchakova.
She considers the U.S. “hellish sanctions” bill—which, according to Axios sources, the U.S. Senate may consider as early as next week—to be far more dangerous for Russia’s financial system.
It includes measures against the Central Bank of the Russian Federation, as well as the largest state-owned banks, and codifies into law sanctions that were previously imposed by U.S. presidential decrees—meaning that a congressional decision would be required to repeal them.
If adopted, the “hellish sanctions” could halt all dollar transactions in Russia, including cash dollars, Milchakova believes.
It will be more difficult for the Central Bank to purchase non-cash yuan, since a significant portion of these purchases is still made in dollars; settlements with Russian exporters and importers by foreign partners will also become significantly more complicated; a shortage of cash foreign currency could emerge in the market, as it will become practically impossible for Russian banks to acquire it through legal channels, the expert explains.
This could force the Central Bank to impose restrictions on the purchase of cash dollars—and, under EU sanctions, euros as well, Milchakova believes.
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