The U.S. Treasury Department is still evaluating and discussing the impacts of expelling Russia from the SWIFT interbank payment system, U.S. Treasury Assistant Secretary for International Finance Ramin Toloui said at a U.S. Senate Foreign Relations Committee hearing on Tuesday.
During the Committee hearing, U.S. Senator Marco Rubio asked the panel that if Russia was to violate the Minsk Protocol, what the specific sanctions would be and if denying Russia access to the SWIFT system was something that has been discussed.
“We don’t discuss in a public forum, any specific measures,” Toloui said. “But we discuss a whole range of things, as we’re evaluating it.”
Toloui declined to comment on “specific actions” that the U.S. may take, but acknowledged that the U.S. is engaged in discussing further measures such as excluding Russia from the SWIFT system.
“We look at both the impact that it would have on Russia, as well as the spillovers that it would have on the global economy, the United States, and our European partners, but I don’t want to comment on any specific actions,” he said.
In August 2014, the European Parliament urged EU member states to consider disconnecting Russia from the SWIFT system in response to Moscow’s alleged role in the Ukrainian conflict.
In December 2014, Russia’s Central Bank — The Central Bank of Russia (CBR) — announced that it had launched a rival to SWIFT in its own domestic version of a payment service which was aimed at moving away from Western financial dominance.
In February, the Russian Central Bank said that over 90 banks are participating in the nation’s domestic banking payment system.
The CBR said that it planned to complete Russia’s switch to its SWIFT alternative by May 2015.
Russia joined the global interbank system in 1989 and has become one of the most active users globally, sending hundreds of thousands of messages per day.
SWIFT (The Society for Worldwide Interbank Financial Telecommunication) is a Belgium-based global organization that provides services and a standardized environment for global banking communicating that allows financial institutions to send and receive messages about their transactions, the system is used by most international banks. The information the system carries, including payment instructions, is securely exchanged between financial institutions. It began operating in 15 countries in 1973 and is now used by over 9,000 financial institutions in 210 countries and territories.
Watch the U.S. Senate Committee on Foreign Relations hearing: “U.S. Policy in Ukraine: Countering Russia and Driving Reform”